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Wednesday, 05 June 2013 07:14

Xbox One more expensive than PS4?

Written by David Stellmack

Could be a reversal this time around

While the actual pricing of neither Microsoft’s nor Sony’s consoles have been announced yet, it seems that we are getting a sense that Microsoft’s Xbox One could be more expensive than Sony’s PlayStation 4. This would be a reversal from the previous generation, where Sony’s PlayStation 3 was the more expensive console at launch over Microsoft’s Xbox 360.

Webush analyst Michel Pachter claims in his pre-E3 research note that he believes the PS4 will launch at $349, while the Xbox One will be $50 more expensive at $399. Microsoft will offer a subsidized version of the Xbox One that will be less, of course; but it is unknown how well gamers will embrace the subsidized sales model. Microsoft does seem to be better positioned and have more experience using the subsidized model than Sony, as it has been experimenting with it using the Xbox 360 for some time now.

The biggest reason for the difference in price is believed to be the bill of materials. The PS4 is believed to be coming in around $275, but the Xbox One is coming in close to $325. The cost of the new Kinect is said to be driving the price higher in the Xbox One. Because of Microsoft’s making the Kinect functionality such an integrated part of the Xbox One experience, it is a cost that Microsoft will be stuck with moving forward.

The TV and always-connected requirements open up some interesting possibilities for subsidized bundles from cable, satellite, and ISPs who might want to offer the Xbox One as part of a package. Speaking of the TV functionality of the Xbox One, Pachter claims that he believes that Sony could offer pretty much the same TV functionality using the PlayStation 4 as is offered in the Xbox One through a variety of software and firmware updates.

Neither Microsoft nor Sony want to lose money on the consoles right out of the gate if it can be avoided, but the $50 difference in price right up front could drive gamers from one camp into the other when you combine it with some of the other things (such as the restrictions on used games and always-on connectivity restrictions) that Microsoft has put on the Xbox One.

David Stellmack

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