It seems more and more unlikely that Sony and Microsoft will be venturing into the territory of outlandishly expensive hardware for their next generation game consoles.
According to Baird Equity Research, both companies will be using off the shelf high-end PC components instead of custom hardware that is specific just for their console. The research firm believes that such a strategy will bring down the launch price of the next PlayStation and Xbox into the range of $350 to $400.
That is good news for parents who will have to check their bank accounts later this year: While far from being cheap, the PS4 may be much cheaper than the PS3, when it launched for $499 for the 20 GB model and for $599 for the 60 GB model, which quickly escalated to a near $1,000 investment with a few accessories such as a remote, a high-end HDMI cable, and a few games. Game developers should also be facing a much more comfortable learning curve to create games.
Baird Equity Research also indicated that this next console generation is not ready to ditch optical media just yet, but will rely on "hybrid physical/digital distribution models". The next Xbox is likely to integrate Kinect by default, which - according to our sources - will come not only with improved 3D resolution, but also with "surrogate" creation that will replace the Kinect avatars. Kinect will be scanning the player's body and clothing to recreate the player's appearance on the game screen.
Baird Equity Research expects that both the PS4 and the next Xbox will be shown at the coming E3 and debut in October (PS4) and November (Xbox).