Pachter: Xbox One $400, PS4 $350

By Muhammad Farrukh
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Grand Master

Muhammad Farrukh

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Analyst Michael Pachter estimates prices for upcoming consoles from Microsoft and Sony, says Nintendo must have strong E3 showing.

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 expensive console 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 that ISPs 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 than their 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 markedly in 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."

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Grand Master

compl3x

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Stolen from GAF (from the thread where Pachter claimed Fuse will sell 5m copies or higher):

OcDHF.gif

lmao!

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Grand Master

red.

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Yeah Pachter is clearly wrong, I mean the Xbox One price is above PS4, that surely can't be right.

I'm just saying you can't go by what he says. He's wrong quite a lot. This has nothing to do with him pricing Xbox One more than PS4 and me not liking it. In fact, i'm more likely to get a PS4 than Xbox One.

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Grand Master

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I completely miss-read LegendOfMart's comment, I have to agree with red. in that I expect the Xbox to be more expensive then the PS4 this time around. I think Sony suffered slightly because of the price, I certainly held off buying a PS3 because of it.

I think the fact that Kinect is being bundled with the Xbox this time it will bring the price up whereas I think Sony will do everything they can to make it as cheap as possible.

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George P Global Moderator

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Even with the Kinect 2 coming with every Xbox One I think MS is ready and willing to take the initial hit and price match Sony.

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Grand Master

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Even with the Kinect 2 coming with every Xbox One I think MS is ready and willing to take the initial hit and price match Sony.

The problem with that is that neither one has announced a price yet, as much as they want to remain competitive and usually consoles do make a loss at first, neither company is going to try and price so competitively that they run the department into the ground. Yes MS and Sony have deep pockets but at the end of the day it's not about winning its about making a profit.

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George P Global Moderator

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The problem with that is that neither one has announced a price yet, as much as they want to remain competitive and usually consoles do make a loss at first, neither company is going to try and price so competitively that they run the department into the ground. Yes MS and Sony have deep pockets but at the end of the day it's not about winning its about making a profit.

I agree, but i'm not thinking we're going to see $299 prices from the start either. I bet $399 is on the low end to start for both actually.

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Vandalsquad

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The problem with that is that neither one has announced a price yet, as much as they want to remain competitive and usually consoles do make a loss at first, neither company is going to try and price so competitively that they run the department into the ground. Yes MS and Sony have deep pockets but at the end of the day it's not about winning its about making a profit.

Sony don't have the deep pockets to take hit. They have lost billions for the last 5+ years now.

Microsoft can be competitive if they want with pricing and take the loss for the first few years, DDR5 will be more expensive for the PS4, Kinect will drive up the Xbox. I think we will see around the same prices either way but.

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I agree, but i'm not thinking we're going to see $299 prices from the start either. I bet $399 is on the low end to start for both actually.

Completely Agreed, I think the XBox1 will definitely be considerably more expensive then the 360 with the PS4 around or slightly below the PS3 price.

Sony don't have the deep pockets to take hit. They have lost billions for the last 5+ years now.

Microsoft can be competitive if they want with pricing and take the loss for the first few years, DDR5 will be more expensive for the PS4, Kinect will drive up the Xbox. I think we will see around the same prices either way but.

Maybe not as big as MS but I think they can still afford to take a little dip, I do agree though. I was trying to avoid a situation where I was suggesting one company was bigger/better than the other!

I think other than the two differences you state the hardware is pretty similar in terms of price, I'm not sure the GDDR5 will come as expensive as the Kinect Unit however, bearing in mind the 1st variation on release was around ?120 in the UK.

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BajiRav

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Even with the Kinect 2 coming with every Xbox One I think MS is ready and willing to take the initial hit and price match Sony.

They don't need to. The BOM on Kinect wasn't very high (they had like $100 margin on $150 RP) and Kinect should be equal or less given that they don't have a motor this time. Kinect 2 will have better camera and some more silicon but assembly should be easier/cheaper.

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