According to industry veterans Michael Pachter and Peter Moore, Microsoft are looking to undercut when it comes to the price of next-gen hardware. Speaking to Geoff Keighley on a mini-podcast hosted on Friday, the two shared their opinion that they believe Microsoft will be aggressive right out of the gate when pricing the Xbox Series X in an attempt to compete with Sony’s PS5.
Wedbush Securities analyst Michael Pachter stated that Microsoft are waiting patiently for Sony to make the first move when announcing the price of the PS5, before potentially offering the Xbox Series X for up to $100 cheaper. He believes that the high component price will drive up the price of both consoles, but Microsoft will be able to take a bigger hit.
Pachter stated that he reckons Sony will price the PS5 at around $500, but Microsoft can easily take the hit: “If [Microsoft] wanna cut the price by $100 – just price below [PS5] and subsidise the first 10 million [units] – they will. So, I think that they’re waiting to have Sony blink first and then they’ll reveal the price. Very likely $400.”
Former EA and Microsoft executive Peter Moore agreed with Pachter’s assessment, believing that both platforms are currently assessing how much they’re willing to lose in the short-term in order to achieve long-term success with their consoles.
Moore states: “Michael’s right; what both companies are going through right now is [asking] ‘how much can we afford to lose in the first 12 to 18 months?’ ‘what is our attach rate of software to hardware?’ ‘What are we willing to do in year one, two and three to hit 10 million [units]?’ Microsoft right now – the stock price, the market cap – everything’s flying for them. Does Satya [Nadella, Microsoft CEO] say, you know, ‘this is our opportunity right now, as we did with Xbox 360, let’s get in, let’s price it right’?”
As neither company has hinted at the final price of their consoles, Xbox head Phil Spencer has stated in the past that the plan for the Xbox Series X price is to “stay agile”, which matches the analysis on offer here. Regardless, we’ll find out more as we get closer to launch.
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