Colin Sebastian of Baird Equity Research has suggested that the Microsoft Xbox 720 and the Sony PlayStation 4 could arrive this fall, costing anything between $350 and $400. According to the source, 'The analyst revealed that during the Consumer Electronics Show last week he spent time "with a number of companies involved in video game development and distribution," who informed him that the next-generation consoles will be "largely built from 'off the shelf' high-end PC components, along with hybrid physical/digital distribution models, enhanced voice controls and motion sensing, and broad multi-media capabilities.'

Sebastian believes that “a PC-based architecture (Intel chips in the case of Xbox) should have a number of advantages over custom-developed silicon.” In his opinion, there will be less of a “learning curve” for software developers compared to completely new technology, and the cost of production and retail price points should be lower than prior console launches.

Microsoft launched the Xbox 360 in 2005 with a top end price of $399, while Sony released the PlayStation 3 a year later for $499 and $599 respectively.