Some people were upset when Microsoft announced a launch price of $499 for the Xbox One. Sony executives, however, were ecstatic.

"I'm not gonna lie. I remember exactly where I was," Sony Head of Worldwide Studios America Scott Rohde told Ars Technica. "We were in press conference rehearsals last year. We had a feeling they were going to come in at $499, but we weren't sure. So yeah, we were dancing in the aisles and high-fiving. It was great."

The $499 price was a hundred bucks more expensive than Sony's PS4, launching within a month of the Xbox One. The lower price of the PS4 gave Sony an instant selling point for the console.

"Anyone that came in on an interview, it didn't matter what the question was, I could always just answer it with $399. It was the answer to every question."

The reason for Xbox One's higher price was the Kinect camera. Microsoft decided to bundle the Kinect with every Xbox One. The company argued that the Kinect's voice and motion commands were an essential part of the hardware.

Microsoft would come to regret this decision. The higher price helped PS4 establish a sales lead in late 2013 and early 2014. The negative backlash over the Xbox One's proposed DRM policies (since reversed) and consumer suspicion about the Kinect's spying capabilities hurt, too. Still, the $100 price gap was the most tangible disadvantage for the Xbox One. Some gamers may not have known or cared about the whole DRM fiasco, but they sure cared about spending an extra hundred bucks on a console.

In May, Microsoft announced that they would begin selling the Xbox One without the Kinect. This Kinect-less SKU, released in early June, is the same price as the PS4. Rohde said that they saw this move coming from day one.

"I think that, to be truthful, we always assumed that eventually they'd have to release a SKU without a camera," he said. "So we were waiting for it to a degree, and we were ready for it."

The E3 press conferences from Sony and Microsoft this year reflected the shift in their competition. Now that the Xbox One is cheaper, has a PlayStation Plus-like rewards program and doesn't have a paywall for entertainment apps, Sony had to find new ways to contrast their console with Microsoft's. Both companies focused their press conferences on games exclusive to their hardware. Sony showed off titles like Uncharted 4 and Bloodborne while Microsoft presented Sunset Overdrive and Crackdown 3.

The consoles seem to be on more even footing these days. However, PS4 still enjoys a sizable lead in hardware sales. You have to wonder how much smaller that lead would be had Microsoft announced a $399 Xbox One last summer. Could the Xbox One have even outsold the PS4 at launch with that price?

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