Does The Xbox One UK Price-Cut Spell Trouble For Microsoft?

Microsoft is a powerhouse — there’s no doubt about that. Its products can be found in nearly every home that isn’t some straw-roofed mudhut, and nearly every division of the company operates like a well-oiled money-printing machine. Smartly investing in creative product development, Microsoft and its partners have long been offering innovative solutions and technology to companies and consumers the world over, and though they’ve had their share of missteps (i.e., Zune), Microsoft has always maintained itself admirably in the face of popular trend shifts and generational advances.

So why is it that the Xbox One, successor to the console that dominated last-gen by offering superior third-party experiences, can’t manage to compete with Sony’s totally not-an-all-in-one-entertainment system? Well, the short answer is: simplicity. Sony hasn’t launched a crusade injecting its console into every avenue of entertainment. Instead, they’ve been silently offering a plethora of non-gaming options without forcing any of them a primary focus (not in marketing or user experience).

The long answer is a bit more complicated, and it involves retracing every one of Microsoft’s ridiculous blunders since the Xbox One’s horrendous announcement. That, however, wouldn’t be very fair. Microsoft has since cleaned the slate, lit a fire under their indie efforts and cut-loose the once-necessary motion controls (not to mention all the changes in management, operational staff and major acquisitions — such as Minecraft developer, Mojang).

xboxone commercial

Indeed, its misguided marketing campaigns (the company essentially tried to sell sports to hardcore gamers, and hardcore games to a casual market of Zumba fanatics and QVC enthusiasts) had a negative effect on initial sales, but a series of price reductions coupled with a fairly meaty library should have spelled triumph — not stagnation.

Recently, and in the wake of Destiny’s astounding success on PlayStation 4, Microsoft has decided to kick yet another dent in the Xbox One’s price in Europe — almost coinciding with upcoming blockbuster exclusives: Forza Horizon 2, Sunset Overdrive and Halo: The Master Chief Collection. As of today, the console is available for £329.99 across most major retailers. The new price point is a far stretch from the console’s initial £429.99 price tag, which was followed by a price-drop around Christmas, and the £349.99 kinect-less version that was released earlier this year.

Sadly, while this comes as great news to those interested in purchasing an Xbox One, it certainly spells trouble for Microsoft. The Xbox division, whose long-standing mismanagement has been bordering on destructive, hasn’t been earning the profit-per-console boasted about shortly after the console’s successful launch in November. Despite lower development costs per unit (in contrast with storefront prices), a lack of consumer demand has dampered Microsoft’s plans at commanding predicted numbers.

Sunset Overdrive Xbox One

Microsoft has since received its share of harsh-criticisms from multiple key-shareholders, with several members threatening to walk away from the company’s operations altogether. After all, the Xbox brand was never the profitable darling many fans believe it to be, and the vocal majority of said outspoken shareholders have been against Microsoft’s venture into gaming from the very beginning. However, the division’s recent losses (and countless pricey investments) are edging on staggering, and there’s hardly an end in sight — at least not a happy one.

Now, the Xbox One is no slouch in the power department. Although it doesn’t share PlayStation 4’s raw capacity, it twins its capabilities fitly. The console certainly doesn’t lack in exiting exclusives (including the recent Tomb Raider reboot sequel and Insomniac Games’ third-person cornucopia of crazy), and its seemingly detested entertainment additions are surprisingly, well, entertaining. Conclusion: it’s expensive to produce, and will remain so for quite some time. So with countless innovative projects underway and several steep hardware/software investments, what does this price-drop (and multiple previous price-drops) mean for the company?

Other than the deconstruction of the entire Xbox division? Nothing, I suppose. Industry chatter — which should often be taken with a shot of penicillin — suggests that Microsoft will hand over the reigns to another, more capable lead. While this is scarcely the Xbox division’s likeliest outcome, it’s far from an impossibility. At the end of the day, Microsoft is a business, and like any other shrewd business in the world its goal is to make money. And its countless investments in the Xbox brand haven’t been paying off — not yet, anyway. Fortunately, this is set to be the longest console cycle of them all, and Microsoft has all the time in the world to turn things around.

I know, I know, this all reads like another gloom-and-doom Xbox One article. The sad fact is that, like Sega and many others before it, Microsoft isn’t immune to failure in light of its previous successes. And if its string of defeats continues, there’s no telling whether there will be an Xbox Two (or whatever equally stupid name Microsoft’s marketing team chooses).