Pricing Project Scorpio

Project Scorpio - What Dilema Microsoft Faces In Pricing

E3 2017 is just around the corner, and will finally get to learn more about Project Scorpio. It's been almost one year since its first presentation, when, I still recall, rumors had been around for few weeks - I read an interesting report on Polygon, claiming two new Xbox models were in the making - and we even thought Microsoft was ready to lead the way with Sony pretty behind in the development of more PS4 SKUs.

Since then, the Japanese platform holder has unleashed two new PS4 models - the slimmer and thicker PS4, and the powered up PS4 Pro -, while Microsoft has released Xbox One S. Something more than a simple Xbox One Slim since it's featuring a 4K Blu-ray drive together with a slightly faster CPU. The second Xbox One models that rumors and leaks were all about was of course Project Scorpio, and E3 2016 gave an unexpected confirmation to all that.

Pricing Project Scorpio

The Redmond console maker was indeed developing a more powerful Xbox One, something that, before PS4 Pro was announced and marketed, was freaking anyone out since we were used to simple slim models making slight changes to the design of the console, not to their performances. So, Scorpio is now coming to a world of gaming which has probably already digested the concept of more powerful, mid-gen consoles, even though it might need more stable and easier to detect improvements upon base models.

But is this all going to have an impact when it comes to its pricing?

Pricing has proved to be an important factor, if not the most important factor when marketing a console. Even though its lineup was pretty sparse until 3-4 years after the launch, PS4 has basically dominated so far because of its $399 price tag at day one, where it was $100 less expensive than Xbox One. A similar scenario could repeat later this year when Microsoft risks being launching a much more expensive platform than PS4 Pro.

Sony's strategy with the PS4 mid-gen upgrade was brilliant. They got as high as possible in terms of specs without having any impact on the price tag, which was exactly the same PS4 was attached with back in 2013. Of course, that $399 price tag came with lots of compromises and few exceptions aside PS4 Pro is always offering upscaled 4K games, but does the general public know about that? Does it really care?

What they care about is that they're getting "the most powerful console" on the market right now at a very affordable price. 4K can wait, or better -- native 4K can wait. And that's the point with Sony's strategy: a new PS4/PlayStation to be released in around one year from now, which is set to be labelled the true 4K PS experience. That'll be two years after PS4 Pro launch, which allowed the Japanese company to be the first out there with a mid-gen, upgraded platform.

Microsoft decided instead to fight PS4 Slim/PS4 Pro with just Xbox One S, which you can't definitely call mid-gen console even though, as said, it isn't a normal slim model either, and then ship the most powerful console they could build in that timeframe. The immediate pro is you really have much fewer compromises when it comes to delivering the 4K gaming experience to your public, and that's important -- if you manage to properly communicate this message to the players.

The con is simply the higher price you'll be required to demand for your new console. More powerful components - we're talking about a 6 teraflop GPU - mean more expensive products. It's clear that Xbox One was overpriced when it released four years ago at $499 (especially because of Kinect, but this isn't the sole reason), so Microsoft can think to be working in that range with Project Scorpio.

People's perception for a new console is not more than $399, thanks to both the PS4 and Nintendo Switch launches, so you need to stay as close as possible to it. After PS4 Pro's announcement, I was pretty optimistic about Microsoft managing to come with the same price, also because not doing that would be yet another suicidal operation. Now that we approach E3 2017, part of that optimism is gone.

Phil Spencer keeps repeating this is going to be a "premium" hardware, but also that it'll be in the same range of other consoles at their respective launches. So, don't expect $599/699 price tags, because the highest priced this gen was Xbox One at $499, but also don't put too much hope on the likes of $399. PS4 Pro shipped at $399, but that isn't a "premium" console in Microsoft's philosophy since Project Scorpio is the only platform out that capable of delivering "true 4K". My only doubt is Xbox One S's starting price at $299 was meant to pave the way to an only $100 pricier console, but that wasn't a proper mid-gen platform, again.

So, if Microsoft really doesn't try to shock the world of gaming, and Spencer's previous statements weren't just a way to deceive the competitor and fans until his information and decisions were finalized (which I don't rule out), $499 is going to be the price of Project Scorpio. $449 could be a good compromise and a signal of the will to help gamers make this expense (the surplus in comparison with PS4 Pro's $399 would be divided into 50% gamers and 50% Microsoft), $399 would be a miracle.

At this point, all we can do is wait and see if they really manage to surprise on June 11. E3 2017 is just around the corner...

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