Cable TV subsidisations will result in record low prices for next-gen consoles and further marginalise Nintendo’s Wii U, says Wedbush Securities analyst Michael Pachter.
In a preview note for The NPD Group, Pachter said that the price on the next Xbox and PlayStation 4 were likely to be the lowest launch prices ever seen thanks to deals with non-gaming content providers.
"We expect the next Xbox to have an IPTV tuner that will allow an MSO [cable TV operator] to deliver services over the Internet outside of the MSO's regulated geographic boundaries.
“If we are right, any of Microsoft's MSO partners will have an incentive to subsidize the purchase of the next Xbox in exchange for a long-term service commitment (similar to the cell phone model).
“If the subsidies are steep, it is likely that the next Xbox will appear more affordable to many consumers than currently anticipated, and it may capture market share faster than many expect.
“We don't expect Sony to sit idly by watching, and believe that the PS4 will follow Microsoft's lead in short order, suggesting to us that next-generation consoles could have lower starting prices than any in history."
This would have a cooling effect on already-dire Wii U sales, said Pachter.
“We think that core gamers are far more likely to turn their attention to the PS4 and the next Xbox,” he said.
“The long-term appeal of the Wii U will be severely limited by the perception that the PS4 and next Xbox will be much more powerful with greater online integration and multimedia functionality."
Pachter also forecast that the Wii U would sell just 55,000 units in its next month on the market, and that a price cut would have little effect on sales.
“Its fortunes appear unlikely to improve for several months, even if Nintendo decides to drop price, as there are an insufficient number of core titles that are generating interest in the console.
"Should the new consoles from Sony and Microsoft be price competitive, we think that Wii U sales may continue to stagnate."
Last month in Japan, even the struggling PlayStation Vita managed to outsell the Wii U.