At the brink of new console launches, be it handheld or home based, there are always analysts who try their damndest to predict what these upcoming units will end up costing. More often than not, the analysts and their crystal ball are terribly wrong. Surely we all remember when analysts swore that the PS2 would cost nearly $500 at launch, and possibly as much as $700. Analysts also predicted a quick demise and a ridiculously high price point for the Xbox, as well. It's not much of secret that these analysts don't really know what they're talking about. But whenever they predict a price for one of Sony's upcoming units, we have to be there and let you guys know what's up.
Michael Pachter and Edward Woo of Wedbush Morgan Securities demonstrated their incredible powers. They went on to predict that the PS3 may likely launch for $500 in 2006, and they feel that the primary reason for such an inflated launch price is because the PS3 may possibly feature TiVo-like capabilities. The predicting duo states: "We expect Sony to introduce its next console with more functionality than its current console. We base this conclusion on the introduction of the PSX, planned for late this year. The PSX will include a Digital Video Recorder (similar to TiVo) functionality; broadband Internet accessibility; wireless LAN functionality; and DVD read-write functionality. These features add approximately $500 per unit to the cost of production, resulting in an expected launch price of around $700. By late 2006, we expect the cost to include these features to decline to around $250, but speculate that the next generation console, should it include these features, could debut at $500. At this level, we believe that many consumers will be alienated."
We'll hold you to that one, guys.
Though to be perfectly fair, their price point prediction for the PSP (alliteration is awesome, isn't it?) was a bit surprising and seemingly generous. The duo predicts a launch price of $250, but didn't go into detail as to why they felt that way.