Report: PS4 and next-gen Xbox likely to start at $400

Posted by Shane McGlaun

Both the Microsoft Xbox 360 and Sony PS3 have been around for an embarrassingly long time.

To be sure, Nintendo has already upgraded its Wii with the Wii U, leaving both Microsoft and Sony behind with their third-generation consoles. This scenario is quite likely to change in 2013, with analysts expecting the Xbox 720 and PlayStation 4 systems to launch this year.

Specifically, Microsoft has all but confirmed that its Xbox Next will debut at E3 2013 this June, while many in the industry believe the console is likely to go live in time for this year's holiday season. 

In terms of pricing, analyst Colin Sebastian from Baird Equity Research recently stated that the new consoles are likely to start at about $400, which would be in line with the Xbox 360 when it first launched in a premium bundle priced at $400.

"Given the fragile state of the console game market, we expect the E3 trade show in June will take on added significance, most likely providing the industry with the first public opportunity to examine next-generation hardware," Sebastian opined in a recent industry note.

"Our checks suggest that next-generation console hardware will be largely built from 'off the shelf' high-end PC components, along with hybrid physical/digital distribution models, enhanced voice controls and motion sensing (Kinect integration with every Xbox), and broad multi-media capabilities."

Sebastian also noted that a PC-based architecture with Intel chips inside of the next Xbox would boast a number of advantages over custom developed chips. Meaning, devs wouldn't have to learn new tricks and could code apps and games for the consoles more quickly. Using off-the-shelf components would also lowers production costs, allowing the console to sell for a cheaper price.

Sebastian believes that by using a PC architecture for the next Xbox, Microsoft would be able to offer flexible business models such as free to play, subscriptions, and add multimedia streaming content over the top.

Sebastian says he expects the Xbox 720 to launch in November, with the PlayStation 4 due at a later date as a result of an "early production issue."

However, Sony home entertainment VP Hiroshi Sakamoto recently emphasized that the PS4 game console may very well debut ahead of E3 2013 in June. Sakamoto said that the announcement could hit as early as May.