Xbox One at $499: “the price is too high”, says economist

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Xbox One will cost $499 / £429 at launch in November, but the cost of entry is too high, economist and author Rafi Mohammed has cautioned. He has stressed that a low console cost would result in more players investing in Xbox One games in a new interview.


Mohammed has worked as a pricing analyst for some 21 years and is author of a book called The Art of Pricing. If there’s one thing he appears to know, it’s how to price a product successfully.

Speaking with Bloomberg TV, Mohammed said of Xbox One, “You want to get that console in consumers’ hands, and then where you really make the money is off of the games.

“So it was really surprising that they charged such a premium, especially when they had a lot of negatives…like the very restrictive DRM, which they did retract from. One of the key things is that they really listened to their consumers and they did backtrack and they reduced the price, but I still think the price is too high. So it’s still a $100 premium.”

Despite the $499 asking price, Microsoft’s Don Mattrick has recently suggested that Xbox One over-delivers on value, and offers thousands of dollars worth of content and features. We’re still not sure what ‘over-delivering on value’ means exactly.

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Related Forum: Xbox Forum

Source: http://www.vg247.com/2013/06/24/xbox-one-at-499-the-price-is-too-high-says-economist/

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"Xbox One at $499: “the price is too high”, says economist" :: Login/Create an Account :: 221 comments

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BooleanPosted:

MicroSonyPC
Katsumi
Busselton
Wavelength The price really isn't too high. People are acting like 500$ is a lot of money.


It is a lot of money, but it isn't for those stupid little 10-13 year old kids who don't have a job and need there parents to buy it for them, i hate those spoiled little kids :@ I can make $500 in maybe 2 weeks with my schedule at work.


The $500 dollars also needs to be spent on rent, food bills, taxes etc.


That $6 a month you're spending on TTG Gold could also be spent on rent, food bills, taxes etc.

I can tell you've never had to pay any of those in your life though.


Yes I agree with you MicroSonyPC. I'm 14 and I don't have a job. I wouldn't even think of asking my mom to buy this for me. I got to the age when I realized how much you got to work for money. For parents it's not like they get "Birthday Money" or "Graduation Money", they don't get a Christmas where someone buys them gifts. They have to work for there money. A lot of that money is spent on their children, supporting them making sure they are healthy and stay that way. Where I live in Massachusetts minimum wage is $8. That's decent money. Until you go to buy food and it's like 4 something for a gallon of milk. Well, there goes more then half of what you made and hour working. I got off topic here, but what I am saying is $500 is a lot of money to be spending on something like a video game console. In mass you would have to work 62 and a half hours to make that money.

I-DA-KINGPosted:

How do some people think its too high?

A console made 8 years ago is still, $299

WoobiePosted:

Damn right it is, not everyone has that kind of money to blow.

MorfPosted:

All of these profits will come together and help Microsoft develop and improve the Xbox Live service, it tends to be that the more money put into a project the better the outcome.

MicroSonyPCPosted:

Katsumi
Busselton
Wavelength The price really isn't too high. People are acting like 500$ is a lot of money.


It is a lot of money, but it isn't for those stupid little 10-13 year old kids who don't have a job and need there parents to buy it for them, i hate those spoiled little kids :@ I can make $500 in maybe 2 weeks with my schedule at work.


The $500 dollars also needs to be spent on rent, food bills, taxes etc.


That $6 a month you're spending on TTG Gold could also be spent on rent, food bills, taxes etc.

I can tell you've never had to pay any of those in your life though.

Jono_EvzPosted:

It is expensive but in the long run it will be cheaper for those willing to wait

AustraliansPosted:

ThatGTR $499 thats a very high price for something thats going to do the same as the last console


What? It's gonna be so different to the last console on so many levels? New controller, new improved dashboard and servers, live TV and so on. Unless you have the new Xbox One than you may make that bias statement

RuinsPosted:

i dont even want the kinect... in fact i hate kinect

KatsumiPosted:

aViRaLNiNjA It's all about the money for Microsoft.


It's all about the money for most companies.

SjooqvistPosted:

You americans complaining about the price is to high 499 bucks in sweden there i live there is 3493 crowns there is no money, but in sweden because we have **** high taxes on import stuff so our price on the xbox one is 4500 crowns = 650 dollars that is high pricing my friends


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