"I'd like to see maybe two models, one under $300 and one under $400 would be ideal. $299 is the magic price point," Pidgeon said. "I think this current generation took way too long to get there. It has to be under $400 and honestly if they could subsidize it further and take more of a hit, it might be worth their while in the long run."
Pidgeon added that he believes both the PS4 and Xbox 720 will see slower initial sales during the first year due to the way in which consumers now take in entertainment from a host of sources. This means, according to Pidgeon, that Sony and Microsoft will continue to look to current-generation systems as viable platforms.
"Uptake during the first year is going to be slower than people expect," he said. "And to keep a viable business in terms of profit margins, they're going to have to do their best to keep their current-gen platforms viable as they're perhaps moving into next-gen more slowly than they did last time. Historically, we've seen generational transitions where the previous generation just dropped off a cliff when the new console came out, but that would really hurt either Sony or Microsoft if that happened."