Next generation systems from Sony and Microsoft will launch at between $350 and $400, Baird Equity Research's Colin Sebastian has forecast in a note released to investors.

Sebastian obtained this information at CES after spending time with "a number of companies involved in video game development and distribution".

This kind of price range is in line with what Microsoft achieved with its 20GB Xbox 360, which launched at $399 in 2005. The PS3, however, hit stores a year later priced $499 and $599.

Sebastian expects the new consoles to be ready for public consumption come E3.

"Given the fragile state of the console game market, we expect the E3 trade show in June will take on added significance, most likely providing the industry with the first public opportunity to examine next-generation hardware," he wrote.

And the new systems won't take long to hit stores, with the PS4 expected in October, followed by the next Xbox in November. Although "early production issues with Sony's PS4" have been mentioned.

Regarding the components of the new consoles, Sebastian says the platform holders aren't investing millions in the development of custom parts.

"Our checks suggest that next-generation console hardware will be largely built from 'off the shelf' high-end PC components, along with hybrid physical/digital distribution models, enhanced voice controls and motion sensing (Kinect integration with every Xbox), and broad multi-media capabilities," he explained.

"Moreover, a PC-based architecture (Intel chips in the case of Xbox) should have a number of advantages over custom-developed silicon: for one, the learning curve for software developers will be shorter than completely new technology. Second, the cost of production and retail price points should be lower than prior console launches."

Given that both platforms are expected to sport pretty big improvements in graphical horsepower, launching the PS4 at a price point equal to or cheaper than the next Xbox is essential for Sony if it is to hit the ground running in the next generation.

Source: Gamesindustry Internatinal