Analysts, developers: PS3 to cost $399-$699

January 12th, 2006, 02:49 Posted By: wraggster

Ever since the PlayStation 3 was announced, industry watchers have been prognosticating its price point. Just over a month after E3 2005, Merrill Lynch predicted the game would sell for $399, even though it would cost an estimated $494 to make--before labor.

However, when Microsoft announced the Xbox 360, which uses current-generation DVDs, would sell for $399, many thought the PS3's internal next-generation Blu-ray disc drive would push its cost higher. That assumption was reinforced at the Consumer Electronics Show (CES) last week, when the first stand-alone Blu-ray disc player was unveiled--with a $1,800 price tag. (The Xbox 360 uses conventional DVDs, but will get an external drive which supports Blu-ray's rival format, HD-DVD).

In the wake of CES, CNN/Money correspondent Chris Morris decided to poll a nonscientific sampling of game analysts and developers to see how much they thought the PS3 will cost. "Several developers I spoke with (under the condition of anonymity) said their studios were expecting the system to launch at $499," wrote Morris, who included quotes from analysts who concurred with the assessment.

However, Morris said that not all insiders' estimates were the same. Some pegged the console as matching the 360's $399 price point--which, according to last year's Merrill Lynch report, means Sony could lose more than $1 billion during the console's first year on the market. Several developers also lowballed the console at $450, while others said it could cost as much as $699. However, as Sony is staying resolutely mum on the PS3--until GDC 2006, anyway--no price is yet official.

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