A hot potato: As we’ve learned from past and current generations of consoles, it’s not just a machine’s performance that makes it “better” than a rival. There are also elements such as games, reliability, and, of course, price. In the case of the PS5 and Xbox Series X, Microsoft’s offering could be the cheaper option, according to one analyst, as the company waits for Sony to reveal the PS5 price so it can undercut its rival.
The prediction comes from Wedbush Securities analyst Michael Pachter and ex-EA and Microsoft executive Peter Moore, who both appeared on Geoff Keighley’s Bonus Round podcast.
Pachter believes Microsoft is holding back from revealing the Xbox Series X’s price until Sony announces how much the PS5 will cost, at which point the Redmond firm will undercut it.
Back in February, we heard that Sony was having trouble deciding a price for the PS5 due to its expensive components. With some estimates putting the console’s MSRP as high as $550, the company will reportedly limit its supply at launch because of anticipated subdued demand compared to its predecessor.
Pachter believes Sony will price the PS5 at $500, which matches what we’ve heard before, and he thinks Microsoft will respond by announcing its machine will cost $400.
“From what I’ve seen, Sony’s gonna have to charge $500 for the PS5,” he said.
Pachter added that Microsoft will be willing to take a bigger loss on every Xbox Series X sold than Sony will on its PS5.
“Microsoft has a big balance sheet. 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,” he added. “Very likely $400.”
Moore agrees, saying that much of the decision on pricing will come down to how much each company can afford to lose. “Michael’s right; 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]?’”
There’s been no official word from either company on how much their respective consoles might cost. What we’ve seen so far has been a bit disappointing: there was the bone-dry Sony presentation, and the Xbox game trailers from Microsoft, which didn’t look like the mind-blowing experiences promised by Xbox boss Phil Spencer. Hopefully, we’ll get some solid pricing information soon enough.