The 2013 International CES may be over now, but rumors regarding the next-generation video game systems from Microsoft and Sony are just starting to heat up. Developers like Valve and NVIDIA surprised many with game hardware announcements at CES, and the hot topic is considering exactly what traditional game makers will do to retain their dominance.
After spending CES 2013 with multiple video game development and distribution companies, Baird Equity Research is predicting new systems - Xbox 720 and PlayStation 4 (or PS4) to cost between $350 and $400. For Microsoft, that's roughly the same price range that the Xbox 360 launched at. For Sony, however, it represents a substantial shift in its consumer pricing strategy. The PlayStation 3 launched with two different models at $499 and $599.
Baird's Colin Sebastian also suggested that the new consoles' internal systems will consist mostly of existing high-end technology instead of custom-developed chips and resources.
"Our checks suggest that next-generation console hardware will be largely built from 'off the shelf' high-end PC components, along with hybrid physical/digital distribution models, enhanced voice controls and motion sensing (Kinect integration with every Xbox), and broad multi-media capabilities," he said.
"Moreover, a PC-based architecture (Intel chips in the case of Xbox) should have a number of advantages over custom-developed silicon: for one, the learning curve for software developers will be shorter than completely new technology. Second, the cost of production and retail price points should be lower than prior console launches."
According to Sebastian, this will make it easier to accommodate a wide range of online services, ranging from subscription-based models to free-to-play. He even hinted that it'll allow Microsoft to easily integrate Windows 8 into its console.
As for when these consoles will actually go on sale, Sebastian said he expects Sony's PlayStation 4 in October, with the next Xbox releasing in November.
Baird's outlook on Nintendo is notably down after the Wii U's modestly successful holiday launch, and the firm sees a tough year ahead for the Japanese company.
"Nintendo will need to bring to market major first-party releases (Zelda) and retain the support of key third-party developers to reduce market share losses. In a negative scenario, Nintendo will be forced to prematurely lower the Wii-U price, and over the course of this cycle, we expect consideration will be given to extending first party franchises to other platforms," Sebastian said.
