Impact: As with the PS4 we expected Microsoft Corp. would be upgrading the Xbox One with a 1TB drive. The latest DFC Intelligence reports have covered the rapid growth of digital delivery on console systems. With the progressive shift to digital game delivery and cloud content interaction the added storage space is necessary. The new model also gives the company the perfect reason to lock in the $349 on the 500GB version. From our perspective that MSRP was already locked in since the Xbox One is reliant on price reductions and software bundles to keep consumers buying the system. Now that $349 is official, we don’t see how Sony can avoid matching prices on its 1TB and 500GB PS4s. The only real question is whether Sony will announce its new SKU at E3 and when it will ship to retailers. Even so, Microsoft is not off the hook yet. Too many gamers are still grumbling about the same games not performing as well on the Xbox One compared to the PlayStation 4. Microsoft’s console is in need of a performance boost, an upgrade that preferably won’t cost the consumer extra. Two years on since launch and economies of scale plus engineering advancements should make such an increase in raw power possible without cost impediments. The reality is price parity with the PS4 won’t sell sufficient Xbox Ones alone. But a performance edge at the same price point can change the value dynamic.