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Pachter: New Xbox could be subsidised by cable companies

2014 machine likely to heavily engage TV audience, says analyst

Wedbush Securities analyst Michael Pachter has predicted that the next Xbox won't be seen until 2014, and is likely to have at least one SKU which sees the hardware subsidised by a cable TV company in exchange for a subscription contract.

Speaking to X360 Magazine, Pachter pushed his launch predictions a little further into the future than most, saying that a release in spring 2014 meant that Micrsoft's target audience could buy themselves a console during a period when they weren't expected to be buying presents for family, something which he thinks would damage a Christmas release.

However, Pachter also thinks that "only a few million units" would be manufactured for the launch period.

Perhaps more interestingly, Pachter sees the cable and satellite TV providers playing a major role in making Microsoft's next machine affordable to the masses.

"It's pretty clear to me that Microsoft intends to allow the Xbox 720 to function as a cable TV box," says Pachter, "allowing cable television service providers to broadcast over the Internet through the box, with SmartGlass as the remote controller, and with the Xbox 720 using Windows 8 to split the TV signal into multiple feeds, allowing consumers to divert different channel feeds to different displays within the home."

That close association with TV providers is about much more than just offering better services, Pachter believes. By tying in a long-term contract with a satellite or cable television provider to the purchase of the console itself, Microsoft can offer a more advanced machine for less, in much the same way as it has with the $99 360 with a two-year LIVE contract.

"I think this is the biggest part of the next launch," Pachter continues. "It will allow Microsoft to participate in the cable TV monthly subscription. There are 85 million households in the U.S. with either cable or satellite TV, and if Microsoft could sell half of them an Xbox 720 and collect a $5 monthly Xbox Live Gold fee from each of them, we're talking huge profits.

"This suggests to me (along with the current $99 Xbox 360 financing plan) that Microsoft will seek to get a cable TV provider to subsidize the cost of the box, meaning that we might see an Xbox 720 for $99, if the customer commits to a cable TV subscription for two years."

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Latest comments (6)

Greg Wilcox Creator, Destroy All Fanboys! 9 years ago
As the old saying goes: "Be careful what you wish for..."

Nice idea, but I can see it now: a few thousand people a month who can't pay their cable bill (should there be a monthly plan for those who can't afford a two year shell-out up front) getting their consoles shut down and not able to play games OR watch TV. Oh, that's going to be an interesting dynamic, that's for sure...
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CK Hicks Developer, Writer 9 years ago
Oh. My. I'll pass, thanks.
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Tim Carter Designer - Writer - Producer 9 years ago
Yes... because there is nothing quite like a game machine to engage a TV audience.

After all, when I'm watching Boardwalk Empire, I really want some pimply nerd to be bothering me over when I'm done so he can start killing zombies on his XBox controller again.
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Dave Knudson Sr. Technology Manager, Electronic Arts9 years ago
I can see it now. Buy a [insert console name] from [insert cable provider] and all your downloads/streaming on this platform don't count against your bandwidth cap.
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Andy Samson QA Supervisor, Digital Media Exchange9 years ago
So this makes Nintendo the man from the future, setting MS back two years. By that time Nintendo is already 1/3 into the Wii U's life cycle and they are already developing their next machine to replace the system. While Nintendo gives users more freedom to enjoy their TV, MS would rather let families fight over it.

That bandwidth cap's going to be a major problem specially with SmartGlass having the need to use the internet to stream data to and from the system. It wouldn't be seamless.
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I know that the journos are focused on all things consoles' but I am a little disappointed that none have attended any of the consumer electronics meets and press events (possibly they do not get free invites or spoon fed press releases). In that sector the discussion on the 'constantly connected' entertainment system has been the main focus, and with that the talk of what that will require has focused on control of the 'pipe'!

As we have seen in the UK - Virgin acquired TiVo styling to guarantee their cable is a "must have" component of the future living room. And as we will see with GoogleTV+ the "hot pipe" mentality, with special constant connections and subscription (micro-payment) business model is the way forward for many providers (any of you guys seen the Google Nexus Q???)

That Nintendo has scrapped its previous plans for online, and are looking at a 'free too-download - but expensive to own' model is their choice. But Sony and MS are looking at a Netflix / Cable TV approach - and the idea of a constant on XB760 fills me with woe. That is why they are hyping their power-saving (green) capability for the future (and forgetting the XB360 fires of the past). Just wish the console media was in a better position to report the finer details with a open (and not compromised) [Atari brought any more ads/reviews in Gamespot recently] approach!

[Rather than have to go to DigiTrends for any detail!]
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