New Xbox One 1TB Console Unveiled, Xbox One 500GB Console Reduced to $349
Next week, Xbox is kicking off the biggest games week of the year as we head to Los Angeles for E3 2015 where we'll showcase the best lineup in Xbox history. But before the lights go up and we take the stage …
Context & Ripple Effects
This is Microsoft's second move on Xbox One pricing this year: after leading US December sales, it had already dropped the 500GB console back to $349 in January. What's new here is the hardware tier — a 1TB model unveiled right before E3, timed against Sony, whose own 1TB PlayStation 4 was set to arrive within weeks. Storage capacity, not price alone, has become the head-to-head differentiator between the two platforms mid-generation.
First-order effects
- Buyers choosing between Xbox One and PS4 now face matched $349-class pricing but a direct capacity comparison — the 1TB SKU removes the storage disadvantage without raising the entry price.
- Sony's imminent 1TB PS4 launch loses its novelty as a differentiator; both platforms offer 1TB in the same summer window.
Second-order effects
- Microsoft keeps iterating on form factor and capacity rather than a next-gen jump — within a year the leaked 40% smaller Xbox One S arrives with a 2TB drive at $399, extending this SKU ladder upward.
Third-order effects
- If the pattern holds, each console generation stretches into multiple capacity and configuration tiers sold simultaneously — visible today in the 2024 lineup of a discless Series X, a 2TB special edition, and a 350-class 1TB Series S, echoing the same tiering logic that began with this 1TB/price-cut pairing.
The trend: Console competition is settling into layered hardware tiers — capacity, size, and disc-less options refreshed annually within a generation — instead of single-SKU generations reset by price cuts.