When it comes to both the PS5 price and the Xbox Series X price, it looks like that Microsoft will try to undercut Sony according to Michael Pachter, a long time industry analyst under the employ of Wedbrush Securities. Speaking on Geoff Keighley’s Bonus Round YouTube show, Pachter suggests that the Xbox Series X will undercut PlayStation 5 by coming in at a sub $500 price point – absorbing a massive loss in the process which is something that, even in the current economic climate, the Redmond based tech giant is well equipped to handle without passing the cost onto the consumer.
Speaking on Bonus Round to Keighley, Pachter said “Microsoft has a big balance sheet. 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.”
Current Liverpool FC boss and former EA and Xbox executive Peter Moore agreed with Pachter’s assertion, stating ““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.”
Of course, the notion that economically that Sony would be stuck between a rock and hard place when it comes to the PlayStation 5 price is hardly a new one. In December last year we posited that because Sony, like Microsoft, will be manufacturing an extremely high-end console, it will have to either pass that cost onto the customer, or use other elements of the PlayStation eco-system (such as PlayStation Plus and PlayStation Now) to offset the hit to revenue.
Microsoft, in comparison, has arguably spent longer firming up other parts of its Xbox ecosystem to take such a monetary hit. With Xbox GamePass now doing record numbers and Microsoft’s still massive war-chest of funds to fall back on, it’s going to be interesting what Sony decides to do as the holiday 2020 release window for both next generation consoles draws ever closer.
Source: Geoff Keighley (Bonus Round), YouTube.