Analysts suggests that the next generation home console from Microsoft and Sony will launch by the end of the year. Both the consoles will be priced around the $350 to $400 price point. It is expected that the Sony’s PS4 will launch in October where as the next Xbox, the Xbox 720, will be available in November. Bot the consoles will be made available just in time for the year-end holiday season. Relevantly, another batch of rumours indicate that the two consoles will possibly be unveiled at GDC ahead of E3 this year, though we'll take that news with a pinch of salt. 

When Microsoft launched the Xbox 360 back in 2005, the top end version of the console cost $399 for the 20GB variant. The price of the 360 was significantly lower than its rival the PS3 that launched a year later at $499 and $599 for the two models. The analyst suggest that the new consoles will be unveiled at E3 2013 in June, but other speculations on the Internet suggest that Sony and Microsoft may hold their own events just before E3 to give gamers a “first glimpse” of the consoles. When Nintendo unveiled the Wii U it did so at E3, but it did hold its own events in subsequent months leading to the launch of the console which gave us more information about the launch and games lineup for the system.

Analysts also suggest that the next generation consoles will be built from off the shelf PC hardware. The Xbox 360 had backward compatibility with a limited library of games, but the backward compatibility was pretty good. The PS3 on the other hand, well the less spoken the better. The fear of backward compatibility is a lot more when it comes to the PS3 games working on the PS4 rather than the Xbox. This will not only enable them in cost control during production, but will also make the process of game development a lot easier. The Sony chose a unique Cell-based architecture for the PS3, which was not only more powerful than the Xbox 360, but was also more powerful then some high end PC’s at the time of the console's launch. The downside was that the PS3 was priced way too high for the average gamer and the process of developing games for the system was a nightmare. 

Initially, both the PS3 and the Xbox 360 were sold at a loss, but the 360 had the first mover’s advantage (launching a console before the competition), and also had an easier game development cycle. The war for online and exclusive games started a bit later.