A $500 PS3?

In a 144 page annual report into the games industry, Michael Pachter and Edward Woo of Wedbush Morgan Securities have made some fairly lofty predictions. The report, titled "The Definition of Insanity: Why The Next Console Cycle Will Start Off With A Whimper", provides some new data and insight into the next console war. The prediction that is causing the most hubbub in the gaming industy today is that of the $500 Playstation 3.

The report reads, "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."

The Wedbush analysts also predict a $249 PSP (Sony's handheld) launch, with $30 software titles.

For more report findings, please check out any one of these fine sources:
Gamespot
GamesIndustry.biz
Spong
IGN Online