OCT. 27, 2014 • The Xbox One is getting a $50 price reduction for the holidays in North America starting November 2. This is not an unusual promotional move by Microsoft Corp. as the company has done so previously during the holidays and during other times of the year. The difference is that Microsoft has a habit of not promoting the discounts in favor of letting its retail partners manage communicating with consumers. This time, however, the firm is right out in front announcing the price reduction. The Xbox One discount applies to all SKUs including the Special Edition Sunset Overdrive Bundle ($349), the Xbox One Assassin’s Creed Bundle ($349, and the Xbox One Limited Edition Call of Duty: Advanced Warfare Bundle ($449). The promotional price cut will end on Jan. 3. Microsoft said availability and timing outside the U.S. would vary, but did not disclose specifics of the promotion in other markets.
Impact: We never quite understood Microsoft’s past propensity for stealth price reductions. Lower pricing is a good story to tell and one that usually is worth promoting as widely as possible. Much better for the console maker to get fully behind the program than leave the impression that retailers might be taking the move of their own accord as a way to clear underperforming stock. No question that more Xbox Ones need to be sold, yet DFC does not see this price reduction as a move of desperation. It is more a case of getting behind the platform during the year’s most important sales quarter. Last week DFC Intelligence released new forecasts that anticipated a price drop that would help boost Xbox One sales. However, the PlayStation 4 is still forecasted to be the leading system. The Sunset Overdrive bundle is an important exclusive for the platform. The title from Insomniac Games is a frenetic and colorful shooter that doesn’t take itself too seriously. Those are virtues we used to see a lot more of in the past on consoles and believe Sunset Overdrive could be a big draw for the platform. Sunset Overdrive and $50 off are a great opening salvo to get consumer attention moving into the holidays. The game is already getting high-frequency television commercial coverage, and as awareness of the $50 price break spreads, that’s a really positive massage for Microsoft to tell.