Microsoft to Slash Xbox One Price by $100 - Analyst Blog


The world's largest software maker Microsoft ( MSFT ) recently slashed the price of its game console, Xbox One, by $100.

The company stated that Xbox One console will now be available at $399 instead of $499. This represents a decrease of 20% from when the device was launched in Nov 2013. However, the cheaper version will not come with Kinect motion sensor for gesture and voice control.

The price cut marks the first significant discount by Microsoft since the software giant released the new console. This cut could be in response to its closest competitor, Sony Corp. ( SNE ), taking a lead in the game console market. According to recent data, Sony sold more than 7 million PlayStation 4 units globally, while Microsoft sold only 5 million Xbox One, since launch. The steep pricing of Xbox One may have discouraged casual gamers thus affecting Microsoft's gaming market share.

Microsoft has always been very competitive and in the current environment, where competitors like Sony are far ahead in the gaming console market, it is natural that Microsoft would take some aggressive step. The price cut could help Microsoft woo back gamers, compete more effectively against Sony's PlayStation 4 and thereby drive Xbox One demand.

Microsoft has made several efforts to make its gaming device more appealing. The company has been enabling the console with rich gaming features and new content. The company has been offering free copies of premier titles such as Titanfall on the purchase of Xbox One units. The console is an all-in-one entertainment device i.e. users can enjoy live TV from cable as well as a satellite set-top box through the console. All these features will help the device gain momentum in the near future.

Microsoft has a Zacks Rank #3 (Hold). Other stocks that have been performing well and are worth considering include Aspen Technology, Inc. ( AZPN ), Adobe Systems ( ADBE ) and Citrix Systems Inc. (CTXS). All these stocks sport a Zacks Rank #2 (Buy).

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.

This article appears in: Investing , Business , Stocks

Referenced Stocks: CTXS , ADBE , AZPN , MSFT , SNE

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