What is Microsoft's strategy behind the Xbox One S?

[SWORDF1SH]

The launch of the Xbox One S as come and gone and with the PS4 Slim going the 'build it as cheap as we can' route, the Xbox One S is a decent upgrade from the Xbox One OG. But what is MS's thinking behind this?

On the face of it, it seems like the wrong strategy but delve a little deeper and MS have made this console for a few underlying reasons but will it pay off?

First let's take a look at the console at face value, it comes sporting 4k Netflix streaming, play UHDs, 7% hardware boost, better looking that the OG and inbuilt infra red blaster. Initially this seemed like the wrong route to take, Xbox One is struggling to sell well against the PS4 and the only way it can sell at the same rate as the PS4 is if the consoles sells for a lot cheaper. Even averaging at $50 cheaper, the Xbox One keeps losing ground in it's strongest region so it seems a little odd that they didn't go a similar route to the PS4 Slim and get the console selling for as little as they dare. Now they have a console that'll cost more than the PS4 Slim to make, Sony can probably sell the PS4 for $250 and make the same amount of profit per console as MS selling their console at $300. So now they are in a situation where the PS4 will be at least priced the same or $50 less when the Xbox One struggled to compete when the PS4 cost $50 more.

So what is the real reason behind the Xbox One S?

I think there's a few reasons, to increase the value on the console and to combat the Neo. The Xbox One is constantly getting price cuts and the perceived value of the Xbox One as fallen to the point where a month where is sold for $100 less than the PS4, it only outsold it by a mere 10k. The Xbox One S sort of stops the rot, traditionally a slimmed down console sells for less but the Xbox One S launched at the same price as the OG. If MS stick to their guns and decide not to go crazy this holiday with sales, they might be able to maintain the value at $300. It's sort of a second chance but it will all be thrown out of the window if the decide to drop it to $250 with a $50 store card and extra games this holiday. The aftermath will be lull in sales and Microsoft will have no choice but to drop the price permanently.

This brings us to the Neo and I feel the main reason for the S. The Neo will be marketed as a 4k gaming machine, the Xbox One S is a 4k capable gaming machine. Sound similar right? But we know the difference (One is purely 4k media while one is 4k gaming) we know what both machines are about, the general public not so much. MS will aim to confuse the message of the Neo, while Sony will go about marketing their 4k gaming machine, MS will be also saying the Xbox One S can do 4k and will have a much cheaper price tag. If MS can do this right, and they are capable, they can make their Xbox One S sound like they have the same features as the Neo and then slap 'Starting at $299' while the Neo will probably have a price tag of $399 upwards.

So there are my thoughts and it will be interesting to see how this one pans out. Will MS be prepared to keep holiday deals modest and try and maintain that $300 price tag? Will they be effective in trying to combat the Neo?

What are your thoughts?

[darkknightkryta]

I think MIcrosoft did this to try to change its image.  They spent way too much money on a price war that they essentially lost.  We'll probably never truly know what Microsoft lost with its game division since they completely hide what the game division is profiting/losing.  Recently it looks like Microsoft is trying to go back to trying to make money.  But it's kinda hard to do that with its game lineup.  We'll see what Microsoft can come up with.  I personally think the entire lot needs to be fired.  You'll have Greenberg say one thing, just to have Spencer say the opposite.  The right hand doesn't know what the left hand is doing.

[SWORDF1SH]

I think MIcrosoft did this to try to change its image.  They spent way too much money on a price war that they essentially lost.  We'll probably never truly know what Microsoft lost with its game division since they completely hide what the game division is profiting/losing.  Recently it looks like Microsoft is trying to go back to trying to make money.  But it's kinda hard to do that with its game lineup.  We'll see what Microsoft can come up with.  I personally think the entire lot needs to be fired.  You'll have Greenberg say one thing, just to have Spencer say the opposite.  The right hand doesn't know what the left hand is doing.

Greenberg is just a sucker and I originally liked Spencer when he became Head of Xbox but not so much anymore.

They have a few big games this year, Horizon 3 and Gears. Gears should shift some consoles

[Mmm_fish_tacos]

I don't think MS knows. When they announce it, let me know.

[SWORDF1SH]

I don't think MS knows. When they announce it, let me know.

Lol I doubt they will come out and say "You know the Xbox One S, well it's our way of trying to fudge up the Neo" but we will find out when they market the S and see it with our own eyes.

[Legend]

I pretty much agree with OP. They're trying to fill the middle ground between slim and Neo while also rebranding themselves as a "premium" system. They'll get sales from UHD and hype, but outside of that I think MS is ok with the system selling less units. As long as it stays relevant and makes money, MS is happy.

[the-pi-guy]

-Cutting manufacturing costs
-while simultaneously reinvigorating interest in the Xbox One for a few weeks.