Pachter: Next-gen consoles may be cheapest in history, Wii U doomed

Industry analyst Michael Pachter believes the PlayStation 4 and especially the next Xbox may be very cheap, which is very bad news for the expensive, current-gen Wii U.

In a note to investors reported by GamesIndustry, pachter said he expects the Wii U to underperform when the NPD releases its March retail figures.

"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," he said.

"We think that core gamers are far more likely to turn their attention to the PS4 (due in the holiday season) and the next Xbox, which we believe will be unveiled before E3 and have a launch alongside that of the PS4, and believe that 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."

If the PlayStation 4 and Microsoft's next console are priced reasonably, then Pachter believes Wii U sales will continue to "stagnate".

It's a situation Pachter considers quite likely, as he's a believer in the service commitment model - where you'd buy a console on a contract, like a mobile phone, with an extended period committed to a particular provider. The next Xbox, in particular, with its expected IPTV focus, may end up quite cheap.

"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," Pachter said.

"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."