In an E3 preview note to investors, Investment firm Wedbush Morgan forecasted that PlayStation 4 will retail for $349 while Xbox One will retail for $399.
According to the company, PlayStation 4 hardware components cost Sony $275 per console while Xbox One components cost $325. These numbers doesn’t include R&D, marketing and distribution costs, so the consoles actually cost more than that.
While Wedbush Morgan expects Xbox One to be more expensive than PlayStation 4 at launch, the company also expects that Microsoft will offer SKUs at a subsidised price through a subscription contract from a broadcast, cable or ISP provider.
"We believe the ability to watch live TV from a cable, telco, or satellite set-top box through Xbox One could entice an MSO to drive subscriptions through a subsidised box in exchange for a multi-year contract," the preview note reads."The 'always connected' requirement for the Xbox One likely means that a broadband connection will be required, suggesting to us that ISPs may have an incentive to offer a subsidy as well."
"In addition, Microsoft could conceivably subsidise the Xbox One through prepaid Xbox Live Gold subscriptions (as it has done on a limited basis in the past) or premium Skype functionality as well. Similarly, Sony could subsidise the PS4 through prepaid PlayStation Network subscriptions, but unlike Microsoft, it does not have a history of doing so."
As for Nintendo, Wedbush Morgan affirms that it"risks losing additional share to its console competitors if the quality and volume of content available for Wii U does not pick up markedly in the near-term."
"In addition, if the Wii U's popularity does not improve by the end of the year, many third-party publishers may pass on producing games for the console. We note that EA recently announced that it had no Wii U games in development, and it remains a possibility that the publisher will abandon the platform entirely. Should other third parties follow EA's lead, the Wii U could be relegated to a first party only platform."