This article was updated on 9.6.2020 with further details on possible pricing strategies for next-gen gaming.
The thing about waiting this long to release the price of your new console means that the ball will inevitably get rolling in various places whether you want it to or not. And that’s why we’ve got promotional materials mentioning an Xbox Series S before it’s even announced, and why we might just have a leak of the Xbox Series X price from, of all places, Pringles. The company is holding a contest for a new Xbox Series X in South Africa, and a sharp Twitter user took a look at the fine print to find it includes both the number of consoles being given away and the estimated value of these consoles. There’s a lot in the air on this, but let’s take a look.
We’ve seen leaks of this nature before, with estimated value of a total prize pool being used to try to peg down price. But there were some more caveats in there, with the price of a controller and Halo Infinite not really accounted for properly, and with a very specific disclaimer that the price estimate was not final. This one is more specific and closer to the time that the price is meant to be final. There is, again, a disclaimer in there, based on the fact that the prize value could change before the product is released. As many have theorized, the prices on these consoles probably aren’t even final yet.
But with a little quick math, that would make the price of each individual Xbox Series X R13,500, which, according to Google, translates to $815. Don’t worry, we will not have an $815 console. This is likely not the final price either in terms of US dollars or South African Rand, because it doesn’t include taxes and that sort of thing. Critical Hit argues that because this translates to £611, it could be pointing towards something like a £599 price in the UK, and possibly similar in terms of US dollars. Again, we’re being purposefully vague here, because taxes and other variations in international pricing means we’re never going to be looking at 1:1 either in terms of currency conversion or simple numbers.
It’s a little circuitous! Taken in a more general way that doesn’t involve punching numbers into a calculator, this also just sort of prepares us for a higher number than we’ve been expecting. As a rule, people have been looking at $499 as a low end and $599 as a high end for these things. $599 would be a lot, but Microsoft could more plausibly raise the price of its high-end console because it will also offer the lower-priced Series S.
While we don’t have an official number from Microsoft yet, we do know that the final price of the Xbox Series X will be influenced by a number of factors. Chief among these is the cost to build the thing, which people have previously estimated as somewhere between $460-$520. This would mean that a $499 console would sell for a loss once you factor in marketing, shipping and other logistics, and that a $599 console would either sell for a smaller loss or eke out a profit. Considering Microsoft’s heavy influence on subscriptions and services for the future of its game business, it might not be quite as concerned about making a profit off the hardware this time around.
The other major factor, however, is the price of the PS5. Microsoft isn’t pricing this thing in a vacuum, and nobody has forgotten the sting of defeat after the PS4 came in $100 under the Xbox One. This is the essence of the game of “price chicken” that the two companies are playing: each one wants to know what the other one will do in order to have a better shot at matching or undercutting them, and so neither wants to go first. It’s even possible that neither company has committed to a final price because they’re both waiting for the other one to announce.
In the meantime, one company appears to have arrived at a kind of next-gen pricing scheme: Nvidia, which has priced its Series X and PS5-competing 3070 graphics card at $499. Which, if either or both consoles come in at $599, starts to look even better than it does now.
We’ll see what happens…this month, probably? We’re long past the point where I had expected to see the price and release dates for these machines, so everything is just sort of a mystery now. Both of these consoles will likely sell out on pre-orders regardless, which gives the companies an uncommon degree of flexibility. In order to open those up, however, they do need to tell us what the consoles cost.