Will Sony respond to the permanent Xbox One price cut?

Thanks to an extended price cut, the Xbox One is gaining in on the PS4. Is it time for Sony to respond with their own price cut?

[Mechanism]

No. XBone did some good work in the US and UK over Christmas, but the PS4 has still been outselling the XBone globally.. Sony has the first half of the year wrapped up nicely with exclusives, and I even think NPD's will return back in Sony's favour.

An announcement at the next Playstation Experience is more likely, or even possibly E3.

The price drop isn't even permanent (marvellous journalism!), but I think it will become permanent once Sony put that nail in the coffin with a price drop.

[insomnium2]

Why would they? PS4 would be out of stock all the time if the price would be lower.

Another thing is the games. They are now finally starting to push some high profile games out in droves. How about seeing how the sales act when that happens before dropping the price?

If xbone starts to win or even out the sales globally AND if the new games don't do a damn thing to counter that then maybe it's time to drop the price. That's a whole lot of ifs in there. It would need a miracle for that to happen though. Many miracles in a row.

[Death]

I don't think the fear of being sold out is the issue. What is the point of selling at a loss or cutting into profits at this time if you are Sony? The bottom line is Sony really needs to make a profit with the Playstation. The companies health is the worst it has been in a very long time. The PS4 is helping change that and needs to continue contributing to the companies bottom line.

Look at Microsofts last quarterly results and you can see how the $50 price drop affected the division. Microsoft still had close to half a billion in profit, but that profit came at a cost of $1.5 billion more in revenue over the quarter before it. For Microsoft it's not an issue, but for Sony that would be very difficult to do and to this point they don't need to.

[XBLSkull]

Nope, they cannot afford to. Sony didn't make a penny last year, but they did manage to lose a figure in the billions.

[IGiveHugs2NakedWomen]

@"Will Sony respond to the permanent Xbox One price cut?"

They already did...

$399 PS4 with The Last Of Us Remastered

$399 PS4 choose a game: Destiny, Far Cry 4, Little Big Planet 3, or NBA 2k15.

No price drop required.

[OB1Biker]

Another misinformation article ... Anyway I think when the PS4 is really cheaper to make (which is more and more likely) there's no reason why they wouldn't cut the price. Sounds fair enough to me.

[ABizzel1]

No they have no need to. The PS4 still sold well in the US and UK despite the XBO price drop. Now sales are neck and neck after the holiday rush has ended (like I said it would), but Sony has some big exclusive for the next few months, so they're going to keep their $400 price and maximize profit.

They'll have a price cut this holiday when it's needed to keep momentum strong, but that's not happening until September at the earliest.

[Army_of_Darkness]

PS4: Hey xbone! what's the hold up?? you like titan fall 9 miles behind me bro!!

Xbone: dude, I gained a little weight this Gen and feel pretty bulky right now, plus my vision is blurry sometimes and can't see any further than 900p... I'm feeling Forced'ta Kinect with a bike or something to at least catch up a bit...

ps4: sure, go ahead... use a bike if you really need too. LOL! I'll allow it for now ;-)

and so the race continues..

[donthate]

I see people keep throwing the worldwide number and how Sony is still in the lead, but what they fail to see is business isn't just about outselling the competition, but how it fares over time. Ideally you would increase sales every month, quarter or year taking market share from competition.

MS is doing just that, they are taking marketshare and significantly increasing sales period-over-period.

Sony will look at the US and UK market and have to respond if MS continues to put pressure i.e. that their sales continue to hold well. Lowering their prices in those region won't hurt them in other regions.

However, Sony cannot afford it as their mobile division did worse than expected and was a huge bet. Sony keep selling or divesting off their divisions, and the only one really making money is their gaming division. Loosing much needed profit to pad Sony's losses isn't an option so Sony might just let MS continue to take marketshare.

[SoapShoes]

It's not even selling more at a cheaper price now according to major online retailers. I think they'll drop it for holiday 2015, seems likely but not before that.

[Death]

<sigh>

Why do people still use Amazon.com to gauge console sales? Weren't people saying PS4 would top Xbox One in December based on Amazon ranking? I honestly have no clue who will come out on top in January. If I were to guess I would say PS4 since Microsoft did the temporary price hike at the beginning of the month. I wouldn't use retailer ranking to make the call though.

[SoapShoes]

Well I said, "according to major online retailers" which isn't just Amazon nor is it implying overall sells. It means just what it says I agree it could go either way though.

[kneon]

@Death

Amazon has always been right about the sales ranking for consoles. It accurately shows the XB1 on top for December so I don't know what you're talking about.

http://www.amazon.com/gp/be...

And now it shows the PS4 ahead of the XB1 for January

http://www.amazon.com/gp/be...

PS4 #8, XB1 #18

[GribbleGrunger]

Perhaps we'll know soon:

http://i.imgur.com/D7F0oYb....

[MasterCornholio]

Hmm I wonder what they will announce there?

[WeAreLegion]

I'm willing to be a +1.

[xabmol]

Oooohhhh....

OPEN BAR!!!!

[Bathyj]

"Xbox One is gaining in on the PS4"

Stopped reading right there.

[VforVideogames]

Yes Sony has to lower the price or else Xbox its gonna take over US and UK sooner than latter (has anybody seen how close Xbox is to take over?) and may be Japan. The rest of the world its not that important.

[mkis007]

At the current rate of ps4 gaining a 1.2 million lead in the us every January - October and then losing 500-700,000 in Nov and Dec, Xbox 1 will still never catch up :)

Question answered :)

The rest of the world is responsible for over half the world wide sales...

The japan part is just silly.

[DarkOcelet]

Its unknown whether the price cut is permanent or not and Sony has nothing to worry about as long as its on the lead and have many exclusives in the upcoming months.

[Death]

I agree to a degree. Sony needs to focus on Sony and the companies overall health. As long as PS4 sales are doing well there is no reason to reduce profitability. The only thing they need to be concerned with is how much marketshare will be lost due to Xbox One sales which have been on the rise in North America and the UK. This could have a long term impact if left unchecked.

All data present and historical points towards Sony having the sales advantage globally. I don't see any reason for Sony to be worried the Xbox will outsell them worldwide. Currently the PS4 is priced $100 less than the higher end Xbox One and $50 more than the lower end SKU's. It's not a bad place to be and sales show this.

[DarkOcelet]

It seems also people are forgetting that the price cut is not everywhere. Middle East has no Xone price cut at all while the PS4 is more likely to have a price cut in certain store offers. So PS4 have a tremendous edge here too.

[DanielGearSolid]

They haven't yet, so i assume no

[Malice-Flare]

if sales slow down, they'll cut the price. bundling TLOU permanently can be considered a price cut...

[lemoncake]

Ps4 is still selling well and Sony need all the money they can get, until that changes don't expect any price cut.

[Zool 08]

Sony will cut the price when they're ready to do so, maybe at some point next year.

[MasterCornholio]

With games.

:)

Thats how.

[Genuine-User]

not while they're on top in every single region.

[strangeaeon]

If Sony cut the price they would be supply constrained, plus they are already outselling the X1 nearly 2-1 world wide.

[lameguy]

Not yet. They simply don't have to as of Feb 2015, and at $400, is still a fantastic deal for the performance and incoming game catalog.

[blackblades]

People still talking about that, if they were to respond to it they would of did it by now.

[Nucler100]

Sony can just keep doing what they're doing. I'm not underestimating Microsoft, but they still have a little more work to do if they want to catch up. I still think it's possible.

[Jaqen_Hghar]

Well they didn't even finish behind Xbox for ONE week in 2014 (something not even Wii ever accomplished for a full calender year) even the week OF the price cut during the holidays or all the weeks where you could get 2 games and an Xbone for $330. So no they don't need to respond because

1)Xbox division (not MS as a whole) can't afford to keep selling at a $100 loss (at least)

2) they were #1 even with all the desperation by the competition.

Sony will most likely cut price in the Fall if their past consoles are any indication and with several internal revisions since launch and the very design of the console being conducive to quick reductions in manufacturing costs (basic parts that have all gotten smaller and less expensive since launch) they can easily afford to cut $50 off then and still make a good profit on each console. Not to mention with more volume being sold the cost to produce reduces faster. Just look at Amazon's top sellers of 2015 to see where Xbox has slipped to now that the usual initial price cut surge is gone. The snowball effect will be strong this year with market share.

Think about this too. Sony just sold almost as many PS4s in its first calendar year as PS3 did in its PEAK calendar year (2011). They sold 13.6m (roughly cause it's from VGchartz). PS3's best year was 14.7m after it was $250 and had a slim and much more software and lots more friends getting it. Now think of this. PS3's first full year on the market (2007) it sold just shy of 8m. PS3 at a similar part of its lifecycle was at just 9.1m. That means PS4 is doing over TWICE as well as PS3 and you think Sony is gonna drop price? MS dropped because up until November 360 was tracking ahead of Xbone so they needed to before they wanted to. Demand had fallen off. PS4 demand is only increasing as it becomes the next gen console for most groups of people and in most parts of the world. It still leads in Xbox's strongest territory, a territory Xbox dominated with almost twice as many sales last gen (just to stay even worldwide). It has retaken its weekly lead with no price cut in that region. This gen is done the only question is when will PS4 catch 3DS and then how high can it go and how long will Xbone live?

For those of you thinking "yeah but PS3 got off to a terrible start" it did for a Sony console but lest we forget that it still did better than 360 launch aligned and of course still went on to sell 86m and counting. So just imagine how high PS4 can climb with much more of the HD market share and a much faster start while still having those traditional Playstation legs and 3rd or 4th year peak every Sony home console has enjoyed.

[Death]

Microsoft posted a $460 million profit in the division housing Xbox One for the quarter ending December 31st. This was on sales of $4 billion. To put this in perspective they had $480 million in profit on sales of $2.5 billion the quarter before. Surface is in the mix with the Xbox One in the division so you can pull close to $1 billion in sales from the last quarterly result along with what profit was made. I would imagine this is why they can afford to sell for $50 less. The "at least $100" you stated is sensationalism at best and not accurate.

[Jaqen_Hghar]

wrong. They would not have been selling at $400 if they didn't need to when demand had dropped off so much before the holidays. They want to win the US period. They know they aren't winning anywhere else and thus didn't even bother dropping the price. At least $100 was in reference to the AC bundle. That's at least $80 worth of game in that bundle. 330-80=$250. $350 was the price cut price so obviously $100 less than that. If they could always make up for the price with software then why don't they both just put the consoles at $200 and make up for it later? Oh that's right because it's not as simple as you're making it out to be and Xbox lost money this fiscal quarter with revenue down 20% according to what MS released.

[Death]

Wrong?
You may want to check your facts. http://www.microsoft.com/in...

The division housing Xbox had $4 billion in revenue for the quarter. It is up from $2.5 billion the quarter before but down $470 million from the same quarter a year ago which seen revenue of $4.47 billion. That's a difference in revenue of 12%. I would imagine the $50 price cut is partially responsible along with slowing 360 sales which Microsoft sited.

You can lose your equations on perceived value/losses. Microsoft cut the price $50 no matter which way you want to spin it. Both Microsoft and Sony had bundles for the Holiday. Unless you know what Microsoft paid for the Assassins Creed games, saying how much they "lost" is a moot point.

I'm not sure what your rant about selling for $200 is. The Xbox One did not sell for $200. Both manufacturers sell their consoles for what they can. Lowering the MSRP eats into revenue and profits. No one is arguing this. Microsoft stated they made $460 million in the division according to link I provided.

While I agree it is not simple, it's also not as complicated as you are making it with your assumed numbers.

[Spotie]

Good for the division housing Xbox One.

Unfortunately, Xbox rather obviously wasn't doing well enough in that category. If it were, there would have been no need for the massive cuts/bundling during the holidays, nor a need to return to that price point.

You can quote overall numbers all you want, but common damn sense says it's not doing well enough if they're doing another "promotional" price cut right after the holidays.

That means that, regardless of how the rest of the division is doing, XBOX can't afford to keep falling short of expectations. Investors aren't gonna just shut up and accept it; why should they?

[Dread]

Do not see why they would do this.

The PS4 is selling very well and the XB1 sales are not a threat at this point.

A price cut would increase sales no doubt, but it might also hurt Sony's bottom line.

[Shuckylad]

I hope sony does lower the price, and Microsoft lowers there's again too. Cheaper the consoles the better. There's a lot people in the world who can't afford to buy and enjoy these great machines. But back in the real world I don't see sony needing to drop the price. Yet.

[Leaguer]

"Xbox One is gaining in on the PS4" -- joke of the day

[Death]

To gain on the PS4 they would have to outsell it on a global sale. I don't think anyone honestly thinks that will happen including Microsoft.

On a regional scale the Xbox One is gaining ground in North America where it did indeed outsell the PS4 for the two biggest months of the year. If Microsoft can create momentum with this, there is a good chance they will reclaim North America. The same can be said of the UK.

[brew]

This article , lol

" Microsoft recently announced that the Xbox One has sold over 6.6 million units in the last quarter, outselling the PS4. "

James , ya dun goofed. Does your website even have editors and fact checkers?

And you should clarify when you're talking about NPD numbers or worldwide sales. This is one terrible article all around.

[WizzroSupreme]

I doubt it. Xbox outsold the PS4 in the holiday season alone, but the Playstation brand just has more momentum and will keep it for most of the generation. Sony also can't afford to sell its hardware at a loss, either – Microsoft can as a company printing money with windows as opposed to dealing with a movie studio fiasco.

Akin to what people claimed about what the Xbox One would do last year, Sony won't likely lower the price, but there will be incentives. More bundles and more PS Plus discounts, maybe even a Jak & Daxter announcement could be in the works. Then there's Microsoft's chances of doing something with Banjo Kazooie. There are a lot more options available than more price drops. This war's only getting started.

[GNCFLYER]

Sony doesn't care about MS 350 price, they only care about their own business model. It's funny when guys with names like xblskull actually do care about how much money sony made last year though.

Come on man.

[assdan]

I suspect the ps4 will drop it's price in 1 or 2 months.

[bunfighterii]

I think Sony will be focused on maintaining profitability of Playstation, and won't cut until their production and distribution costs lower enough to absorb it.