Michael Pachter is worried. In an interview published Sunday, the Wedbush Securities analyst explained that Microsoft’s upcoming Xbox One X is impressive, but it may suffer due to the company’s business decisions.
“I don’t think so at this price, I think it’s too expensive,” Pachter told GamingBolt. “You always hear these false equivalencies about what things cost … so you’ll hear things like ‘Xbox One X is cheaper than a big screen TV,’ but my big screen TV will be useful for 10 years or more, and when I am done with it, it’ll still find use in my guest bedroom.”
Although the Xbox One X offers an impressive array of specs, it’s hard to justify its high price tag. The console is set to go on sale November 7 for $499. But the and Xbox One S and PlayStation 4 Slim frequently appear in stores for $249-$300, bundled with a game or extra storage capacity. For the same price as an Xbox One X, customers can pick up two modern consoles that play all the latest games.
Microsoft has positioned the upcoming console as the ideal 4K game machine. It offers a faster graphics processor than its direct competitor, the $399 PlayStation 4 Pro. The One X packs six teraflops of processing power, compared to the PS4 Pro’s 4.2 teraflops, while the 2.3GHz octa-core processor also edges out the PS4 Pro’s 2.1GHz octa-core processor. This means graphics-intensive 4K games are likely to run smoother on the One X, where the PS4 Pro may occasionally depend on upscaling techniques to make games appear 4K without actually requiring the power to push that many pixels.
Both consoles appeal to a niche audience: people who own a 4K TV. Currently, it’s estimated at around 10 percent of American households. Buying the Xbox One X will guarantee high-resolution gaming when the buyer makes the switch to 4K, but without many other benefits, the high price tag is a hard sell.
Pachter said that the ideal price point for a games console is $300. The PlayStation 3 priced itself out of the market when it launched in 2006 for $599, and although the PlayStation 4 launched at $399 in 2013, the price soon dropped by $100. The Nintendo Switch launched this March, priced at $299, and so far it’s been flying off the shelves.
“At $500, if I had only that money in my pocket, and I had to choose between an Xbox One X and a 4K TV, I would buy a 4K TV,” Pachter said. “So, they’re only appealing to people who have $1100, because they have to buy a TV as well. This is the same problem Oculus faced. I really think the Xbox One X will not do well.”