Video game analyst Michael Pachter, of investment firm Wedbush Morgan, believes the PlayStation 4 will retail in the U.S. for $349, a significantly lower price than the PS3's starting launch price of $599. This is the same price Pachter told us in our exclusive interview last week, but in an E3 preview note to investors, the analyst estimated that the PS4 costs around $275 per unit to build.
Meanwhile, Pachter estimated the Xbox One Will have a starting price of $399, the same as what the Xbox 360 cost when it first released back in 2005, and a build cost around $325. Despite the higher price point of the Xbox One, Pachter believes broadcast, cable, or ISP providers may offer the console at a subsidized price.
"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," Pachter wrote.
"In addition, Microsoft could conceivably subsidize 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," he added.
Despite the costs, Pachter believes both the PS4 and Xbox One will "sell out" at launch; although, he didn't go so far as to tell us which console he believes will come out on top once E3 is over.
Which do you plan on purchasing at launch: the PS4, the Xbox One, both, or none?