Analyst: Xbox One X “Will Not Do Well”

/ 3 years ago

Analyst: Xbox One X "Will Not Do Well"

Following its protracted unveiling, which involved months of teasing, Microsoft finally unveiled its Xbox One hardware refresh at E3 2017. The Xbox One X – formerly known by the much cooler Project Scorpio codename – is a 4K, 6TFLOPS Xbox One upgrade. The console, set for release on 7th November, certainly excited many. Excitement for the console became tempered, though, by its inflated price: $499.99. One analyst in-particular, the infamous Michael Pachter, thinks the Xbox One X’s price will cause the console to bomb.

“Buy a Xbox One S and PS4 Slim For the Same Price”

Pachter, an analyst at Wedbush Securities, baulked at the $500 price point, and not for the first time. He claims that anything over $300 is too much for a game console. For the same money, consumers could get both an Xbox One S and a PS4 Slim, he says. Pachter told GamingBolt:

“I don’t think so at this price, I think it’s too expensive. And everything is relative obviously, and you always hear these false equivalencies about what things cost… so you’ll hear things like “Xbox One X is cheaper than a big screen TV”, but my big screen TV will be useful for 10 years or more, and when I am done with it, it’ll still find use in my guest bedroom.

So I think $500 is a lot, and I think we’ve been trained […] that $300 is the price point people are willing to pay. And Microsoft started this $400 price point with the Xbox 360, Sony of course made the mistake of pricing the PS3 at $600. PS4 […] quickly dropped to $300… I just think people are willing to pay $300 for a console, but not $500, $500 is way too much. And given that you frequently see Xbox One S and PS4 Slim discounted to $249, or at $299 with a good game bundled, the perceived price for both is $250, regardless of the sticker price.”

“Or, Buy a 4K TV Instead”

Pachter adds that slow 4K TV adoption will also impact Xbox One X sales. He explained:

“I know they are selling the appeal of 4K, but let’s be real, probably fewer than 10% of US households have a 4KTV, and certainly way less than that in any other developed country. So who is waiting for this? Next year, maybe around the end of 2017, we’ll probably be closer to 20% US households, and 10% for the rest of the world. And by the end of 2018, we’ll probably be at 35% and 20% respectively, and by 2019, we’ll probably be at 50% and 30%.

So yes, it’s a more relevant purchase down the line. [I]f I had only that money in my pocket, and I had to choose between an Xbox One X and a 4KTV, I would buy a 4K TV. So, they’re only appealing to people who have $1100, because they have to buy a TV as well. This is the same problem Oculus faced. I really think the Xbox One X will not do well.”

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