News Article

Talking Point: Should Sony Respond to Microsoft's UK Xbox One Price Cut?

Posted by Sammy Barker

Incredible crisis

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 policiesonly 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

9%

Hmm, I’ll wait and see

18%

No, the company is still selling more units than it can make

72%

Please login to vote in this poll.

More Stories

User Comments (42)

FullbringIchigo

#1

FullbringIchigo said:

kind of cleaver actually with the PS4 being so hard to get and now the xb1 is only £10 more expensive thsn the PS4 bundels, it's perfect timing on microsofts part because most people are not really bothered which they use but tend to use the one they buy first as their main system, if they buy a second or third system at all (and for the first time I'm not going to get third system just PS4 and Wii U for me)

of course all sony have to do to battle this is get the PS4 back in stock

Bliquid

#2

Bliquid said:

I'd ignorantly say:" stick to the plan".
PS4 has an excellent price point, and the many U-turns MS did through the "troubled" XBone announcement/launch earned them the distrust of many. Why piss off early adopters?
If Sony thinks they have a valid product in their hands, they should prove it by not taking in account rivals maneuvers. Apple does it that way and apparently it pays. To be confident about one's image, product and price, i mean.
I'd rather have everybody work on software prices, because regardless the production costs, the final user is starting to pay a little too much. Ours has always been an expensive hobby/passion mainly because we were fewer in numbers. Now there are millions of gamers, so costs must be spread more evenly. 70/80 euros for one game is too high, period.
Just my two cents.

ShogunRokAdmin

#3

ShogunRok said:

It's a smart, but seemingly quite desperate move. With Sony riding so high lately, Microsoft had to do something - and I can't see this not working. That said, how well it'll actually work is up for debate. As soon as Sony can fix these stock shortages, it'll still be an extremely close race if this move is a success for Microsoft.

Strofan7

#4

Strofan7 said:

Just read a Forbes article confirming the package is coming stateside as well.

I think its desperate, but that doesn't mean it won't work. Sony doesn't need to respond regardless...as long as stock is selling out there is no reason to provide extra incentives.

SuperSilverback

#6

SuperSilverback said:

I feel that the scene from Thor 2 were Loki says "You must be truly desperate to come to me for help" is appropriate here.

Paranoimia

#7

Paranoimia said:

Sony don't need to do anything in my personal opinion.

They have the lower price, the better hardware, the best exclusive games (and true exclusives at that, not available on PC), and the best versions of multiplatform titles.

Xbox One has the HDMI pass-through and the "TV! TV! TV!" side of things, but outside of the US, those have comparatively limited functionality - plus it apparently doesn't play well with UK/EU 50Hz TV tech.

So for me, if you're not in the US, there's no compelling reason to buy an Xbox One. If you are in the US, I guess it depends on your taste in games. Generally, it's a half-assed system all round, doing a bit of everything, but nothing as well as it should.

charlesnarles

#10

charlesnarles said:

I guess they could include the camera if they wanted to have a hardware showdown, but they don't seem to even need to. I can't find a new camera in NA at all btw

rjejr

#11

rjejr said:

I just got the X1 comes w/ a free DL copy of Titanfall email. Was this previously announced? I would think that people who just bought an X1 recently - and it's only been out a few months - might be annoyed that the game they probably bough tthe system to play is now bundled free. Though I don't follow X1 too closely so I could be way off.

rjejr

#15

rjejr said:

OK, so this is a new X1 bundle, what does MS do w/ all the non-bundled X1s siting on shelves? They have to at least cut the price, no? Plus, it's hard to tell if this is a limited time bundled, or the new X1 model, like the Wii U dropped Nintendo Land for NSMBU. Gotta give credit to MS, maybe they think Nintendo waited to long to change the bundle and drop the price and they don't want the X1 to be the next Dreamcast.

Yes it seems desperate, but better to be desperate and do something about it then stick your head in the sand.

banacheck

#16

banacheck said:

Microsoft is sweating to drop the price this early on, it's there own fault with what thay did at E3 and telling people to #Dealwithit. Microsoft what's happens if a customer doesn't have broadband but still wants an XboxOne? Microsoft-Well thay can buy a Xbox360. Unbelievable but it happened, and then came the 180 with we listen to our fans. Sony doesn't have to worry about anything in my opinion, in the UK you can already buy a new PS4 under £349 unofficial.Also in my opinion Sony has the best games that are exclusive, thay are also this gen bringing New IP's.

Cyrso

#17

Cyrso said:

No. PS4 is still less expensive and more powerful. And it's still selling out.

No need to burn a few early adaptors by discounting it so quickly already.

WCamicase

#19

WCamicase said:

You still need Live to play the game right? So that's 60$ or so per year
Around the same price I have plus which also gives me free games every month LOL
I don't really remember though, did MS also adopt the same strategy of plus for XBox? First I read it was only up to the release of the new console but I have this vague idea I read they would keep doing that, might be my imagination LOL

Reverend_Skeeve

#20

Reverend_Skeeve said:

It's smart, indeed and it smacks a little of desperation, but I agree that Sony should just sit this one out.

Dropping the price too early might alienate some early adopters and, obviously, the PS4 is still constantly sold out, so there's really no need for a price cut...also, inFamous launches in March and will surely shift some decent numbers additionally, so...

Nonetheless, Sony has to stay sharp and up to its game...it's obvious that MS is willing to fight, which is good, because it hopefully prevents Sony to fall back to its former arrogance.

@WCamicase They did a half-hearted rip off of PS+ last year, I think. I'm a little out of the loop, but for some month, they offered really old, 4-5 year old games for Xbox Live Gold subscribers and some better ones after they got burned for offering such old games.

I think I read that MS plans to continue this on the X1 and 360 eventually, but the offer Sony has with PS+ blows Xbox Live out of the water.

Runkel

#21

Runkel said:

MS are banking a lot on Titanfall so you can't blame them for pulling the obvious move of slapping a themed bundle out there, especially during a time that Sony have mentioned there will still be a scarcity of their product in the UK. The price drop is enough incentive for those still teetering on the brink of a purchase but the fact of the matter is that you can easily stroll into any store at the moment and walk out with an Xbone ... the same can't be said about the PS4.

Until Sony are in a position where they're struggling to shift product they don't really need to do anything

Ginkgo

#22

Ginkgo said:

MS had to do something as they have lost the UK at this stage, which was their second biggest market in the 360 era. The Bundle will sell consoles, no question, just have to wait and see how many. I would like to see Sony respond and not give them any opportunity, but they possibly don't need to.

At the moment Titanfall is their one big hope. The game looks good, so it will be interesting. I still think that with no single player and it not being exclusive, it won't give them quite the up-sell they are hoping for.

Squiggle55

#23

Squiggle55 said:

Offering this bundle with Titanfall (the only thing they have going for their entire ecoystem at the moment) and lowering the price is a clever move while Sony is struggling to keep stock. But it's undeniable that it shows desperation, will frustrate early adopters, and should ultimately be seen as a "victory" by Sony making MS react this way. Hopefully people still just want to have the better console ;)

BornOfEvil

#24

BornOfEvil said:

Sony shouldn't respond, they're already selling systems faster than they can make them, I'd hate to see what would happen if the PS4 were more affordable.

Carl-G

#25

Carl-G said:

Microsoft gave away a free copy of FIFA14 with the Xbox ONE for the UK & that did nothing really + i don't even think it's the price thats holding it back to. MS just got lucky last-gen. SONY made it waaaaaaaaay to easy for them :D

N711

#27

N711 said:

I just wonder if 'informed' people outside UK who were thinking of getting an Xbone would just hold on waiting for a price drop too... Meanwhile in Japan...

Shaolin

#28

Shaolin said:

I think Sony needs to run its own race. Sony's priority at the moment is to maximise profit so if a response is appropriate they'll do what works best for them. The PS4 is as much of a threat to the Xbox One as the Xbox One is a threat to PS4 - i.e. no threat whatsoever. In fact Android is more of a threat to iOS but Tim Cook said that Apple don't need to sell more to win which is very true. Sony & Microsoft are working together like a nice little tag team at the moment. It's no mistake that both consoles were released at the same time and it would've taken a big effort to coordinate their efforts like that. Sony & Microsoft are trying to take up the entire conversation so that Amazon, Samsung or Apple will have to work much harder to gain gamers' mindspace. If either of these enter the living room console market then both Sony & Microsoft will need to make a bigger response. Although I suspect that the fanboys will have one hell of a headache because they seem to have barely enough intellect to deal with a 2-horse race lol! Imagine how confusing it will be for them in a 3 or 4 way competition.

DaftPlayStation

#29

DaftPlayStation said:

I agree with everyone here with the position sony is in right now they don't raelly need to do anything but i still think that with Titanfall and now this price drop i can see X1 outselling PS4 in the UK for a few weeks

Squiggle55

#30

Squiggle55 said:

@Shaolin Apple has the potential to make bigtime waves when they finally release a product marketed as a home console with a controller. Put that app store on a box with all the functionality of Apple TV, market it as a game console with a controller. Sell it for $100. I think there is dangerous potential there to get into a lot of homes. And devs will continue to go to where the install base is.

JaxonH

#31

JaxonH said:

Honestly, I don't care whether or not MS did this in response to Sony. Nor do I really care who sells more consoles, or which one is the "better" console.

In the end, even though I'm a loyal Sony fan, and even though I'm a loyal Nintendo fan, first and foremost I'm a loyal fan of gaming. And any gaming console that offers new games I can't play elsewhere, well, I'm interested, including Xbox One. Hope price drops soon in N.A. I'll be buying one when it hits $400. I'm not particularly fond of MS, but like I said, as long as they're bringing games to the table not available on Wii U or PS4, they've got my attention. I hate missing out on good games over brand loyalty. I have my preferences, obviously, but that doesn't mean I'm going to remain monogamous.

BlackSkullv3

#32

BlackSkullv3 said:

thinking about it now this bundle is more or less cheaper then the PS4 if we take a look at the hardware. if you purchased the cam+titan fall+ ps4 you would end up paying more then just this bundle, plus you would get a ***** cam x). but still im not yet interested in buying either console.

Shaolin

#33

Shaolin said:

@JaxonH That's the spirit! I consider people like you to be true PlayStation fans rather than some of the drivelling fools on here who can only string together something like "Da ps4 beatz da xbox".

@Squiggle55 Absolutely! If Apple releases something like you just described I think that's when we'll really see Sony & Microsoft step it up.

iSolipsistJudas

#34

iSolipsistJudas said:

This is pretty much a marketing scheme from Microsoft to boost sales. By doing this Microsoft is losing money for quantity sadly. But the PS4 is in good shape and does not need a price shift but if I can get a price shift for these games I'm all up for it ^_^

PSN: iSillyBoi Judas

BornOfEvil

#35

BornOfEvil said:

@Shaolin What are you talking about? How are Sony and Microsoft working together? What do Samsung, Apple and Amazon have to do with anything?

And the big question: Where did you get this idea that Sony and Microsoft don't have the intellect to deal with a 3 horse race (because Nintendo still counts)?

Jaz007

#36

Jaz007 said:

Reacting would be a bad idea as long as they are out of stock. I think they should only do something if MS starts gaining ground in them and they are aren't selling out.

Shaolin

#38

Shaolin said:

@BornOfEvil A lot of high ranking people in the tech industry believe that there was a soft, legal type of collaboration between Sony & Microsoft over the architecture and the timing of the consoles. If they were truly at each other's throats they would likely have completely different hardware architectures and they wouldn't be releasing at pretty much the exact time. Sammy even alluded to as much in his comments to a previous article where he effectively questioned the coincidence of it all. Furthermore, you don't see the type of litigation between them that you do with Apple, Google and Samsung. We all know that Sony willingly licences Bluray for the Xbox One. Interestingly enough Sony often celebrates the fact that ps4 is so much easier to develop for (as it rightly should) but did you know that's because Microsoft has licenced them Windows 7 based environments with the same Visual Studio software that is used to develop PC & Xbox games? For reference checkout: http://arstechnica.com/gaming/2013/03/sony-dives-deep-into-the-ps4s-hardware-power-controller-features-at-gdc/

This really is the profile of a cosy little money making tag team where they keep all the hype about them and not about anyone else's gaming products. Now, I know a lot of people won't want to hear that because they want to believe that there is some sort of war going on. Push Square and other media outlets thrive from and even sometimes encourage hostile sentiment because they generate clicks for their adverts and Sony & Microsoft gain because people declare their loyalty by spending money buying one or the other. Some people even spend money they don't have just to angrily take part in this silly non-existent war and that greatly saddens me.

To see why Samsung, Apple and Amazon were mentioned you might want to read Squiggle55's comment above as well as considering the rumours that Amazon and Samsung are working on games consoles. Also, with regards to your "big question" if you go back to my original post you'll see that I wasn't referring to the intellect of Sony & Microsoft but to that of their fanboys. If I thought I could pull off the humour I'd suggest that you were a perfect example of one given that you made that mistake. But I know it wouldn't come across as the light hearted humour I'd intend it to be so I won't :(

CanisWolfred

#39

CanisWolfred said:

Why isn't this price drop news on PureXbox?

Anyways, I'd be worried. It's like Sega cutting prices and giving away Sonic 2 at the same time. It could be big, at least in the UK. If it works there, maybe they'll consider doing something similar elsewhere?

Jaz007

#40

Jaz007 said:

@Shaolin Why would they collaborate with release dates? If one could release earlier than the other wouldn't that provide an advantage? The PS3 and Xbox 360 released around the same part of the year, but they were one year away. They PS4 and the One could easily release near each other without collaboration. And if they are working together, it's not too closely considering the whole DRM issue.

Shaolin

#41

Shaolin said:

@Jaz007 "Why would they collaborate with release dates?" That is an excellent question don't you think? Just look at how much more both consoles have been in the news due to the way their launches have been billed as some sort of Thrilla in Manila type boxing match. I actually think the WiiU is a great little console but together Sony & Microsoft have almost completely stolen the limelight away from Nintendo. People are poo pooing Xbox One's sales but I read with great interest last week that they're comfortably beating their Xbox 360 sales by the same stage as last time. You'd think that the unfortunate comparison with PS4 would be a bad thing for Xbox One but rather than hinder them it actually appears to be helping them. It was funny, a few days ago I read someone's forum comment where they suggested that Xbox One being a bit crappy has secured it a lot more mainstream press coverage than PS4 which was a real eye opener.

Launching a new console is a logistical nightmare so to align a lengthy development process together with all the marketing and retail preparation that's required is no easy feat I assure you. Sony & Microsoft aren't small businesses that have the benefit of being able to react quickly to market conditions, like most big companies they move really slowly and have to plan things out years in advance so to release so near to each other and with such similar architectures would have been anything but easy.

About the DRM issue, you have to wonder whether Microsoft thought that Sony was going to go ahead with it. Certainly everyone else seemed to think that they would up until the last minute especially as they'd just acquired a patent for it. But even that seems a little too conspiracy theory for my liking. To be honest Sony & Microsoft are always going to try to differentiate their products and DRM is just one area. The nature of their similarities and the whole timing of it is what's extremely striking.

Crimson_Ridley

#42

Crimson_Ridley said:

People are already going on about how the Titanfall bundle is now cheaper than PS4 bundles in many retailers. This is ridiculous, because it's only a quick ploy to push as many Xbox One consoles out in March, and then they'll fly back up to £400. The PS4 is still more powerful, still has a better line up of games, is getting major consumer and developer backing, continually proves that Sony won't repeat the same mistakes as last time, and seems to be the console to back this generation.

A price cut on the One will sting Sony, but even though the bee stings hard, it still dies. Xbox One is the bee.

Leave A Comment

Hold on there, you need to login to post a comment...