Although Microsoft bravely made a U-turn on its controversial data rights management policies last week, the hefty price tag on their next generation Xbox One console is still a matter of debate.

A pricing expert and economist, Rafi Mohammed, said the Xbox One price is too high and risks derailing the system, even if Microsoft backtracked on other issues that triggered customer anger, such as online authentication and restrictions on used games.

Xbox One Price Too High, Expert Says

The Xbox One will sell for $500 when it is released this holiday season. Its biggest rival, Sony’s PlayStation 4 will be available for $400. Moreover, the PlayStation’s sales may be boosted further by the fact it benefited from god publicity from the start, by offering a system free of the restrictions Microsoft initially envisaged.

Mohammed said Microsoft’s price tag for the Xbox One is surprising, given that the system was faced with a lot of negative feedback over DRM issues.

In his opinion, the Xbox One price could be lowered by making the Kinect 2.0 sensor an optional accessory, instead of a built-in one, just as it was with predecessor Xbox 360. This would bring the Xbox One closer to the PS4 price point. The Kinect sensor is optional for PlayStation and users have to pay an additional $60 to get it.

But Microsoft officials are very unlikely to make any such changes and insist that the Kinect is an integral part of the Xbox One. Earlier this month, Xbox head Don Mattrick also reiterated that the $500 price is justified and that Microsoft is over-delivering value to consumers.

Consoles smash preorder records

Despite the price tag and other issues, Xbox One remains one of the best sold items in the Amazon game section preorders. Microsoft’s Day One edition is the only Xbox One product listed on Amazon, while PS4 has about 5 SKUs in the top 20.

The two consoles helped Amazon report the biggest preorder week ever during the E3 2013 week (June 10-16), with 4,000% higher console purchases this year than last year’s E3 period. At peak, customers were preordering as many as 2,500 consoles per minute, Amazon said.

[Image via O.Canada]