Despite costing £80 more than its chief rival the PlayStation 4, Microsoft has defended the £429 price point of the Xbox One, with Don Mattrick, head of Microsoft's Interactive Entertainment Division, saying the console delivers "thousands of dollars of value".

Xbox One price
Don Mattrick, President of the Interactive Entertainment Business at Microsoft reveals the Xbox One on May 21, 2013. (Credit: Reuters)

The Xbox One is focused heavily on video streaming and internet services, and aims to dominate living-rooms as an inclusive all-in-one entertainment box. These additional features, coupled with the One's next-generation gaming capabilities, justify the console's price, Mattrick said:

"It's a lower number than some of the analysts had forecast," he told Bloomberg TV. "We're over-delivering value against other choices I think consumers can get. Any modern product these days, you look at it: $499 isn't a ridiculous price point. I think people are going to love it when they use it."

The Xbox One's price marks a turnaround from the previous console generation, when the Xbox 360 launched in the UK at £279 in late 2005, way below the £425 PlayStation 3.

At E3 2013, held in Los Angeles last week, Sony confirmed the PlayStation 4 would cost less than the Xbox One, at £349 in the UK and $399 in the US.

It too will feature video streaming in the shape of Sony's Music Unlimited and Video Unlimited services. The company is also integrating instantaneous game streaming via GaiKai, a streaming service which it purchased in 2012 for £240m.

As well as beating Microsoft on price, Sony has also scored points with consumers for its policy on used games. Whereas Xbox One owners will only be able to lend game discs to people who have been on their Xbox friends list for at least 30 days, PlayStation 4 games will be completely unrestricted.

The Xbox One has also sparked consumer concern due to its online requirements. Users will have to "check-in" their console every 24 hours to validate that the games and hardware they are using were purchased legally. The PlayStation 4 on the other hand will not require users to check in online.