Speaking as part of a live episode of Geoff Keighley's Bonus Round this week, Wedbush Securities analyst Michael Pachter suggested that Microsoft may undercut the price of the PlayStation 5 this holiday. According to the industry analyst, he thinks Sony will charge $500 for its next-gen console, giving its Redmond competitor the opportunity to take a big loss – and charge consumers less for the Xbox Series X.
“Microsoft has a big balance sheet,” he pointed out. “If they want to cut the price by $100 and subsidise the first 10 million, they will. So, I think they’re waiting to have Sony blink first, and then they’ll reveal the price and launch date. It’s going to be Holiday 2020, so very likely in November and very likely $400.”
Peter Moore, who’s a former Xbox and EA executive but the current boss of Liverpool FC, agreed: “Both companies are considering how much we can afford to lose in the first 12 to 18 months, [and how that is offset by] software attach rate and services revenue. From the perspective of each company, Microsoft right now… the stock price and market cap is flying for them. Does [boss] Satya Nadella say, ‘This is our opportunity’? Let’s dare Sony to come in at $500.”
With its Game Pass service, there’s a good chance that Xbox will already have a big plus over PlayStation, as all of the system’s first-party launch titles – including the upcoming Halo: Infinite – will be available as part of its subscription. It also technically has the more powerful hardware in terms of teraflops, although there are advantages to the PS5 in other areas, such as the speed of its SSD.
Nevertheless, this could prove a real headache for Sony – especially if rumours of a cheaper, alternative Xbox Series X model also turn out to be true. The Japanese giant has insinuated that it’s undecided on the PS5’s price right now, although reports have indicated that it’s an expensive platform to manufacture. It’ll be interesting to see how things shake out this holiday.