When Microsoft Corporation (NASDAQ: MSFT ) announced plans to unbundle the Kinect from Xbox One sales, cutting the effective price of the console to $399, it framed the decision as a response to customer feedback. Are we witnessing the birth of a new Microsoft? One that actually tries to give customers what they want, rather than what Mr. Softy wants to sell?
Host Ellen Bowman puts these questions to Fool analysts Nathan Alderman and Tim Beyers in this week's episode of 1-Up on Wall Street, The Motley Fool's Web show in which we talk about the big-money names behind your favorite movies, toys, video games, comics, and more.
Nathan says the move appears to reflect a broader shift in philosophy under new CEO Satya Nadella. If so, it's a welcome change. Not only will users be able to get the newest Xbox without also paying up for a Kinect, but Mr. Softy is also removing the requirement to subscribe to Xbox Live Gold in order to access streaming channels such as Netflix, Red Bull TV, and soon, HBO GO.
Of course there's also a financial motivation behind the changes. According to the latest available figures, Microsoft had shipped 5 million Xbox One consoles. By contrast, Sony (NYSE: SNE ) has already sold more than 7 million PS4 systems to gaming customers. Changing the value-for-dollar equation appears to be part of Mr. Softy's catch-up equation.
Tim also notes that the Xbox One is key to Microsoft's strategy to control the hub of all home computing, including gaming and entertainment. Why? PCs are increasingly giving way to smartphones, tablets, and consoles and Mr. Softy can't afford to be left behind in the face of intensifying competition. Anything that convinces consumers to stick with the Xbox -- or try it, if they haven't already -- is likely good for the company over the long term.
Now it's your turn to weigh in using the comments box below. Do you expect the Xbox price changes to affect Microsoft stock? Why or why not? Click the video to watch as Ellen puts Nathan and Tim on the spot, and then be sure to follow us on Twitter for more segments and regular geek news updates!
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