MARCH 25, 2014 • Sharp-eyed gamers awoke to find a $50 price reduction on the Titanfall Xbox One bundle at major national retailers in the United States. Amazon.com Best Buy Co. Inc., Fry’s Electronics, Target Corp., and Wal-Mart Stores all advertised the bundle at $450. Soon after the Microsoft online store matched the price reduction. Prior to this week Costco Wholesale Corp. had the best deal on the package at $380. Surprisingly, GameStop was still displaying the Xbox One and Titanfall SKU at the regular $499 MSRP. On February 28 Microsoft Europe officially reduced the same bundle to £399 ($665) from £429 ($715), but U.S.-based representatives said at the time that was a U.K.-only promotion.
Impact: Microsoft is no stranger to unannounced price cuts at retail. Back in October 2012 it was the Xbox 360 that got an undercover $50 discount across its various SKUs. After a while Microsoft stepped up to say the reduction was a temporary promotion, and we expect much the same disclosure to happen with the Titanfall bundle. From our channel checks we don’t believe that this SKU is underselling and see the price cut as more of seizing the opportunity to ignite sales. With the arrival of Titanfall on the Xbox 360 pushed out to April, we can also see a scenario where Microsoft is attempting to get hardware and Titanfall unit numbers on Xbox One as high up as possible for the March retail recap due out in April. There is also the public relations issue of once the price is lowered in one major market, as with this same bundle in Great Britain, consumers clamor for equal treatment in other markets. This package is also doing very well in the U.K., having boosted Xbox One sales by 96% in the week after its March 14 release. With the PlayStation 4 in the unit sales lead, chipping away at Sony’s frontrunner status would be a welcome accomplishment for Microsoft in the U.S. By including Titanfall, which retails for $60, the Xbox One at $450 has arguably achieved price parity with the PS4.