Microsoft has recently announced the Xbox One X video game console, with the manufacturer pushing the new device strongly at the E3 trade show. This will be the most powerful machine of its type to ever be released, with the 6 tflop of power included meaning that it significantly outperforms the competing PlayStation 4 Pro, although Sony has also been linked with the release of a PlayStation 5.
But considering the powerful specs of the console, pricing was always likely to be challenging. From the moment that Microsoft indicated the potential power of this device, it was obvious that the Xbox One X price would be pretty hefty. So here ValueWalk examines the pricing of the device in the United States, Canada and the UK, along with some related issues.
Naturally the United States will be a key marketplace for Microsoft with the new console, and thus the price tag of the Xbox One X in the US has made the most headlines. This is also due to the fact that the figure for the machine in the US is around the rather neat $500, or $499 to be precise.
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Pushing a console out at this price point is almost unheard of, with both the PlayStation 4 Pro and Nintendo Switch retailing at around $399 in the United States currently. With both Sony and Nintendo having the potential to slash the price of their consoles ahead of the release of the Xbox One X, this means that Microsoft must deliver something truly outstanding in order to garner significant market share.
Yet despite the $500 price tag in the US, Microsoft has already confirmed that it is making absolutely no profit on each console sold. Xbox boss Phil Spencer was reluctant to confirm that the corporation is making a loss on every machine at the launch price figure, but this does seem entirely possible.
Spencer pointed out that games have always made money for console manufacturers rather than the hardware itself. “I don’t want to get into all the numbers, but in aggregate you should think about the hardware part of the console business is not the money-making part of the business. The money-making part is in selling games.”
Despite this argument, Microsoft will be looking for stronger software sales from day one.
The weakening position of sterling has had a negative impact on retail prices in the United Kingdom, which will be irritating for British consumers who often pay over the odds for consumer electronics anyway. So the price of the Xbox One X in the UK is rather eye-watering, with the console launching at £449 ($570) in Britain.
By comparison, the PlayStation 4 Pro can be purchased for £100 less than this in the UK, with the console available at £349 on Amazon.co.uk. and the most basic version of the Nintendo Switch is more affordable still, with Amazon stocking this at £279 in the UK.
Again, the price gulf between these three consoles means that Microsoft will have to deliver something truly outstanding, particularly as Sony can put the boot into the Xbox One X further still by slashing the price of the PS4 Pro. By the time that the Xbox One X hits the stores, we could even be looking at a £150 gap between the two consoles. So the Xbox One X price could certainly look hefty by this time.
Despite this troubling gulf, the Microsoft executive Mike Ybarra claimed that the Xbox One X would retail at $1,500 if it was a PC.
Speaking to TechRadar, Ybarra noted that the “console is fixed hardware, so we know exactly what GPU, CPU and memory is in that box.”
Ybarra went on to attempt to justify his comments, which have drawn derision in some quarters.
“We have extensions to DirectX specific for that, so that developers can call right to the hardware and know exactly how to get every ounce of power out of it. When you’re on PC there’s that abstraction layer. Even with the GPU manufacturer add-ons there’s still an abstraction layer there that pays a tax on performance. With fixed hardware on a console we can get every single ounce of that out and into a game’s hands.”
Finally, it has already been confirmed that the Xbox One X will launch in Canada on November 7th for $599 CAD. This $100 more than the PS4 Pro, while the recommended retail price for the Nintendo Switch is $399 CAD.
With the Xbox One X being nearly double the price of the Nintendo console – and it could be literally double the price by the time that the system hits the stores – the Xbox hierarchy has made some bold public statements in an attempt to ensure that the console ultimately sells.
“Xbox empowers game developers large and small to create different types of games for every type of player,” the aforementioned Spencer commented. “Not only do we have the biggest cross-platform blockbusters on our platform, we’ve also scoured the world to bring our fans unique content from creative artists that capture the imagination.”
Whether this turns out to be the case remains to be seen, but what can be said is that Microsoft has taken a big gamble with Xbox One X price.