Why the PS4’s New $349 Price Ensures Sony will Win the Holiday Season

It’s only October 8 but Sony has just ensured that their PlayStation 4 will win the holiday season. Target accidentally leaked a hint that this was coming, and today The Verge reports that Sony’s console will indeed drop $50 starting tomorrow.

Over the past 23 months that they have both been on the market, the PS4 has outsold the Xbox One in all but 2 months. The last time the Xbox One outsold the PS4 was last December when Microsoft undercut Sony by $50. Microsoft has since kept $349 as the starting price for the Xbox One, but they have never beaten Sony again.

I worked for Target last November and sold a ton of game consoles. People are weird that time of year. They’re simultaneously more and less price conscious than the rest of the year. Peoples’ average ticket price rises sharply as they buy gifts for other people, and usually pick up a few nice things for themselves as well. “It’s the holidays!” they say as they stuff a few more things in their cart. Debit cards make way for credit cards and people go on making buying decisions that are not in their best long-term interests.

At the same time, people are more prone to buying the cheaper of 2 options when they are presented side-by-side on store shelves. Increased traffic also means they’re less likely to flag down an employee to explain differences between products, so people choose the less expensive option nearly every time. This was the situation last year as pallets of two black boxes at played games sat on pallets next to each other. With no information to go on, disinterested parents, aunts, uncles, and grandparents elected to save $50 and get the Xbox One.

I don’t think Microsoft can drop the Xbox One down even farther right now. The current selling price is already 30% lower than its launch price, so I can’t imagine margins are so good they can go lower. They do have Halo 5 coming out this month and will surely be a sales booster as the biggest exclusive title coming out this year. However, Sony will have an Uncharted bundle, Call of Duty bundle, and 2 Star Wars bundles coming out as well, so they’ll have a lot of value to shout out.

I’ll be very curious to see the actual sales numbers for the next few months as I think Microsoft and Sony will have bonkers sales numbers, but I feel very strongly that Sony will come out on top by a wide margin.