With the Xbox One at $400, will Sony cut the price of the Playstation 4?

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Source: Sony

Now that Microsoft is launching a $400 Xbox One SKU you might be hoping Sony will retaliate with a price drop for the Playstation 4 in order to keep its place as the cheaper of the two systems. That'd be great for consumers, and would help the Playstation 4 keep its lead over the Xbox One, right?

Well, I wouldn't get my hopes up given the financial report Sony released yesterday. The company lost $1.25 billion in fiscal 2013 and is expected to lose a further $489 million in fiscal 2014 (ending in March 2015). Assuming that holds true it'll mean losses for 7 of the most recent 8 years (they managed a profit in fiscal 2012).

Sales were actually up this year, particularly in their smart phone (+29.6%) and gaming (+38.5%) divisions but divesting themselves of their Sony Vaio PC division cost them $890 million. Further restructuring will happen in fiscal 2014.

With the PS4 and Xbox One both selling for $400, the console race is going to get really interesting. The Playstation 4 is still more powerful than the Xbox One and that certainly matters to serious gamers, but when holiday 2014 rolls around I think the console that 'wins' will be the console with the most compelling exclusive titles. We won't know which console that is until after E3 (and even then you can never be sure until you play the games).

If the Xbox One starts dominating the Playstation 4 then Sony might decide to cut the price in spite of the company's continuing financial losses, but I think they'd have to be backed pretty far into a corner before they take that step. I just don't think they can afford to lose the revenue if they can possibly avoid it.

Instead, this console war is going to wind up being all about which machine has better games. And you know what? I think that's exactly how it ought to be.

Read more of Peter Smith's TechnoFile blog and follow the latest IT news at ITworld. Follow Peter on Twitter at @pasmith. For the latest IT news, analysis and how-tos, follow ITworld on Twitter and Facebook.

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