Mon. Sep 26th, 2022
Microsoft needs to offer customers a better deal to convince them to give up drives for good.
enlarge Microsoft needs to offer customers a better deal to convince them to give up drives for good.

[Update: Since Microsoft’s announcement, the Xbox One S All-Digital Edition has appeared for pre-order on retailers such as Amazon and Best Buy for the MSRP for $249.99. As outlined below, the more capable, disc-drive-equipped Xbox One S currently sells for the same price at those very retailers.]

Today’s announcement of the previously rumored “All-Digital Edition” of the Xbox One S is one of the few cases where a redesigned version of a home console is, from a feature perspective, strictly worse than the version that came before it. Removing the disc drive means that the All-Digital Edition won’t play any Blu-rays, DVDs, or old disc-based games you (or GameStop) have lying around, and you won’t be able to resell games with it. buy for it. The new box isn’t even any smaller, even though the bulky optical drive has been removed.

Microsoft plans to make up for this feature loss with a lower price for the new unit, which will retail for a suggested retail price of $249 beginning May 7. But that suggested price, while technically lower than the official suggested retail price of $299 for a 1TB Xbox One S bundle: it doesn’t seem likely that many people will be convinced to invest in the future of a disc-free console.

An old low price?

To understand why $249 is such an odd MSRP for this new, less capable Xbox One, we need to look back at the history of Xbox One pricing. After a higher-than-expected launch of $499 with a bundled Kinect, the Xbox One saw some relatively quick price cuts following the Kinect unbundling in 2014. By September 2016, players could already access the Xbox One ecosystem (with a bundled game). ) for the low, low price of $249.

Yes, that price was for the bulkier original Xbox One design, and it only included a 500GB hard drive. But that unit, available 32 months ago for $249, plays the same games as the “All-Digital” Xbox One announced today for the same MSRP. And the old unit can also play those games on disk.

Similar prices for the redesigned Xbox One S drive and all have not been hard to find in the past. The 500 GB version of the system was available in 2016 for just $249 in Black Friday bundles. After the holidays, Microsoft again offered an official 500GB, $249 Xbox One S bundle with Minecraft in March 2017. In the summer of 2017, you could spend $249 for a 500GB Xbox One S and also get a $50 gift card. By the end of that year, 500 GB systems were going for $189 during Black Friday closings.

Sure, the All-Digital Edition has twice as much hard drive space as those old deals. But almost a year ago, 1TB Xbox One S systems, with disc drives, were offered for $249 with a bundled game. And while $299 is the “official” MSRP for a 1TB Xbox One bundle these days, there’s been an extensive, de facto price drop to $249 at all major retailers (including Microsoft’s own stores) since late January.

Unlike a limited-time holiday sale, the several months spent at the lower $249 price point will make it difficult to convince customers (and retailers) to ever go back to the $299 “actual MSRP.” even harder when you consider that a 1TB Xbox One system with Battlefield V is currently available for $199 at Walmart or $219 at Amazon.

And yes, the All-Digital Edition comes with three downloadable games instead of the single disc that usually comes bundled with Xbox One S disc-drive units. But those games…Sea of ​​ThievesForza Horizon 3and Minecraft-are cheap legacy titles released one year, 2.5 years, and 4.5 years ago, respectively. All three digital games are also available for free through an Xbox Game Pass subscription. The bundles Microsoft is currently offering for the original Xbox One S, meanwhile, let customers choose from more recent (and more expensive) hits: The Division 2HymnFallout 76Forza Horizon 4Battlefield Vand NBA 2K19

The unenforceable suggested retail price

Historically, console makers have been able to maintain their MSRP with an iron fist. Companies like Sony, Nintendo and Microsoft would charge distributors and retailers a “minimum advertised price” and then refuse to provide future inventory to stores that dared to undercut competition.

By officially keeping the full-featured Xbox One S at a suggested retail price of $299, Microsoft can balance its slower-selling hardware with Sony, which has been selling 1TB PS4 bundles at that price for a while now. But with the actual retail price for an Xbox One being lower across the board, things get a little weird. Yesterday when I asked my Twitter followers what the suggested retail price for a 1TB Xbox One S bundle was nearly half the price of $249. That’s not scientific research or anything, but it’s not too surprising, considering $249 has been the price retailers have been asking for months. ask for the system.

That’s a perception problem that Jeff Gattis, GM of Microsoft Platform and Devices, told Ars he “was painfully aware.” But the official pricing of the newer system shows no such awareness. To really impress this new hardware, Microsoft should have launched it at a suggested retail price of $199, trumpeting console hardware breaking the $200 barrier (before retail prices) for the first time this generation. That could have been packaged with an official drop to $249 for the disc-drive version of the Xbox One S, securing a price that has been de facto standard among retailers for months.

As it stands, this kind of below MSRP pricing is probably what we’re going to see happening in retail anyway. Stores currently selling an Xbox One with a disc drive for $249 can’t really get away with selling the same console without a disc drive for the same price† If they do, they’ll soon find that customers are ignoring the All-Digital Edition until the price drops below Microsoft’s unsustainable suggested retail price.

We’ve long argued that there’s a market for an all-digital console that’s aggressively priced compared to the competition. But for those kinds of prices to work, Microsoft needs to stop pretending that the 1TB Xbox One S is still a $299 system in practice.

By akfire1

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