Adding a "free" game with your console isn’t quite the same thing as a price drop — anyone who has worked in retail will tell you the power of having a lower sticker price no matter what comes in the box — but when the game is as hyped as Titanfall … it’s not far.
Microsoft has announced that the Xbox One will be given a price drop from £429.99 to £399.99 in the U.K. starting on Feb. 28, with a free copy of Titanfall added in March. The Xbox One will continue to cost $499.99 in North America, but customers will get a free copy of Titanfall as a download code in specially marked bundles starting on March 11.
This is a good deal for anyone who had the foresight to hold off on buying the system, and it will definitely cause systems to move off the shelves, but these aren’t the actions of a company that’s winning a console war.
It’s hard to create an apples-to-apples comparison on console sales without also taking into account supply by region, but in raw numbers the $400 PlayStation 4 has outsold the Xbox One worldwide to date. Sony has announced that the PlayStation 4 has sold 5.3 million units worldwide since launch, and the console has only recently gone on sale in Japan without any competition from Microsoft. The gap is likely to widen.
Microsoft isn’t dropping the price on hardware in some regions and giving away what is widely seen as the Xbox One’s killer app because they’re excited about how well they’re doing; this is in response to a competing system that’s $100 less expensive, is doing better at retail and is seeing better performance in multiplatform games.
I walked past a Microsoft Store that had a sign that stated you could save $100 from the price of a Xbox One by bringing in your PlayStation 3, and my immediate reaction was that players could save their system and buy a PlayStation 4 for the same price. When your opponent is doing so well and selling for $100 less, it's hard to find a PR win in any advertisements that deal with cost.
Microsoft needs to goose sales of their hardware, and creating a bundle of this nature and dropping the price in the UK after three months of availability is a bold move. Nintendo made a similar course correction in 2011 with the 3DS, and it worked wonders for the system. Microsoft has to be hoping for the same level of excitement.
This is good news for EA
The real winner of this situation, outside from the patient gamers who will get a much better deal than those who bought at launch, has to be EA.
It's hard to find a PR win in any advertisements that deal with cost.
Microsoft has gone to great lengths to include Titanfall in its marketing materials, and now the game is going to be given another huge push as a pack-in with the hardware itself. Microsoft keeps paying for the game. The company wrote what was likely a large check to make the game exclusive. Microsoft is now offering EA more guaranteed sales with this pack-in promotion, and is cementing the connection between Microsoft platforms and Titanfall. This only increases the value of a multiplatform sequel, which means the cost for exclusivity for any possible sequels has also gone up.
Call of Duty is closely tied to the Xbox platform due to exclusivity deals with the DLC, and that game was widely available on other platforms, but the push for Titanfall's dominance is something else altogether. Microsoft is used to paying for greater mindshare when it comes to third-party games, but it's going all-in with Titanfall's exclusivity, and now this pack-in.
This promotion will almost certainly move the needle when it comes to retail sales, but it also proves just how important this multiplayer shooter has become for Microsoft. EA has basically guaranteed adoption for a new IP, and Microsoft is willing to get out the checkbook to lock down a game it needs before Sony widens the sales gap. Both companies get something they want.
Let's break this down to its component pieces, because it's good news for just about everyone involved. The Xbox One may be outpacing the sales of the Xbox 360 historically, but Sony is outselling that number by what looks to be a decent margin. This pack-in and regional price drop will help move the hardware, and will help promote a system exclusive. Players will get a better deal on hardware, and EA has help launching one of the more exciting new games in recent memory. This is why competition is a great thing: New Xbox One owners will benefit nicely from Sony's sales lead... and EA's not doing too badly either.