Microsoft to slash Xbox One by $50 until year's end

Starting November 2, Microsoft will offer a temporary $50 price cut across its Xbox One line in the US, until the end of the year. The company said in a statement the Xbox One model that comes with the Kinect motion camera accessory will retail for $449, down from $499. The standalone Xbox One without Kinect will sell for $349 from its earlier $399 price tag. Microsoft says other regions may have specific promotional offers, including possible price cuts; the company already implemented a similar strategy in the UK. The price drop will also affect the consoles Microsoft sells with games included in the box.

The changes mean the entry-level Xbox One will gain a new feature as well: A price nearly 13 percent lower than Sony's PlayStation 4. That video game console, which was released a week before the Xbox One last November, has outsold the Xbox One in the US for nine straight months this year, according to industry watcher NPD Group.

The price cut comes at a crucial time. Most of the video game industry's highest profile new games are released during this time, including installments from best selling franchises like the military-style shooting games Call of Duty and Battlefield, as well as action adventure titles like Assassin's Creed.

Microsoft's strategy is also different from Sony, its primary competitor. That company has hammered out deals to ensure PlayStation 4 owners can get specialized access to storylines and features for popular games, a strategy the company says makes its device more appealing.

Microsoft has focused more on appealing to consumers' wallets to gain ground. In March, the company gave away a popular new space-age shooting game called Titanfall for free when consumers bought a new Xbox One. In May, when Microsoft announced the Kinect-less Xbox One, it sweetened the deal for its Xbox Live Gold social network for gamers, giving gamers two free downloadable titles each month to those who ponied up $60. Sony's PlayStation Plus service gives its members a similar deal.

Xbox fans will likely celebrate the move, but investors may see it as a sign the Xbox is struggling. A price cut is a "last resort," according to Wedbush Securities analyst Michael Pachter.

:story: c|net