New Generation Game Consoles Not Expected to Set New Price Records – Analyst

Microsoft and Sony to Sell Next-Gen Consoles for $350 - $400

by Anton Shilov
01/14/2013 | 04:52 PM

The forthcoming next-generation Microsoft Xbox and Sony PlayStation video game consoles are going to, without any doubts, set up performance records among game systems. However, they what they are not going to do is to set up new price records, like Sony Corp’s PlayStation 3 did over six years ago, according to an analyst.

 

Colin Sebastian, an analyst with Baird Equity Research, said in a note to investors, that keeping in mind slow economy in developed countries in general and weak game console market in particular (which became evident with the launch of Nintendo Wii U), it is unlikely to expect Sony and Microsoft to sell their next-generation PlayStation and Xbox consoles at prices higher than $350 - $400, which is considerably lower than the launch price of premium PlayStation 3 model six years ago ($599).

Both game consoles will likely see the light of the day at the E3 trade-show this summer and hit the market in October-November timeframe.

"Given the fragile state of the console game market, we expect the E3 trade show in June will take on added significance, most likely providing the industry with the first public opportunity to examine next-generation hardware," wrote Colin Sebastian in a note to clients, reports GamesIndustry web-site.

It has been widely reportedly that both Microsoft Xbox Next as well as Sony PlayStation 4 (Orbis, Omni, Odin, etc.) will be powered by microprocessors and graphics processors developed by Advanced Micro Devices (AMD). The financial analyst considers this as a benefit for both platforms since it will take game developers relatively short time to learn everything about the hardware inside new consoles and will make it easy to develop competitive titles for the forthcoming devices. Thanks to extensive usage of PC-derived technologies, it will also be relatively easy for software designers to create online services and implement modern things like free-to-play or subscriptions.

"Our checks suggest that next-generation console hardware will be largely built from 'off the shelf' high-end PC components, along with hybrid physical/digital distribution models, enhanced voice controls and motion sensing (Kinect integration with every Xbox), and broad multi-media capabilities. […] A PC-based architecture […] should have a number of advantages over custom-developed silicon: for one, the learning curve for software developers will be shorter than completely new technology. Second, the cost of production and retail price points should be lower than prior console launches,” explained Mr. Sebastian.