In short...Microsoft fell into the same trap Sony did 8 years ago and their overconfidence and ego got the best of them. Consider this: After the success of the PS2 when Sony was in the lead and XBOX a distant 2nd, Sony announced their PS3 would sell for a massive price of $600!!!! When questioned about why so much, Sony said people will pay it. Microsoft saw that as a chance to pounce and priced their system lower and came out a year sooner. This resulted in a huge win for XBOX and allowed them to secure 1st in 'next generation' consoles (no I'm not counting Wii in this scenario although I know Wii sold more). Fast forward to years later and you have Microsoft that comes to the main stage, announces a $500 system requiring a Kinect purchase, the inability to share games (at the time), an online all the time system that eliminates the need for disc games after install. When questioned about the price and gaming strategy, Microsoft said the same exact thing Sony did. They claimed people will buy their systems and they leaned on the strength of their name brand to carry them through. What did Sony do? Exactly what Microsoft did the last console release. The system came out $100 cheaper and they didn't have mandatory features that Microsoft eventually backpedaled out of. They also positioned themselves in these exclusives so they could gain the ground they lost from the previous generation. That's why you saw $350 XBOX Ones on the shelves this Christmas. Damage control. These companies sometimes get too arrogant in their branding and they assume too much of the consumer. You'd think they would learn from each other.