The cost question is arguably the most important when it comes to next-generation game consoles. Even with all the best games in the world, too high of an asking price will ensure that nobody but the most hardcore of gamers will buy the new console. One analyst thinks that the price of the next-gen consoles will be pretty reasonable this time around though.

Wedbush Securities analyst Michael Pachter recently sent a note to investors saying that the PS4 will retail for $350 while the Xbox One will retail for $400. The price discrepancy is all due to the price of building materials which he pegged at $275 for the PS4 and $325 for the Xbox One.

Even at those prices, it may be hard to convince consumers to buy into them. The Wii U retailed last year for $300/$350 and it’s still struggling to find an audience. Of course, you can mostly blame that on the lack of games for the console, but the high price does factor into the equation.

In today’s age of subsidized smartphones, consumers are less and less interested in paying the full price of an electronic device upfront. Pachter says this may factor heavily into Microsoft’s strategy as he predicts the company will offer a subsidized version of the console to consumers:

“We believe the ability to watch live TV from a cable, telco, or satellite set-top box through Xbox One could entice an MSO to drive subscriptions through a subsidised box in exchange for a multi-year contract. The ‘always connected’ requirement for the Xbox One likely means that a broadband connection will be required, suggesting to us that ISPs may have an incentive to offer a subsidy as well.”

Even without a subsidy, Pachter’s predicted prices are lower than what the Xbox 360 and PS3 launched at in 2005/2006. The premium Xbox 360 retailed for $400 in 2005. When taking inflation into account, a $400 Xbox One would be cheaper than the Xbox 360 at launch. As for the PS3, it launched with a ridiculous price tag of $600. Sony would be absolutely foolish to try that again.

We’ll probably hear about official launch dates and price points at E3 next week. Sony and Microsoft will both hold press conferences on Monday, June 10.

[h/t: Games Industry International]