Merrill Lynch On Xbox360Merrill Lynch Analyst: Users Will Choose Xbox 360 Over PS3 Will users really prefer the Xbox 360 to the PS3? Consumers are more likely to choose the Xbox 360 over the PlayStation 3. Thats the word from Merrill Lynch advisors, who weighed in on the next-gen console war on Wednesday. The key issue? Cost. Merill Lynch predicts that the PS3 may launch at a steep $500 price point this spring. But the investment firm also believes that Microsofts pricing advantage will only increase with time. "As volumes ramp up, Microsoft should see an improved ability to lower hardware costs [with the Xbox 360]," predicts Merrill Lynch. The investment firm also predicts that Microsoft could drop the Xbox 360 to $249 by the time the PS3 launches in April of 2006. Merrill Lynch specifically targeted Sonys "Cell" chip as a major disadvantage; the PS3s Cell chip will initially cost $160, compared to the Xbox 360s $100 PowerPC-based chip. To drop PS3 prices quickly, Sony will need to sell millions of the PS3s multi-purpose Cell chips in areas outside the gaming industry, a feat that the investment group finds to be unlikely.