Xbox 2: $249 to $299 and 3 million units by year-end, says Goldman Sachs

The next-generation Xbox console will be priced at $249 to $299 when it launches in October / November, according to leading analyst firm Goldman Sachs, which expects Microsoft to ship three million units of the console by the end of the year.

The firm gave its projections for the Xbox 2 launch in the wake of Microsoft's decision to show off the console to the public in an MTV special to be broadcast on May 12th in North America, and May 13th worldwide.

The October or November launch date has been widely reported by sources around the industry, but Goldman Sachs' suggested price point, while in line with near-launch prices for similar hardware in recent years, is somewhat higher than the circa $400 prices being proposed by some other analysts.

However, it's worth noting that most hardware launches in the past few years have come in at lower prices than those expected by many market analysts - with the Nintendo DS and Sony PlayStation Portable being the most recent examples of this trend.

Forbes reports that the Goldman Sachs analysts went on to say that Microsoft would ship three million units of the Xbox 2, which is powered by multiple IBM processors and a next-generation ATI graphics chip, by the end of the year. The console is expected to launch worldwide during the third quarter, which would generally imply a million units at launch for every major territory, but Microsoft is likely to be cautious in terms of shipments to Japan - where the Xbox failed to sell in any numbers - and favour North America and Europe with larger shipments instead.

The report also confirmed that Microsoft does not plan to discontinue production of the Xbox console when Xbox 2 launches. The company has already given assurances that Xbox software production will continue through to 2007 - although few studios appear to be working on original or exclusive titles for Xbox in that timescale, with most key Xbox developers having refocused on Xbox 2.

The decision to continue Xbox hardware production will mean that Microsoft still has hardware at retail at a price point which challenges Sony's PlayStation 2 and Nintendo's GameCube this Christmas, as well as having the only next-generation console on the market.