: Cheaper Xbox One In 2014? Is This A Sign Of Panic?

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Cheaper Xbox One In 2014? Is This A Sign Of Panic?

Normally, you don't start talking about price drops until long after a system launches.

Of course, that's assuming the system in question is relatively successful. If it isn't, if the product isn't really hitting internal sales numbers, you're more likely to see a price cut.

If the product is struggling, though, it's usually the first thing the manufacturer wants to do: Look at the last few handhelds (3DS and Vita); Nintendo and Sony really had to give consumers a price drop so each portable would be more attractive. It worked out very well for the 3DS, but the Vita is still struggling. The point is that if a system is selling, if it's doing what the manufacturer expected, there's no reason to drop the price. They've got that price worked into long-term plans.

Now, we're hearing rumors that Microsoft will produce a cheaper Xbox One, and it'll happen this year. That isn't confirmed, obviously, but what if it's true? I'm willing to bet that MS never expected to be significantly behind the PlayStation 4 right out of the gate. Hell, I bet the company didn't think they'd almost immediately lose the lead they'd spent years building. We've got a long ways to go, of course, but many analysts are saying the Xbox One's biggest problem is its price.

We also see a new promotion that makes the new Xbox only $399. It seems clear that Microsoft is actively seeking ways to make the console more appealing, and first on the agenda is to lower the price. To me, this is an early sign of panic. And I don't mean "panic" in the most literal sense; it's not like the Xbox One is going to fail. Nobody believes that. But Microsoft thinking about price cuts a mere two months after their latest and greatest launches...? That's telling, I say.

1/31/2014 Ben Dutka

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Comments (53 posts)

Dell Taco
Friday, January 31, 2014 @ 10:34:58 PM
Reply

I think it's also to get back to the original vision they had with the DRM and family sharing plan.

Last edited by Dell Taco on 1/31/2014 10:35:26 PM

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FatherSun
Friday, January 31, 2014 @ 10:39:29 PM

You absolutely beat me to it. On PSX anyway.

This is exactly where this is going. Discs are the bane of Digital Distribution. Or is it the other way around?

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firesoul453
Saturday, February 01, 2014 @ 12:02:21 AM

Digital may be the future but its has a long way to go.

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WorldEndsWithMe
Friday, January 31, 2014 @ 10:44:15 PM
Reply

It could be Kinectless. I'm not so sure it won't fail. Stranger things have happened and MS will dump an uphill battle if it's too much of a money pit. I doubt that because they can afford to fail for a century but ya never know, it could be the next Dreamcast.

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SaiyanSempai
Friday, January 31, 2014 @ 10:58:19 PM

I doubt it would be kinectless, MS has repeatedly said they won't be doing that. Although, they have done 180's before...

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Killa Tequilla
Friday, January 31, 2014 @ 11:10:44 PM

If you had an Xbox One, you would understand how important the Kinect is for the system. It makes the system that much faster to navigate. I hope they don't remove the Kinect.

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SaiyanSempai
Friday, January 31, 2014 @ 11:17:27 PM

Yeah, I spent some time with the Xbone over the holidays and that Kinect is INTEGRAL to the UI. I can see why they would never remove it.

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infamousgodV2_0
Saturday, February 01, 2014 @ 6:58:48 AM

@ SaiyanSempai

I can see it now the new XBOX180. it well be slimer has no Kinect. but it always have to be online to play it.

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WorldEndsWithMe
Saturday, February 01, 2014 @ 10:30:08 AM

Wonder how they'll get the price down then.

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xnonsuchx
Saturday, February 01, 2014 @ 5:31:55 PM

They still said the Kinect doesn't HAVE to be connected, so regardless of whether it makes using the system easier, they still don't need to FORCE everyone to own it.

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Shauneepeak
Sunday, February 02, 2014 @ 2:03:55 AM

I keep hearing it is going to lack the Blu-ray drive and be pure digital. Which sounds plausible it would prob save close to $100 doubt the Kinect will go and a smaller HDD wouldn't effect cost to make that much it would also cause Microsoft to buy more HDDs which would actually cost more unless they have some smaller ones stashed away somewhere.

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Neo
Friday, January 31, 2014 @ 11:01:07 PM
Reply

@Ben:

You should probably correct that ;)

>>"Nintendo and Microsoft really had to give consumers a price drop so each portable would be more attractive"

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Beamboom
Saturday, February 01, 2014 @ 2:30:36 AM

Yeah hehe - I noticed the same. "Sony", not "Microsoft". :)

Last edited by Beamboom on 2/1/2014 2:30:58 AM

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rogers71
Saturday, February 01, 2014 @ 7:40:10 PM

I'm confused. What does Microsoft have to do with the Vita. That is what Ben was talking about in that statement. That is why he said Sony.

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Killa Tequilla
Friday, January 31, 2014 @ 11:09:18 PM
Reply

A price drop on the 3DS is what killed the PS Vita in my honest opinion. Happened right before the PS Vita launched too, I think. With great price drop comes great power.

Edit: I don't literally mean "killed", I'm just saying... It greatly affected its success.

Last edited by Killa Tequilla on 1/31/2014 11:15:57 PM

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FatherSun
Friday, January 31, 2014 @ 11:33:57 PM

Nintendo did an excellent job with turning the 3DS around. They undercut the Vitas price brute it even launched and secured a franchise that not only boosted their sales but disallowed the it from the competition. A title that flourished on a Sony machine to boot. Genius.

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Beamboom
Saturday, February 01, 2014 @ 2:33:12 AM

I don't think so. I think the sales difference between 3DS and the Vita is based on that the 3DS appeals to the remaining share of the market who don't have a smartphone yet: Children.
I believe that is the essential difference.

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Bonampak
Saturday, February 01, 2014 @ 2:41:25 PM

I dunno beamboom. I can't tell you how many times I've seen kids as small as toddlers playing on their parents phones or tablets. I've yet to see any kid that small, playing on a 3DS or Vita.

The reason why the 3DS took off was because of 3 main reasons:

1. A hefty price cut

2. Full support from Nintendo's top dev teams. Meaning that 3DS owners get the real deal when it comes to games. Not watered down versions of what they can get on consoles. Example: Mario Kart 7.

3. They secured nice exclusives for it, such as MonHun & Resident Evil (on handhelds).

Not saying kids didn't embrace the 3DS, they probably did, but reading some of the statistics behind that handheld, such as who bought the new Pokemon games, it turns out that the great majority of them were in their 20's.

Which was surprising to me since I always thought it was a kids franchise. But that was true back in the 90's. Those kids grew up and are now adults. Still playing Pokemon.

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Beamboom
Saturday, February 01, 2014 @ 4:56:41 PM

Well, when I say "children" I mean kids up until the age where (at least here in Norway) they get their own iOs/Android device: Sometime during their teen years.

If I as a parent with no particular preference towards Sony should go and buy a portable gaming machine to my kid, I'd choose the 3DS for sure. The whole machine just appears so much more child-friendly. Everything from the look of the machine itself to the marketing material, not to mention the selection of games just strikes you as the obvious choice for a kid.

The Vita is geared towards a more adult audience. And that is the big mistake, cause that audience has their focus elsewhere.

... with the exception of course of the Nintendo fans of yesteryear, as you too mention. I can believe they make out a certain share of the sold units.

Last edited by Beamboom on 2/1/2014 5:00:11 PM

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xnonsuchx
Saturday, February 01, 2014 @ 5:33:19 PM

Sony killed the Vita, not the 3DS.

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SaiyanSempai
Friday, January 31, 2014 @ 11:13:14 PM
Reply

I don't think anyone can say that selling over 3 million units in just a couple of months is a sign of a struggling system.

However, after a few days of playing with the Xbone at my brother's place over the holidays, I have to say that the PS4 is so much more intelligently put together in almost every aspect. MS needs to do something if they are going to compete with the minds at Sony.

Last edited by SaiyanSempai on 1/31/2014 11:18:54 PM

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Ben Dutka PSXE [Administrator]
Saturday, February 01, 2014 @ 12:41:11 AM

Didn't say it was struggling. I said that number might be well below internal expectations.

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SaiyanSempai
Saturday, February 01, 2014 @ 11:17:28 AM

Yeah, point taken.

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WorldEndsWithMe
Saturday, February 01, 2014 @ 11:43:05 AM

For MS I would call that struggling.

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FatherSun
Friday, January 31, 2014 @ 11:17:40 PM
Reply

MS is about to get very, if not extremely aggressive with the XBoxOne. Removing the physical media equation altogether versus removing what most were clamoring for in the Kinect is the first step in recovering their initial DReaM boX.

Desperate times. Desperate measures. But in Microsoft's defense, it is not that they are not selling great. Is just that they are not selling as much as the PS4. Its real early in the game. Sony locked it with specs and finesse. MS will counter with cash and advertising. I predict subsidized console in 2015.

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PC_Max
Friday, January 31, 2014 @ 11:56:46 PM
Reply

Well, I think everyone knew or knows there will be variations of the systems at some point. If not based on new tech it will be excluding certain hardware or features.

But really, I really do not get MS or big corporations in general. X1 by all accounts is doing well or okay. Maybe not as good as Sony or possibly not as good as the numbers MS projects, but why the panic?

To me it is probably soooo simple. Greed. They projected certain sales and profits, it was not met, so now they want to somehow make up those losses. And when I say losses I mean MS made some big profits for sure, just not as much as they wanted. To them, its a loss. You know, the mug/cup is half empty analogy.

Its humbling (really) to see the tables turned. The fanboys on both sides have reversed their chat roles and speaking like the other from last gen. Granted, I have not see as many stupid remarks coming from PS fanboys as we did last gen from the X360 ones. I might be... a little bias there.

Anyway, MS is only beginning with this kind of marketing. I would expect more soon. Big Hollywood stars will start appearing I am sure on the TV in commercials promoting a game and then the console its on.

Not really sure why this has to start to be a war, once again, but my hope is, being that I am a Sony system gamer and happy with each gen I have bought from Sony, that Sony does not sit on their laurels. Marketing is good, but I would like to see the great games they are know for produced for the PS4 in the next few years.

Let MS do what it thinks it has to, let Sony start making the games we all know and love to play. Dare I say it, their systems are made for gamers in mind. Well, with a few other features too. Bonus.

Keep playing!

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Knightzane
Saturday, February 01, 2014 @ 12:28:44 AM
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MS be losing footing so they getting worried. All there is to it.

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LimitedVertigo
Saturday, February 01, 2014 @ 1:09:02 AM
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I finally picked up a 360 (again) so I could enjoy Lost Odyssey. I doubt the XB1 will ever reduce in price enough to warrant a purchase.

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Ben Dutka PSXE [Administrator]
Saturday, February 01, 2014 @ 10:18:47 AM

If they made LO2 for the Xbox One, I might do it.

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coverton341
Saturday, February 01, 2014 @ 10:46:52 AM

Lost Odyssey II would be the only thing that could get me on board probably. I just don't see any other franchise that would make me say "hey, I gotta have one of these". I don't see them making another Odyssey game though so I don't see myself making room in my entertainment system.

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ethird1
Saturday, February 01, 2014 @ 1:45:26 AM
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You heard it hear first. Microsoft will bow out of the gaming console business after this console. :)

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kraygen
Saturday, February 01, 2014 @ 1:45:37 AM
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For me personally I have no interest regardless of the price or what they do to the hardware because every "exclusive" xone game I've seen will also be available on pc. If I have a pc then why buy it for the box?

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slow and smart
Saturday, February 01, 2014 @ 1:47:21 AM
Reply

very good from ms,this is a step in the right direction to be honest.
But there are more problems for ms,what about the fact multiplatf.games are better on the ps4?also by then they are 1/2 or even 1 year behind by then if they present a cheaper xboxone .PS4 is THE gamingconsole in the media and in the crowd.
There is 1 thing that can bring the xboxone at top:the games,but also there i expect more from sony then from ms

Last edited by slow and smart on 2/1/2014 1:51:37 AM

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___________
Saturday, February 01, 2014 @ 2:30:48 AM
Reply

releasing redesigned systems is always the best way to reinvigorate sales in a product.
whether its removing the optical drive and offering a 1TB HDD, or changing other designs.
in a ideal world with ideal net connections id be great to have a diskless drive, most of the noise created by the new systems is because of that, not to mention the bulk.
id be nice to be able to run everything off your HDD and not have to constantly keep swapping discs.
but that just aint practical yet, most people are unable to download 50GB games every time theres a new game they want out!
one thing i HATE about telstra, they offer you less and charge you more!
for instance my new plan is 150 per month for 100m connection and 500GB download usage, optus on the other hand were offering UNLIMITED download usage, same speed, for only 120!
so, you get UNLIMITED downloads, and the same speed, for 30 bucks a month less, or 720 dollars less over the 24 month contract.
there starting to turn into $ony!
more $$$$$ for less content and quality!

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Dukemz_UK
Saturday, February 01, 2014 @ 3:32:22 AM

You're trolling against Sony again?
I can't believe u haven't been banned yet

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Gordo
Saturday, February 01, 2014 @ 5:54:45 AM

Telstra is rubbish. No joke there! There won't be a digital revolution in Australia for a few years.

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Snaaaake
Saturday, February 01, 2014 @ 5:43:12 AM
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Well you know what they say, desperate time calls for desperate measures.

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JackC8
Saturday, February 01, 2014 @ 7:28:09 AM
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Any time I hear an anonymously sourced rumor that sounds an awful lot like fanboy wishful thinking I tend to ignore it. I very much doubt they could re-engineer the thing overnight and come up with a new version that they could manufacture for $100 less. That's borderline absurd.

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Simcoe
Saturday, February 01, 2014 @ 8:03:03 AM

According to other sites, the source does work for MS and MS is actively trying to figure out who the source of the leak actually is!

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JackC8
Saturday, February 01, 2014 @ 8:10:00 AM

Yeah rumors piled on top of rumors. Pretty common these days.

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Ben Dutka PSXE [Administrator]
Saturday, February 01, 2014 @ 10:20:00 AM

It's not that hard to produce a console that's cheaper later in the year. Production costs will have fallen by then.

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coverton341
Saturday, February 01, 2014 @ 10:51:42 AM

I work in hardware development and I can assure you that even two months is enough time to find a component manufacturer to cut down the manufacturing cost of a single hardware unit by a few percent. That's just component-wise like reduced price capacitors and such. Now, you go with a cheaper manufacturing factory and remove a few things in the PCB design and you can cut a significant amount of cost pretty quickly out the door.

Honestly, it's not even that uncommon to do so and keep a product at the same price point to the consumer. When you first design a board you pump it up and make sure you have the very best resistors and caps and whatnot, show it off to your consumers, get it tested and approved, and then cut the heck out of it and leave the price alone so you have a higher return per unit.

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JackC8
Tuesday, February 04, 2014 @ 8:59:41 AM

asked if there was any truth to talk of a $399 Xbox One, [Microsoft's Aaron] Greenberg responded, "No, you cannot believe everything you read on the Internet."

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Simcoe
Saturday, February 01, 2014 @ 8:05:01 AM
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I wonder if this new optical drive-less system will be called the "XBOX ONE-half". ;-)

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ProfPlayStation
Saturday, February 01, 2014 @ 8:23:07 AM
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I'm willing to bet this is still fallout from E3 2013. Microsoft didn't for a moment expect that Sony would undercut them by 20%. Sony's conference was a rare watershed moment that will be reverberating throughout the industry for years to come. The best moment was the "HELL NO!!" sentiment expressed toward DRM restrictions, by the crowd reactions. I'm sure that woke a few people up, who had buried their heads too far up their corporate ass.

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Bio
Saturday, February 01, 2014 @ 9:34:43 AM
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Short answer - no, it's not a sign of panic. The Xbox One is selling just fine.

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WorldEndsWithMe
Saturday, February 01, 2014 @ 10:30:23 AM

That's what they said about the Wii U

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Ben Dutka PSXE [Administrator]
Saturday, February 01, 2014 @ 4:01:01 PM

Selling "fine" is subjective. In Microsoft's eyes (aka internal expectations), it might be well below "fine," as was the case with the 3DS. It topped sales charts and Nintendo certainly wasn't happy.

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glets86
Saturday, February 01, 2014 @ 3:31:18 PM
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Desperate moves by M$... HAHA!

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greg238
Saturday, February 01, 2014 @ 10:36:45 PM
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That js shows playstation rules silly Microsoft thinking that can keep up

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ChadWSmith
Sunday, February 02, 2014 @ 1:44:07 PM
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That's funny. A Playstation blog talking about how it's a "Sign of Panic" to lower the crazy price of a system soon after launch. How soon we forget the PS3 dropped $100 from it's ridiculous price inside of 8 months from launch. And within 1 year had upgraded hardware at $200 less than the original price.

The PS3 launched with a 60GB model at $599 in November, 2006 - in November, 2007 they had a 40GB model for $399 - and an 80GB for $499. This was the 5th! hardware or price change IN THE FIRST YEAR!!! THAT is panic, people.

(Source: http://vgsales.wikia.com/wiki/Price_cuts#PlayStation_3 )

Last edited by ChadWSmith on 2/2/2014 1:44:54 PM

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Underdog15
Monday, February 03, 2014 @ 7:47:35 AM

Except that releasing cheaper models and attempting to bring down cost was a plan of theirs well before the system released. Whether Sony then or MS now panicked or not is subjective.

The difference between the Sony then and the Microsoft now is twofold:

1) Microsoft is backpedaling. Sony merely stayed the course.

2) The XBOXone does not have the longevity that the complexity of the PS3 provided.

Last edited by Underdog15 on 2/3/2014 7:48:17 AM

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Ather
Sunday, February 02, 2014 @ 4:39:02 PM
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So wait. Charging more for a system, locking all it's features behind a $60 yearly Gold subscription, and originally making a system gamers were against doesn't sell well?

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