Price for Next Gen

Credit: Sony, Microsoft
Will subsidized options for the PS4 and next Xbox lead to cheap starting prices?
In a preview note sent to investors Monday, Wedbush Securities analyst Michael Pachter engaged in a little next-gen speculation. The controversial industry suggest that both the Playstation 4 and next Xbox (aka Xbox 720) could be launched later this year with extremely low starting prices thanks to cell phone-like subsidies.

"We think that the next-generation consoles will perform a wide range of multimedia functions," Pachter wrote in the note picked up by GamesIndustry.biz. "We should learn more in the coming months, but we expect the next Xbox to have an IPTV tuner that will allow an MSO to deliver services over the Internet outside of the MSO's regulated geographic boundaries. If we are right, any of Microsoft's MSO partners will have an incentive to subsidize the purchase of the next Xbox in exchange for a long-term service commitment (similar to the cell phone model). If the subsidies are steep, it is likely that the next Xbox will appear more affordable to many consumers than currently anticipated, and it may capture market share faster than many expect. We don't expect Sony to sit idly by watching, and believe that the PS4 will follow Microsoft's lead in short order, suggesting to us that next-generation consoles could have lower starting prices than any in history."

The "any in history" line is possibly a little hyperbolic as the lowest launch price of a console this century was the Nintendo Gamecube at $199.99. The PS2, Xbox and Xbox 360 all started at $299.99, the Wii launched at $249.99 while the PS3 started at $499.99. Prior to that, $199.99 was the norm with a couple of outliers such as the Sega Genesis at $189.99 and the Atari 7800 at $139.99.

That said, Microsoft is expected launch the next Xbox with a subsidized model after introducing the concept last year. Windows blogger and insider Paul Thurrott recently suggested that the console will be priced at $500 when it launches but will come with a $300 subsidized option.

In a recent episode of GameTrailer's Bonus Round, Pachter further explained the subsidization ideas he expects from Microsoft.

"So I think the price for the next Xbox is going to be subsidized either by a cable TV company or an internet service provider," Pachter said. "I think ISPs have a reason, if you add broadband to get the next Xbox, we'll give it to you for 100 bucks. If you subscribe to our cable TV and sign up for a couple of years, we'll give you the next Xbox for 100 bucks."

Sony hasn't tipped its hand one way or the other about either the price or the possibility of a subsidized model of the PS4 but there have been suggestions of different subscription tiers for PSN and PS Plus. Pachter believes that Sony will eventually match Microsoft's move though.

Both the Playstation 4 and next Xbox are expected to be released this November. Microsoft is said to be planning a reveal for its next-gen console in May.

Edit: Fixed a typo with the PS3 launch price and accidentally saying "Dreamcast" when I meant "Gamecube". Whoops.

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Interesting didn't hear of this possibility, the one I read was that they will more than likely go with the full price and or cheaper model with a sub per month price as they tested last year. Sub price ranging in the 10-15 per month range. Can't wait for the 21st!!

Also heard of ps4 mini and Xbox mini less GB and half the cost but could just be rumors. Great for people like myself who just use it for COD and nothing else gaming wise.

neat idea too bad it still fucks those of us with limited infrastructure - there essentially is not subsidized market unless their ISP of choice is in the area (which for me is doubtful)

Looking forward to the release of the 720. I doubt I would sign up for a service for a few years just to get the Xbox cheaper by a couple hundred dollars.

^^^If it's just a contract for say 2 years of Xbox live and $200 off the system... i'll do that in a second! I've been paying for live for 10+ years now. I figure if you're going to be playing online this rumored deal/rate will work out nicely.

Asztalos_ wrote:

"I think ISPs have a reason, if you add broadband to get the next Xbox, we'll give it to you for 100 bucks. If you subscribe to our cable TV and sign up for a couple of years, we'll give you the next Xbox for 100 bucks."

People willing to sign contracts with a different cable tv or ISP? I know I'm locked in to DirecTV for another year, so no cable TV for me. As for the ISP, it depends on who they go with. If it's a crappy one, forget it.