In Xbox One Price War with Sony PS4, Both Companies Could Lose Money

Xbox OneIn the fight for market share in the game console business, the key ingredient to success may be what it costs to make and market Microsoft Corp.'s (NASDAQ: MSFT) Xbox One and Sony Corp.'s (NYSE: SNE) PS4. And the winner may not win at all. Experts in the industry often remark that the move of gaming to tablets and smartphones eventually may completely eclipse the traditional game industry.

According to Reuters:

Sony Corp on Monday priced its latest PlayStation 4 console $100 lower than the new Xbox One by rival Microsoft Corp as competition for gamers' pockets intensifies ahead of the year-end holidays and gift-giving season.

Sony said it would sell the latest PlayStation model for $399 late in the year shortly after Microsoft announced a $499 price tag for its first new Xbox in eight years and said it would go on sale in the United States in November.

None of the traditional sources like iSuppli has offered a "virtual teardown" of either console.

If the cost to build either console is much above $400, Sony and Microsoft will be fighting for market share, and perhaps some level of revenue from the games that play on the boxes. However, that is not much of a future since the price pressure on consoles is general down as they age. Probably, the same is true as competition from outside the console market gains.


Filed under: 24/7 Wall St. Wire, Video Games Tagged: featured, MSFT, SNE

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