CNET and pretty much every gaming site is reporting that Wedbush Morgan Analyst Michael Pachter has made his predictions on the price of the next generation consoles, Xbox One and Playstation 4.
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Pachter made his predictions in a pre E3 address to investors today. Pachter estimated that the Microsoft Xbox One console will launch at $399, $50 more than the Sony Playstation 4 that is likely to debut at the same time.
The analyst made his estimate in a research note prepared in a week ahead of the E3 conference. He based his estimation on the cost of materials needed to build the consoles, taking into account speculation about the specifications for each.
Pachter also took into account the launch price for the Xbox 360 and PlayStation 3. The 360 premium edition debuted at $399 in November 2005 and went on to become the best-selling console in the U.S. On the other hand the PS3 with a 60 GB hard drive started out with a more expensive price tag at $599 which negatively impacted its long-term popularity.
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CNET suggest that Microsoft and Sony will offer subsidies to offset the cost of the consoles. Especially since the new Xbox One features watching live TV, satellite and cable there may be operators willing to offer discounted boxes in exchange for multi-year contracts. Also the Xbox One requires a large portion of its use being connected online so there could also be some Internet service providers offering some discounts as well.
With little news on the PS4 Pachter believes there are fewer subsidies. Sony could however offer a discounted price off the offer for gamers who purchase a subscription with their PlayStation Network service.
With the holiday season coming up Pachter also believes the console makers, including Nintendo will drop their prices.
E3 will start June 11 and until then expect to see more speculations on the prices.
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