Wedbush analyst Michael Pachter believes that Microsoft is able to leverage Xbox One online DRM removal to convince consumers that its console is worth the extra $100 above PlayStation 4's price. And if not, it is always possible to lower price and level the playing field.
"The focus will shift from Microsoft's onerous policies to the price differential between the Xbox One (at $499) and the PS4 (at $399)," he explained. "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."
"We are 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. If we are wrong, we think that Microsoft is prepared to lower price next year."
Pachter also stated that he expect the next-gen console cycle to last for 10 years or so.