Xbox One Price Drop in UK: Did Microsoft Panic?

The PlayStation 4 has the early worldwide lead on the Xbox One, and Sony’s console is selling especially well in Europe.

Is this why Microsoft suddenly cut the price of their console in the UK region? As the company just announced, as of February 28, the Xbox One will retail for £399.99.

This cut comes only 94 days after the console was launched at the original price point of £429.99. Dropping a new console’s price so quickly is basically unheard of; as a frame of reference, Microsoft didn’t issue a price cut for the Xbox 360 until almost two years after it released. Even the PS3, which sold poorly out of the gate, didn’t get a price drop until 8 months after launch.

Xbox UK Marketing Director Harvey Eagle confirmed that there are currently no plans to cut the Xbox One price in any other territories, and he did remind us that the new system is their “fastest-selling ever console in the UK.” That being the case, many are assuming there’s only one reason for the price slash in that region: The PS4 is just kicking the Xbox One’s tail.

The PS4 just debuted in Japan last week, so Sony’s global lead will undoubtedly grow. Furthermore, the NPD Group’s results showed the PS4 was the best-selling console in the US in January, with Sony later saying their console had outsold the competition (namely, the Xbox One) by “nearly double.”

Microsoft probably didn’t expect this

After the 360 dominated the US throughout the previous generation, and basically tied the PS3 in the worldwide tally (both systems have sold approximately 88 million units to date), Microsoft likely didn’t expect to be this far behind in the new generation. It’s still early, of course, but not having the lead in a single major territory might prove baffling.

Personally, I’m not baffled in the slightest. One console is significantly more expensive than the other, and consumers don’t appreciate being forced to purchase a peripheral. I heard rumors that Sony was going to put the PlayStation Move in the PS4 box and charge $500, just like Microsoft is doing with Kinect and Xbox One. The decision to not do that proved to be a good one.

I also don’t believe that Microsoft isn’t considering price drops in other regions, including the US. I bet you’ll see one here before the holiday season.