By Jay Greene
When Microsoft’s Xbox One goes on sale before the end of year, it should cost $399, $50 more than the Sony’s PlayStation 4, likely to debut at the same time, according to estimates by Wedbush Securities analyst Michael Pachter.
The analyst made his estimates in a research note prepared in advance of next week’s E3 video game conference. He based those estimates on the cost of materials needed to build the consoles, taking into account speculation about the specifications for each box.
Pachter also took into account the launch prices for the Xbox 360 and PlayStation 3. The Xbox 360 premium edition debuted at $399 in November 2005 and went on to become the best-selling console in the United States in the current generation. The top-end PlayStation 3, with a 60GB hard drive, initially sold for $599, a price Pachter wrote “negatively impacted its long-term popularity.”
Both Microsoft and Sony declined to comment on the report.
Pachter believes Microsoft, Sony, and their various partners will likely offer some subsidies to offset the cost of the consoles. Given that the Xbox One includes the ability to watch live television, cable and satellite television operators might offer discounted boxes in exchange for multiyear contracts. Similarly, given that the Xbox One depends in large measure on being connected to the Web, Internet service providers could offer a subsidy as well. And Microsoft could offer discounts for gamers who purchase long-term commitments for its Xbox Live Gold service.