The battle for the price of PS5 and Xbox Series X is about more than just component prices.
Microsoft will be very aggressive at the start of the next-generation of console, and that could lead it to undercut Sony’s PS5 price, even if it means losing money initially.
At least, that’s according to Wedbush Securities analyst Michael Pachter, and former EA and Microsoft executive Peter Moore. Both industry veterans were guests on a mini-podcast hosted by Geoff Keighley on Friday.
Pachter suggested that Microsoft will be waiting for Sony to make the first move, before the company announces a cheaper Xbox Series X. The analyst says the console could be being up to $100 cheaper than PS5.
“From what I’ve seen, Sony’s gonna have to charge $500 for the PS5 and Microsoft has a big balance sheet,” said Pachter, referring to earlier reports that the advanced components of PS5 could end up driving its price up, perhaps a bit beyond what consumers expect.
This is also true for Xbox Series X, but the difference, according to Pachter, is that Microsoft can take a bigger hit on every console.
“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.”
Peter Moore was in agreement, pointing out that there’s more being considered than simple component prices. Moore believes that both platform holders are currently calculating how big of a hit they can take by subsidising PS5/Xbox Series X.
“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]?'” said Moore.
“Microsoft right now – the stock price, the market cap – everything’s flying for them,” he added. “Does Satya [Nadella, Microsoft CEO] say, you know, ‘this is our opportunity right now, as we did with Xbox 360, let’s get in, let’s price it right’?”
Of course, neither company has so much as hinted at what the price of their next-gen consoles is going to be. In Microsoft’s case, at least, there are reports that it’ll launch with two consoles, which could free it from having to price Xbox Series X competitively.
Update: Yer boy HipHopGamer interviewed Pachter and actually broke this news before the Keighley interview (skip to about 3:40).
You can also check out the full HipHopGamer interview.