If some recent comments are anything to go by, it looks like Microsoft is coming into the next console generation with the intent to kill. On a recent mini-podcast hosted by industry pundit Geoff Keighley, both ex-Microsoft/EA executive Peter Moore and industry analyst Michael Pachter have stated that Microsoft is waiting for Sony to reveal the price of the PS5 before it does anything with the Series X. The company is gearing up to undercut Sony so it can get a leg up come release.
"From what I've seen, Sony's gonna have to charge $500 for the PS5, and Microsoft has a big balance sheet," Pachter said. "If they wanna cut the price by $100 – just price below [PS5] and subsidize the first 10 million [units] – they will. So, I think that they're waiting to have Sony blink first and then they'll reveal the price."
Moore agreed, adding, "Michael's right; what both companies are going through right now is [asking] 'how much can we afford to lose in the first 12 to 18 months?'...Microsoft right now - the stock price, the market cap - everything's flying for them. Does Satya [Nadella, Microsoft CEO] say, you know, 'this is our opportunity right now, as we did with Xbox 360, let's get in, let’s price it right?'"
This strategy seems eerily familiar to what Sony did with the PlayStation 4. While the company had always been targeting a $400 MSRP, Microsoft's announcement of the Xbox One costing $500 basically nailed its coffin shut. Sony just had to confirm the details and people were happy to spend less.
On the flip side, Microsoft's early lead during the Xbox 360 generation was that it hit the market a year before the competition. The PlayStation 3 would eventually outsell Microsoft's console, but not until roughly 2013. The cheaper price was just a byproduct of being on the market longer, not to mention Sony having a big head from its PS2 domination.
A situation like this just reminds me of E3 1995. Sony's Steve Race (US lead on bringing the console stateside) took to the stage shortly after Sega announced the price of the Saturn to undercut it by $100. He simply uttered, "299" and left. It was a glorious moment and I kind of want to see that happen here.