Damn, I want to be an analyst some day.

We predict a pricecut by 2016, but it can happen much faster than that!
What a lousy prediction is this?

I found that interesting...

"It should be noted that the Saturn released at $100 more than the PSX, and it took Sega nearly a year to knock it down to $299..."

It should be noted that the Saturn released at $100 more than the PSX, and it took Sega nearly a year to knock it down to $299...

— Jeremy (@ManaByte) January 3, 2014

not that interesting, they were in bad weather thus couldn't afford to increase the loss per unit sold

http://www.theregister.co.uk/2013/11/27/xbox_one_price_brings_loss_to_microsoft/

He's trying to get some predictions right for a change by making some obvious ones. A One price cut by 2016? PS4 outselling the Wii U by spring? How bold of you.

I'm going to say that Patcher's prediction for Wii U is completely out to lunch and that Wii U will be 20 mill sold WW by no later than end of 2015.

I don't see it...

I would think that both Sony and MS would want to keep the cost as high as possible for as long as possible and just up the HD sizes etc.

Unless MS are under pressure, I don't see a price cut until 2015 from either.

Analysts claim Microsoft's new Xbox One games console will be a loss-leader – each costing Redmond more to produce than the price tag, once you factor in research'n'development.

Technology market watcher IHS tore into the components of the new gaming machine, and – judging by the Xbox One's hardware and manufacturing costs – believes Microsoft is taking a hit on hardware sales in hope of revenues from licensed games and Live subscriptions.

This follows a time-honored tradition in the console market of selling games machines at a loss, simply to get as much gear as possible into homes, and then make back the money on royalties from third-party developers. It's claimed Sony makes "about $18" on each $400 PlayStation 4, for example.

The IHS estimates that each Xbox One console carries a hardware cost of $457 per unit and an additional manufacturing cost of $14, making the device a $471 machine to produce wholesale. An Xbox One costs $499 in the shops, so that's a $28 difference. (But then the retailer will want a cut, and there are other overheads to consider, so Microsoft's mileage may vary.)

Among the most expensive hardware bits in the Xbox One is the AMD processor at its core. The system-on-a-chip package includes the Xbox One's GPU and CPU, and we're told it costs $110 per unit.

Other price factors include $75 for the Kinect hardware, $60 for DRAM and $37 for the Xbox One's internal hard drive.

When additional costs from the research and development of the console are factored in, analysts believe that Microsoft will in fact be taking a slight loss overall on the sales of the Xbox console itself.

"For both Microsoft and Sony, their latest-generation video game console hardware is unprofitable at the time of release, requiring the companies to subsidize it initially," said IHS senior principal analyst Steve Mather.

"However, these companies easily can largely compensate for their losses though sales of highly lucrative game titles. Meanwhile, as the cost to produce the consoles decreases according to the normal learning-curve dynamics in the electronics industry, the companies can cut their retail pricing — or pad their profits."

The Xbox approach differs from that of other Microsoft hardware lines, such as the Windows 8 Surface tablet lines. Microsoft enjoys a healthy markup on its fondleslabs, which thus far have carried less pressure on vendors to minimize hardware costs.

As Mather noted, however, Microsoft may hope that the cost of keeping the Xbox One cheap will pay dividends for other, more lucrative hardware lines down the road.

"The Xbox One is designed to serve as a beachhead in the home for Microsoft, with the console’s capability to interact with—and interface to—other devices, such as televisions, set-top boxes, smartphones and tablets," Mather said.

"Gaining such a strategic advantage in the battle to control the connected home and Internet-enabled living room is well worth having the Xbox One act as a loss leader for Microsoft." ®

thats not how including R&D costs work, rest of the article is guesswork. I hope you don't mind if I keep with my statement that each xbox one sold is making microsoft money.

MS's new CEO + the board of directors probably won't sign off on a price cut unless there were significant manufacturing cost cuts. Sorry guys, that's not likely to happen for another 2 years at least. I don't see them ever going the route of taking a loss on selling the console again and it's far more likely they'd rather the pocket the difference than leave it on the table.

I think it's more likely we'll see a subsidized Xbox One offered by a major cable company in exchange for a service bundle. Like it or not, if the Xbox one is going to succeed, it needs to be what it was originally presented to be: an all-around entertainment device. There's just not enough Xbox One exclusives to capture enough market share globally for Xbox to be profitable simply on gaming alone.

That's why I said end of spring. If theye're still close by then they probably shouldn't drop the price. But let's say after the next holidays in January if PS4 leads by double the sales they should do something drastic and I think they're capable of such a feat.