For the Xbox One, if there are in fact no meaningful subsidies, we believe a starting price of $399 makes sense given that the Xbox 360
Pro debuted at that price point in November 2005. Our estimate of the bill of materials for the Xbox One (based upon speculation
regarding many of the specs) is around $325, suggesting that Microsoft could make a modest profit at the $399 price point. For the
PS4, we remain confident that the new console will have a lower initial MSRP than the PS3, which had a lofty starting price of $599 that
we believe negatively impacted its long-term popularity. We expect the PS4 to debut at $349, as our estimate of the bill of materials is
$275.