Michael Pachter Predicts Next-Gen Console Prices

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Michael Pachter Predicts Next-Gen Console Prices

Xbox One

Industry analyst Michael Pachter believes the Xbox One will launch at $399 while the PlayStation 4 will actually come out of the gate even cheaper.

Michael Pachter, everyone's favorite outspoken videogame industry analyst, made his opinions regarding next-gen console pricing known to the world today by way of a pre-E3 note to investors in which he said he believes that the PlayStation 4 will debut in the U.S. at $349, while the Xbox One will carry a release price of $399. His figures are based on the material cost of the consoles, which he placed at $275 for the PS4 and $325 for the Xbox One.

Even if the Xbox does launch at a higher price, however, Pachter said it is more likely to be subsidized through contract subscriptions with ISPs or cable providers. "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," Pachter wrote. "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."

He also noted that Microsoft could directly offset the consumer cost of the Xbox One with Xbox Live Gold subscription agreements or premium Skype functionality; Sony could do the same thing with PlayStation Network subscriptions, he added, but unlike Microsoft, which has previously offered subsidized deals on the Xbox 360 with Xbox Live subscriptions, it has no history of doing so.

Pachter also predicted, not surprisingly, that the Xbox 360, PlayStation 3 and Wii will soon undergo another round of price cuts, and that if the Wii U doesn't get it into gear soon it "could be relegated to a first-party-only platform."

Source: GamesIndustry

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Ah Pachter again. I wouldn't trust him to predict the sun was going to come up tomorrow.

Seriously, why do people keep listening to (and paying) him? He's so rarely even close to right.

Yeah too bad people already have those services on other devices.

And the Wii-U ISN'T a first-party-only platform?

If the live TV thing happens with subscriptions with ISPs or cable providers, I suspect that it won't work in Canada. ***** Bell and Rogers! You money grubbing **********!

If those were the prices I'd buy a new console in a snap. Anything under 500 would be a great price

Alfador_VII:
Ah Pachter again. I wouldn't trust him to predict the sun was going to come up tomorrow.

Seriously, why do people keep listening to (and paying) him? He's so rarely even close to right.

My guess is that it's because, while not as good as we would expect from an expert, he might be the best available.

"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,"

I have absolutely no clue what that means. What's an MSO?

Every prediction Michael Pachter seems to make turns out to be wrong. How does he still have a job?

So 229 for the PS4 and 261.62 for the Xbox One, both of which were lower than some of the Wii U prices on release?

Of course, I know it doesn't exchange exactly, but something seems off about that for consoles that are supposedly meant to be more powerful than the Wii U

Then again, it is Pachter who probably just reads whatever he sees in his alphabet soup and goes from there.

I wouldn't complain if those were the prices, but somehow I don't see it happening.

Those material costs can't be right. Consoles have always sold at a loss initially. Has technology really fallen in price by that much?

If those are the correct prices for materials, and they use history to try and charge much more... I don't even know. I've never bought before the 1st price drop, I'm in no hurry.

Michael Pachter also predicted that Fuse would sell over 5 million copies.

Here in the UK, it stormed the UK chart by entering in at position number... thirty-seven.

Another example, if any were needed, of Pachter's searing insight and incredible knowledge of the gaming industry.

At this point Pachter is like that octopus that predicts the winners of football tournaments (actual football, not that thing you yanks call "football"), only less accurate...

What the heck does MSO mean? Is that the stuff you used to find in Chinese food?

Alfador_VII:
Ah Pachter again. I wouldn't trust him to predict the sun was going to come up tomorrow.

Seriously, why do people keep listening to (and paying) him? He's so rarely even close to right.

I'm wondering exactly the same thing. He's been wrong time and time again, yet gaming sites keep posting his bullshit. :/

"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."

The 'always connected' requirement needs a connection, does it? Better alert the town crier!

Maybe I'm wrong but would this be the first time in a while the new consoles are not sold at a loss? I wouldn't be surprised if the new consoles didn't end up costing that much given the parts in them. Except for XB1 that this, which comes with a kinect that can see in the dark. I would also assume that Sony has a lot of incentive to make the ps4 a lot cheaper given the $600 price tag of the original nearly put them out of business

BrotherRool:
If those were the prices I'd buy a new console in a snap. Anything under 500 would be a great price

Hell yes. If the ps4 comes out under $400 I'd buy it quick

Andy Shandy:
So 229 for the PS4 and 261.62 for the Xbox One, both of which were lower than some of the Wii U prices on release?

Of course, I know it doesn't exchange exactly, but something seems off about that for consoles that are supposedly meant to be more powerful than the Wii U

Doesn't the touch screen controller for the Wii U cost $200 alone? But I also wonder how much the ps4's GDDR5 ram will cost. But the ps4 and XB1 are also using AMD mobile processors which are probably cheap

That's still way too much for the sanity of my wallet to take.

Why is he still relevant? so we can make jokes?

MisterColeman:
Those material costs can't be right. Consoles have always sold at a loss initially. Has technology really fallen in price by that much?

If those are the correct prices for materials, and they use history to try and charge much more... I don't even know. I've never bought before the 1st price drop, I'm in no hurry.

Those prices aren't right. The gDDR5 RAM in the PS4 alone is going to be hugely expensive. Then there's all the Move components that have to be built into the console and the controller. The Xbone is shipping with a full Kinect 2 in each box. That alone will drive production costs right up.

Pachter's pulling these numbers out of his arse. Both consoles are going to be sold at a loss for the first couple of years at least. Especially at the sort of prices he'll claiming they'll sell for at retail.

Nowhere Man:
What the heck does MSO mean? Is that the stuff you used to find in Chinese food?

MSO is a thick paste made from fermented soybeans and barley or rice malt; used in Japanese cooking to make soups or sauces. Maybe he was hungry when he wrote this?

I'm suprised that the material costs are so much lower than the prices, although maybe the manufacturing and distribution are horrendously expensive and the consoles will still be sold at a loss. Maybe he's just shit?

My prediction? The Xbone will cost money, the PS4 will also cost money. This analyst thing is pretty easy.

Would be awesome if the PS3 gets another price cut here in Japan. I'm holding off getting one until it goes seriously cheap 2nd hand.

Game console subscriptions?!? No thank you. That kind of thing ballooned cell phone prices beyond all rationality.

Guaranteed to both sell for $700.00 or more in Aus -_-

PoolCleaningRobot:
Maybe I'm wrong but would this be the first time in a while the new consoles are not sold at a loss? I wouldn't be surprised if the new consoles didn't end up costing that much given the parts in them. Except for XB1 that this, which comes with a kinect that can see in the dark. I would also assume that Sony has a lot of incentive to make the ps4 a lot cheaper given the $600 price tag of the original nearly put them out of business

Yeah I think it would be (if we're discounting the Wii maybe?) Sony said that they were hoping they'd be able to make a profit on selling the console this time round with much cheaper development which is good considering with the state of the company, they probably can't afford to loss-leader that much.

It also means that if the consoles don't have a quick start, then they can slash prices without too much risk

Even if the Xbox does launch at a higher price, however, Pachter said it is more likely to be subsidized through contract subscriptions with ISPs or cable providers. "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," Pachter wrote. "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."

I call Shenanigans

I have enough VCR sized boxes under my TV at the moment plus the fact that I can stream Skype, netflix and any other Xbone 'App' through my smart TV without having to buy an ad laden "Premium" live service over and above my current internet subscription why would I buy something like the Xbone?

Sounds like they also want to use the Xbone as a quasi PVR, well if you put a few games on there plus any HDTV you tape I don't see much space being left on the internal hard drive. Microsoft will also want to you to buy their branded HD's to supplement the Xbone.

I know these quotes aren't coming from Microsoft direct but from an analyst however this isn't far from what was revealed initially since the common theme from it was TV, TV, TV,...

MisterColeman:
Those material costs can't be right. Consoles have always sold at a loss initially. Has technology really fallen in price by that much?

If those are the correct prices for materials, and they use history to try and charge much more... I don't even know. I've never bought before the 1st price drop, I'm in no hurry.

The 8 jaguar cores in the PS3 and Xbone have a die area of 24.8mm2 the PS3 cell processor at launch had a die area of 221mm2 or nearly 9 times larger so the CPU side will be much cheaper.

The PS3 launch Blu ray player was $125 to make today it's $60 for a person to buy so for Sony it's even cheaper the same goes for Memory and hard drives both of which have fallen a lot in price (the 8GB of GDDR5 is about $80 compared to $92 for the 256MB XDR DRAM plus what ever the 256MB of GDDR3 cost).

If he is correct, the Xbox is boned! <.<

>.>

Eeeeh, I'm betting on $499-$599 each. Cheaper than last gen but not as cheap as this guy says.

Whatever the price, it'll no doubt be twice that in Sweden. Because we apparently have taxes at 100%.

Andy Shandy:
So 229 for the PS4 and 261.62 for the Xbox One, both of which were lower than some of the Wii U prices on release?

Of course, I know it doesn't exchange exactly, but something seems off about that for consoles that are supposedly meant to be more powerful than the Wii U

YOu're forgetting that =$ so far as games go. But still 350 for thew PS4 is fine by me if I can get it at that price with a reasonable HDD (or SSD, preferably replaceable) and Killzone.

Jaeger_CDN:

Even if the Xbox does launch at a higher price, however, Pachter said it is more likely to be subsidized through contract subscriptions with ISPs or cable providers. "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," Pachter wrote. "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."

I call Shenanigans

I have enough VCR sized boxes under my TV at the moment plus the fact that I can stream Skype, netflix and any other Xbone 'App' through my smart TV without having to buy an ad laden "Premium" live service over and above my current internet subscription why would I buy something like the Xbone?

Sounds like they also want to use the Xbone as a quasi PVR, well if you put a few games on there plus any HDTV you tape I don't see much space being left on the internal hard drive. Microsoft will also want to you to buy their branded HD's to supplement the Xbone.

I know these quotes aren't coming from Microsoft direct but from an analyst however this isn't far from what was revealed initially since the common theme from it was TV, TV, TV,...

They already subsidized the Xbox 360 with XBL, so why not take it one step further.

My prediction: The PS4 and Xbox One launch at $499 and $450, respectively, both sold at a loss (remember, the retailer takes a cut, so even if they're both $500 in materials the companies lose money). This would mean that just about everything he said is wrong, which is why I'm predicting it; Pachter's track record is so awful that it's always a safe bet to count on him being wrong.

P.S. Thanks

Covarr:
My prediction: The PS4 and Xbox One launch at $499 and $450, respectively, both sold at a loss (remember, the retailer takes a cut, so even if they're both $500 in materials the companies lose money). This would mean that just about everything he said is wrong, which is why I'm predicting it; Pachter's track record is so awful that it's always a safe bet to count on him being wrong.

P.S. Thanks

Retailers do not get much money for consoles sold, actually. When the PS3 launched they actually got like 5$ for each one sold.

Why is pachter still relevant again?

Cause I can't think of a single reason we still pay attention to whatever he says.

Maybe I am missing something, but didn't Sony say that they wanted to keep the PS4 at a $400 price point?

MisterColeman:
Those material costs can't be right. Consoles have always sold at a loss initially. Has technology really fallen in price by that much?

If those are the correct prices for materials, and they use history to try and charge much more... I don't even know. I've never bought before the 1st price drop, I'm in no hurry.

The materials cost is just one part they have manufacture and distribution costs as well. Manufacture costs are the big one at the beginning as you have to build the infrastructure for it.
other wise I would not trust Pacther's opinions on games at all at this point but console price points is something math and business knowledge can get far more actually. also it is people just like him with probably only marginally more information that sets these points.

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