Sony Corporation (ADR) (SNE) Has Microsoft Corporation (MSFT)’s Xbox One in Its Crosshairs

Moreover, both Microsoft and Sony came out with starting prices this week. While Microsoft announced a surprisingly high price of $499 for the Xbox One, Sony is starting PS4 pricing at $399 (pricing outside the U.S. is similar). With this move, Sony solidified PS4’s position as the console to beat for this generation. Wii U sales have been disappointing so far, and Sony has now undercut Microsoft on price while providing significantly more customer friendly policies (the PS4 device specs are also slightly higher than Xbox One’s). For most hardcore gamers — but also for many casual users — PS4 looks like the obvious choice right now.

Foolish conclusion

Sony’s double announcement — that PS4 would not incorporate DRM and would be priced $100 below the Xbox One — has crippled Xbox One’s momentum. While Xbox is not a major contributor to Microsoft’s profitability, the company has been hoping to use it as a platform to win the “battle of the living room.” However, the Xbox One’s new TV-oriented features will not matter much if most people buy a PS4 instead!

For Microsoft, this is just another blow to a company that has probably seen its best days. Xbox has been one of the few bright spots for the company, as Bing has never become a money-maker like Google Inc (NASDAQ:GOOG)’s search engine, and the Windows platform has been undercut by the mobile revolution. Unfortunately, it looks like Xbox may not provide the growth that Microsoft investors are hoping for, either.

The article Sony Has Microsoft’s Xbox One in Its Crosshairs originally appeared on Fool.com and is written by Adam Levine-Weinberg.

Fool contributor Adam Levine-Weinberg has no position in any stocks mentioned. The Motley Fool recommends Google. The Motley Fool owns shares of GameStop, Google, and Microsoft.

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