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Xbox Series X Will Undercut PS5 On Price, According To Analyst

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Xbox Series X Will Undercut PS5 On Price, According To Analyst

We know plenty about both the PlayStation 5 and Xbox Series X at this point, but there's one crucial piece of information that we've yet to learn about either next-gen console: the price. Despite the fact that both machines are expected to arrive during the holiday 2020 period, we're still waiting to learn when and how much we need to start saving.

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As it turns out, there's a reason for that. It appears Microsoft and Sony are locked into a sort of game of financial chicken. Microsoft is reportedly waiting for Sony to announce the price of the PS5 so that it can undercut its rival and announce a cheaper price for the Xbox Series X.

At least, this is according to Wedbush Securities analyst Michael Pachter and former EA and Microsoft executive Peter Moore. Both are well-respected industry veterans who appeared on a Geoff Keighley-hosted podcast last week (via VG247), where they made their predictions about next-gen pricing.

The new PlayStation logo
The new PlayStation logo
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It was Pachter who claimed Microsoft is waiting on Sony to go first so it could announce a cheaper Xbox Series X. According to him, Microsoft could make its next-gen console as much as $100 cheaper than Sony's hardware. He referenced the fact that expensive components are reportedly driving the price of the PS5 up higher than expected, and argued that Microsoft can afford to shift units at a bigger loss than Sony.

"From what I've seen, Sony's gonna have to charge $500 for the PS5 and Microsoft has a big balance sheet," he explained. "If they 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."

Moore agreed with Pachter, and suggested that both companies are currently working out how much of a loss - if at all - they can afford to sell their consoles for. Remember that the Xbox One and PS4 sold at a loss too, with both companies making the money back through game sales and subscription services.

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Credit: Microsoft
Credit: Microsoft

"Michael's right," Moore said. "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," he continued. "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'?"

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For now, all we can really do is speculate on pricing and hope that Microsoft and Sony have something to share with us soon. Alternatively, this weird cold war on talking about the price will go on indrfinitely and neither console will ever see the light of day.

Featured Image Credit: Microsoft/Sony

Topics: PlayStation 5, PS5, Xbox Series X

Ewan Moore
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