So Just How Much Will Gaming's Next Generation Cost, Anyway?

Steve Anderson : End Game
Steve Anderson
The Video Store Guy
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So Just How Much Will Gaming's Next Generation Cost, Anyway?

With E3 rapidly closing in on us, and a lot of answers in the making for the next generation of console gaming, there are certainly plenty of questions left to ask that will hopefully get those answers at the big event. But the biggest question left to answer is just how much those wonderful new systems will cost, and recent reports from Wedbush Securities' Michael Pachter may just have the answers we all needed to hear.

Pachter, who often puts out prognostications on the subject of video games, recently released a note targeting the upcoming E3--Electronics Entertainment Expo--event, providing some predictions in advance of the big show. Pachter, backed up by analyst Nick McKay, has a handle on the pricing for the two new systems poised to hit the market. The PlayStation 4 will be the bargain system this time around, priced at $350, while the Xbox One will be the higher-priced model at $400.

The difference in pricing, Pachter and McKay suggest, is largely due to costs of components. Pachter and McKay estimate that the Xbox One takes around $325 to build while the PS4 takes $275. These are speculative estimates, of course, and should be taken with a grain of salt. But given the overall differences in the spec loadouts between the two devices, the prices don't appear to be out of line. However, Pachter and McKay both acknowledge the possibility that Microsoft, which seems poised to require some kind of Internet connection, may get a subscription-based model going, as well as putting in an outside possibility for Internet service providers to throw in a few bucks on the deal in subsidies as it will require more use of an Internet connection. It may even prove possible that Microsoft will offer discounts on the strength of Xbox Live Gold subscriptions.

Sony, meanwhile, doesn't have much of a history on this front, and so that suggests that the $350 is fairly likely to stay as it is. However, there's a possibility, thanks to the PlayStation Network and the PlayStation Plus, that there could be some kind of subsidy arrangement involved.

Looking at the two price tags, I'm not thinking it's likely that the prices will sway users one way or another on this one. All else being equal, people would likely take the cheapest alternative, but this isn't a situation in which all else is equal. The two sides' value propositions are going to come into play here: the games coming out, the exclusives for same, the response to the issue of used and rented games...these are the things that are likely to drive the opinion. If Microsoft can put up a lot of big names in short order--and fix its issues of used gaming and the like, definitively--then that extra $50 isn't likely to be a problem for most users.

The question will be just what Microsoft and Sony can bring to the fore at E3. The more exciting display is likely going to take all the marbles, and given Microsoft's multiple issues of bad press lately--not to mention all the frantic backing and filling--Sony has a clear opportunity before it to seize this leg of the console wars definitively. E3 is likely going to prove the make-or-break on this front, but the only question is, who's got the better presentation in the works?
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