PS4 will launch for $349 and the Xbox One for $399, analyst Michael Pachter has predicted.
He adds that each Xbox One will cost $325 to manufacture suggesting that Microsoft could make a modest profit at the $399 price point” while Sony will look to undercut PS3's $599 launch RRP as he believes the lofty starting price negatively impacted its long-term popularity”. PS4 manufacturing costs are pegged at $275.
However, Pachter also reckons that Microsoft is investigating methods through which it could offer a day one discount.
Xbox One is the more likely of the two new consoles to be subsidised due to its functionality,” Pachter added. 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 subsidized box in exchange for a multi-year contract.
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.
In addition, Microsoft could conceivably subsidise the Xbox One through prepaid Xbox Live Gold subscriptions (as it has done on a limited basis in the past) or premium Skype functionality as well.
Similarly, Sony could subsidize the PS4 through prepaid PlayStation Network subscriptions, but unlike Microsoft, it does not have a history of doing so. We believe that many of the multimedia functions demonstrated at the Xbox One reveal event could be emulated by Sony in the next year or so through a firmware update.
Pachter also reckons that a price cut for both Xbox 360 and PS3 is very much a possibility – as are cuts to Wii U and Vita.