Economist Says Xbox One is Too Expensive

Economist Rafi Mohammed wants to see the Kinect made optional to help lower the Xbox One’s price

Among Sony’s victories at E3 (and Microsoft’s arguable mistakes) was the fact that Xbox One, priced at $499, was substantially more expensive than the PlayStation 4 which would sell for $399. Microsoft has since defended this price point, pointing to the inclusion of devices like the Kinect and the various services the new console will offer as being well worth the extra one hundred dollars. While Microsoft’s reversal of the Xbox One’s unpopular DRM has like made the console more tantalizing to consumers, there are still people who think that its price point may prove to be a blunder.

“I still think the price is too high,” said Rafi Mohammed, an economist and author of The Art of Pricing. “You want to get that console in consumers’ hands, and then where you really make the money is off of the games.” Mohhamed doesn’t see this happening at the console’s current $499 price point, at least not to the extent Microsoft may be hoping and with a competitor selling for less. “What they really should be doing to get consoles in consumer’s hands is to decrease that price and make the Kinect an accessory.”

With Microsoft currently pushing the Xbox One and Kinect as essential partners, the idea selling the Kinect as optional is likely something that won’t appeal to the company. That said, there are probably more than a few gamers who could do without the Kinect and, as Microsoft has already confirmed it can be turned off, it begs the question of whether or not it needs to be there in the first place. A cheaper, Kinect-less console in homes would probably be better for Microsoft than an expensive console gathering dust on store shelves. If the company doesn’t believe us, it can always ask Sony.

Source: Bloomberg