Xbox Series S initially launched with a higher price than the digital edition of the PS5, however, that was quickly reduced to compete with the PS5.
According to Xbox Studio Head Phil Spencer, who shared a comment on this matter on the Japanese gaming magazine Famitsu, this is not related to the PS5 price. The initial price of the Xbox Series S was set at 32,980 yen (including taxes) but it was dropped to 29,980 yen afterward.
According to Phil Spencer, this was in response to the feedback that they received from the Japanese users who were interested in the new Xbox. It was decided internally by Microsoft without taking into consideration how they are pricing their console higher than their competitor.
Phil Spencer also seems to be confident in their next-generation plans with the Xbox Series. He considers having the most powerful and most affordable console as having a big advantage against the PS5. He also suggests that Xbox Game Pass could give them an upper hand against their competitors.
While Sony has traditionally enjoyed a second place in the Japanese gaming market that is dominated by Nintendo, Microsoft has failed to pull any meaningful sales in that region. If Spencer is confident in getting Xbox Series S to do well in Japan, it could help push the Xbox brand and get more support from third-party game developers.
Microsoft will launch the Xbox Series X and S on November 10, 2020. Both of the consoles have their own advantages and are being billed as the next-generation with one offering affordability while the other offering more raw power. These consoles will also come with a trial for Xbox Game Pass allowing users access to hundreds of games at launch.