Inside Network analyst Billy Pidgeon says he believes Sony will need to price its upcoming PlayStation 4 console at $299 for the system to rack up high sales this holiday season.
"I'd like to see maybe two models, one under $300 and one under $400 would be ideal," Pidgeon told GameIndustry.
"$299 is the magic price point. I think this current generation took way too long to get there. It has to be under $400 and honestly if they could subsidize it further and take more of a hit, it might be worth their while in the long run."
According to Pidgeon, sales in the first 12 months will be slower - for both Microsoft and Sony - than the previous generation of consoles as more people now play games on devices like tablets and smartphones.
"Uptake during the first year is going to be slower than people expect. And to keep a viable business in terms of profit margins, they're going to have to do their best to keep their current-gen platforms viable as they're perhaps moving into next-gen more slowly than they did last time," said Pidgeon.
"Historically, we've seen generational transitions where the previous generation just dropped off a cliff when the new console came out, but that would really hurt either Sony or Microsoft if that happened."
Meanwhile, Wedbush analyst Michael Pachter says he believes Sony's upcoming PlayStation 4 video game console will carry a price tag of $400-$449.
"We remain confident that the new console will have a lower initial MSRP than the PS3, which had a lofty starting price of $599 that we believe negatively impacted its long-term popularity," Pachter opined in a recent industry note.
The analyst also noted that unlike graphic jump from standard to HD (PS2 to PS3), the transition from the PS3 and PS4 would not a have significant impact on development budgets.
"The smaller jump in graphics this cycle, coupled with a PC-based architecture, should result in a smaller incremental increase in game development spending by the publishers than in prior console cycles," Pachter explained.
"Although the PS4 will likely be able to play games at higher frame rates than its predecessors, we believe publishers will be reluctant to significantly increase their development budgets to maximize game frame rates, as the improvement will be largely unnoticed by many gamers."
In related PlayStation 4 news, Hiroshi Kawano, President of Sony Computer Entertainment Japan, has acknowledged that even he doesn’t know what the final console design will look like.
“If I’m being honest, I also haven’t seen its final design," he said. "Even the controller we showed [this week], I saw the final design around [a day before] or so."
As TG Daily previously reported, Sony unveiled its long-awaited PS4 console at an event this past week in NYC. Described by the Japanese-based company as a "platform by game creators for game creators," the PS4 is equipped with "supercharged" PC architecture, including an x86 processor, enhanced GPU, unified high-speed memory, a massive hard drive and support for suspend/resume mode.
As expected, the Playstation 4 is also packaged with a redesigned controller that features a touchpad on the front, a share button, a headphone jack, a light bar for player identification and tech to sense a player's depth and 3D position.
The Playstation 4 is capable of downloading games in the background, even when put into suspend mode. Meanwhile, the entire Sony Playstation UI has been redesigned, with a special emphasis on social features and integration, as users can even watch games being played (via the controller's "share" button) and discuss in-game events via a chat window. Interestingly, friends can take over another player's controller, if they are given permission to do so.
Sony also described the Vita as the "ultimate companion device" for the PS4, as remote play is support for the portable console via Gakai.
"Our long term goal is to make every PS4 title playable on the Vita," Sony execs explained. "To make remote play on the PS4 and Vita feel good. So we've integrated Gaikai into the PS4, effectively making it a game server."