Pachter: PS4 and Xbox 720 could have lowest starting prices for consoles ever

XMNR: In a preview note sent to investors Wednesday, Wedbush Securities analyst Michael Pachter engaged in a little next-gen speculation. The controversial industry suggest that both the Playstation 4 and next Xbox (aka Xbox 720) could be launched later this year with extremely low starting prices thanks to cell phone-like subsidies.

[WorldGamer]

I thought this guy wasn't credible? If he's correct, that would be awesome tho. Guess we gotta wait and see.

[Queasy]

Depends. I think everyone is expecting some sort of subsidized model for the next Xbox. Whether Microsoft can get cable providers and internet providers to throw in even deeper subsidy cuts remains to be seen.

[LOGICWINS]

It seems likely. This is the first generation I feel that console makers are actually LISTENING to gamers and building consoles based primarily on our feedback for the past 10 years.

I'd happily buy a $350 PS4 with a contract to PS Plus for 2 years.

[MasterCornholio]

Jesus the PS4 at 350€ would destroy the premium Wii U bundle.

But im honestly expecting it to be 400€.

[dcbronco]

I think both will do a subsidized plan. The days of consoles being sold at a lose for the first few years are over. They are trying to figure out a way to make a profit day one. But the specs of these consoles point to them already being extremely cheap to make. The specs of the PS4 should be a console that could easily be sold for $400 and make a profit day one on each unit.

Unlike last generation when a 90nm CPU and GPU cost over $100 each, these 28nm APUs should be less than $100 each and include both the CPU and GPU. If you look at the price of a desktop Trinity APU with a 7660 GPU it's $130 retail at 32nm. The chip in the next consoles will be a similar GPU with a mobile chip and will be bought bulk at wholesale prices or shopped to a chip maker with the best price. So these chips will be well under $100 and the most expensive parts traditionally will be had for a third of the cost of previous generations. Add the second cheap, which will probably be an ARM SoC or maybe just a CPU and you're still under $100 for both. ARM SoCs run around $15 wholesale.

By adding the ability to have the console act as the cable box they can make a huge profit on each box sold and sell at retail for $400 at a smaller profit. Cable companies in many areas already give away $200-300 dollars for 2 year agreements. Buying a console from MS for $300 and giving it to you for $100 means they are still only giving you $200. Which is $100 less in many cases. MS and the cable company are already going to profit once you have the console anyway from disc sold and the cable fees, respectively.

This makes sense sense when you look at the leaked document from last Summer. It seems that cable companies and TV manufacturers could include 720 hardware into their own cable boxes or TVs. And Sony could do the same thing. When the PS3 was launched the Cell was being used for some TVs and there is no reason the GPU couldn't be added since they are using APUs. We could all be paying a lot less for our next consoles.

[RyuCloudStrife]

Pachter is a disgrace, dirty analyst.

[CalvinKlein]

I really doubt that. If I remember correctly the N64 and dreamcast came out at 199$ and others too im sure. NO way either will cont 200$, maybe xbox with a 3 year monthly subscription to a more expensive xbox live, but that doesnt really count.

[dcbronco]

People are confusing the cost of these consoles with their power. More power is cheaper now than it was when the Dreamcast launched.

@ Science Guy

Don't ignore the message just because you don't like the messenger.

[Tapioca Cold]

- No new video hardware required (DVD/Bluray commonplace)
- Wifi cheap / common
- HDMI cheap and common
- Better rechargeable longer lasting bateries
- HDD larger and cheaper (solid state? Don't need it really)

Anything else?

[DarkZane]

Sorry, but I don't like subscription based stuff. Obviously, I will go for the full purchase right from the start here.

[Queasy]

I wouldn't do it for TV or internet but I might do it for Xbox LIVE depending on the subscription price if its the difference between paying $300 or $500 upfront. I would subscribe to Xbox LIVE anyways so it would be no real skin off my nose (again, depending on the subscription price).

[Saigon]

I would only do it if they are including PS+ or Live into the equation. Such as a two year subscription or something at a very low introductory price. 9.99$ a month or better 5.99$ a month for PS+ or Live with unlimited Access. Yeah, I would sign that contract especially if I would get a 100$ or something off the system at first purchase.

[miDnIghtEr20C_SfF]

Xbox is going to do it just like a phone. You buy the phone on the cheap, and then you pay monthly until it's paid off or your subscription to Live runs out.

It's genius.

It will sell millions.

It's the way it is.

Deal with it.

[stage88]

You do know that the whole "deal with it" thing is a knock on Microsoft and the xbox brand, right?

[WalterWJR]

How is it genius? The only reason it works with phones is because most are overpriced to begin with and you are paying for calls, texts ect..

You can already pay for consoles on credit, hardly anyone does as they rip you off.

The only thing I could see happening is tv companies like SKY in the UK could start offering a SKY/XBOX receiver which is free with a SKY subscription.

[pete007]

almost everywhere, internet service is unlimited, and cheap, i´m in France and a 8mb connection all illimited+phone calls+cable tv is at 19,99. if next box could bring a subscription +box it would make almoat all gamer comunity change ISP! me included

[sprinterboy]

You get bet your ass Sky will only offer the new xbox for a reduced price if you go for the full package with 3D or a least sports or movies which price hikes your sky plan by £30 or more when your mum and dads might not want to pay that or need it plus in the long run you pay more, I have always gone for pay as you go with phone contracts, if they offer a reduced xbox with phone you will end up paying like £60 per month or more that works out at £1300ish for a phone plus bills and a console, way too much money than just saving alittle, gamers have had 7 yrs to save for there nxt gen purchases.

[ps3_pwns]

u get a 400 dollar cellphone for 200 dollars but u must also pay the monthly fee for 2 years. the contract will be more then if u bought the phone straight up. most phones require you to have the expensive contracts.

[mochachino]

If MS is going subsidized they should have gone all out on 720s power.

If I can get a $650 phone for $180, I wouldn't have minded a $1000 console for $300 with a 2-3 year cable subscription.

[Mr_Writer85]

But how would they control this sub console, you'd have to have the net for a start and always on. And be willing for the console to not work at all if you faulted on payments.

It would also mean you'd have to prove you have Internet surely.

[iconic56]

I'm willing to bet faulting on your cell phone bill one month into your shiny new contract will cause more than a simple shutting off of your service... seeing how you technically owe them money. You wouldn't go around saying, but I still got my shiny new iPhone6 on the cheap when most of your functionality is disabled and your credit and future prospect of getting another cell phone service is down the drain.

Faulting on a cable or internet service provider (if they are the ones subsidizing) wouldn't look good for your future prospects of finding another service, not to mention the greatly reduced functionality of your shiny new Xbox. I'm willing to bet that you may perhaps be allowed to play games on the new console offline, but that's all you would be able to do and seeing that the next Xbox will most likely be 90% online, you're only screwing yourself.

So long story short. Subscription based pricing is no less a possibility for the next Xbox and perhaps even the PS4 than it is for your similarly priced smartphones.

[Mr_Writer85]

But if it still plays offline then you could just buy it and never take it online.

Unless to buy the sub model you had to prove you have accsses to the Internet.

But what about those who don't have Internet? They will have to pay more just because they don't have the Internet (or don't want it online) I mean I've seen the number 40million Live accounts (which I ashume are gold) out of 78million sold Xbox's. Now there might not be 78million Xbox players (I myself have had the Xbox twice and sold twice) but still they could potentoally lose 39million users.

That is a lot, and if they lost a large chunck of that to Sony then regardless of how rich the company is, to loose that much MS wouldn't be happy.

But maybe I'm thinking to much into it, but this sort of scenario would of been planned for by MS if they do go down this route so who knows.

[iconic56]

I totally get what you're saying. I do feel however that the subscription model and traditional model of payment can coexist and will garner a much larger install base than simply relying on just one of them.

I feel that you are unconvinced that the subscription model would be compelling or perhaps just wouldn't work fundamentally. I don't quite understand your thoughts on having to prove internet connectivity. If you are contracted with cable, internet, or Xbox Live... you will be paying for those services independently. It doesn't matter what you do with your Xbox. You could throw it away, and you would still be paying for your contracted service. It sucks, but that's life. So I guess this addresses your thoughts on paying for a subsidized console, and never going online with it.

Anyway, I'm glad we could discuss this topic a bit. It's such a small piece of the grander puzzle that it's not that big of a deal to me. I know my wife doesn't like the idea of subscribing to anything just to get a console, but I also understand that not everyone has 300-500 bucks to spend on a console.

I originally commented because the video game enthusiast in me agrees with @mochachino in hopes that one day we can see some truly amazing tech for a reasonable price due to subsidized pricing. But that is just me, and not everyone should be forced into subscription to whatever service just to be able to afford a console. It would be quite alienating and elitist to do so.

I believe Microsoft's greatest success lies in Xbox Live and if they can make that so integral to the Xbox experience that it would be the equivalent to having a voice/data plan with the purchase of your new cell phone (which makes them affordable), then we may be able to start seeing some $800 consoles for $300, and people would be willing to pay it because who would want it without Xbox Live anyway? Well that's Microsoft's hopes and dreams I'm guessing. I, for one, wouldn't mind it, but this leads to a broader war that is online vs offline. Keep in mind though, just because you sign a contract for 2 years of Xbox Live DOESN'T mean you have to always be online or even use Xbox Live... but you will be paying for it.

(Sorry about how lengthy this reply is.)

[Mr_Writer85]

you will be paying for those services independently....

Hmmm interesting point. See I was thinking it would be a yearly sub (for xbox)And that if you didnt pay on that date you would be locked out of your system (much like PSPlus locks you out of content), and it would of require an 'always on' connection.

But you see them maybe going monthly (maybe charging more then someone who paid more upfront?) And that does make alot more sense.

That way they can keep a closer eye on who is still subbed. I wouldnt be suprised if the sub offer required the 'always on' and if you miss a payment you are locked out of the console (maybe even offline games)

I see exactly where you are coming from and I agree I wouldnt mind paying 'monthly' if put down price was cheaper. As long as the 'full fat' version didnt require any sub (eg I wouldnt be happy paying for Xbox live if I bought the more expensive version) And infact I think that would be a fair deal

You buy the cheaper version you have to pay to get online, and if you default on payment you are locked out of your Xbox.

If you pay full whack, thats it, you dont pay for online and therefore have no fear of being locked out.

See I cant see Sony doing this as PSN is free on PS2, PS3 and Vita. Where as Xbox has always charged. Hmmmmmm interesting.

[BattleReach]

Now I like this guy.

[seanpitt23]

Minimum price for ps4 is $399 but I think it will be more than that Sony cannot afford to take a huge hit on consoles like they did with ps3 but saying that the ps4 will be a lot cheaper to make than the ps3 because off the shelf parts etc and gone with AMD and not over the top expensive nvidia.

I think personally it will be $499 but we will have to wait and see.

[LOGICWINS]

I'd pay $499 for it if it included the camera and a game. $599 for a Vita/PS4 combo with a cross buy game.

The base price for the console itself SHOULD be $399 if Sony actually wants to be competitive. If Sony says they want a "broad" audience for the PS4, launching at anything over $399 for the base console would be a grave mistake.

[KwietStorm_BLM]

Right, they can't afford to, but the PS4 shouldn't be as much to manufacture as PS3, based on the more standard parts and the Blu-Ray not being expensive anymore. I think a model with no camera or anything else could go for 399 maybe 429. I just hope they again allow us swap standard hard drives and WITHOUT the encryption this time.

[BitbyDeath]

"WITHOUT the encryption"

That was probably a linux thing.

[imchuckbass]

Well duh, cheap parts = cheap console

[sourav93]

Damn! That means PS4 and 720 will have the highest starting prices for consoles ever.

[KiLLUMiNATi_89]

Not a huge surprise when you think about it, both companies didn't really put too much resources into theses consoles. Either way it's a win for me, Ps4 looking more appealing to me now if this guy is right !

[Grimhammer00]

These corps aren't going to make these consoles cheaper simply because the parts are cheaper.
They will analyse the crap out of what today's consumer can afford and en mass.

So I fully expect $399 as the price point with skus that may include a larger hdd or camera. (Ps3)

[CRAIG667]

Valid point but if they go head to head both launching in November then competitive pricing is going to be extremely important...

[Darrius Cole]

The article says>:

"The "any in history" line is possibly a little hyperbolic as the lowest launch price of a console this century was the Sega Dreamcast at $199.99. The PS2, Xbox and Xbox 360 all started at $299.99 while the PS3 started at $399.99. "

That's not right, the PS3 started at $499 & $599, and even that is deceiving because it was nigh impossible to find the $499 version unless you were lucky.

[ps3_pwns]

all i know is they wont be overpriced for what you get like the wii u is. 350 for wii u is overpriced and cant believe nintendo fanboys without self control or awarness bought it at that price. if you got a wii u already dont want to ever hear you complain about the ps4/x720 prices when they come out. wii u doesnt even have a big hardrive, blueray, or dvd, or name a billion other things and the wii u doesnt have it lol. talk about a rip off. get a 3ds if u like nintendo stuff not a wii u.

[FreakdoutKid]

300$ will be a dream price

[Brian1rr]

$400 without camera and 250 gb HD and $500 with camera and 1 TB HD

[tweet75]

thats a smart move and just put out lots of kick as games at regular prices and they will sell many more copies

[PantherDST]

This is how they will sell the "always on" concept to the masses. Offer a low price with a subscription service...

[josephayal]

$200.00 would be a fair price

[tweet75]

they would each sell more consoles at a $99.99 price point

[oof46]

And they would be bankrupt.

[Deku-Johnny]

This guys comes out with whackier statements every week. WHy haven't they sacked him yet?

[oof46]

Because he's an analyst. He is not saying what will happen, he's projecting and guessing. A lot of people like to cream on him, but, at the end of the day, he his pretty good at his job.

And when I say "his job", I mean the people he works for, namely investors and companies.

Plus, he's an affable and amiable personality for the gaming press.

[Deku-Johnny]

You say he's pretty good at his job but I've never heard of any of his predictions coming true, wouldn't that mean he's actually pretty bad at his job?

[Albie360]

He is defnitaly the most idiotic cunt ever!!!!!

[oof46]

@He's about 50/50, which is the norm for any videogame analyst I've compared him to (Jesse Divnich, Scott Steinberg, etc). He gets heat from gamers, but if you read into his predictions and suggestions, they make a lot of sense.

Examples:
1. He said Borderlands was sent out to die. In a way, it was. It was released within a week or so of Modern Warfare 2. Any other game would've died, but the Diablo-esque, co-op nature of Borderlands helped word of mouth sales.

2. He kept saying Nintendo would release a Wii HD. He predicted that because it made the most financial sense at the time. Now, Nintendo releases the Wii U, which is in essence, the Wii HD, and sales are floundering because casual Wii buyer is confused by what the Wii U is (add-on? Nintendo tablet?) and the hardcore gamer sees it as underpowered compared to the upcoming next gen systems.

I think it can be summed up best by Pachter himself, "If I have an opinion that more than half of people agree with, then I'm criticized for being 'Captain Obvious'. If more than half of people disagree with my opinion, I'm an idiot."

[Urusernamesucks]

I <3 competition