Breakout

Microsoft’s Next-Gen Xbox Will Change the World: Pachter

Jeff Macke
Breakout

This year marks the 8th battle in the so-called "Console Wars," with the release of long-awaited sequels to Microsoft's (MSFT) XBox 360 and Sony's (SNE) Playstation 3. With Microsoft set to reveal at least some details of its new console next week ahead of June's E3, Breakout asked Wedbush' Michael Pachter to help handicap the high stakes battle for your living room TV.

In the attached video Pachter says this round will be all about multimedia and Microsoft has the early lead. Pachter expects this to finally be the year when the gaming console becomes the long-awaited Trojan Horse for the living room. That doesn't just mean connecting to your digital content or being able to talk to your friends while gaming. We can do that now. It's not even going to be a matter of tweaking the Xbox Kinect or adding Skype features. Think bigger.

The big driver of sales as Pachter sees it is the game consoles not just complementing but entirely replacing your cable box. These consoles won't cut the cable; they'll destroy the monopolistic grip your cable company has over you and your neighbors. Instead of being stuck with whoever owns the rights to cable in their region, consumers will be able to pick and choose which cable company gives them the best package.

Pachter scoffs at the idea that Sony and Microsoft are simply updating their consoles. He thinks these boxes will give consumers a level of choice they couldn't even imagine just a couple years ago. The ability to personalize you cable lineup and pay for only content you want, so-called a la carte pricing, will finally have arrived.

The games are just a multi-billion dollar add-on to a device with the potential to satisfy the wants of every disgruntled cable customer in the country, then the world. The revolution will be televised, gamed, telephoned, and broadcast to anyone who wants to see it and it's all going to be because of Microsoft.

We've heard such promises before and we're still slaves to cable pricing. Is the future finally here? Tune in this time next week to find out.

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