Out of all the whiz-bang features in the new Xbox One, Microsoft left out one important bit of news: we have no idea how much this thing will cost.
Keep in mind, the hardware isn’t cheap. The Xbox One is a relatively high-end computer with a Blu-Ray player, 500 GB hard drive, 8 GB of RAM, 8-core processor, and an advanced Kinect sensor for motion control.
For now, Microsoft refuses to drop any hints on pricing. In an interview with Business Insider, Xbox’s hardware boss Todd Holmadahl wouldn’t budge when asked about how much the Xbox One would cost when it launches.
But there’s still a lot of informed speculation out there. The consensus seems to be that the Xbox One will cost in the $400-$500 range, but Microsoft will also offer a cheaper, subsidized version if you sign up for an Xbox Live account that connects the console to the Internet and lets you access online gaming and streaming services like Netflix. (Holmadahl also refused to comment on Xbox Live pricing plans for the Xbox One.)
Microsoft blogger Paul Thurrott reported about a month ago that he’s heard the Xbox One will launch in November for $500 if you want to pay full price or $300 if you buy it with a Xbox Live subscription.
Analysts hold a similar viewpoint. Piers Harding-Rolls of IHS told Business Insider that he thinks the Xbox One will cost around $400, but there are still a lot of unknowns such as what kind of profit margin Microsoft is looking for. Harding-Rolls also agrees that it’s likely there will be a subsidized Xbox One if users agree to pay for Xbox Live for two years.
But keep in mind this is primarily a video game console and it’s going to be tough to convince people to buy an Xbox One without a healthy library of games.
“The sweet spot for pricing depends on the games shown at E3,” Harding-Rolls said in an email, referring to the annual video game conference that takes place next month. “While the live TV overlay and cutting edge UI will catch the consumer’s eye, we still believe that games will be the key driver of sales. If the games are desirable and exclusive, early adopters will be willing to pay higher prices at launch.”
There’s some precedence for that pricing model too. You can buy the current Xbox 360 today for $99 with a two-year subscription to Xbox Live that costs $14.99 per month.
Plus a lot of the Xbox One’s best features will require an Internet connection, so it’ll likely be worth it for most people to buy the subsidized console and pay a monthly access fee.