Pachter: ‘Focus will shift from policies to price between Xbox One and PS4’

Now that Microsoft has removed the draconion rules of the Xbox One, video game industry analyst Michael Pachter believes the conversation will shift to the price differential between the Xbox One and PlayStation 4.

As revealed at E3, the Xbox One will be priced at $499, $100 more than the PS4 which will cost $399 at launch. With similar policies and hardware specs, there's very little differentiating the two systems now; except for that price differential which is due to the inclusion of the Kinect with every Xbox One. The problem is that not everyone wants a Kinect, so charging an extra $100 for a device, that most would argue is creepy to begin with, could further push those on the fence towards the PS4.

"…the focus will shift from Microsoft's onerous policies to the price differential between the Xbox One (at $499) and the PS4 (at $399)," Wedbush analyst Michael Pachter reiterated in a note to investors. "The differential is due to the inclusion of Kinect (a high definition camera with a microphone array) with every Xbox One; Microsoft intends to offer a more robust hardware bundle than Sony will offer, and Microsoft is convinced that consumers will ultimately appreciate the value proposition presented by Kinect."

"Microsoft has not done a particularly good job of communicating the value proposition to consumers, but today's announcement will remove an impediment to the company's ability to get its message across," he noted. Of course, that's always the hardest part. Convincing consumers that the extra $100 is money well spent could prove difficult, especially with some already skeptical of big brother watching.

Still, despite the price differential, Pachter is "confident that with six months of focused messaging, Microsoft can fully level the playing field with Sony, and we expect the Xbox One to sell as many units as the PS4." Should the price prove to be the deciding factor for many early on, Pachter and others "think that Microsoft is prepared to lower price next year."

When it comes to getting an Xbox One or a PS4, what is the ultimate deciding factor for you?