The 399 USD/EUR price tag is great news, but games are still important

May 14, 2014 23:19 GMT  ·  By

The new 399 USD/EUR price tag for the Xbox One that's just been confirmed by Microsoft will give the console an advantage over the PS4 in North America, although it's unlikely that the PS4 will be dethroned anytime soon in terms of global sales.

Microsoft and Sony both launched their new consoles back in September of last year but, while Sony aimed for a lower 399 USD/EUR price with the PS4, Microsoft added the new Kinect sensor and charged 499 USD/EUR for the Xbox One package.

This quickly led to a sales momentum for the PS4, which began moving millions of consoles, while Microsoft's Xbox One units were sitting on store shelves.

In order to remedy this, the company revealed that it was going to remove the Kinect from the bundle and sell the Xbox One for $399 or €399.

This change will allow the Xbox One to overtake the PS4 in its native North America market in 2015. However, it will still not be able to beat the PS4 on a global scale, at least according to IDC analyst Lewis Ward, who talked with GamesIndustry.

"This change will be enough to push the Xbox One installed base higher than PS4 in the U.S. and Canada in 2015 rather than 2016. It kind of reminds me of Microsoft's evolution on Windows and IE," he said.

"The initial design needs some serious help (i.e., last summer's DRM 'Xbox 180') and then improves to point of being a serious contender (this Kinect unbundling) and then vies for market share dominance (although I continue to believe PS4 will have the largest global installed base of any console at the end of 2016)."

Pricing will be important at least for the next stages of the console cycle but, ultimately, the games lineup will decide the victor, according to Tilting Point executive Jesse Divnich, who also shared his thoughts.

"Early in a console's cycle, pricing has shown to correlate with install base. Later in a cycle, the strength of the software library, digital offerings, and social influences tend to have a stronger weight in the consumer decision process."

"As we witnessed with the PlayStation 2 to PlayStation 3 transition, being the market incumbent doesn't always give you an advantage at the start of a new console generation. It's almost as if consumers hit the reset button at the start of every cycle and re-evaluate their gaming needs from a home console."

The lower-priced Xbox One will be available for purchase on June 9.