While Microsoft wasn't surprised by Sony's decision to release PlayStation 3 a year after Xbox 360, the announcement of the console's $599 launch price came as a "total shock" to the company, according to former Chief Xbox Officer Robbie Bach.
"The single moment when I knew we had real upside was when they announced the pricing at E3," Bach said on the latest episode of IGN Unfiltered. "We knew their bill of materials was going to be too expensive but we thought they’d suck it up."
Bach recounted their reaction to Sony's announcement at E3 2006, adding, "Kaz [Hirai] said the price and the room we were in went silent and I said, 'Did he really say what I think he said?'" After getting confirmation that what they heard was indeed correct, the former Xbox exec noted that many in the room said aloud: "Oh, this could be really fun."
Xbox 360 launched with two models, with the "Core" option priced at $299 and the "Pro" at $399. This provided Microsoft with a $200 edge, as the 20GB and 60GB launch options for PlayStation 3 cost $499 and $599, respectively.
Despite the price advantage, Bach didn't jump to the conclusion that Xbox 360 had already won the generation, noting that "when you have 20 percent market share and they have 60, you never think you’ve won. That’s the kiss of death." That said, he did come away from the announcement saying to himself: "Okay, we’ve got a real chance. There’s real upside here. If we push hard, we can really make a difference."
Microsoft was determined to gain ground on Sony with Xbox 360. In fact, the company considered calling its second console Xbox 3 in order to avoid appearing a generation behind PlayStation 3. For more interesting stories about the early days of Xbox, be sure to check out our full interview with Bach on this month's episode of IGN Unfiltered.
Alex Osborn is a freelance writer for IGN. You can follow him on Twitter and subscribe to him on YouTube.
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