In a note to investors Baird's Colin Sebastian brought together various rumours about the new consoles that have been floating around the games business over the past year, and the assumption that both Sony and Microsoft will reveal their new consoles just prior to E3 in June.
"Given the fragile state of the console game market, we expect the E3 trade show in June will take on added significance, most likely providing the industry with the first public opportunity to examine next-generation hardware," he wrote.
"Our checks suggest that next-generation console hardware 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 (Kinect integration with every Xbox), and broad multi-media capabilities," he detailed.
"Moreover, a PC-based architecture (Intel chips in the case of Xbox) should have a number of advantages over custom-developed silicon: for one, the learning curve for software developers will be shorter than completely new technology. Second, the cost of production and retail price points should be lower than prior console launches.
"Third, it will be easier to build online services around PC chip architecture, including flexible business models (free-to-play, subscriptions) and multi-media (over the top) content offerings. For Microsoft, this design will also allow for more integration with Windows 8 and Windows Mobile devices," he added.
Sebastian expects an October launch for the new Sony console and a November launch for the next Xbox, although he warned through his "field checks" there "may be early production issues with Sony's PS4."
$400 price point for next PlayStation, Xbox consoles | GamesIndustry International