Talking Point: Should Sony Respond to Microsoft's UK Xbox One Price Cut?
Posted by Sammy Barker
You’ve got to hand it to Microsoft, it knows how to react quickly. The Redmond-based manufacturer has been flip-flopping between Xbox One strategies faster than Usain Bolt in sandals, starting all the way back at E3 where the company controversially defended its abhorrent digital rights management policies – only to yank them back out a few days later. It later reversed its approach to indie development, and ended up making a handful of other smaller changes in order to remain competitive with a rampant Sony. Today marks its latest bid in the battle against the PlayStation 4, as the firm’s reduced the price of the Xbox One to £399.99 in the UK.
While the discount is exclusive to Britain for the time being, it brings the platform’s entry fee much closer to the Japanese giant’s runaway device. Previously, Microsoft’s challenged console cost £429.99, making this a £30.00 saving against the original recommended retail price. You can still get a PS4 for cheaper, as Sony charges around £349.99 for its device, although the trump card in the Xbox maker’s locker is the inclusion of TitanFall for free, which is sure to propel sales over the coming months. It’s worth stressing that this is a time limited promotion, meaning that once stock has been depleted, the bundle will presumably be discontinued. However, should SCE be concerned?
The Xbox maker insists that today’s move was not propelled by the PS4. However, it’s widely known that Sony’s system is outpacing Microsoft’s at retail at an alarming rate – an unexpected turn of events given the latter’s dominance in key territories such as the UK during the previous generation. The Japanese giant’s black box of tricks current sits at an install base of 5.3 million globally, while its competitor has yet to provide an update since the end of last year, when it announced numbers in the region of 3.9 million.
Perhaps most impressive is that a whopping 500,000 PS4 consoles were sold in the UK in 2013 alone, with that figure leading to a significant advantage in software sales. It’s unsurprising, then, that Microsoft has opted to focus on the British market, where its dominance with the Xbox 360 appears to be fading the fastest. Sales are also flagging a little in North America, where Sony’s system commands a marginal lead as well, but the situation is not quite as dire, as evidenced by the Xbox One’s victory in the December NPD.
Reducing the system’s price and bundling one of this year’s biggest games seems like a smart move, then, but will it have Sony sweating? We daresay that it’ll be keeping a very close eye on the numbers, but we doubt that it’ll be panicking just yet. The problem for the platform holder is that it can’t seem to keep on top of demand, with Amazon.co.uk currently showing a 25th March notification for when stock will next be available online. SCEUK managing director Fergal Gara recently admitted that the issue may not be rectified until April.
And that means that there’s no real reason for the platform holder to respond yet, as it can’t sell stock that it doesn’t have. The move may pressure the company into fast-tracking additional units into the battleground in order to prevent fence-sitters from selecting the Redmond-based manufacturer’s machine instead, but additional incentives will be unnecessary while it can’t even fulfil existing pre-orders. Once interest wanes, it’s then that it may need to start countering with some promotions of its own.
Assuming that the gap does start to close, of course, the company has options available to it. If Microsoft continues to offer game bundles at £399.99, it could easily add value to its own hardware packages to maintain an advantage over its rival manufacturer. An inFAMOUS: Second Son bundle currently costs £389.99, so the inclusion of the PlayStation Camera or a three month subscription to PlayStation Plus could keep the console’s nose in front of its competitor’s machine. The firm could also include a download code for a game such as Killzone: Shadow Fall or Knack if it feels the need.
The important thing is that it doesn’t panic, as it’s engineered an advantage big enough to force its closest competitor into this response. There’s no doubt that the promotional blitz surrounding TitanFall will give the Xbox One a big injection of interest, but despite the differences being somewhat diminished, Sony still has the advantage of a cheaper, slightly more powerful box. Microsoft’s latest move will level the playing field a little – but the Japanese giant is still very much in charge. That certainly doesn’t give it an excuse to get complacent, though.
Do you think that Sony should be concerned by today’s Xbox One announcements? What should the platform holder do to counter Microsoft’s small price cut? Submit your strategies in the comments section below.
Should Sony react to today’s Xbox One price cut? (87 votes)
Yes, the platform holder’s leading position is now in threat
Hmm, I’ll wait and see
No, the company is still selling more units than it can make
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