Xbox One will see cheaper SKU this year - rumor

A senior publishing source has confirmed that Microsoft is definitely looking to bring down costs to match PS4

According to VG247, a cheaper version of the Xbox One should be hitting the market in 2014. The website received confirmation from a senior publishing source, but details are scarce and this should still be taken with a grain of salt.

Rumors about new models of the Xbox One started appearing this week on popular forum NeoGaf, and while those rumors mentioned an Xbox One without a Blu-ray drive and featuring a Bluetooth adaptor, the senior source could not address that speculation. While some of that information seems dubious, Kotaku has noted that Microsoft is actually taking legal action to find the individual who leaked the news. The fact that Microsoft is pursuing a legal route does make us think that at least some of it is true.

The original rumor pointed to a white version of the Xbox One shipping in October and a 1 TB version of the Xbox One in November. The idea is that a discless Xbox One would have a $399 price point allowing Microsoft to match Sony's PlayStation 4, which has taken a slight early lead in the next-gen console race.

Wedbush Securities analyst Michael Pachter slammed the rumor in his most recent note about Microsoft. "To my friends at Microsoft, and to all of my friends who would like to see Microsoft fail: If this rumor is true, it is one of the dumbest ideas of all time. It would alienate GameStop and other retailers, and it would demonstrate that Microsoft can afford to release a 1TB Xbox One at $399 with essentially the same production cost as the $499 model with a 500GB HDD and a Blu-ray drive. That would likely cause gamers to believe that the model with a Blu-ray drive is overpriced, or would cause them to believe that Microsoft is greedy. I have three words for this idea-dumb, dumb, dumb," he wrote in the email to investors.

"However, as I respect the people at Microsoft immensely, and think that they are far from dumb, I don't actually believe the rumor," he added.

If the rumor of a disc less Xbox One proves true, Pachter doesn't see it actually selling well. "Although a $399 Xbox One would make the console price competitive with the PS4, we are skeptical that the new model would be popular. In our view, of the two $399 options, the PS4 would be the more popular, as it would include a disc drive, giving the purchaser the option of trading in or selling his games when he chooses. In addition, a discless box prevents the gamer from playing the disc-based games he has already purchased, limits portability, and decreases his ability to use his PowerUp Rewards credits [at GameStop]. We note that as of November there were over 26 million domestic members in the program, and over 7 million international members, meaning that over 33 million gamers worldwide would likely prefer discs," he said.

"We concede that there are some gamers not involved in the program who would opt for a $399 discless Xbox One over a $399 PS4 or a $499 Xbox One with a Blu-ray drive. We estimate that this percentage of the gaming population is likely under five percent. More importantly, we think this product has the potential to create consumer backlash against Microsoft as being gamer unfriendly."

At the very least, some reduction in price by the end of 2014 for the standard Xbox One model seems reasonable, given that manufacturing efficiencies have been better this generation from the start.

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Latest comments (16)

Kevin Patterson musician 4 years ago
I knew waiting till the fall regarding the Xbox One would be a wise idea. I figured that whatever fall release they had would have custom models for it and that is looking to be the case.
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Jim Webb Executive Editor/Community Director, E-mpire Ltd. Co.4 years ago
No Blu-ray drive?

1. How in the world is that alone going to knock off $100.00 from the price?
2. All digital = bad for console.
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Greg Wilcox Creator, Destroy All Fanboys! 4 years ago
I find this rumor amusing to no end and Microsoft's response in going after the leak interesting if it only a "rumor". As usual, we'll see how this pans out when there's a new press event and whatever is rolled out gets rolled out.

An all digital console isn't the same as a good gaming PC or even a Steam Box, so let's not bring up the argument that it's going to be a "great" thing for those millions of players who still aren't ready for it. You can enforce digital evolution all day and night, but not the speed at which people who live in areas with crap connections get better ones, as it's still an issue in some areas large and small.

Too many service providers (in the US at least) screw people over with caps and bundles and other rate jiggering nonsense and with net neutrality getting killed off here, it's going to be a free for all when it comes to rates going UP for people who happen to want to download those large game files and have an always online connection.
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Show all comments (16)
Cale Barnett Animator 4 years ago
The elephant in the room here is obviously Kinect. Microsoft have done a pretty poor job convincing people that Kinect is essential enough to warrant an extra, non optional, $100 cost.

Either convince us, or take it out and release an entry-price model.
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Rick Lopez Illustrator, Graphic Designer 4 years ago
The problem is Kinect... I would have been happy witha Kinectless version. Cause honestly most games I enjoy dont require it and microsoft cant simply make all games kinect enabled because the nature of many games simply doesnt require motion control. I mean fighter within was a total bust compared to killer instinct which I really liked. I got the chance to play it before the Xbox was even released. And you gotta hand it to microsoft their controller is very comforatible. Anyway, alot of things sometimes come off as good ideas in a persons head and on paper, but in reality turn out to be just a dud. Honestly I can only see afew games using kinect and even fewer being any good. And so far the only games that have taken advantage of kinect are those just dance games and I also find kinect good for any fitness game. However Im not sure if a game like that is available for XB1.
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Paul Jace Merchandiser 4 years ago
I knew they were just rumors when they announced "Halo 2 Anniversary" as "Halo Anniversary 2". That just doesn't sound right. Obviously some of the stuff on that list is true, otherwise Microsoft wouldn't be so quick to bring out the lawyers.

The Titanfall themed console seems pretty logical as it's the XBox One's biggest exclusive so far and will no doubt sell out. l honestly could care less about the cheaper white system, especially if it doesn't have a disc drive. And on that note, Pachter once again got it right with this quote...
More importantly, we think this product has the potential to create consumer backlash against Microsoft as being gamer unfriendly."
If Microsoft learned anything last year it's that they should not be upsetting the massives. I think that a discless XBO this early in the gen will do enough to cause them to lose so much steam in the US that they may not be able to regain it at all until the next gen. A discless XBO system is something that shouldn't be launching until the next system(Xbox Two?) gets released, similiar to the near-featureless Wii Mini that Nintendo launched not long ago. I really hope that system is just a rumor because if it's true and Microsoft launches it they may face even worse backlash than they did last year. I seriously hope they learned their lesson.
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Yiannis Koumoutzelis Founder & Creative Director, Neriad Games4 years ago
Perhaps generating this rumour more hurts their sales than not. As we know console sales influence game production. I wonder what the person generating that rumour was trying to achieve. Why would MS cut the price of a perfectly fine selling console less than a year after launch? Why would this rumour come out less than 2 months after launch after seeing that sales of the two systems are about equal despite the media onslaught?

This is something that if circulated in media could seriously hurt sales. And that is a very serious reason why MS would seek a legal route!

Edited 1 times. Last edit by Yiannis Koumoutzelis on 1st February 2014 4:52am

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Morville O'Driscoll Blogger & Critic 4 years ago
Why would MS cut the price of a perfectly fine selling console less than a year after launch?
If your definition of "perfectly fine selling" is a bit fluid, then this wouldn't be unheard of: the N64 had a massive price-drop in the UK just 2 months after release. Then again, no matter how bad the sales are, you wouldn't expect a company to drop the price substantially after just a few months.
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Klaus Preisinger Freelance Writing 4 years ago
The difference in price between buying a 500GB drive and a 1GB drive is 5. That is obviously not an issue.

If Microsoft removed the Kinect, then it would essentially have released a lesser PS4. Because instantly the argument about the details of processing power being superior on the PS4 would have become the only argument. For this reason the Kinect has to stay.

At first glance, the removal of the disc drive seems gutsy, but whether or not it spoils relations with Gamestop depends on what MIcrosoft has to offer, or whether Microsoft even thinks they require Gamestop, or any used game trader. Remember, Microsoft wanted to axe them once before. Microsoft does not care whether there is a Gamestop in every mall selling Xbox or not. Microsoft cares about having any point of sale in every mall or not. iTunes gift card, Google Play gift card, Sony PSN card, Microsoft money.

The real elephant in the room for me is copy protection and ownership. Right now, both are essentially tied to the disc. This rumored Xbox puts the "always on, no game sharing" version seemingly back on track with an added incentive of $100, which might be a larger MS subsidy based on the assumption of less options to share games with friends, results in more money being spent. Honestly, whether you take that or not is your choice to make with your wallet, based on your local Internet infrastructure.
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Nick Wofford Hobbyist 4 years ago
According to the VG247 article, their senior analyst says that the current model would get dropped to $399 as well as the new model. So Pachter's assessment isn't quite right.
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Sam Spain Studying computer Science (Games Development), The University of Hull4 years ago
"If Microsoft removed the Kinect, then it would essentially have released a lesser PS4. Because instantly the argument about the details of processing power being superior on the PS4 would have become the only argument. For this reason the Kinect has to stay."

That's a bad reason to keep the Kinect because it sounds like you'd want them to keep the Kinect for the sake of it. The Xbox team should be making new arguments, with those being a lower price point and enough exclusives to make it worth it. I'll probably buy my console this summer. What I get depends on price and games. Isn't that what most people care about?
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Klaus Preisinger Freelance Writing 4 years ago
I do not want Microsoft to do anything. I just want to look at the ins and outs, trying to explain them.

We will probably see more articles in the future concerning themselves with 720p, 900p, or 1080p. Not all people reading those articles will care in the end, but some certainly will. Like it or not, but the Kinect is one of the unique selling points of the Xbox One. Some will care, some won't. Even if I might scruff at the Kinect because it does not suit my taste in games, I always got the strong impression Microsoft regarded the Kinect device as their entry ticket to a part of the market that can not be reached with a purist core games console such as the vanilla PS4. For that reason I am pretty sure, Microsoft do not want to cut off this limb.
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Alfonso Sexto Lead Tester, Ubisoft Germany4 years ago
"those rumors mentioned an Xbox One without a Blu-ray"
Drop. Kinect. NOW! It's a tumor sucking GPU power from the XOne
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Kevin Clark-Patterson Lecturer in Games Development, Lancaster and Morecambe College4 years ago
If they 'did' release a discless version the only way it would be remotely 'successful' is if they went full 'digital only' and sell games on the marketplace at a price that gamers wouldn't mind paying and not being able to trade. Say top end 35/$50?
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Nick Wofford Hobbyist 4 years ago
I'm assuming that's the idea. Then it would make sense.

As for the Kinect, it's in there for the non-gamers. We'll always see it as a failed gaming peripheral (in the usefulness sector, at least), but MS has switched to selling as a business/medical/navigation device now. A few games here or there for the kids, but that's it. It's a device that works much better as a non-gaming device, and it's in the X1 to catch the non-gamers.
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Craig Page El Presidente, Awesome Enterprises4 years ago
This could work if they also price it to take advantage of people who are bad at math. Rather than sell a no disc version for $399, sell it for $299 plus $10 a month for 36 months and also give them Xbox Live for "free" while they're paying it off.
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