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The Future of Gaming Costs How Much?!

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By , dealnews Media Editor

At E3 on Monday, Microsoft and Sony held really long keynote events in which they tried to get us excited to pay lots of money for another one of their consoles, even though the one we already own is fine and we barely play it as much as we'd like. But we digress.

Taking the stage in the morning, Microsoft's Xbox team shed some light on the features of its new console. The Xbox One will include an 8-core proprietary CPU, 8GB of DDR3 RAM, and a Blu-ray drive for starters. It'll only cost you $499. Later that day, when it was Sony's turn, the team rattled through a list of pertinent hardware features for its new PlayStation 4: it will include an 8-core CPU, 8GB of DDR5 RAM, and a Blu-ray drive (still), among other things.

Now, if you can remember way back to 2006, you'd have been expecting the PlayStation 4's price to be greater than the Xbox; the last time each of these companies released new consoles, the PS3 cost $200 more, so one might guess that the PS4 would be priced at or around $699. But Sony instead dropped a bombshell: The PS4 would cost "only" $399! Yes, less than the Xbox.

Price Hijinks?

Is this a case of the Xbox team assuming the PS4 would again be more expensive, and thus inflated the console's cost thinking that it'd still be safely cheaper than the new Sony offering? Or is the Xbox One's $499 price tag a fair representation of what it costs Microsoft — which had in the past sold the Xbox below cost in order to gain a greater market share — to build the device? Or is Sony now taking a hit on its bottom line to gain a wider audience?

No matter the real answer, we know that over time prices will come down. However, with a lot of people now eying the PS4 as a "cheaper option," it's reasonable to assume that there's presently a fire under the Xbox's proverbial butt to bring its latest console's price down faster.

What do you guys think about the cost of each of these next-gen consoles? Based on the experience and hardware you'll get, are these prices fair? Has the cost of the consoles swayed your opinion about whether or not you'll buy either system? Are both systems too expensive? Let us know your thoughts by dropping a comment below!


Related dealnews Features:
Jeff Somogyi is the dealnews Media Editor. He waited four years to buy his current Xbox, he can wait four more years to buy something new. See more of his slow thoughts on Google+ or Twitter.

Follow @dealnews on Twitter for the latest roundups, price trend info, and stories. You can also sign up for an email alert for all dealnews features.

Please note that, although prices sometimes fluctuate or expire unexpectedly, all products and deals mentioned in this feature were available at the lowest total price we could find at the time of publication (unless otherwise specified).
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24 comments
InMyOffice
Like a huge portion of the gaming market, I am already always on-line with my gaming systems (Xbox, PS3, PC), and only buy new games as it is (usually at least $15-$20 off from dealnews). So I will likely jump on the Xbox One train first, and then maybe pick up a PS4 in the discount bin a couple of years down the road, as the 360 has proven to be a much better user experience than the PS3.
plschultz
The question of price "fairness" is an interesting one, but it will really be difficult to find this out...if we're talking about the difference between the console's price and its cost to develop and manufacture. There's probably very few people, even within Microsoft, who know what the true unit cost is. The better question for us as gamers is if these prices are good for a mass market consumer device, because it's good for all of us if Sony and Microsoft can create a sizeable installed base that attracts developers making quality games; on that I think that Sony is closer to the mark than Microsoft but it would be better if the prices were between $300 and $400. Regarding the restrictions on the used market, we have to remember that this is a tactic to attract developers to the Xbox so the advantage may yet go to Microsoft over time in terms of building a high quality game library.
bilboBagit
Who wants to sell me their used XBOX 360 with Kinect?

@AnywhereButHollywood on deals you can use the dedicated "Report an error" link off to the right, the one that pops up a blue box. The comment just goes to staff hidden.
portbcv
After the cost of the console, the "Live" subscription, and the most likely inflated price of the games, I will have to pass on the Xbox One. On a similar note, who wants to sell me some of their Xbox 360 games? Going to start beefing up my library in 3-4 months.
grumpy
I can say No at $250, it's just easier at $499.
dealnews-Somogyi
@pdpat43 If you're definitely not going to be playing any games on it, I'd certainly say you should eschew a next-gen console for a standalone Blu-ray that does streaming! Just make sure it can stream what you want it to. Heck, you can even get a refurb that does what you need for
Risrepkel
@AJtheAJJ voice/gesture navigation are mostly party tricks. A month after you get the console, you'll be back to hitting the arrow buttons.
pdpat43
I've been using my PS3 mainly for Blu-ray and streaming video (Hulu Plus and Amazon).
Lately, Blu-rays have been skipping.

Rather than repair it, would you all recommend upgrading to either PS4/Xbox One or just a devoted Blu-ray player with streaming capabilities?
bikeral
sorry, but $499 plus not being able to control how you use the games you paid for makes the Xbox One a no buy in my book.
AJ_TheAddisonJ
Xbox One all the way. Yeah, OK, for $399 you can get a plain ol GAMING CONSOLE... or for $499 you can get a GAMING CONSOLE, Voice/Gesture navigation, Live TV Overlays, and the best streaming experience available.. The Xbox is more money for more features. When I can walk into a room and say "PlayStation Play _______" or "PS BING ________" and have it display or play whatever I ask along with being able to say "PS pause/stop/play/rewind/fast forward/next episode" then MAYBE the PS4 will be a viable media contender. Also, if you want the Move controller and Camera the PS4 is MORE money than the Xbox which bundles everything you need. So again sure, you can get the PS4 cheaper and it does less, I totally agree. My consoles are online anytime they're on anyways.. Why would you want a next gen console if you are gonna go online? That would get boring fast. Sony wont stop DRM its up to the devs, they also removed PS3's backward compat & ability to load Linux, they easily could again.
dealnews-Lindsay
@AnywhereButHollywood No worries, thanks for pointing it out! We're updating the article now.
AnywhereButHollywood
Well, I didn't expect that comment to go public! I just assumed "I am reporting an error" translated to "private message for staff." Oh, well.
Maxdaddy
Some people say "Oh but it has the Kinect 2!" That doesn't seem so good when their agreement says they can use your images as they please basically they can use the kinect to spy on you and if you haven't heard Microsoft is one of the PRISM participants.
AnywhereButHollywood
Annoying, I know, but the grammar police never sleep. Just thought I'd suggest you take a second look at these four bits:

" ...it will includes an 8-core CPU..."

"...PlayStation 4's price to be more greater..."

"...Is this a case of the Xbox team assuming the PS4 would be again more expensive, therefore, looking for wider margins inflated the console's cost thinking that it'd still be safely cheaper than the new Sony offering? "

"...there's presently fire under the Xbox's proverbial butt to bring its latest console's price to come down faster."
Maxdaddy
The only real thing that makes the difference here is that Xbox is not a buying option because of the connectivity factor and the non use of older games factor. Those two things alone even if it was cheaper then PS4 is a deal breaker.
frank257
You cant play used games those are the only ones I buy, I will never buy another XBOX again, PS4 it is.

Microsoft is a rip off with their DRM
carlosriosness
everyone is hitting the nail on the head. (except neonElixir)

1) better hardware, ddr5 vs ddr3
2) $100 less - use that towards 2 years of PS+ (online gaming)
3) the PS eye will be $60 (you can get it if you want and still save $40)
4) no "used games restricions" - xbox will charge activation fees on used games - A BIG DEAL
5) no "constant connection" required, xbox HAS to connect online once every 24 hours or games will not work, even in single player mode. please tell me you dont expect this system to fail at least a couple times leaving users with bricked systems for hours/days at a time.

sony was loosing $300+ dollars on every PS3 when they were released, i dont think they would mind doing that again if it means winning this generation of gaming.
NeonElixir
Regardless of what hardware is better or who makes a better product, I feel like it's important to point out that while the Xbox One costs $100, it does include a Kinect 2.
buell_usa
I'll wait 6 month to a year when both drop to under $300. PS4 has better stats and is a $100 less and "allows" you to play used or traded games. I would say the clear winner is Sony. These draconian DRM protections are just plain stupid I am really disappointed in both companies. Why does the gaming industry continue to punish its customers?
valle07
I'm a huge 360 fan. HUGE. Never owned a Playstation. But I'll be honest, PS4 took E3. They slapped MS. Kicked them while they were down after dropping the Price Bomb. Sony let's you trade games while MS doesn't (well they do BUT with A LOT OF Restrictions and some fees, I'm sure). I'm jumping ship. Bye Bye Xbox. Hello PS4. Plus with the xbox, you have to pay for xbox live gold to watch Netflix and Hulu but you don't have to on the PS4. Save $100 people, don't buy xbox.
dxf289
The always on internet, the DRM for game developers that prevent loaning, gifting or renting games, and now a higher price tag? I was having an ongoing debate on social networking with a gamer clan member from another state about the merits of PS4 vs XB1. After yesterdays announcements, he equivocated and stated that the PS4 is indeed the better console for our 600 member clan. I'm sure each memeber will also engage in discussions with those who are less dedicated to games as we as well. Do these companies realize how much of their marketing is relegated by our word of mouth? Oh well.
drreese
I probably will not be buying either anytime soon as I don't have a lot of time to play with my 360 right now anyway. Most of the games I buy are used so the Microsoft policy on used games would probably drive me to the PS4 now. If the XBox One was backward compatible and allowed for true used gaming, I would consider upgrading. Since they don't, there isn't any reason to stay with Microsoft (other than Halo) for the next generation console.
PadreTimbo
I agree with Cilvre. Sony's system is probably the better system based on hardware. I think the reasons more people are looking away from the Xbox One are the issues of no borrowed game play (w/o a fee), the lack of backward compatibility (which both Vendors are doing...common nowadays), and Internet connection. I do think the final blow was the price. Coming out of pocket for $500 for a new console and who knows how much more for purchasing of games (NEW)... will be more of the $650 range. A lot of money for gamers in this economy. Myself... I will just keep the PS3 and Xbox 360...and buy all the games that will be dropping in price... That will keep me busy for sometime!!
Cilvre
the ps4 has better hardware overall due to using amd's radeon graphics which microsoft declined to use, and the ps4 has ram that is much faster than the xbox one. all this with a cheaper price makes me think sony is selling it at very little profit margin, where microsoft is trying to go the route that apple has gone, thinking that a higher price point will mean it has a better value or is a better product to consumers. psychology goes a long way into their marketing strategies, but microsoft had already turned a lot of gamers away with previous announcements. we will have to see where this holiday season goes and where uninformed buyers in this economy decide to place their money.
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