Microsoft defends Xbox One $500 price point--"We're over-delivering value"

Xbox boss Don Mattrick says when compared to other modern products, $500 is not a "ridiculous" price point.

Microsoft's Xbox boss, Don Mattrick, has spoken out to defend the Xbox One's $500 price point, saying the company is in fact over-delivering value with the next-generation system.

"It's a lower number than some of the analysts had forecasted," Mattrick said on Bloomberg TV. "We're over-delivering value against other choices I think consumers can get. Any modern product these days you look at it [and] $499 isn't a ridiculous price point. We're delivering thousands of dollars of value to people, so I think they're going to love it when they use it."

Competitor Sony will offer its PlayStation 4 at $400 this holiday season, but Mattrick believes consumers will choose the Xbox One for its suite of exclusive services and applications like an improved Xbox Live, as well as Skype, Twitch TV, SmartGlass, and Kinect.

"We're really making the living room your center of fun for your family," Mattrick said.

Also in the interview, Mattrick refers to the new Xbox One Halo title as Halo 5. This game was announced during Microsoft's E3 briefing last week only as "Halo Xbox One."

Every Xbox One will include a Kinect 2.0 sensor, while PS4 gamers will need to pay $60 to purchase a PlayStation Eye camera.

Written By

Want the latest news about Quantum Break?

Quantum Break

Quantum Break

Discussion

9148 comments
Alex_09
Alex_09

Gamers always have been confused about the meaning of value...

"It cost 60 dollars so that's what it's worth!" .... Then they try to sell that product back to a gamestop a week later and are offered 10 bucks.

thingta42
thingta42

Again with this living room crap. What gamer spends his hard earned money on a 500$ games console not including games and other stuff, so that his little 5 year old can play his games all day in the comfort of the "Living Room"

I tell you now if i was to have my PS3 in the living room my parents would get pissed at me for spending too much time on it and whine that im hogging up the TV and make me play it in my bedroom.

Gamers just want a console that can just play games on. That's it. They are tying to make the Xbone into a Wii, Problem is, the wii is a family console and most households have that device in their living rooms due to the games. And that's why it worked! us othe gamers had the PS3/Xbox.

The Wii will continue to sell for years to come for the familily household that wants a family console. The Wii-U is The gamer version pretty much.

Emoboii93
Emoboii93

I refuse to buy the kinnect . If it means not buying a new xbox. Yeah i won't . give me an otpion to not get the kinnect and we'll talk. but i still wouldn't cuz the ps4 has better hardware and it still is 100$ more than the ps4.  And i can live without halo 5 microsoft. lol....

ApocaLeepse
ApocaLeepse

I didn't even ask for any of this! I just wanted to play games. At this point, I'd be spending a couple hundred more dollars on features that I am never, ever going to use!

zenstrata
zenstrata

Over delivering value?  Ok lets look at the list.

1 A camera and microphone bundle called Kinect which makes good games suck and pretty much ruins most of the experiences I may be looking for in a game console.  For proof just look at the games that have come out on kinect, and have been absolutely terrible - most of them. The franchise titles that were ruined - most notably Steel Battalion and the Star Wars kinect titles - the only thing it does well is dancing titles, and honestly, who is really interested in those?

2 Television options I will Never Use because I do not watch TV and have not for the last 18 years.

3 Internet options for stuff I don't use or have an account for like facebook, twitter, and all that other nonsense.

4 A complete Lack of one of the few things actually useful in multiplayer gaming - a basic headset, and lets not forget you force me to buy a proprietary version straight from you, instead of just plugging in my own.

5 And what about options that I might actually want as a gamer?  Like say the ability to buy and install my own hard drive to expand the system in a way that might actually benefit me?  Oh yes, you will have proprietary HD's available that are probably more than double the cost I would spend on my own.

6 an utterly useless smartglass connection - why would I want to balance a tablet on my lap and have to put down my controller, during a game, to pick up the tablet to do something I should have been able to accomplish with a simple button press on the traditional controller?  Not to mention I don't even own a smartphone or a tablet, so once again, this is utterly useless.

Where is the value again?  I think MS has lost it.  This is not a device aimed at gamers or gaming.  It is some sort of frankenstien monster - overcharging for a pile of 'features' that I don't need and will never use.  No thanks.

Scholar_Of_Time
Scholar_Of_Time

Let me get this straight Don, so your tellin' us to give you money for some crap we'll never use, to prevent us from doing what we always wanted to do with a "VIDEO GAMING CONSOLE" in the first place??..

Besides...with that kind of money, I can buy a PS4 AND a Videogame!!...

Pff!!...fend it for all I care, I'm still rootin' for Nintendo...

buriedanger225
buriedanger225

I'm a Sony fan boy through and through but i also hope MS does well because I'm going to own both anyways and I want them to both push the boundaries in gaming. With that being said, MS can come off being so arrogant, I really hope they can justify all these claims that have been made.

LOXO7
LOXO7

Thousands of dollars of value?  That camera must be expensive.  They could even add to their mythical value if they included free multi player and backwards compatibility. 

Nah.  Forget practical value.  Stick with the imagined kind.

MasterManiac772
MasterManiac772

Xbox One: Delivering you moar Haloz and Call-a-Dooty.

Some big announcement. So shocking.

DoxaAgent
DoxaAgent

Over-delivering on the bullshit more like.

jefferson1964
jefferson1964

wait and see, when enough folks have both and all the pro's and con's are out then I will buy until then I will enjoy my 360 and ps3

Darksider141
Darksider141

"We're delivering thousands of dollars of value to people" lol

Seventk
Seventk

Sorry.  I have no need to wave my hand and yell at my TV to do shit.  I also do not need the extra HDMI inputs when I have a receiver for my surround sound and other devices.  Taking out a $10 headset and giving me a $100 camera is not worth it.

Space_Paranoids
Space_Paranoids

'Mattrick believes consumers will choose the Xbox One for its suite of exclusive services and applications like an improved Xbox Live, as well as Skype, Twitch TV, SmartGlass, and Kinect.' ... No, I choose games.

Speranza318
Speranza318

Microsoft is truly a giant troll.  The specs in a PS4 and Xbox One are so similar hardware wise.  How is Sony able to charge $100 less?  When you compare $400 to $500 for almost the same hardware, you're not "over-delivering value".  You're failing at basic math.


Also, the eye is not $60 unless you're buying it from Microsoft and they overcharge you 20%


If I want to make my living room the center of attention, I can already just turn on my tv....and connect my PC tower to my tv if I needed.

whitexlotus
whitexlotus

''i come with chopstick and shove up mattrick's ass''(chinese accent)



JimmyJumpy
JimmyJumpy

I'm sticking with personal computers anyway, so...

Chimzard
Chimzard

Oh Micro$oft. I sincerely want to "Kinect" my foot to your face two times as much now. 

BLaverock
BLaverock

Love this article. I read it when I need a laugh. Microsoft is funny...

Meta_Dragon
Meta_Dragon

"We're over-delivering value"

Take that value, and shove it. Shove that Kinect while you're at it.

Elann2008
Elann2008

Xbox One:  "Over-promise. Under-deliver."

sonicare
sonicare

$500 isnt a ridiculous price point, but it's $100 more expensive than your competitor.  What we've seen in the past is that video game consumers tend to look more closely at price than value.  You'd think they would have learned from Sony's fiasco with the ps3.  Sometimes I wonder how supposedly smart people can miss the mark.

UrbanMessiah
UrbanMessiah

Silly, silly Mattrick....I never tire of the brazenly dumb things you say in interviews. -=)

zazzaro
zazzaro

The problem is the over delivering value that no one wants or need Unless you are a straight up couch potato that spends tons of hours on the couch watching TV and playing video games.

DamnILoveGames
DamnILoveGames

Regardless of whether you're 'over delivering value' or not, $500 is $500, and your competitor is still $100 cheaper.

Agent-M
Agent-M

[Microsoft Executive #1] "Guys how can we con - I mean convince these saps to fork over $500 for our Xbox when Sony's machine is whole $100 less?"


[Microsoft Executive #2] "Just add the word value in there somewhere.  If it works for McDonalds it'll work for us."


[Microsoft Executive #3] "HahaHa value...  Pfft, As long as these suckers don't figure out we added a whole bunch of useless features to hike the price up!  I'm fine with whatever gets these suckers to put more money in our bank accounts!"


[The entire board of Executives] "HAHAhahAHhAhahahahAHahahahAhahahahAH"

Snakepond1
Snakepond1

I must be rich because compared to my ipad, iphone, Xbox 360 elite and pc this thing is peanuts. 

gkoolaid
gkoolaid

LMAO if only I could get a youtube video of the Microsoft big wigs in there suits at a conference and the guy in charge is like "OMG don't they get it We're OVER- Delivering value." (and his voice cracks on the OVEr) Lol these statements sound like they came from kids who got beat up in school.

vissioner
vissioner

its all right saying its not over price for what you are getting but here in the uk we are getting half of a machine I know its based in America where they are going to get all theses things with new machine and like we allus  uk people do is wait till we get are half machine into a full machine hence sky sports live tv lol

Kismetic
Kismetic

"Overly-Delivering Value" sounds kind of douchey. (Sucky choice of words)

Batosai001
Batosai001

Why do I need twitter to play video games?

mjswooosh
mjswooosh

Leave it to some tone-deaf MS geek to come up with some totally out-of-touch corporate-speak phrase like "over-delivering value", whatever the fuck that means. lol

The bottom line is the One is priced $100 higher than the PS4 and it remains to be seen if gamers see actual value in the Kinect 2.0 or not. I for one, will never buy a One until MS offers a SKU without a Kinect at $349. Period.

MS did the right and smart thing by shit-canning the horrible anti-consumer DRM (for now) because they knew they were going to get destroyed in sales if they didn't. Reported pre-orders at all major retailers like Gamestop/Amazon/BestBuy was as much as 5:1 in favor of PS4 prior to the reversal. So, MS back-pedaled because they had to. But, they still have a big problem: the PS4 is significantly more powerful (fact) and $100 cheaper. And, in case anyone isn't paying attention to the news lately, US citizens don't take kindly to being spied on by corporations or the government. Regardless of MS's intentions, it's mind-bogglingly stupid to *require* a camera be purchased with every One given the current political climate and people's fears about being surveiled by "Big Brother". It just proves how tone-deaf MS continues to be.

Remember your history MS: Sony "over-delivered value" with PS3...and tried to force gamers to pay more for features (Blue-Ray) they didn't want to have to pay for at the time.  PS3's sales were terrible until Phil Harrison (ring any bells?) left and Sony offered a re-design and a price drop. And, keep in mind, this was in 2006 when the economy was still booming. In 2013 we are currently still in a global recession and people have LESS money to spend now than back then.

$500 is too much when your competitor is $400 for a more powerful console. That same $500 gets you a game and an extra controller with every PS4 purchase. "Over-delivering" doesn't matter.

kaiserdisco
kaiserdisco

"Hey you should really buy this for 500 dollars because we included all these features you already have on your computer or tv"

robertcain
robertcain

@thingta42 Microsoft knows very well that gaming makes millions every year, but that isn't enough for them. They want the millions to come in heaps and droves by targeting all forms of entertainment whilst alienating their fans who initially bought their systems mainly for gaming. They've never strayed too far from their primary focus of making money above all other things.

mjswooosh
mjswooosh

@thingta42 Yep. MS is trying to make non-gamers care about gaming consoles. The problem is, the only people who care about gaming consoles are GAMERS. Go figure. Convincing non-gamers to buy a $500 brick because it has voice control is a tough sell, especially when most middle class families already have a million and one devices in their households that do everything else the One does, only better/cheaper/more efficiently. Rokus/iPads/smart-phones/stereo receivers/etc...all pretty much fill every function of the One. I can't for the life of me figure out how MS thinks average consumer non-gamers are going to buy this thing when it costs $500. The sweet price for impulse buys in electronics is at least $200 cheaper, whether we are talking about consoles or blue ray/dvd players. Historical fact.

Hainesy74
Hainesy74

@zenstrata 

1. How do you know its going to be "terrible", have you used it?

2. It's an option, do you understand that?

3.See number 2

4.You can use the Kinect and none of us know how good that will be, who knows it might actually do the things they claim it will like noise cancellation. Plus they are working on an adapter so you can use your crusty old headset.

5.You can add any HDD that you want to boost storage.

6.Once again it's an option to use if you want to and have a Surface. I fail to see the downside on adding optional extras if they are not to the detriment of people who don't use them.


A lot of people seem to not realise that the original Kinect was a complete failure for one main reason, it was optional, and had a very small userbase. Who's going to develop a triple A title and then include Kinect integration when the userbase, therefore sales, are so small? With it being sold with every system, plus the fact that it's a lot more powerful, should result in much better quality titles.

ScouseLemon
ScouseLemon

@buriedanger225 A sensible comment for once. Good post buriedanger225. I too would like to see the boundaries of gaming pushed to the limits within console gaming. If both do well they will always be fighting to stay ahead of one another which can only mean good things for us gamers.

Higurashinoni
Higurashinoni

@Speranza318 I thought the hardware for PS4 was actually better? I might be wrong, but if that's so, that would be even more ridiculous.

BLaverock
BLaverock

@sonicare It's not just about the price anymore. Microsoft has made it personal with gamers by trying to impose such arrogant restrictions, blaming publishers even though Microsoft designed the X1 to function the way it does.

blueoasis
blueoasis

@UrbanMessiah Yeah. This guy has a serious case of foot in mouth disease. Something tells me his tenure at Xbox will be a short one.

mjswooosh
mjswooosh

@Snakepond1 The problem isn't necessarily the $500 price point by itself. The $500 price point does become a problem when your significantly more powerful competition is launching at the same time with a $400 price point.

Meta_Dragon
Meta_Dragon

@kaiserdisco Considering you need a cable box to go with the Xbox one anyway, i'd say the TV feature, at least for me, is useless.

cursealoud
cursealoud

@kaiserdisco Idiotic comment. I can say the same about your damn smart phone. "Why do I need games, music, camera, or web on my phone when I have a console, digital camera, ipod, and computer." See how stupid you sound

H0RSE
H0RSE

@kaiserdisco  

While you make a point, The point of including everything in one device, is so you don't need to use your TV or your PC to do those things. You can watch TV while skyping on the same device. You can play a game, record and edit playpack vid and upload it, all on the same device.  

This may not impress or sound meaningful to many, since all they wanted was an updated gaming console, the features are there, like it or not. many may see them as superfluous, but I'd wager many will also use them, and given time, some may think back and find it hard to imagine that consoles used to come without them.

mjswooosh
mjswooosh

@Hainesy74@zenstrata

Price point is everything when launching two nearly identical products at roughly the same time. The fact that the PS4 is significantly more powerful in terms of "real world game performance" (not theoretical like with the PS3 vs 360 discussion) is also a major issue. 

Ergo, the problem that MS has with the higher price point is they have to convince gamers the Kinect 2.0 gives them $100 more of value right out of the gate despite being a less powerful gaming console. With most gamers already having a negative view of Kinect 1.0 as a mostly useless, over-hyped peripheral that's not going to be an easy task. 

On a side note: The assertion that the Kinect 1.0 only failed because it was optional ignores the fact that the Kinect's functions were very spotty and implementing anything of actual use/value within most games is simply difficult to do. Devs are human and have limited IQs/time to learn new approaches with coding...as well as publishers breathing down their necks to produce the next sequel that guarantees a profit. There is a possibility that Kinect 2.0 being required may put enough units in households that pubs can justify taking it more seriously and perhaps put AAA $$$ towards a Kinect project or two. But, I wouldn't bet on it. The approach simply doesn't work well enough and has too many functioning variables to give most gamers a compelling experience. To put it bluntly: shooter and action gamers just don't want to get off the couch and jump around when gaming. So, the Kinect 2.0 is most likely going to be relegated to second tier development status yet again. On some level, most gamers sense this even if they don't understand all the economic/business factors underlying this reality. And that's why MS is most likely going to see sales falter at the higher price point relative to the PS4...and they'll have to offer a SKU at $399 without the Kinect. Book it.

mjswooosh
mjswooosh

@Higurashinoni @Speranza318 The specs on PS4 are verified by multiple sources to be significantly better in real world performance, not just theoretical like with the PS3 vs 360. This is because they use identical APIs/SDKs and the hardware is easy to extrapolate/predict performance.

mjswooosh
mjswooosh

@BLaverock@sonicareThis is exactly what I've been saying since all this went down. How the coneheads in Redmond missed these little factoids is beyond me. 

Price point is everything when launching two nearly identical products at roughly the same time. The fact that the PS4 is significantly more powerful in terms of "real world performance" (not theoretical like with the PS3 vs 360 discussion) is just icing on the cake. 

The problem that MS has with the higher price point is they have to convince gamers the Kinect 2.0 gives them $100 more of value right out of the gate. With most gamers already having a negative view of Kinect 1.0 as a mostly useless, over-hyped peripheral that's not going to be an easy task.

mjswooosh
mjswooosh

@cursealoud The point is that none of the features on the One are new and most are already replicated by other devices in most middle class households. Furthermore, the One is hyped as an "all in one" but I still need other devices to use it...so it's not really an "all in one", now is it? Finally, the $500 price point is a problem when your main competitor is launching a significantly more powerful console at the same time for $400. History is littered with the carcases of consoles that gamers felt were too expensive. There aren't enough people with low IQs like yourself who will buy this thing to make up for this fact.

mjswooosh
mjswooosh

What exactly can it do that I can't already do with my SmartTV (voice controls), Yamaha receiver (pass-thru), Roku (Netflix/Amazon/Hulu), iPad (Skype), etc....?

Cable service overlays? Seriously? I thought this was 2013. I guess MS thinks people like commercials. I prefer Netflix. And I can do that on Roku, a tiny, cheap device that sits almost invisibly in my entertainment center, uses almost zero electricity, and cost me only $75 from Costco for the top-end model. Why would I want to awkwardly Skype on my 65" Plasma from 15-20 feet away when I can Skype on my iPad or iPhone or Android phone or laptop up close and personal as it is meant to be used? All these other devices are portable as well, so I can skype from anywhere. Why do I need a huge device that looks like a DVR...and is hyped as an all-in-one...but doesn't actually function as a DVR? So, I will still need a DVR and/or cable/satellite box.... Errrr.... And why in the hell would I want to Skype WHILE gaming or watching TV? The last thing I want to do is carry on a Skype call while I'm trying to survive in Left 4 Dead or listen to my girlfriend about something while the "big game" is on.

As far as I can tell, the One offers exactly ONE feature that is kinda neato: voice control. And I can already do that on my SmartTV and generally speaking, it's more efficient to just push a button on a remote rather than wave my hands around like a spastic or talk to my entertainment center when I want it to do something (yes, I have a Kinect 1.0...which has been about as useful as a square wheel and gets the most use from my girlfriend playing Fruit Ninja on it once a week or so...).

Is voice-control "kinda cool"? Sure. Is it an actual selling point on a $500 device to most users who already have a dozen other devices which do everything else the One does better? Nope.

MS needs to sell this thing to GAMERS. No one else cares about Xboxes or Playstations. And I have a hunch they are going to learn this lesson in November/December.

PS

The in-game video/editing/uploading features you mentioned are available on the PS4 as well...and I do think those features look kind of cool on both consoles because, well, they have something to do with gaming...

mjswooosh
mjswooosh

@H0RSEI'm not insinuating anything. What I'm stating is fact: none of the features on the One are new or revolutionary or "system sellers". Most of its features are already replicated by other devices in most middle class households. Furthermore, the One is hyped as an "all in one" but I still need other devices to use its main "entertainment center" functions...so it's not really an "all in one", now is it? Finally, the $500 price point is a problem when your main competitor is launching a significantly more powerful console at the same time for $400. History is littered with the carcases of consoles that gamers felt were too expensive compared to the competition. MS has to give people (read: GAMERS) a reason to buy this thing for $100 more than the competition and so far I don't see what that reason is. Of course, only time will tell how this will work out...and we will see in Nov/Dec. But, if I were a betting man I'd say MS will be forced to offer a SKU fairly quickly without the Kinect because their sales are not going to keep up with the PS4.

Chimzard
Chimzard

@cursealoud I believe the whole point is, why would you need these functions when you already have the means to access them on other devices? Sure, as convenient as it may be to have them all in one slick little box, we already have the bloody ability to do these things in a more preferred manner. Do you really expect someone to pay £/$/500+ for something they already have? People want features that the Xbox One can do that their other devices can't, rather than receive more of the same. I'm not saying that the features are redundant or useless by any means, it's just that they're not very remarkable. Also, you could have gone about being more polite in your response, as that insult was unwarranted.

cursealoud
cursealoud

@mjswooosh Did you just mention 4 devices that X1 does in one device? Wow, you are really some kind of stupid aren't you? So tell me, what does the PS4 do that the PS3 can't do?

H0RSE
H0RSE

@mjswooosh  

You mention features your TV and receiver can do, as well as your roku, which shows you completely ignored what I said. The features of the X1 were implemented to make an all-in-one console, so people don't need to use a receiver or switch to their TV to access them. It's not so much that the X1 introduces entirely new technologies to consumers, it's that it takes already established ones, and puts them all in one device. Why would *you* want to skype while gaming? Who gives a shit? Are you insinuating that absolutley nobody will like and/or use this feature, simply because *you* do not? It's seems you took my post, and interpreted it as if it only applies to yourself - like the X1 was marketed to you personally...

Like I originally stated, many (apparently including yourself) may find the features of the X1 meaningless, and that's fine, because others unlike yourself, may not, so what *you* find "cool" or "useful" or not, really is besides the point, because *you* are not the only person the console is being marketed to. And I'm sure I'll get a response like, "well, no gamer is interested in this" or "no true gamer care about this," and that would be either an ignorant generalization, and/or a logical fallacy.

Regardless of the features X1 has or does not have, or the $500 price point, it really comes down to basic concepts when it's time to decide which console to buy. 

- controller

- online service

- games

- friends

these are the things I looked for, and why I decided on an X1. I hate the look, feel, and layout of the PS controller, PSN is lackluster compared to XBL, PS has absolutely no exclusives I am interested in (same for current gen) and my gaming friends are getting an X1. Much of the X1 features are extras that many likely don't care about, I get that, but they are still there whenever people want to try them out.