Xbox One X is $500 - so how much will next-gen consoles cost?

Xbox One X's pricing at £449/$499 may have disappointed many users, but it's indicative of a substantial challenge facing console platform holders: the pace of technological advancement is slowing, and existing hardware components are holding their price for longer. It's a trend that shows no sign of changing and projecting forward, we do wonder - just how much will the actual next generation of consoles cost, when will they arrive and how powerful will they be?

There are two comparisons we'd like to highlight in this piece: we're going to take Microsoft's new console and stack it up against both iterations of PlayStation 4 - the base model and the Pro update. On the one hand, you'll find that the extra $100 compared to the Pro isn't at all unreasonable, but on the other, comparisons with the base unit definitely highlight how difficult it's going to be to provide a cost-effective next-gen console design within the remainder of this decade.

First up, let's discuss the Xbox One X price specifically, and the reason the Xbox team opted for £449/$499. We can't really accuse Microsoft of profiteering here - in an interview with Business Insider, Xbox boss Phil Spencer confirmed that the firm will not make any money from Xbox One X hardware sales. However, the platform holder claws back revenue from elsewhere in the Xbox ecosystem in order to break even and push into profit.

"I don't want to get into all the numbers," Spencer said. "But in aggregate you should think about the hardware part of the console business is not the money-making part of the business. The money-making part is in selling games."

It's not just about selling games though - we can expect committed Xbox users buying the top-tier X model to be paid-up Xbox Live subscribers too.

If Xbox One X is $500 - How Much Will Next-Gen Consoles Cost?

Leaving out the concept of selling hardware at a loss, it's easy to justify the extra $100/£100 Microsoft is asking by comparing specs with PlayStation 4 Pro, and stacking up the extras on top of the basic bill of materials:

• We estimate the Scorpio Engine to be 15 to 20 per cent larger than the PS4 Pro's processor. This is most expensive single component in a console and prices here tend to scale in line with silicon area.
• Xbox One X's extra four gigs of GDDR5 won't be cheap. Two years ago, AMD told us that it cost them $30 to move from four gigs of memory to eight gigs with its R9 390 and 390X. Prices may have fallen since then, but that's still a significant addition to a console price.
• The vapour chamber cooling used in Xbox One X is not insignificant. A similar technology is used in Nvidia's GTX 1080 and 1080 Ti graphics cards, but it was omitted from GTX 1070 - a $400 GPU.
• Hard drive bandwidth has risen from 40MB/s in a standard Xbox One, to 60MB/s in Xbox One X - a 50 per cent improvement. Microsoft wouldn't comment on how this was done (maybe it's a 7200rpm drive) but regardless, a higher performance unit will cost more.
• Using a UHD Blu-ray drive will add to the cost of the hardware compared to a standard unit. However, the presence of the same drive in Xbox One S suggests that this additional cost is not too onerous bearing in mind some of the excellent deals seen on this console.
• Microsoft's 'Hovis Method' - individually tuning power delivery on each motherboard for each Scorpio Engine - must surely add to the cost of production.

While many users were holding out for a $399 price-point, understanding the components and the construction of Xbox One X shows that you're getting a good deal when PS4 Pro is used as the baseline for costing, and that's exactly why we predicted a $499 price-point back in April when we revealed the Xbox One X hardware spec. PC World's attempt to build an equivalent PC that covers off all areas of the X's spec also confirms that you're getting a hell of a lot of tech for your money, especially bearing in mind the ultra small form-factor.

However, it is the comparison with the base PlayStation 4 that proves more illuminating. Effectively, what we're doing is comparing the most powerful console released in 2013 with its 2017 equivalent. It's a measure of how far we've come in four years - which, coincidentally, is the same amount of time between the release of the original Xbox and its successor, Xbox 360. Whether we're talking about those two machines, or the jump from PS2 to PS3, we are looking at undisputed generational leaps there. The same cannot really be said for the jump from PS4 to Xbox One X - even though it is quite clearly the most powerful console ever made. Of course, there are hardware-level customisations to factor in that skew the increases in performance in favour of the more modern box, but fundamentally, with similar AMD technology as the basis for both machines, the figures are a good starting point for ballpark comparison purposes.

The CPU is custom, but still based on the same core tech and only achieves a 44 per cent improvement in frequency. Memory has only increased by 50 per cent when the leap between the OG Xbox and Xbox 360 was a factor of 8x. Not surprisingly, graphics throughput judged by basic compute performance increases most, but still only by around 226 per cent - not a patch compared to prior Xbox generational improvements. Again, it's not an entirely fair comparison owing to the inclusion of AMD Polaris features that provide tangible performance increases, but it firmly pegs Xbox One X as a machine best suited to running the same games at higher resolutions - which is exactly what it was designed for.

With the arrival of 4K displays, the existence of Xbox One X and PlayStation 4 Pro are perfectly justifiable as a means of extending the current console generation, but the figures are stark. In four years, we've only managed relatively small increases when compared to the leap between older console generations. The pace of technological advancement is obviously slowing, but more than that, we're also looking at a 25 per cent increase in the cost to the consumer, even though the platform holder is still losing money on selling the hardware alone.

So why has this happened? It's primarily down to advancements in microprocessor fabrication technology taking longer and longer to come to market. PS4 Pro and Xbox One both use TSMC's 16nm FinFET node, the first clear evolution since 2011's 28nm (as used on base PS4 and Xbox One). New processes allow for more transistors to be crammed onto a piece of silicon, meaning more powerful hardware - but without access to new technology here, it's difficult to deliver substantially better consoles. AMD's recently leaked roadmap for its PC desktop APUs - similar core technology to the chips found in Sony/Microsoft consoles - suggests that we're looking at 2019 until the next viable process comes along.

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As we discussed recently, any console produced without a process shrink wouldn't offer much of a boost compared to Xbox One X and PS4 Pro, and even with access to this crucial technology, costs for surrounding components will make a true generational leap difficult. Where a console generation has typically enjoyed an 8x boost to memory capacity (16x between PS3 and PS4!), we'll be fortunate to get a 2x increase from 8GB to 16GB for the next generation. And ideally, we'd need HBM memory to see scalability in bandwidth to get the most out of the leap in GPU power, plus solid-state storage to fill that memory quickly. Prices on both components there are still very high.

All of which has led to two different approaches to the future of console hardware. Microsoft's strategy is to shift consoles to a mobile phone-like upgrade cadence with full compatibility with existing Xbox content, while Sony still believes in the traditional console generation. The arrival of 4K display technology has given both platform holders the chance to experiment with a shift to a difference upgrade model and sales look promising - one in five PS4s sold is a Pro unit, a healthy split bearing in mind how much value we've seen in base unit bundle packs.

Despite its $100 premium, we hope to see similar success with Xbox One X too - but both platform holders will be watching very carefully. The price a consumer is willing to pay will have fundamental implications on how powerful the next-gen consoles will be, not to mention the time-frame they will arrive in. Gut feeling? This wave of consoles will persist just as long as the last - and while the slower pace of technological advancement favours Microsoft's vision, there is much to commend Sony's commitment to the traditional console generation. It resets the baseline and challenges developers to think bigger in terms of concepts, game simulation fidelity and of course, rendering techniques.

But if we must wait, maybe that's not such a bad thing. Key games released this year along with others revealed during E3 suggest there's plenty of life left in the current generation. It's remarkable to think that the stunning Horizon Zero Dawn is running on GPU hardware broadly equivalent to a vintage Radeon HD 7850. Sony's first-party titles continue to push the state of the art, Forza Motorsport 7 looks stunning, while Anthem and Metro Exodus demonstrate that third parties can push current-gen visuals to a new level. All of these titles look beautiful and will hopefully play well, not just on Xbox One X and PS4 Pro, but on their veteran 2013 equivalents too.