Posted in: Gaming

Xbox One: ‘The Art Of Pricing’ Author Says Console Is Too Expensive

Xbox One price may be too expensive, says 'The Art of Pricing' author

The author of “The Art of Pricing” says the price of the Xbox One is too high.

Back in the previous round of the console wars, Xbox 360 pretty much cleaned the mat as the PlayStation 3 launched at a ridiculous $600, nearly double that of Microsoft’s machine. Gamers on a budget sprung for the Xbox 360 and Nintendo’s Wii as the PS3 mostly sat on the shelf, waiting for someone with a higher income or loyalty to Sony to come along and grab it.

This round, Sony has the upper hand, not only because of the bonehead things Microsoft had insisted on until just last week, but because the PlayStation 4 is launching at a bill less than Xbox One. That’s just how it goes if you’re trying to sell a console to a public that for all intents and purposes isn’t taking sides for any reason other than a lower price tag. Rafi Mohammed, author of “The Art of Pricing,” understands this.

Rafi Mohammed states:

“You want to get that console in consumers’ hands, and then where you really make the money is off of the games. So it was really surprising that they charged such a premium, especially when they had a lot of negatives … like the very restrictive DRM, which they did retract from. One of the key things is that they really listened to their consumers and they did backtrack and they reduced the price, but I still think the price is too high. So it’s still a $100 premium.”

What the author of “The Art of Pricing” is saying can be related to the shaving razor industry. You sell the handles for cheap or give them away in the mail as part of a promotion, and then you make all of the money on the disposable razors you clip onto the handle.

Even though the Xbox One finally started doing what the consumer wanted, the price just isn’t competitive enough.

Imagine you’re in the store, and you don’t know anything about either console. The PlayStation 4 is $400, and the Xbox One is $500. Chances are, you’ll take the PS4 with an extra game or accessory. You’re still spending five bills, but you’re technically getting more.

What do you think of the author of “The Art of Pricing” saying that the Xbox One is too expensive? Is the higher price tag enough to deter you from buying Microsoft’s next generation console?

Articles And Offers From The Web

Comments

7 Responses to “Xbox One: ‘The Art Of Pricing’ Author Says Console Is Too Expensive”

  1. Anonymous

    I think there's very simple logic that can be used here in regards to this system being "too expensive". PS4 + PS EYE = $460. $40 shy of the XB1, but that $40 is going towards a MUCH more advanced piece of technology compared to the eye. Not to mention the most basic iPad (i know this is an exhausted point, but still seems relevant) starting at the XB1 price. In the competitive landscape it seems pretty aligned. If anything the question should really be if the Kinect should HAVE to be included, driving the price up or not. Then again having it included makes for a better all around experience as now developers can COUNT on people having it.

  2. Patric Engelkins

    Exactly what my response was going to be. The moms and dads that know nothing and walk into the store to buy a console may not understand why there is a $100 difference. However, the kid that sent them there to buy the console does know why. In my opinion the console itself is actually cheaper than the PS 4. The new Kinect would probably sell for $150 minimum separately which would make the console $350.

  3. Sheldon Prescott

    I'll finish reading this article when I get back from buying yet another iPhone. The new one is like $500 right? But regardless, I'd like if it maybe they dropped it down to $450.

  4. Stuart Halliday

    Does no one realise all new products are priced artificially high so companies can reclaim as much initial profit as soon as possible? It's how our Capitalist system works!
    In any case. Only idiots buy version #1 of anything new as well. As 3 months down the lane they bring out a new version with the production bugs taken out.

  5. Kris McConnell

    "as the PS3 mostly sat on the shelf, waiting for someone with a higher income or loyalty to Sony to come along and grab it."

    That's not even close to accurate. The PS3 was sold out and on backorder for months after launch. Demand still outstripped supply for quite awhile after that.