Sony sticker shock: $500 PS3, $249 PSP are possibilities

Revenues, sales, even price tags are on the rise as analysts address the upcoming transition to next-gen machines.

In a year-end report that puts Leo Tolstoy to shame, industry analysts Michael Pachter and Edward Woo of Wedbush Morgan Securities presented the industry today with a 144-page tome of charts, theories, prognostication, and predictions. Unlike Tolstoy, however, their book has a happy ending. Titled: The Definition of Insanity: Why The Next Console Cycle Will Start Off With A Whimper, the analysts present an "in-depth look at interactive entertainment software." And while many of the report's data points were revealed in May, during a Pachter-hosted E3 Conference Program luncheon, most of the data is, in fact, new.

Probably the most exotic of the report's predictions was a reference to Sony's PlayStation 2 update. The report suggests Sony is considering adding PSX and TiVo-like functionality to the PlayStation 3. And if it does, the sticker price on the unit could climb as high as $500. The report 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."

News source: GameSpot

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