Analyst Predicts Further Console Price Cuts

Thanks to an anonymous reader for pointing to a Reuters/Yahoo story discussing software sales growth and possible console hardware price cuts for the US. Tony Gikas, a gaming sector financial analyst, saw strong short-term sales prospects for companies such as EA, Activision, and Take Two, and "said he expected software sales growth for the industry of 12 percent each in 2003 and 2004." Interestingly, Gikas is also quoted as saying "(The recent) hardware price cut to $179 is working and (there will be) more to follow before year-end." How low can prices go before a new generation of console hardware kicks in?

Comments

Inside Information

[Anonymous Coward]

Working at Microsoft Games Research, I can tell you a few things (anonymously ofcourse). The codename for it is Xenon. We are considering using wireless controllers (no specifics). We are also considering using two TV-outs (our focus group voiced that 4 people crunched together on one TV wasn't too enjoyable). The DVD will be front tray loading rather than on the top. Remote control on/off a possibility (from controller probably). It will be backwards compatible. The controller will be smaller. There will be an expansion slot. Most of the focus group said they weren't interested in web browsing or email with the console, so we will be more media centered.

Other numbers to consider: In the US, Xbox is #2 with over a million units over GameCube. However, worldwide, Xbox is #3. GameCube has sold just a little over 300,000 units over Xbox.

Re:Inside Information

[Matrix272]

Wireless has always had some appeal to me, as well, but the problems with them in terms of gaming don't even seem to be something that most people have been looking at. I know 2 people that have wireless controllers for their gamecubes that noticed the same latency issues I'm talking about (note: not dropouts, latency, the time between pressing the button and the action being performed on-screen), but I don't know if they have the controller you're talking about or not. I definitely have had problems with wireless controllers on the PS2 (my step-brother bought one), and wireless keyboards/mice on the PC (my dad and my roommate both have wireless keyboard/mouse combos that are less than a year old).

My guess is that you're not using good wireless equipment. I have a WaveBird for my GameCube, and it's fantastic. I never used a wired controller with it, and don't see any need to. I've played it on the same batteries for 8-12 hours at a time for over 6 months and never had any problems at all, including latency (yes, I know what latency is). For the PC, I'm currently using a Logitech MX700, both at work and at home. I have noticed one relatively minor problem... after a little while of not moving the mouse, it takes about 1/4 of a second to re-initialize the wireless connection before any movement is seen on the screen. It never seems to happen during games, but only when I'm browsing the internet or doing other non-time-critical things. I would highly recommend both items, although cost might be an issue. If memory serves, the WaveBird was about $35 new, and the Logitech MX700 is around $75 - 80.

At least the XBox controllers have longer cables than the Sony controllers. I had to buy extension cables for my PS2 controllers, whereas the XBox controllers get from beside the TV to the couch with no problems. I've considered putting my consoles next to the couch to alleviate all of the problems associated with the cables streamed across the room when playing, but then I'll have to route the video & audio cables under the carpet or through the walls & attic, either of which seems a bit much at the moment.

I bought my XBox a week after it came out, and I have to agree. I absolutely LOVE the 10' cables, as compared to the standard 6' ones on the GameCube and PS2. I don't know who the hell ever thought that 6' was enough to go from somewhere near the TV to wherever the kids would be sitting, but they need beaten in the head with something heavy. That's the main reason I tried the WaveBird (see above ;-) ).

It depends a lot on how it's handled by the transmitter. Many wireless standards such as bluetooth will shift frequencies to avoid interference, which I'd imagine the Live headset would do as well (I'm not sure what wireless standards it uses, or the specs if it's a proprietary protocol). The amount of data is generally not an issue, as long as they chose their specifications properly in the first place.

I personally wouldn't recommend bluetooth, or anything else in the 2.4ghz range. At this point, almost everything is operating at 2.4ghz... microwaves, cordless phones, wireless mice / keyboards, etc. Even if bluetooth can shift frequencies, there's only 3 non-overlapping ranges in the 802.11b standard... I'd recommend 5ghz. It's got additional bandwidth, and not nearly as many things operating in the same range. Latency shouldn't be an issue, as long as it's tested properly...

My personal opinion would be to sell the wireless controller in 2.4ghz, and the XBox Live headset in 5ghz. In the XBox Live box there would be a replacement transmitter that would include BOTH 2.4ghz AND 5ghz, and there wouldn't be any overlapping between them at all. The headset could easily have a 5ghz transmitter built-in, and the controller already would have the 2.4ghz built in. It may not be cost effective yet, but it seems like a good solution to me.

What Nintendo SHOULD do

[KU_Fletch]

I hope Nintendo doesn't do a price cut, but instead creates a super bundle. Put the Gamecube, GBA SP, and a game for each. Keep the $150 price level. Parents will love it because they see it as getting two consoles for the price of one, kids will love getting more, adult gamers (myself included) will enjoy the linkable features that are upcoming. Plus, they could have theme packs. The Zelda, Metroid, and Mario also have big name games on both consoles (with Zelda and Metroid having link capacity). Hell, there could even be an Animal Crossing bundle with Animal Crossing and an e-Reader instead of a GBA-SP game since you can download NES games instead.

What if they introduce networking in a big way?

[Ayanami Rei]

Then cheap, individual consoles are going to be important to get. They should come with game discs that let you play GBA-SP or go webtv/networked mode with a broadband adapter and let you remotely boot net-aware games, like an arcade setup.

That would kick ass. Of course, they might not like the idea of only having to have one copy of the game for 4 people to play over a LAN (you'll probably need it for net play, however)
In fact, that sounds like a good compromise! $150 for a "LAN party pack", GC, controller, Net/GBA rom, broadband adapter.

How low can prices go?

[Matrix272]

How low can prices go before a new generation of console hardware kicks in?

Pretty low. Remember the NES and SNES? Or even the SNES and N64? What about the N64 and the GameCube? (This is from memory, so mistakes can and probably will be made.) AFAIK, they ALL dropped to around $100 before the next generation came out. Here's my prediction: we should expect another relatively minor cut in the next few months (probably before November) to around $149 for the PS2 and XBox. Then, right at the end of 2004 or beginning of 2005, they'll announce the next generation, which would be out in mid-2005 to late-2005... as soon as the announcement is made, it'll be less than a week before they drop prices to $100, or possibly $125 (counting for inflation and all).

Does that sound amiable to all?

...and in other news...

[ameoba]

Computers will get faster, education will get more expensive, politicians will lie and SCO will soon press charges of distributing child pornography against IBM.