Just one year after Microsoft greatly reduced the price of Xbox One consoles, Sony is losing the fight for sales in the Latin America's fast growing markets. On Oct. 8, Thursday, Sony announced that it was reducing the price of the PlayStation 4 by $50 to a new starting price of approximately $350 bringing the cost of purchasing a PS4 at the same level as Microsoft's Xbox One.
The move by Sony comes just before the holiday shopping season sets in, and at the same time it coincides with a new report on the 2014 console sales in the Latin America that highlights PS4's pricing issues, according to Gear Nuke.
It is big challenge for the future of PS4 against Xbox One battle since the report indicated that Latin America is currently the second-fastest growing region for gaming globally, just after Asia. According to Bloomberg, Latin America is the largest market for consoles after the United States and Europe, in addition to being a region where purchasing a current generation console is the most expensive.
The expenditure on consoles especially affects PS4 where local currency exchange rates and high import fees on consumer electronics has made the big Brazilian market the most expensive nation in which to purchase Sony's console. A PS4 console in Brazil goes at an equivalent of $1,700.
Meanwhile, Microsoft has production facilities in Brazil ever since the inception of the Xbox 360, which allows the company's consoles to avoid the import taxes. Microsoft dominated about 85 percent of the sales in the last generation consoles, and it seems to be the same case for the current generation. Avoidance of the tax has reduced locally manufactured Xbox One price to about half the price of Sony's foreign import PS4.
Microsoft's presence in Latin America is beyond strategic avoidance of import taxes as the company builds its cultural foundation in the big gaming markets such as Mexico.
However, Sony is still the leading console company in terms of sales globally and Microsoft had a lot to do so that it can cover up in the highly developed markets where PS4 is dominant, including the US, Europe, and Asia.