Making the rounds on the internet today is Wedbush Morgan Securities analyst Michael Pachter’s reaffirmation that Natal will cost Microsoft $50 to manufacture, and he believes they will sell it at cost (an assertion he first made last October).

While we’d like to believe the hype, it’s hard to imagine that Natal will cost the same as a wireless controller. On the other hand, Microsoft has been hardware savvy before. It’s launch of the 360 a year earlier and for less than the PS3 put it far ahead in install base this generation. With Sony threatening it’s own motion wand (which, really, who wants to game with a magic wand?), it’s not completely beyond reason that Microsoft would bite the bullet on cost.

If true, a $50 Natal would almost certainly end this generation of console war. I’ve been in retail 18 years, though, and my gut says an $89 entry price, with $10 to $30 discounts abound for the holiday season.