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Why $ 249 is an unsustainable price for the first all-digital Xbox



  Microsoft needs to give customers a better deal to convince them to give up discs for good.
Enlarge / Microsoft needs to give customers a better deal to convince them to give up discs for good.

The announcement of the previously rumored "All-Digital Edition" of the Xbox One S is one of the few instances when a redesigned version of a home console is, from a view of features, strictly worse than the version that came before it. Removing a disk drive means that All-Digital Edition can not play Blu-ray, DVD, or your old (or GameStop) disk-based games around, and will not let you resell anything games you can buy for it. The new box is not even smaller, even if the big optical drive is removed.

Microsoft wants to make up for the loss of features with lower price point for the new unit, which will sell for a $ 249 MSRP beginning May 7. But that suggested price point-while technically less than the official $ 299 MSRP for a 1

TB Xbox One S bundle-does not seem to convince many people to invest in future disc-free consoles.

An old low price?

In order to understand why $ 249 is such a strange MSRP for the new, less-able Xbox One, we have to look back at the Xbox One pricing history. After a higher than expected $ 499 launch in a Kinect bundle, Xbox One saw some relatively fast price reductions after the 2014 Kinect unbundling. By September 2016, players will affect the Xbox One ecosystem (with a bundle game) for low, low priced $ 249.

Yes, the price is for the original bulkier design of the Xbox One , and it includes only a 500GB hard drive. But that unit, available 32 months ago at $ 249, plays all the same games as today's "All-Digital" Xbox One announced for the same MSRP. And the old unit can play disc games, to boot.

Similar pricing for the redesigned Xbox One S-disc drive and everything-is not hard to find in the past. The 500GB system version is available for less than $ 249 on Black Friday bundles back in 2016. After the holidays, Microsoft offers an official 500GB, $ 249 Xbox One S bundle using Minecraft in March 2017. in the summer of 2017, you can spend $ 249 for a 500GB Xbox One S and get a $ 50 gift card, too. By the end of that year, the 500GB system will go to $ 189 during seats on Black Friday.

Sure, All-Digital Edition has two hard disk space like old deals. But the 1TB Xbox One S system, with a disc drive, was offered at $ 249 with a bundled game nearly a year ago. And although $ 299 the "official" MSRP for a 1TB Xbox One bundle these days, there was an extended, de facto price drop of $ 249 across all major retailers (including Microsoft's own store) since last January.

Unlike a temporary holiday sale, many months spent at a lower $ 249 price will be difficult to convince customers (and retailers) to return to the "actual MSRP" of $ 299. it becomes even more difficult to consider that a 1TB Xbox One system with Battlefield V is currently available for $ 199 from Walmart or $ 219 from Amazon.

And yes, the All-Digital Edition has three downloadable games instead of a single disc often made up of disc-drive Xbox One units. But those games – Sea of ​​Thieves Forza Horizon 3 and Minecraft – a low-priced legacy title released one year, 2.5 years, and 4.5 years have passed, respectively. All three digital games are available for free by Xbox Game Pass subscription, as well. Meanwhile, Microsoft bundles offer for the original Xbox One S, let customers choose from newer (and higher priced) hits: Division 2 Anthem The Fallout 76 Forza Horizon 4 Battlefield V and NBA 2K19 .

The unobtrusive MSRP

can enforce their MSRPs on a steel fist. Companies like Sony, Nintendo, and Microsoft will impose "lowest advertising" requirements to distributors and retailers, and then refuse to provide future stocks at any store that challenges the attempt to prevent competition .

In official compliance with the entire Xbox One S feature at a $ 299 MSRP, Microsoft gets to keep its slower-selling hardware similar to Sony, which sells 1TB PS4 bundles at the price for a while now. But at de facto retail prices for an Xbox One lower on the whole board, things get a bit different. Yesterday, when I asked my Twitter followers what the MSRP for a 1TB Xbox One S bundle, nearly half of them took the price of $ 249. That is not a scientific survey or anything else, but it's also not surprising, considering $ 249 is that retailers have been charged for the system for months.

That's an understanding problem that Microsoft Platform and Devices GM Jeff Gattis told Ars he was "knowingly." But the official pricing of the newer system does not show such awareness. For these new hardware to really affect, Microsoft should have launched it at a $ 199 MSRP, trumpeting console hardware that prevents the $ 200 barrier (before sales pricing) for the first time in this generation. That may be packaged with an official drop of $ 249 for the Xbox One S disc drive version, which locks prices that have become de facto standard for retailers for months now.

As it stands, this type of lower-MSRP pricing is likely what we'll see to happen in retail. Retail stores currently selling an Xbox One with a disc drive for $ 249 can not get away from selling the same console without a disc drive for the same price . If they do, they will soon see customers ignoring All-Digital Edition until the price drops below Microsoft's unsustainable MSRP.

We have long dispute that there is a market for an all-digital console that is aggressively priced compared to the competition. But for this kind of pricing to work, Microsoft should stop pretending that 1TB Xbox One S is still a system of $ 299.


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