By: Eddie Makuch
Wedbush Securities analyst Michael Pachter has weighed in on what he believes the Xbox One and PlayStation 4 will sell for when they both launch later this year. In a note to investors obtained by Games Industry International , Pachter said he believes the Xbox One will retail for $400, while the PlayStation 4 will debut at $350.
Pachter’s pricing estimations are based on bill of materials figures of $275 for the PS4 and $325 for the Xbox One. Though Pachter believes the Xbox One will be the more expensiveconsole at launch, he also predicts that Microsoft may offer a subsidized model, available at a lower price when consumers agree to a subscription plan.
“We believe the ability to watch live TV from a cable, telco, or satellite set-top box through Xbox One could entice an MSO to drive subscriptions through a subsidised box in exchange for a multi-year contract,” Pachter said. “The ‘always connected’ requirement for the Xbox One likely means that a broadband connection will be required, suggesting to us thatISPs may have an incentive to offer a subsidy as well.”
GameStop chief financial officer Rob Lloyd said last month during a post-earnings financial call that the Xbox One and PlayStation 4 are likely to be less expensive at launch thantheir predecessors. The Xbox 360 launched in 2005 for $300/$400, while the PlayStation 3 debuted in 2006 for $500/$600.
Regarding Nintendo and the struggling Wii U , Pachter said the company must use its scaled down 2013 Electronic Entertainment Expo showing to prove to consumers that compelling games are coming for the system. “Nintendo risks losing additional share to its console competitors if the quality and volume of content available for Wii U does not pick up markedlyin the near-term,” he said. “In addition, if the Wii U’s popularity does not improve by the end of the year, many third-party publishers may pass on producing games for the console.
We note that EA recently announced that it had no Wii U games in development, and it remains a possibility that the publisher will abandon the platform entirely,” he added. “Should other third parties follow EA’s lead, the Wii U could be relegated to a first-party-only platform.”