Next-Gen Gaming to be Uber Expensive

The CNN column Game Over is running an article discussing the costs associated with going Next-Gen. Using the Xbox 360 as an example, they calculate that to get the full next-generation experience would cost almost $2000. From the article: "The first test comes this fall, when Microsoft debuts the Xbox 360. The company hasn't announced a price for the machine, but several industry observers believe it could cost $399 -- $100 more than new consoles have traditionally cost."

Comments

The last round of consoles was more expensive, too

[Canthros]

Didn't the PS2 and Xbox both debut at a price point a hundred dollars higher than the previous gen consoles back in 2000/2001? Are we surprised that the latest batch will be more expensive yet?

All inclusive

[MadChicken]

Uh... that includes $1000 for a HD-TV and $250 for surround sound?

Plus, you'll want to gold plate your thumbs to get better reaction time and higher scores! That just drives the price up more!

Re:All inclusive

[turtled]

The article makes parents think you have to get HDTV. You can play all platforms on a Standard Def TV. I think it is poor choice or price display.

Re:All inclusive

[Anonymous Coward]

Nah, what you do is shave the skin of your thumbs (+ other fingers you use on your pad keys). Use a shaving blade, but be responsible.

Yes, raw meat does hurt like fuck, but I do have much quicker response with nerve endings directly in contact with the pad buttons. I do that before any major halo game I play.

Skin grows back, so shave often if you need to. If you do it right, your parents won't notice either, it doesn't bleed, just oozes this transparent stuff that's like sweat...

Re:All inclusive

[jericho4.0]

True, but a standard TV is gonna suck compared to the HD. I'm hoping to use my monitors.

Re:All inclusive

[snwcrash]

Not to mention you get get a small HDTV for around $300-$400 now. And since that has integrated speakers, you can run on that just fine.

Re:All inclusive

[AuMatar]

You're assuming people care. I'm tired of the effort spent on graphics in games- the things looked good enough 5 years ago. Lets stop with the graphic whoring and work on the gameplay already.

Re:All inclusive

[jericho4.0]

I think it's safe to assume that most of the market cares about graphics. A lot.

Anyway, it's not the job of the hardware manufactures to write games. Go play your NES.

Re:All inclusive

[Meagermanx]

On the one hand, I agree that graphics don't really matter for most games, but on the other hand, I can't help but hate the PS1 when I get slowdown playing Rayman...

Re:All inclusive

[Lord Apolon]

Where's the -1, Disgusting mod when you need it? *shudder*

Re:All inclusive

[Soul-Burn666]

Which is exactly where Nintendo is headed. They will be offering a good, while relatively weaker, console which will allow playing of all your classic games from a downloadable online library.

Last time i've been to one of my friends, he pulled out his old NES from the box and we had a good time playing some Crystalis, Zelda, Mario3, DuckHunt and such.

This is exactly why I think Nintendo will actually have pretty good sales. I believe their new console won't be as pricy as the XBox or PS3, but will offer more gameplay over graphics, as they usually did.

Re:All inclusive

[badasscat]

I think it's safe to assume that most of the market cares about graphics. A lot.

BS. If this were true, the GameCube would be outselling the PS2 and the Dreamcast would have outsold the PS1. Neither happened.

The public cares about games and image. That's all. If the next GTA game came out on the N64, you'd suddenly have a mad rush of people buying up used N64's to play it.

People like good graphics but they generally consider it a bonus to the gameplay. There's a small subset of vocal people who may feel otherwise, but that's all they are - a small subset. The majority of the public has demonstrated time and time again that graphics don't guide their purchases.

Re:All inclusive

[G-funk]

Possibly, unless there's a tickbox that says "My TV is low-def, render half as much shit" and you get a 30% frame rate bump.

Re:All inclusive

[Fjornir]

I didn't know people were doing this for video games, but my understanding is that this has been done for a long long time by people in order to get extra sensation to pick locks quickly.

Price predictions

[mrbaggs]

While most analysts keep saying the price will be up there, I think 360 will arrive at $299. Sony has already shown that it has superior hardware and MS knows that the slight gap of headstart they have on PS3 is their only real chance to seize hold of the console market. MS has shown with Xbox that it will take a hit to keep prices competitive and I believe 360s launch will be no different.

Re:Price predictions

[tjhorne]

Have you read this article, IGN seems to think that the 360 will be superior to the PS3, let me know what you think. http://xbox360.ign.com/articles/617/617951p1.html

Re:Price predictions

[KDR_11k]

I doubt MS is going to price the X360 competitively, at least before the other consoles are released. They will try to make people pay more for the 360 as long as possible, then, when the PS3 appears with its better graphics, the X360 will drop in price to be a bit cheaper than the PS3.

Re:Price predictions

[jericho4.0]

I was like, WTF?, until I saw "We decided to put this Microsoft-provided information up undigested." Now those numbers make sense. A quick critique;

The 360 might have more general purpose CPU power than the cell, but we don't want a PC, we want a games/media box, and the PS3 has oodles more ability there. Physics, graphics, AI, and sound all can be done highly effectively with the cell. MS is also spreading FUD when it calls the SPUs DSPs, they are a lot more flexible than that. In addition, the SPU's are much more integrated than the 360's 3 cores, with the ability to read and write each others memory.

The GPU is a tough call. Little hard info is known about either, but they are going to be in the same ballpark. I don't think a machine with dual 1080p output (the PS3) is going to lag too much.

Memory bandwidth is also a tough call. It used to be chip+cache+RAM+video RAM, but these designs are different. Again, a machine with the video output and storage of the PS3 is probably going to be able to make use of it.

I do agree with the quote at the bottom of that page, though; "However, hardware performance, while important, is only a third of the puzzle. Xbox 360 is a fusion of hardware, software and services. Without the software and services to power it, even the most powerful hardware becomes inconsequential."

Re:Price predictions

[tjhorne]

Either way, both machines are going to kick a#$!

Re:Price predictions

[LWATCDR]

Well that is a pretty useless argument at this time. For one thing at the XBox launch they where not even running on real XBox hardware yet.
Frankly until people get their hands on both no one really knows which will be the better game machine.
The PS3 Could be too hard to program. The Xbox360's 3 PPCs could prove to be a pain to get working well for a game. Right now it is all FUD and Fantasy.

Re:Price predictions

[Keeper]

Sony has a theoretical advantage in floating point math. And I'm not particularly convinced that (based on the cell architecture) cells can be used efficiently in a useful manner (syncronization between main memory, the cpu/cpu cache, and their small working cache sucks up a lot of cycles).

Re:Price predictions

[ZephyrXero]

From what was shown at E3, and not taking into account all the theoretical pre-rendered b/s... it looks like the machines are damn near equal except for in the realm of shaders. The PS3 looks to be able to do twice as much if not more there, and shaders will make a big difference in image fideltiy...but only graphics whores like me will probably notice...The average Joe won't be able to tell the difference between the two, and probably not the Revolution either....but that's yet to be seen. Sony's spreading just as much FUD and Hype with the Cell as MS.

Re:Price predictions

[Quarters]

Sony hasn't shown squat. All they've produced is some specifications (which are naturally biased) and a video of Killzone which has been admitted to be, at best, a CG rendering of what they expect the final game to look like.

Microsoft has, on the other hand, shown running games and let people actually play those games.

The 360 is arguably as "powerful" as the PS3. It also has one thing that Sony either isn't interested in, or can't fathom how to produce....XBox Live. The new Live service alone is enough to make me consider a 360 before a PS3.

Believe the Sony "Umpteen million times faster" hype if you want, but please remember that they pulled the same bait-and-switch shenanigans before the PS2 came out. "Super computers!", "Export controls because they're so powerful!", "The dancing from Final Fantasy 8 in *real time*!", "Sadam using them for TERRORISM!", etc... ad infinitum. Did you ever see a PS2 game that came close to following through on all of the pre-release promises/specs that Sony was spewing? I never did.

Re:Price predictions

[zero_offset]

There is a pretty intriguing article at HardOCP about the 360 GPU. It's sounding pretty stunning.

Re:Price predictions

[zero_offset]

Don't be so sure about that. The HardOCP article about the GPU (here) indicates that there are 192 separate FPUs built into the GPU's "Smart 3D Memory" subsystem. If nothing else, weird new features like that make it relatively pointless to "predict" relative capabilities of the consoles prior to release.

Re:Price predictions

[jericho4.0]

FWIW, the last console I owned was the NES, and my PC has a Geforce4 MX.

The cell exists. The dev kits contain a cell, running linux. Sony stated the demos were running on the cell. IBM demoed the cell at E3, and even encouraged people to touch the thing to see how cool it was. IBM has a cell section at developerworks, and has set up an engineering service for potential clients. I think that argument is dead.

You're totally right about the hype machine though.

Re:Price predictions

[vcv]

So you mean those 2 videos that were 3 hours showing various games running in real-time (proven in the video) on their hardware were fake?!

Re:Price predictions

[unclethursday]

Sony has a theoretical advantage in floating point math.

Until you look at their tech specs from their press release.

Sony says 2 TFLOPS of floating point calculations... but the Cell is doing 218 GFLOPS, and the RSX is supposed to be handling the other 1.8 TFLOPS. The Xbox 360's triple cored dual threaded CPU does 1 TFLOP. As far as the CPUs are concerned, the Xbox 360's is more powerful, at least according to the floating point operations per second it can do.

GPUS are a bit of a different story. Even though the PS3 GPU is supposed to be based off of the GeForce 6800 Ultra (and be equivalent to 2 of them combined), my friends who are game developers said they know jack shit about the RSX chip, yet. But they've been working with the Xbox 360 dev kits for 8 months, and only got their PS3 dev kit in the last 3 weeks (and the dev kit has 1 Cell running at 2 GHz, not 3.2 GHz).

And I'm not particularly convinced that (based on the cell architecture) cells can be used efficiently in a useful manner (syncronization between main memory, the cpu/cpu cache, and their small working cache sucks up a lot of cycles).

Neither are my game developer friends, especially since the Cell itself can't access any main memory, and has to go through the 7 SPEs to access main memory.

In short, they're saying that the Xbox 360 is easy as hell to work with, and takes about 1/6 the manpower to develop for as the PS2 currently does... but they're pulling their hair out at the PS3 specs and dev kit wondering just how long it will take for them to get around its hard to develop for architecture and get good games out for it.

Re:Price predictions

[Keeper]

I think we both agree with each other, except for different reasons. :)

Sony can *claim* to have an advantage in is floating point math (on paper), but as I was saying I'm not convinced that they can get anywhere close to reaching their projected figures (unless you're doing something where you don't care about syncronization of data, like particle effects; though that had better be some damn impressive snow given how much Sony is banking on the cell architecture...).

I'm incredibly impressed with the xbox360 specs -- much more so than with the PS3. They've got a monster of a graphics subsystem in that thing ... I've got to imagine that the engineers at MS are incredibly happy at this point.

Re:Price predictions

[jericho4.0]

The screenshots of the running games I saw looked like ass compared to the Unreal engine demo. That demo, BTW, was running on the actual hardware, not a dev kit. The rubber duckies demos and other tech demos were also extremely impressive.

Stills from the Gears of War demo have been up on the Unreal Technology site for at least 4 months. I don't know what's up with that, but it's a strong indicator that it was not running in realtime on the XBox 360.

Re:Price predictions

[Soul-Burn666]

Indeed synchronization is heavy, but that's exactly why there is the "core" Cell CPU. Its main function is handling the synchronization between SPEs.

However, parallelization seems adequete for games. Atleast AI and physics can be handled seperately, in parallel, due the sheer number of elements that these areas incldue.
For example a racing game, each car's physics can be handled by a different SPE and report back to the main CPU each frame.

Re:Price predictions

[DeadScreenSky]

All of the demos and games we have seen so far for the Xbox360 and PS3 are running on lower powered dev kits. The real final hardware doesn't quite exist yet for either console.

Re:Price predictions

[Keeper]

That's an aweful lot of processing power to waste serving a glorified dsp ... so while the cpu is busy with its "care and feeding" tasks for the cells, what will be taking care of the AI? The audio? Feeding the graphics card?

Re:Price predictions

[Soul-Burn666]

All these things can also be done on the SPEs.
AI, audio, certainly work the SPE can handle easily.
Feeding the video card? I don't know if the SPEs can handle it or not, but don't forget this CPU is pretty strong as it is and can do that too.

Re:Price predictions

[Anonymous Coward]

No kidding, 86 million people bought the shit-tastic graphics of the PS2. Obviously, people didn't mind spending money to look at jaggies all day. The PS3 doesn't have to improve that much to make everyone happy.

Sony lied hyping the PS2 and I don't believe what they're saying now about the PS3 trying to steal 360 thunder. Note to Sony: Release a damn product first and show real demos of STFU.

Re:Price predictions

[Keeper]

You actually have read nothing about how the SPEs work, have you?

The SPEs can't feed the video card. They don't have direct access to the system bus. They also can't handle the audio, as they don't have direct access to the system bus. They can pull chunks to and from ram. At best the SPEs can transform some of the data before the processor sends it to the various components, but those are operations typically performed by the hardware and not by the processor.

The SPEs do not have integer units, and their logic instruction set is 'limited' at best. That rules out AI.

The CPU is where most of the game logic is going to reside; the SPEs can't do it.

The lack of direct access to memory and the limited amount of 'memory' available to all 7 SPEs drops their utility severely. The architecture of the chip forces a programmer to waste a number of cycles keeping the processor cache, main memory, and SPE working set in sync; I'd be singing a different tune if the processor managed to keep all of these things in sync for free, but it doesn't.

Re:Price predictions

[Anonymous Coward]

tell them to calm down. they have another couple of months to learn and play catchup.

Re:Price predictions

[Rayonic]

The 360 might have more general purpose CPU power than the cell, but we don't want a PC, we want a games/media box, and the PS3 has oodles more ability there.

So we've finally stopped measuring performance in MHz and started measuring it in "oodles"?

Physics, graphics, AI, and sound all can be done highly effectively with the cell.

You're just making this up as you go along. Do you realize how silly you look?

Re:The last round of consoles was more expensive,

[StocDred]

In the US, the PlayStation launched at $300 and the PS2 launched at $300. I don't recall what the N64 launched at, but I think it was higher than the GameCube ($200). These doomsayer articles show up for every new console launch, because it makes good theoretical press to run around screaming "OMG PS3 WILL COST $600!" Ignore it.

And...

[Ghost429]

Who wants to bet the Revolution will be cheaper than both of them... again.

Re:And...

[tjhorne]

Remember one thing, you get what you pay for. I mean how many times can you play Mario and Zelda!

Re:And...

[Durinthal]

I mean how many times can you play Mario and Zelda!

More than I can stand to play Halo, at least.

Re:And...

[Suddenly_Dead]

And will again less because people still have the foolish "kiddy game" thing jammed in their heads?

Re:And...

[Anonymous Coward]

I'm already leaning more towards Nintendo this time around based on estimated pricing alone. I could care less what kind of tech goes into a console, as long as the games play and look fun. $400 bucks better get me two controllers + a game with that console or it's priced out of my range. I mean, lets face it; I could be doing a lot more with half a grand. Gaming isn't the end all be all of entertainment for me like it used to be in high school. (And most of that time was in QOOLE, BUILD, or Unreal ED.)

These days I just assume plug in a $6 wallmart DVD and kick back, as to dropping ($60 now!?!) on the latest rehash of Quake on TV, tentatively titled: 'Halo.'

Re:And...

[Suddenly_Dead]

There are more than just one "Mario" game rehashed over and over. Every Mario platformer adds something new, and there are the many many spinoffs. The only thing those share with the original are the character, Super Smash Brothers, Mario Party, Mario Golf, Mario Tennis, Mario Kart, whatever that new one is, they're all very different (besides the mascot) and always introduce new gameplay elements in each revision.

Compare this to several other console games that, while they might even be completely different titles, their gameplay is always the same and unfun.

Re:And...

[tjhorne]

Not a big fan of Halo myself, prefer Halo 2. Just kidding, I just wish Nintendo would make games like the used too.

Re:And...

[BigDork1001]

More times than I can play Metel Gear, Grand Theft Auto, Grand Tourismo, Resident Evil, Silent Hill, HALO, and any number of other games. I guarantee that if those game series had been released in the NES days we'd have GTA 10 or something like that.

Re:And...

[Anonymous Coward]

You mean, like Final Fantasy XI? (Soon to be XXII)

Re:And...

[supabeast!]

It's not hard to be cheaper when you're last out the gate, especially since the Revolution is expected to have less horsepower than either one.

Re:And...

[Anonymous Coward]

Oh yesh, because horsepower is EVERYTHING.

Yeah, it may have less horsepower.. but it probably will have better games. The Gamecube still has the highest percentage of FUN games out there, even if its library isn't as humongous as PS2 or xbox's. (95% of games for either consol are complete crap -- I can think of maybe one or two titles from each that I may want to play, and that's still not enough to justify me buying one until they're well below the 50 dollar pricepoint.)

Re:And...

[gabebear]

I think being last out of the gate may really work for them.

A LOT of people are just going to be waiting for the PS3/XBox2 price to drop and/or for a game that they want to be released before jumping to the next gen. If Nintendo prices the Revolution low enough($150 less than PS3) I could see them outselling Sony this time. Price is going to be the biggest factor for me. My XBox1 w/ EVOX already does everything I want in a media PC(without any DRM).

If Microsoft continues to burn money like they did on the XBox1 then I don't see who can stop them from getting another monopoly.

Re:And...

[Anonymous Coward]

I mean how many times can you play Mario and Zelda!

All the times that are necessary! I mean, neither Bowser or Ganon ever learn that kidnapping princess is bad!!!

Re:And...

[Txiasaeia]

Hmm... comment slamming Nintendo for Mario's success - check. Implication that Nintendo is cheaper, therefore worse, than other consoles - check. Throwaway comment meant to debase Nintendo fans - check. Do I smell a troll?

If you don't think that the cube has good games, you obviously haven't played Ikaruga, F-Zero GX, or either of the Metroid Primes. Throw in Super Smash Brothers Melee as a multiplayer game, and you've got several examples of why your troll is simply not true.

Re:And...

[bitwiseNomad]

Right.

You know, I saw a list of PS2 launch titles and every single one ended in a number. At least Nintendo has the courtesy to come up with subtitles for all of their games.

While we're on the subject of subtitles, have you ever noticed how all of the Nintendo franchise games have them? This may come as a surprise to some people, but those subtitles actually mean something. In nearly every case, they encapsulate information regarding new and interesting gameplay. In Zelda: Ocarina of Time, you used a magical instrument to travel through time, and your actions in the past world had repercussions in the future world. In Zelda: Majora's Mask, you were made to don different masks, which would give you a host of new abilities not available to Link on his own. In the Wind Waker, you got around the world by controlling the wind. The wind had a drastic effect on where you could go (and also affected the trajectories of your arrows).

When is the last time a franchise like Tekken or Gran Tourismo has done anything that drastically changed the way you had to think about the game to survive?

Remember, adding more of the same thing to a game is not innovative. It doesn't take a creative person to say "People like the cars, tracks and music in racing games, so we'll just add more of those things in the next iteration of our racing game." That's not to say that adding more of the same sort of content to games is a bad thing, but unless the game does something to define itself and separate itself from the other games in its genre or even its series, there is little call to hail it as being innovative. On the other hand, a game that actually takes the steps to advance its core gameplay, even if they are not terribly innovative steps, isn't as easy to write off as a waste of money and time.

Re:And...

[Cliff.Braun]

How dare you disrespect Zelda games. I bought a NES just for the Zelda, same for SNES, although the SNES game deserved it more, it was incredible. Ocarana of time kicked ass, it was way ahead of its time, and I still enjoy playing it, as I do Link to the Past. Majora's Mask left alot to be desired, being basically the same game as OoT, but with the annoyance of having to save your game more often and put stuff in the bank. Wind Waker was great as well, once you got over the fact that, OMG, it was cel-shaded. The game was good, it had the same depth as the rest of the series, and was fun to play, adding at least a few things to the Zelda paradigm(the ability to pick up dropped weapons, navigating). Those of you who wrote off Wind Waker because of the graphics will be glad to know that the new one, coming out in october(and already pre-ordered) will have much more realistic graphics. Those of you who play the games for the gameplay and the puzzles(the intelligent ones) will be glad that there is another Zelda game period. If I only had Zelda games for the rest of my life I'd be happy, they are by for the most consistent good experiences I've had with any games(especially not being a big mario fan).

Re:And...

[Cecil]

And Tales of Symphonia/Phantasy Star for the RPG crowd (me). GameCube is the winnar. I couldn't live without mine, sorry.

Re:And...

[geminidomino]

*Which* Phantasy Star?!

Are you referring to PSO (MMOG, not RPG) or are they finally continuing the series?! *hopeful*

*Waiting hopefully for a port of Phantasy Star 4, and going to play Skies of Arcadia: Legends*

Re:And...

[Soul-Burn666]

While I certainly agree this works well for single player games, such as Zelda or MetalGearSolid (which btw does have a subtitle), it's hard to make it to work in games which are very competitive and based around balance between the warring factions.
For example, you can't radically change game style in a fighting game since fans are will find it hard to adapt to the new features and usually these features aren't really important for the gameplay anyways. For this type of game, the companies prefer just tweaking the characters to keep the balance and try to perfect the gameplay.
While it is not innovative, it's a noble cause imho, since they work more on gameplay and replayability, which is the most important thing in competitive games.
Ofcourse they also enhanced the audio/visuals, but that is certainly not the main goal -> After you get used to the graphics, you only really care about gameplay.

Re:And...

[tjhorne]

Hmm...Nintendo fan boy - check. I've played most of those games and really didn't care for them other than the Metroid Primes.

Re:And...

[tjhorne]

I love puzzles!

Re:And...

[KDR_11k]

They ARE continuing the series with Phantasy Star Universe, which will be on the PS2.

Re:And...

[KDR_11k]

Take off the fanboy blinders, there are at least twice as many great games on the PS2 than the GC (not sure about the XBox) and if none of them appeal to you you have a very narrow taste. Might just be a lack of information, though, can't blame you for not knowing some of the more obscure games for a platform you don't own.

Well

[Ailure]

Didn't the x-box struggle until they had a big pricedrop? Price will matter alot amongst people after all...

You never know, Nintendo could lead next generation with their revolution if it's more affordable than PS3 or X-box 360. But i'm not surprised if they do a big pricedrop a few months after release so...

Re:Well

[turtled]

I think Xbox struggled because they didn't have a foot in the door yet for livingroom console games. When the price was dropped, people started to try it out.

the 'full experience'

[HTL2001]

.... is only if you get ALL the consoles, plus games, extra controllers etc. (maybe even throw in the PSP and DS for good measure)

I dont know about you, but I'm not buying them all, probably not more than 1 before the first price drop. I may not even get one of them (xbox 360) ever. Plus I can trade in my old systems.

$2000 is an underestimation!

[Snowmit]

What?! $2000 is LOW! I mean, come on! It only includes the cost of the system, TV and speakers!

They totally left out the price of extra controllers ($30 x 3), a router ($50), broadband access ($40/month), wires ($20), home theatre cabinet ($200), couch ($500), foot stool ($80), snacks ($5/day) and house ($100,000-$1,000,000).

I could cost you as much as $102,902.00 to play Xbox 360! And that's assuming that you get a relatively modest house and does not count your monthly expenses. Truly, we are at a crossroads were the gaming community will be divided into the haves and the havenots. It will be a crisis, my friends. A true crisis.

Re:$2000 is an underestimation!

[DavidLeblond]

Surely then the cheapest gaming solution would be the Gameboy advance. All you need is the system, food, and batteries. And you can even get one of the fancier handhelds if you can find somewhere to plug it in for free when your batteries die.

Re:$2000 is an underestimation!

[linzeal]

Why not wait 2 years for games to come out on emulator and use 30 dollar wireless gamepad to play them? I still have not got my entertainment dollars out of my nintendo entertainment system.

Re:$2000 is an underestimation!

[StocDred]

And why not wait until your older brother outgrows his clothes before you wear anything? Paying full price is worth it sometimes.

Re:$2000 is an underestimation!

[Anonymous Coward]

Controllers will cost you $30x6, for the PS3. (seven controllers! whoot! ... durrrrrrrrrrrrr.)

Re:$2000 is an underestimation!

[PhotoBoy]

It's been 5 years since the PS2 came out, and the emulators for it are barely getting to the title screens of commercial games.

I'd recommend buying a second hand machine if you're strapped for cash rather than hoping someone manages to emulate a complex piece of hardware like the PS2.

Re:$2000 is an underestimation!

[bleaknik]

Wait a minute... only $5 a day for snacks.

You aren't really a gamer, are you?....

Re:$2000 is an underestimation!

[metricmusic]

Because you still need to pay $100,000-$1,000,000 for that house!

What the Industry don't tell you

[superpulpsicle]

1 - Companies only need to bring the next generation development kits in-house ONCE. They make it seem like they need a new SDK for every next generation game.

2 - They only pay for a next generation SDK once! They do pay Sony/Microsoft everytime the license is used to make a new game.

3 - All the jacked up price at the beginning of the console launch is strictly marketing & business. Nothing to do with engineering.

4 - When companies claim they "lose money" on the hardware, it's always debatable. It cost alot less to build a console at the end of the console's generation.

Re:What the Industry don't tell you

[Quarters]

When companies claim they "lose money" on the hardware, it's always debatable. It cost alot less to build a console at the end of the console's generation.

That's only true if the console manufacturer has total control over the engineering of the hardware. Playstations and Nintendo consoles can be reengineered over the life of the hardware to maximize die space and minimize production costs only because Sony and Nintendo have total control over every transistor being used.

Microsoft, on the other hand, bought "off the shelf", so to speak. nVidia was never going to give Intel the designs for their GPU and motherboard chips. Likewise Intel wasn't going to share their CPU designs with nVidia. Microsoft had no way to get below the $180 price point because they couldn't combine any of the guts of the XBox to make it cheaper to manufacture.

The big question this leads to is, "Why doesn't Sony execute the knock-out blow and price the PS2 much lower than the XBox?"

Indeed

Why would they, though? If people are willing to pay $180 for an XBox then they are willing to pay $180 for a PS2. So, Sony probably isn't losing any money on PS2 boxes now. Instead they are probably laughing all the way to the bank with the (at least for consoles) incredibly high profit margins they are seeing....all thanks to Microsoft. This is probably why the PSP is $250 instead of a more reasonable $100 or $120. Why would Sony undercut the sales of their PS2s with a handheld when they can keep the price high (relative to the unwavering price of consoles over the past year) and rake in extra money.

Re:What the Industry don't tell you

[Screaming Lunatic]

Do you work in the industry?

#3 is certainly wrong. At the start of a generation you basically try to write an engine that will last you for the next 5 years. That task is expensive and exactly the reason why EA purchased Renderware, Microsoft is standardizing on Unreal internally and Sony have named it the official middleware provider.

Re:What the Industry don't tell you

[Anonymous Coward]

Microsoft, on the other hand, bought "off the shelf", so to speak. nVidia was never going to give Intel the designs for their GPU and motherboard chips. Likewise Intel wasn't going to share their CPU designs with nVidia. Microsoft had no way to get below the $180 price point because they couldn't combine any of the guts of the XBox to make it cheaper to manufacture.

Microsoft has apparently remedied this situation with the Xbox 360, at least.

How could they forget the sneakers!

[Anonymous Coward]

Which in some cases could cost over $200 just to walk up to your new console.

Re:How could they forget the sneakers!

[imr]

And bretzels can cost you your life!

Re:How could they forget the sneakers!

[Yablo]

but that's... 4 games

How much is too much?

[Anonymous Slacker]

How high will the system manufacturers have to raise the prices of the consoles and games to price themselves out of the market?
I remember years ago when the NeoGeo was first introduced, with prices aroud $400 and up while the rivals (SNES, Genesis) could be had for about $150 or less. Needless to say, they'd managed to price themselves out of the market.
Nowadays, with games themselves going for $50-60 and consoles running $250-300 new, how much longer until the general public realizes how much they are paying now vs. what games and systems used to cost, and how willing will they be to support the manufacturers by buying multiple titles?
Does the general public even remember scrounging their allowances back in the day for a new $30 game? I may personally be financially better off now than when I was in middle school, but the idea of shelling out ever-increasing prices as the "industry standard" bump that comes with each new console still worries me, and makes me think twice about what else that money could be better spent on.
(some of these are vague memories, so don't quote my numbers)

Re:How much is too much?

[rAiNsT0rm]

A cup of coffee used to cost about 25 cents, now they cost over $3.00... when will people realize this and stop supporting Starbucks? Seriously though, this is not meant as an attack... I agree to a point with your post.

I think this round of consoles is going to come down to the people and where they vote with their dollars. Either people are going to support the cheaper, more "fun" based Revolution or are going to be willing to buy expensive media centers that are also much more complex. Sure hardcore gamers will go for all three or their brand-loyal console regardless of price/performance/games but the average gamer and family I think will be voting on the Revolution.

I'm really hoping this is the case, and knock the rust off of the gaming industry and force companies to focus on the games and not the hardware and basically expensive tech. demos. This current trend needs to stop and now is the time to show it to the industry by supporting the one console with true gaming in mind and a reasonable pricepoint.

Re:How much is too much?

[hubang]

I also remember staring longingly at $80-$90 for new NES games in Toys-R-Expensive. And systems didn't used to powerful enough to be export controlled items.

Re:How much is too much?

[brkello]

Either people are going to support the cheaper, more "fun" based Revolution or are going to be willing to buy expensive media centers that are also much more complex.

Really, give me a break. So when some company you loves comes out with inferior hardware, that means they care more about fun? I bet you buy in to the whole "graphics does not equal fun" mentality as well. Let me explain to you why this is stupid. Gameplay and graphics are separate. You can have a much better game with worse graphics, no one will argue this. At a certain point, graphics need to advance...so Nintendo will not be coming out with a new 8-bit system. What they are saying is that their graphics are "good enough". That's fine, I won't argue that if I play a gamecube game I am not thinking...oh crap, this thing has horrible graphics. But the way Nintendo states this, it is like they are stating that because they are graphically inferior, they have upped the "fun factor". This is utter bs. Games will be just as fun on the other consoles, but they will just be on more capable hardware. It's clever how they try to make their weakness a strong point...it is just sad how many of you guys fall for it. Nintendo is going to come out with inferior hardware...deal with it. They will most likely be cheaper because of this. This is their real strong point as most parents and people with limited budget will choose to go with Nintendo and their family friendly image.

But let's get real here. All three companies are trying to get you money. Nintendo doesn't exist as an altruistic being trying to bring games to all people of the world. They are out to make a buck. You may buy in to their marketing more, but that just means they got you. How can I say such a thing? Well, the fact that you are saying a console that DOES NOT EXIST is "more fun" than other consoles that DO NOT EXIST pretty much shows how much power they have over you. Listen, I grew up with Nintendo too and have a lot of fond memories. But we live in a multi-console world now. I'll probably end up with all three eventually, but I will certainly get the one that has the games I find most fun. If Nintendo wants me, they need to start getting some quality (exclusive) RPGs again. If they are non-exclusive, I'd rather play it on hardware that can make it prettier on my HD tv.

Re:How much is too much?

[AuMatar]

A game has a fixed amount of resources that can be expended on it. This amount varies per game, and is limited by your on hand cash and number of developers. You divide that effort among several different catagories:

-playability
-graphics
-level design
-etc

If you focus more on one, you lose focus on others. This is why graphic whoring brings down the fun factor of games- because resources that could otherwise be used to improve it are being spent elsewhere. Nintendo is the only company currently making the correct choice- to focus on the fun and not of the graphics. Thats why I'll be buying their console well before the PS3 (and won't be buying the 360 at all due to it being made by MS).

Re:How much is too much?

[EnglishTim]

Sure hardcore gamers will go for all three or their brand-loyal console regardless of price/performance/games but the average gamer and family I think will be voting on the Revolution.

I think if that was the case The Dreamcast or Gamecube would have taken the current generation.

The Revolution is going to come last to the party, after both the Xbox 360 and the PS3 have launched, and certainly the Xbox 360 will be on its second-generation games already. The Revolution is apparently severly underpowered when compared to the other two, so it's not going to come off well when you look at the games side by side. People who don't want the graphical splendour of the Xbox 360 and PS3 will probably be tempted to stick with a PS2 or Xbox (as the Revolution will probably be only about twice as powerful as an Xbox), as they are much cheaper and already have vast catalogues of cheap games.

Let's not beat around the bush here: The main reason (from what we know about the Revolution) that people will buy the Revolution will be to play Nintendo games on it. I doubt there'll be as much third-party support for it as for the other two as they won't be able to make their cross-platform games for it without severely sacrificing quality. You'll probably also get people with young children buying it just so they can get an easy supply of cheap N64 and SNES games for them to play as well.

Re:How much is too much?

[patio11]

See, the thing is, the demographics of the market are changing. Square is still trying to sell me video games. The difference is, back when it was FFVI they were selling the game at Christmas by way of grandma, who had a very tight budget. Now they're selling it directly to me, and I now have a salary of which a certain portion can be dedicated to entertainment, and a good game is really, really low in dollars-per-hour. You know what the difference between a game at $50 and a game at $60 is? The price of one ticket to the worst movie I've ever seen. If I get 20 hours of play out of a $60 game, and thats almost absurdly low for what I play, thats $3 / hour -- there is NOTHING I can do for $3 / hour, except read books (same deal regarding price insensitivity when paperbacks went from $8 to $15 when I moved to Japan -- "Oh well, I can pay it").

Compare video games to what other "normal" folks in our age/salary brackets do for entertainment. Sporting events? Drinking at bars? Dinner with the friends? Dinner and drinks runs $40 for me, easily (did I mention I live in Japan). The problem isn't that prices are increasing, the problem is that it is slowly dawning on the industry that we're willing to pay a lot more than we've been paying.

Re:How much is too much?

[PyroMosh]

How do you export control something made in China by companies based out of Japan?

Re:How much is too much?

[rAiNsT0rm]

ha, your post actually made me laugh at the absurdity. FYI the revolution and the Xbox 360 will be about equal in terms of power... and BOTH of them are only going to be about 2 times the power of the original Xbox. This is pretty apparent.

The dreamcast and the gamecube fit exactly into my argument, not counter to it. Most hardcore gamers own PS2, Xbox, and Gamecube... and I'd venture to say they all still have a DC too! I do. It doesn't mean they lose.

The graphics chip in the Revolution is designed by ATI as well as the Xbox 360's they will be near identical. The nostalgic games being made available will be a selling point to a lot of gamers who still want fun, easy to pick up and play titles... this will hardly be the MAIN selling point. Oh, and you want to bring up third party support??? Look at PS2, ho wmany of the major AAA *exclusives* were third-party? Yeah. How bout the Xbox? Yeah. Nintendo has first-party titles that blow the door off the competition when they want to fully utilize them... Nintendo software sales beat out every other console overall (including GBA)... yeah they sure are in trouble, oh and the massive support in Japan really hurts them against rivals as the Xbox... which the WonderSwan outsold!

Re:How much is too much?

[bleaknik]

Nintendo is not downplaying the importance of graphics by any means, but we are closing in on the photorealistic boundary between video games and real life. The coming 6th generation of video games (ps3, xbox360, revolution) will probably be one of the last substantial leaps in graphics capabilities. While Nintendo has stated that their machines are only going to be 2 or 3 times more powerful than the Gamecube, is it a bad thing? No. We've all read the articles about Resident Evil 4's quest to the PS2... Capcom is having to remove a lot of the visual prowess of the GCN version. Will Nintendo's hardware be "inferior"? I've read the specifications on the Cell processor, and I know how many FLOPs it throws down. I've read the awe-inspiring specifications of the XBox 360. But I'm not ready to pay $400 for a new console. Especially a console who's flagship game is another rehashed FPS. Sorry /.ers, but I haven't enjoyed a FPS since Goldeneye--and I don't recognize the crap that EA released as a video game. As for your other requirements. Nintendo has supported HD for quite some time now. The GCN was released with a digital video interface (you can buy component cables via the Nintendo Store). I even hear that the GCN originally was going to support a DVI cable through the same digital video interface, but the market lacked interest. This brings me to another point. I'm relatively in a cozy economic position, but buying an HD television hasn't appealed to me yet. The cost-to-benefit ratio just isn't worth it yet. *shrugs shoulders* Then, the comment about the RPGs... To an extent I agree with you. Quite a bit, actually. I would like more RPGs for my 'cube, but I can't say there's much worth it on the PS2 or the XBox. Kingdom Hearts is the rock. Star Wars KOTOR was absolutely amazing. But after that, I'm kind of bored with the RPGs of the other consoles. Final Fantasy X. *Yawn*. Final Fantasy XI. *Yawn*. They just aren't amazing like they used to be. But Crystal Chronicles, for the GCN. Absolutely amazing. It was worth every moment of it. And then there was X-Men Legends (that was poorly programmed and had several bugs) which was also great multiplayer RPG fun. Paper Mario. Baten Kaitos. Tales of Symphonia. Pokemon Coluseum (much less RPG like... sort of). tLoZ: Wind Waker. I'm just not seeing your point about the lack of RPGs for the 'cube. Guess this is a long way of saying this, but I am not worried about Nintendo's strategy: it should be an effective one. Then again, so will Microsoft's strategy. And Sony's strategy. So, give me my Nintendo, and let's game. Woot.

Re:How much is too much?

[EnglishTim]

I agree with you that the Revolution will be about twice as powerful as the Xbox, which fits with what Nintendo have been saying (2-3 times as powerful as GameCube). However, the Xbox 360 is obviously considerably more powerful than that - have a look: 0.73 Ghz vs 3.2Ghz CPU - just from the clock speed alone the CPU is over four times as fast, and that's not counting the fact that the Xbox 360 has three cores with two hardware threads each, so at the very minimum I'd say we're talking an order of magnitude more powerful than the Xbox CPU.

It is true that both the Xbox 360 and the Revolution will contain ATI-produced chips, but it's too soon to know how they will compare as ATI produces a large range of chips. I very much doubt they'll be the same.

I'm not sure what point you're making about PS2 third-party titles, as the PS2 has vast numbers of AAA third party games. Don't misunderstand me - the Nintendo first-party games are great, but there's not really enough of them to support a console. If (as I suggest) the Revolution doesn't match up to the Xbox 360 and PS3, then it's not going to attract nearly as many cross-platform games as it won't be able to handle the games that are designed for the other two. It seems more likely to get multi-format games that have been targeted at Xbox and PS2 than Xbox 360 and PS3, and multi-format games are important for publishers.

Re:How much is too much?

[rAiNsT0rm]

The Xbox CPU is not going to be 4 times as powerful as the Xbox 1, sorry to say. Number wise you may think so but that is to say that when the MHz doubles the acual performance doubles and it simply does not... you are also comparing apples to oranges trying to equate an x86 CPU to a PPC. The XBOX 360 will be about twice as powerful as Xbox 1.

ATI is not going to produce s majorly inferior GPU for the Revolution... it would actually COST them more to go backwards in performance and fabrication than at least the top of the line current GPU's. These GPU's will end up about equal, Nintendo's last GPU was superior to all of the other current gen systems allowing 8 layers of textures/bump mapping per poly! However nothing useful could be done with it due to other issues. Nintendo will not forsake graphics that much, maybe not 300 Million transistors but it will compare quite well to the Xbox GPU.

The PS2 is the only system of the three to have any real third party support, and even then most AAA titles were not exclusive... this will never be the case, AAA titles are meant to sell so restricting them to one system doesn't happen that often.

And to also validate my claims here is one developer publicly denouncing the XBOX 360 and dropping support for it already:

"yesterday development company Factor 5 helped Sony fire another blow to Microsoft's camp by declaring allegiance to the Playstation 3. President Julian Eggebrecht told News.com that the Playstation 3 offered more processing power to more easily simulate the real world for a better game experience. The company had previously stated that it would work on the Xbox 360."

Prices includes HDTV

[agtwilight]

The new XBOX will cost me...$399...or whatever the street price is because like most people on plant earth who have an XBOX and stuff I already have HDTV and DTS sound. Plus you can buy HDTV 30" for as low as $400 or so on the refurbished side of things.

If you have a DVD player and dont have a 480p capable TV - your are missing out. Just go buy one.

twi

Who Are They Marketing NextGen To ?

[garett_spencley]

I might be wrong now, but I always believed that the largest demographic for video games and consoles were teenagers and college students who either rely on their parents to buy them or who don't have the money to buy them thanks to tuition costs etc.

If a console costs $500, doesn't include any games, and the games are $60 - $80 .. what parent in their right mind is going to shell out this kind of money for their kids?!

I realize that there are lot of hard core gamers who shell out $800 for the latest graphics cards and spend a lot on cooling and PC mods etc.. but I'd like to believe they are a minority.. I guess I'm wrong as it seems that's who MS and Sony are targetting now.

All I know is .. as much as I may want a NextGen console .. and even if I could afford one .. I would never spend over $200 - $300 on a console.

Re:Who Are They Marketing NextGen To ?

[superstick58]

I don't know if you were spoiled as a high schooler, but aren't kids 16 and older supposed to get jobs?? I got one at the grocery store as soon as I turned 16 and so did my brother and so did many of my friends. Those employees at Burger King and McDonalds are all teenagers.

While they don't make much money, they all live at home and are supported by their parents. That means the money made at their job (which for me working 20 hours a week at $6.00 an hour is $120 gross per week) can be spent on toys.

Of course with me and most others, a good portion of that salary went to college savings. I think it was something like 30-50% that I put away, but even with a $60-100 weekly income, it would only take a couple months to save up for a new game console. This isn't even taking into account the massive cash inflow for full time summer work.

I'll give you college students are broke, but those 16-18 year olds have lots of extra cash to spend. Also, my friends and I often spent it on other things like car accessories and clothes, but for those who like to play games, they would have the means.

Re:Who Are They Marketing NextGen To ?

[hal2814]

"aren't kids 16 and older supposed to get jobs??"

You're lucky you got to wait until you were 16. My dad was a builder so I was working summers by the time I was 6. I remember looking forward to being able to sleep in when school started back up in the fall.

Back to the topic though, I remember having quite a bit of spending money when I was a teenager. You can tell by looking at my CD and movie collection. I have massive amounts of CD's and movies I bought as a teenager, but as soon as I was on my own financially, the collections abruptly stopped growing. Of course it might also have had something to do with turning 21 and being able to go out drinking (which can be VERY expensive).

Re:Who Are They Marketing NextGen To ?

[javaxman]

All I know is .. as much as I may want a NextGen console .. and even if I could afford one .. I would never spend over $200 - $300 on a console.

Who are they marketing to? Not you.

Like Apple ( well, at least Apple before the Mac mini ), they're marketing to People With Money.

They're marketing to people who buy their _kids_ iPods and color-screen cell phones. People who buy their kids new cars the second they get their learner's permit. If you're worried about how much it'll cost... they're not marketing it to you, at least not for the first few years.

Here's the real test, IMHO. You don't have at least one High-Definition television in your house? They're not marketing to you.

Which is to say, they're marketing to gamers. They're marketing to people who are thinking really hard about spending that $800 on a graphics card that they know will cost $250 in 8 months. They know they'll pick up blokes like you and I a year to two down the road, when their costs have dipped a little. But first, it's time to fleece People With Money ( and early adopters and gaming fanatics with skewed priorities ).

Re:Who Are They Marketing NextGen To ?

[garett_spencley]

Well, obviously :)

But we always hear about the holiday season being the big cash flow for the gaming industry. Consoles are always released around the holidays .. so I always figured that they were marketing to parents who buy consoles as gifts for their children for xmas.

And I'm not that poor. In fact, my income is above average for my area. I also know a few parents who make close to or above triple digit salaries .. and they don't own a high def TV nor would they buy their kids a $500 console. I just have a hard time believing that the amount of people who would spend that much on new hardware is enough to provide a return on MS and Sony's investment in the product... which was really my point.

I guess I just don't understand the economics behind these new consoles.

Re:Who Are They Marketing NextGen To ?

[javaxman]

I guess I just don't understand the economics behind these new consoles.

I think one thing to do is to look to the past. These machines are going to be around for several years. They're going to be expensive to start with. Heck, the PS2 launch price was $300- over four and a half years ago, when nobody could believe a console could be so expensive.

Not everyone is going to have one or be able to get one - which is a good thing, if we *all* went out to get an XBox this christmas, there wouldn't be any on the shelves. I'm guessing they'll be in short supply anyway, and that MS will rightly be able to cite IBM chip shortages as the reason. Of course, that scarcity will only make them more sought-after. Heck, it works for Apple. Sony will have the same scarcity at launch, but there will be plenty by *next* Christmas... at the same high price. Once Microsoft flinches, or if they're doing really well, then the 'price war' will start... and it'll be time for everyone else to take a side.

Something you and I have to remember is that _someone_ is clearly buying HD displays. I actually know a number of people who have them, I'm just not ready to drop that kind of cash on a TV... but give me another couple of years, they'll get cheaper and I'll join in on the fun as well. These companies know this is how it works, and they'll be sure to start selling the machine at the high end of what they think the marketable price will be, so they can drop it later to generate more sales...

Re:Who Are They Marketing NextGen To ?

[javaxman]

Check out the PS2 price history on the wikipedia entry. With XBox360/PS2 price wars, I'm hoping prices will drop faster, but they'll be expensive on launch, no doubt. Remember how crazy we all thought it was to spend $300 on a console when the PS2 first came out? Then nobody could get one, and we all wanted one... expect more of that.

Re:Who Are They Marketing NextGen To ?

[Anonymous Coward]

Heck, the PS2 launch price was $300- over four and a half years ago, when nobody could believe a console could be so expensive.

3DO launched at $699.
Sega Saturn launched at $399.
Sony PlayStation (1) launched at $299.
Nintendo 64 launched at $299.

Care to make up anything else today?

Re:Who Are They Marketing NextGen To ?

[DarkZero]

Who are they marketing to? Not you.

Like Apple ( well, at least Apple before the Mac mini ), they're marketing to People With Money.

They're marketing to people who buy their _kids_ iPods and color-screen cell phones. People who buy their kids new cars the second they get their learner's permit. If you're worried about how much it'll cost... they're not marketing it to you, at least not for the first few years.

It's also worth noting that there's an equally large segment that they're marketing to: Gamers. Most people spend a significant amount of money on entertainment, even if they aren't technically "People With Money". They spend it on books, CDs, movies, going out to dinner, a new MP3 Player or cellphone, etc. Gamers, with a big G, spend their money on GAMES. They will swear off absolutely everything else in the months both preceeding and proceeding the launch of the new console that they're interested in because gaming is their main hobby, just like baseball is the main hobby of the fans who drive two hours each way every other weekend during the summer just to get to Fenway Park, and go there wearing Red Sox caps and jerseys.

Between People With Money and the devoted fans who are willing to pool their cash, there will be quite a market for these systems when they launch. The rest of us can pick them up a year later.

Re:Who Are They Marketing NextGen To ?

[bwalling]

Nintendo 64 launched at $299.

N64 was $200 at launch. I worked at Target at the time, and held one for a friend of mine who bought it on his Target card, and his limit was only $300. He got the N64, Mario 64, and Cruisin 64 on his card.

Re:Who Are They Marketing NextGen To ?

[thrift24]

When the N64 came out I purchased the console, 4 controllers, and both of the video games that were available the day it was released, when the next couple games came out, I had them all. I even recieved Christmas cards from Electronics Boutique. My friends came over and 5 of us at a time would sit down and play for hours on end after school until 3 of the 5 of us all had N64s. This is how the gaming market works. If I hadn't purchased the N64, when my other friend purchased the Playstation, we all would have had that. If Microsoft and Sony release their consoles at $400+ for just the console, I can tell you one person who will not own it. Instead I'll go out and by a game console that may be pricey, but still affordable when it's released. That console. will most likely be the revolution. If all the consoles are in the $300 range I'll purchase the PS3, because it's probably got the best hardware, and will probably be hacked first, and then down the road I'll get myself a revolution or an xbox 360. What I hope Sony and Microsoft realise is that gamers having their consoles is what makes the low end gamer want to purchase a gaming system. If they go too high on price, the high end gamers that by their system will be less, and it will not trickle down to the low end gamers as quickly. No one really cares if some rich dude has the console, because he's not going to have the gaming knowledge or experience to get behind the console and hype it to all his friends, nor is he going to want to play it 24/7 and get his friends addicted to it.

Re:The last round of consoles was more expensive,

[Canthros]

Ah. Never mind me, then. Thanks for the correction.

Nothing to see here...

[chudgoo]

XBOX 360 still does analog video out so there is no REQUIREMENT for HDTV. It is merely an upgrade path you can choose to follow if you want to.... as your finances allow.

Re:Nothing to see here...

[NeMon'ess]

Racing on a console sucks because the resolution is low and limits visibility. Most games compensate with large signs and simpler track layouts. This gen, expect tracks to become more complicated thanks to HD. People with SD will have to work harder at memorizing the track since they won't see it as well.

Re:Nothing to see here...

[NickHydroxide]

...as your finances allow.

For some reason I read this as "as your fiancees allow."

Eh, I guess it applies both ways :)

A huge gamble

[Anonymous Coward]

to get the full next-generation experience would cost almost $2000

Maybe the industry reckons that industry growth is the result of increased demand for gaming and that consumers will bite the bullet and pay the price for the gaming they "need."

Maybe they're right, but in my case, I've bought many, many games this generation (plus the systems) because they've just been affordable to me at the time. An increase in price would stop that kind of purchasing. Gaming is a luxury for me, and perhaps it is for many other people too.

So?

[Anonymous Coward]

To get the full PC gaming next gen experience (64 bit everything, SLI cards, etc.) it could cost me over 4,000 easily.

That's what you get, games industry.

[Anonymous Coward]

That's what you get for letting production costs run wild on everything from good games to crappy ones (a la Hollywood), for assuming that advertising the hell out of even shitty games that you shouldn't be making in the first place will help them sell (a la Hollywood), for paying out the ass to create games around licenses that ultimately nobody cares about (a la Hollywood), for bickering back and forth about and ultimately creating a regular business practice of obtaining outlandishly far-reaching exclusivity deals (thanks EA & sports leagues), for letting Microsoft gain any kind of leverage in the industry (a la every other tech industry), for insisting that console and PC gaming experiences are exactly the same (thanks MS & America), and overall for thinking that you're rockstars when you're really just geeks & PHBs in suits instead of real creative types that would be doing this stuff even without all the $$$ twinkling in your eyes.

This comment is targeted more at the American games industry, but with Europeans like Molyneux and Japanese like Kojima, there are signs that the aforementioned problems are unfortunately global trends. Even Nintendo has had to bend to these market conditions. (LoZ: Twilight Princess looks great, but not every game is destined for the same kind of greatness and guaranteed market success, so not every game should cost as much to produce or hype up.)

Katamari Damacy is an exception, not a rule as far as the cost:quality ratio goes. That is a shame. One can only hope that the portable market keeps great ideas alive (as is always the case with constrained platforms). Things look okay for now, what with Zookeeper, Meteos, Lumines, Puyo Pop Fever, a bunch of the upcoming immersive DS RPGs, and other inexpensive but creative and fun games around. But when every portable thinks that it has to be PS2 level or higher, I fear that even handhelds will have no respite from the Hollywood-styled creative rut that the big companies have imposed on us and themselves. $40 for PSP games (and even some DS games) is a very bad sign.

Re:"Uber"?

[Silicon Jedi]

Ueber and über are German words with specific meaning. Uber is the borrowed Anglification of it. If you're gonna borrow and abuse foreign words, at least have the decency to change the spelling to show the less obvious meaning shift.

Inflation

[FidelCatsro]

"Several industry observers believe it could cost $399 -- $100 more than new consoles have traditionally cost."

That is about the ammount the dollar has devalued since the launch of the last generation , a little more perhaps , $399 is around 317 (about the price the last generation launched at in the EU) and around 218GBP so its a tiny 18 GBP and 17 (well i think they were a bit more expensive in the UK last time around compared to europe)above the previous launch prices if my memory serves me correctly

Re:Inflation

[Anonymous Coward]

Crap , it removed all my euro symbols . So the unmarked values are in Euros

Re:Inflation

[astro_ripper]

In other news, sensationalist media outlets have begun to create news stories from nothing, while betting the viewer will be too stupid or lazy to check the validity of their information.

See also:
Download Your Brain
Engineers have more sons

More people die every day from automotive accidents than have EVER died from Mad Cow disease, but count the minutes you've wasted hearing about Mad Cow.

Remember Dogbert's Cronic Cublicle Syndrome: If you think you've got it, you've got it.

Re:"Uber"?

[Anonymous Coward]

J00 r teh gey uoomlowt 4r33|

Re:"Uber"?

[GeckoX]

Language is what we make it.

Won't anybody think of the children?

[hey!]

If the cheapest car you could get your hands on was a Lincoln Navigator three things would happen: nobody would drive, we'd have a kickass public transit system, and Ford wouldn't sell any Navigators to speak of. Car companies that want to compete in the luxury segment rely on their being an entry level market to to support the infrastructure and provide customers for the upgrade treadmill.

Given how huge the gaming industry is, it's surprising how monolithic it has been to date, with manufacturers vying head to head with flagship products. I'm not a gamer, so I only follow this peripherally, but it seems inevitable that they're going to start producing product lines that in automative terms would be Chevy Cavaliers, Honda Accords and Hummers.

Re:Won't anybody think of the children?

[pashdown]

Your "Cavalier", sir.

Re:Won't anybody think of the children?

[ShawnDoc]

When the next gerneration comes out, it doesn't just go away. The PS2/X-Box 1 will continue to be big sellers for several more years. Heck, they're still releasing PS1 games. The PS2/X-Box will become the Honda Civic's of the game world, while the 360/PS3 become the Navigator's of the world.

Re:Won't anybody think of the children?

[PyroMosh]

Let me explain this the best I can.

Every console launch sells out. (Well, except the PSP). The colsole manufacturers know this, and take it for granted.

If they know for a fact that the next generation console will sell out at $199.99, then why not up the price?

Will it still sell out at $299.99? Yep. So what's it hurt to up it some more? Will it still sell out at $399.99? Yep. How about $499.99?

They extimate how high a yield they'll have for the initial shippments, and what demand will be. Then they price it as high as they think it'll sell out with the early adopters.

Once they start shipping them in more massive quantities, prices will drop, as the early adopters who are willing to pay $500 each will have all been sold a console or two.

Bottom line is, if the initial release is only 50,000 units, what does it hurt to launch at $400 and stay there? If it'll sell out, then they'd be foolish not to.

This is the most simple form of supply and demand, people. Come on!

Re:Won't anybody think of the children?

[hey!]

I think that's a sound analysis, at least in the short run.

However, continuing the automotive analogy, I think this is not really that different than when a new model year comes out. They sell at a lower rate to people who are more interested in having a new car than having the latest car. While in part this is to get rid of inventory, I think that people who want the latest model car are different from people who just want a new car and for which a bargain is the most important factor. One will buy under this circumstance but not the other, and the other, vice versa. I think the people who buy new cars on a regular basis want the latest model; otherwise they'd be slitting their own throats. It's cheapskates like me who would never ever buy a new car unless I thought I was getting a deal that they rope in. I come armed with a huge sheaf of data telling me exactly how low I can drive the price, knowing that at the end of the model year they'll roll over that much easier. And this works for them, because they'd never in a million years make a buck off of me otherwise.

Re:Won't anybody think of the children?

[Morinaga]

That could very well be true. However, they all need to play the games which can't come in the Yugo to Ferrari spectrum of quality (yet). So, just like a Neon can get you from location A to B it can't do it with the reponsiveness of a BMW etc... Basically, the quality of that travel experience is effected by this spectrum. Gaming consoles can't do this because the games can't change from one pimped out platform to another. Halo is Halo.
Now, you could have consoles with different perks, DVD players, media consoles and all that other stuff. But, Cars make you a captive audience and historically are none-modular. Gaming consoles aren't like that. I can use competitor DVD players, media components etc... Even Cars are becoming less monopolistic by nature (to a degree) because of modular/portable technologies like sat radio, navigation gps' and of course MP3 players/radios.
In sum, your analogy is appealing but I don't think gaming consoles will ever evolve in to segments like cars can and do. Simply because the base medium they serve cannot be altered in quality greatly by doing so.

Does inflation not count for anything?

[pnice]

$399 for an Xbox360 or even $465 for a PS3 isn't really that bad. Think about it. In 1980 we were already paying $199 for the newest consoles. Hell, I even payed $199 for my NES and $299 for my Sega Genesis. Back in the early 80's when the Atari was $199 brand new you could buy a car for: Toyota Corolla 4-door sedan, $5,458; Ford Mustang, $6,408; Toyota Celica GT, $7,209; Mazda RX-7 GS, $9,095

Now for most of these cars it costs what? $20,000+ If you adjust for inflation, when people bought an Atari for $199 back in 1980 it was like spending around $400 bucks today. Stop bitching about it. Either you'll pay or you wont. The price isn't really going to stop people from getting something if they really want it. They just might not need it as bad as they thought they did if the price is higher.

Re:Does inflation not count for anything?

[quitcherbitchen]

You make a good point, but there are mitigating factors that should keep the price point of these consoles in the same ballpark as previous generations. The video game market is worth several billions of dollars more a year than the 8-bit age and the pace of technology has far exceeded the cost of inflation. (If it didn't, we'd all be in rough shape economically.)

The same holds true for cars. I just bought a new Acura and my $20,000 got me an upscale sporty car with a CD player, front and side airbags, power windows, and an engine that will run for 110,000 miles without any scheduled maintenance. I'd challenge you to travel back to 1980 and find a deal like that.

Re:Does inflation not count for anything?

[default luser]

Thnk about what you're comparing. The cost of vehicles doesn't generally go down because it's a replacement market. The prices generally follow inflation, and typically car makers add features and options instead of reducing prices, because the reductions in cost are small. The new features for the reasonable price get you in the door, and they make a killing on the upsell.

If all you do is sell cars on low price, you get a bunch of cheap bastards who won't buy any options, and that's bad for business.

The console market is different in many ways: price reductions due to miniaturization and new technology are BIG.

Think about all the benefits you get if you were to say, shrink all the ICs on your mainboard into one system-on-a-chip:

* Less separate components means less cost up-front, both in purchasing the parts and labor for mounting.

* Less components means less external busses and traces, which means you can use less layers on your board, and less board area More money saved.

* You can possibly reduce power of all the components by running them at a lower voltage. This leaves room for cheaper thermal dissapation (bare chip versus passive heatsink versus active cooling), and also leaves flexibility on upselling with higher clock speeds.

And that's not the only aspect of price reduction. You want to know why games have barely crept up in price in the last 20 years? Because low-level bit twiddling on the NES has given way to high-level languages and programming APIs, and "built-in" services that all games can take advantage of like Xbox Live. Since, unlike a car, the majority of costs are in development, this provides a huge reduction in cost.

But the main reason why games and consoles have crept up in price slowly? Because gaming is still a growing market. Unfortunately I think we've reached the end of rampant growth with roughly 100 million consoles sold in the last 5 years, and improvements on the development side can only do so much. I fully expect games to begin following inflation, and even beat the rate of inflation if game houses continue to push huge hollywood budgets.

Re:Does inflation not count for anything?

[NeMon'ess]

Psychological barriers and how parents think about prices are really important too though. Consoles have been 199 or 299 for a long time and people associate those numbers with what a console should cost. $399 is likely going to cause many parents to wait until next christmas for the price to drop. They'll think Four Hundred Dollars sounds like an awful lot of money for a gift.

Microsoft can afford to operate at a loss...

[RemovableBait]

In order to pick up a big user base and make money from the huge games sales, I wouldn't be surprised if Microsoft puts in promotional prices for early adopters. Certainly, they can afford to operate at a short loss, and aren't so stupid as to realise they need to use their few months head start to build up as big a user base as possible.

I'm guessing, that the 360 will debut at around $320-360; the PS3 could shatter the $400-450 barrier; while the Revolution will most likely bring up the rear with $200-250.

As for games, I reckon they'll have serious difficulties shifting them for anything more than $50-60...

Re:Microsoft can afford to operate at a loss...

[StocDred]

They've been operating at a loss since Xbox Day One, and all it has gotten them is second place... and they didn't even knock third place out of the game. They have the undying support of the Live users, which is a niche of a niche. And with PS3 coming out as the graphics powerhouse this time around (which, even if those E3 demos were renders, will still be the case as the newer machines always have better hardware), all of the XBOX GFX ROXORS crowd will defect to the PS3. How much longer can Xbox hemmorhage money before somebody plugs it up?

Re:Microsoft can afford to operate at a loss...

[Anonymous Coward]

Except for the fact that the XBox division has been operating at a loss for 4 years - hundreds of millions have been spent - if they don't start making a profit in this generation the shareholders are not going to want to keep it going.

Re:Microsoft can afford to operate at a loss...

[RemovableBait]

The present Xbox is currently operating for profit, it has been for a good few months now. The reason Xbox is currently in second place is the enormous user base of PS2 owners... 43% to be exact, all gleaned in the first year when Sony was the one and only choice. Xbox has 19% while 14% are Gamecube players.

The biggest reason for anyone to choose Xbox has to be the Live service, it has led the industry in online gaming and has proved the most successful venture for Microsoft's Xbox division so far. To call the industry leading service a 'niche of a niche' is an enormous understatement. Sony rapidly followed suit, but their PS2 Network Play has lagged behind due to network and service issues. Microsoft has also led the industry with the adoption of Hard Drives in games consoles... PS3 is simply following suit with an option that is simply common sense to a computer/software company but previously alien to the console market.

The other interesting thing to note, the newer machines do not necessarily have better hardware. From the looks of things at the moment, the Revolution will be the last thing on our shelves -- far from a powerhouse. The 'massive superiority' that many people claim with regards to the PS3 hardware is also pretty slim. The Cell processor will be powerful, but in raw power, it has little more than a tri-core 3.2GHz PPC combination. The technology behind the PS3 disks was also called into question earlier, as the Blu-Ray disc group/conference could not agree on a standard.

The major problem with the PS3 at this stage will be the cost. There is agreement with the masses that a Cell processor/Blu-Ray HD-DVD combo isn't going to come cheap. I personally suspect $450-500, but many are talking in the region of $600. I'm sure you'll agree, this monster could price itself out of the market...

Re:Microsoft can afford to operate at a loss...

[WebGangsta]

You're right on the money - no pun intended.

As I said last week, I'm guessing that MSFT wouldn't pass up the massive marketing tie-in opportunity they'd have by pricing the XBox360 at $360. It's more than the $299 we've seen before, but under the terrifying $400 price point that could scare off parents from pleasing their kids this Christmas.

I can't see the PS3 coming out at a price point that's higher than what MSFT does, unless there's proof that it carries superior features to cover the increase. I think we can all agree that Revolution will be at least $50 lower than whatever MSFT and Sony put out.

It's already been said that we should expect the new games to run around $60. Start saving those pennies!

Re:Microsoft can afford to operate at a loss...

[Sylver Dragon]

The major problem with the PS3 at this stage will be the cost. There is agreement with the masses that a Cell processor/Blu-Ray HD-DVD combo isn't going to come cheap. I personally suspect $450-500, but many are talking in the region of $600. I'm sure you'll agree, this monster could price itself out of the market...

Maybe my memory is faulty, but when the PS2 and XBox were in the works, I seem to recall that people were expecting ridiculous prices for those consoles as well, e.g. $500+. In the end, they both released for around $300 and quickly dropped to $250.
I expect the same thing to happen again. The manufacturers will pump specs and numbers out to the media, to try to sound like the hottest thing on the block. I wouldn't be suprised if the articles, which question the price of the consoles, are just paid shills for the industry players. They get people all worked up about how cool a console will be, and how it can't be cheap. Then, the companies release thier respective consoles at a lower price point that any of the articles talked about, and everyone goes, "wow, that's cheap, they must be losing a lot of money" While, techinically, they are, it's simply a standard loss leader. they sell you a console at a loss and then make it up on the license costs of the games.
This is a non-issue, the PS2 and XBox will both hit at around $300, maybe $350, but I don't expect $400 or more. Yes, they will be taking it in the shorts for a while, but they will make it back on the games. Eventually, the economics of scale will catch up with the consoles, and the losses on those will either shrink dramatically, or disappear.

Re:Microsoft can afford to operate at a loss...

[Anonymous Coward]

> I can't see the PS3 coming out at a price point that's higher than what MSFT does

I do. It's standard Sony: price it slightly higher, give it a little more gloss, and create the perception that there's more there. Not hugely higher -- maybe $20 more.

As for the price of games, I'll be getting most of my games from the used section. Guess I'll just wait an extra month for them.

Re:Microsoft can afford to operate at a loss...

[WebGangsta]

It's standard Sony: price it slightly higher, give it a little more gloss, and create the perception that there's more there. Not hugely higher -- maybe $20 more.

I disagree -- the videogame market is so important to Sony (what is it, 50% of total revenue?) that they wouldn't risk putting themselves in a situation where they would lose marketshare based solely on price point. Take last year for example: every time MSFT lowered the price of the base console, Sony matched it.

Besides, Sony has proven that they don't always have their heads screwed on straight with creating public perception. They really screwed up their entry into the portable music market by insisting on *not* supporting the MP3 format until they realized (too late) that they've missed the boat and quickly began to try to rectify that. I don't think Sony will let that type of mistake happen to them twice.

Re:"Uber"?

[jericho4.0]

Sö mäny släshdöttërs ärë ünäwärë öf the pröpër üsë öf thë ümläüt.

Get over it. This isn't german, it's english, even if it came from the german. That's how english works. And english does not have an umlaut, Sie dumm fuhrt.

Garbage

[Jukashi]

If you've already got a HDTV, you're all set. If not, the average price these days is around $1,000

But wait - don't have electricity? You're looking at $50-80$ A MONTH. And you cant just run these systems off mains - your gonna need a HOUSE to pipe that 'letric though, which can run anywhere from $80,000 to MILLIONS

Average Final Cost to "Get the Most" Out of Next-gen consoles: $2,654,789 (And this is with one controller!)

Re:The last round of consoles was more expensive,

[ZephyrXero]

I believe both the N64 and the Gamecube released for $250. Dreamcast came out at $200 though...

For some more comparison... Xbox came out at $300. Sega Saturn came out at $400 and the 3DO came out for $700. So with the exception of the Dreamcast, price can be a pretty big factor in a console's success, so I doubt the Xbox360 nor PS3 will break the $300 mark, but it is possible...I could easily see the Xbox360 coming out for $350-400 and the PS3 right at $500, but I seriously doubt it. Revolution will probably come out around 200-250.

Penny arcade has you covered

[drxray]

link

Welcome to the weak dollar

[EnglishTim]

Last time around the dollar was considerably stronger than it is now.

If you compare against Pounds Sterling, for instance, One US Dollar back in 2001 would get you around 72p. Nowadays it'll only get you about 54p, so versus the Pound it's lost about 25% of its value, which coincides remarkably well with the $300 -> $400 change.

Of course, the Xbox isn't manufactured in the UK, so the numbers will be rather different with respect to whatever countries it is manufactured in, but it is a trend. The Dollar just isn't worth as much any more and although you are to an extent buffered by your sheer size, if the Dollar doesn't increase soon you will find things getting more expensive.

Re:Welcome to the weak dollar

[xtracto]

As I am from a Latin American country, you wont
believe how much I enjoy reading and listening those Americans crying about the value of their dollar and how things are getting more and more expensive for them.

Now they are starting to look what they have been provoking in all these years to us the poor Latin underdeveloped countries.

I just can say I am really not sorry for them, I hope you can learn from this and your dollar go down until it is worth a tiny cent of Pound!

Re:Welcome to the weak dollar

[igorthefiend]

But I bet we Brits still pay more for the damn machines than you do.

Re:Welcome to the weak dollar

[Rayonic]

America isn't responsible for your kleptomaniac government printing out worthless money.

But the U.S. has actually benefitted from this modest amount of inflation. Domestic goods have gotten cheaper in relation to foreign goods, and foreign investment is attracted.

Re:The last round of consoles was more expensive,

[Akaihiryuu]

Gamecube launched at $199, in the US at least.

Re:"Uber"?

[Anonymous Coward]

Dood, you still need to capitalize proper nouns in English!

Bad analogy

[rsilvergun]

The NeoGeo was arcade hardware repackaged for the high end home market. It was never intented to compete with the SNES and Genesis, but to offer a high end gaming platform for arcade lovers. The price never really went down because of this.

It's expected that the price of the new consoles will go down significantly after launch. The high launch price is to grab early adopters.

It seems odd ...

[Anonymous Coward]

Assuming that the article is correct in its analysis there is something that really bothers me.

Microsoft, Sony, and Nintendo have all been saying that they're really interested in the "casual" gamer market. (this isn't all that shocking being that I'd guess that the "hard-core" gamer market can't be much larger than 20-30 million users). Now most casual gamers currently look at the price of the PS2 and XBox as a pretty big investment for something they hardly use; if these systems start selling at $400-$500 (and take 2-3 years to drop below $200) then how will they ever be successful at attracting the casual gamer?

Re:The last round of consoles was more expensive,

[edwdig]

The N64 launched at $200. Nintendo talked about it launching for $250, but a month or so before the launch announced it would only cost $200. It was an effective strategy, as I knew a few people that planned on buying it after the first price drop ended up getting it at launch.

I think the SNES was $200 as well, but it came with Mario World and 2 controllers.

TV used to be black & white, sorry for the rac

[Anonymous Coward]

Where'd this idea of Nintendo Revolution being severely underpowered come from?

From the quote of the President saying "two to three times more powerful than Gamecube"?

First, Nintendo has always been conservative with it's graphics hype, if any.

Second, look at the Gamecube. Sony was lying out of its ass at the E3 they showed off the PS2. Microsoft was spouting out its mouth as well for the Xbox. Nintendo largely ignored this graphical "arms race".

Third, to me, graphical upgrades are a given. Yea, of course over time things are going to look more realistic and better. That's what technology does over time! It gets better! Nintendo is doing what it always has done, improved graphics while staying affordable.

There's only so real we can get though. Once we reach that point...what then?

Fourth, also look at the Gamecube again, they're graphics are just as good as the Xbox. We all should know the Gamecube's graphics are better than the PS2 simply by Resident Evil 4 and Capcom's problems porting it to PS2.

Again, graphics will improve over time. It isn't something I'm impressed with.

Lol

[Stonewolf57]

Does anyone seriously expect Microsoft to have a hit with a console that only has pseudo-backwards compatibility, mediocre graphics improvements for games, and a near $400 price tag?

Re:Lol

[Anonymous Coward]

yes, it will flat on its face, just like everything else Microsoft has done, and they will be broke, broke, broke.

HDTV does improve gameplay

[DeadScreenSky]

Well to be fair, the improved resolution of HDTV can and will improve gameplay. It lets you fit more "player feedback" (more interface, more units, wider viewing field, things are clearer further off, etc.) on the screen. Certain console genres right now are a little limited because of the available resolution, especially strategy games. This will be improved by HDTV.

Sure, it won't matter for a lot of games. But a clearer picture (especially a jump from 480i to 720p or even 1080p, which are both HUGE) can make a big difference on the kind of gameplay developers can get away with.

Or You Could Wait

[robbway]

If you don't feel like shelling out $400 for the latest and greatest its first year out of the gate, wait 9 months. Same with all electronics. I've been an "early adopter" on game systems and paid the price. I waited for TVs, VCRs, PCs, and CD and DVD players to drop to half of their original prices prior to buying the latest and greatest, and it saved me a great deal of money. It's all about mass-production.

It doesn't make sense for software to cost more, except for price-gouging. Original releases will cost more simply because of the risk of producing for a brand-new console.

Re:The last round of consoles was more expensive,

[badasscat]

Are we surprised that the latest batch will be more expensive yet?

Generally speaking, pricing at the launch of new systems has been lower than the generation previous, not higher, when adjusted for inflation. For the most part, absolute pricing has remained within the same general range.

Here are some launch prices of various systems and the cost in today's dollars:

Atari 2600 (1977)
Launch price: $199
Today's dollars: $645.75

Intellivision (1980)
Launch price: $299
Today's dollars: $759.36

Colecovision (1982)
Launch price: $199
Today's dollars: $403.70

NES (1985) (note that Nintendo has consistently been on the low end of console pricing)
Launch price: $159
Today's dollars: $282.17

Sega Genesis (1989)
Launch price: $189
Today's dollars: $294.60

PlayStation (1995)
Launch price: $299
Today's dollars: $372.01

Personally, my thinking is the next systems will be in the $300-$350 range, and that's not really out of line with previous launches. Nintendo will probably come in at $200 and undercut the competition, like they usually do (the one exception was the SNES, which came in at $199 compared to Sega's $149 at the time).

$400 might be a stretch and will limit the launch of these systems but it's still not totally out of the range people have paid for systems in the past, in terms of dollar purchasing power. Prices do go up over time, but then so do salaries. People may have a bit of sticker shock at $400 but they'll probably get over it.

One thing I was thinking to myself the other night, though, is that the focus on HDTV with these systems may actually hurt them - at the end of the day people do only have a limited amount of money, and a lot of people are now upgrading their TV's (not specifically for games, but just generally). Spend $1,000 or $2,000 on a TV - even for unrelated reasons - and that's $1,000 or $2,000 less that you have to spend on games or game consoles. It's sort of similar to what happened in 1983, when the industry crashed - people stopped buying consoles as they spent money on computers and other devices. People in general budget a certain amount for entertainment and games have to compete with TV, DVD's, PC's, whatever else... and we're at a point in the cycle now where a lot of people are spending a major chunk of money to upgrade one component in their entertainment system.

When you add in the fact that major game stores all seem to now have mountains of used games for $10 or less (whole shelves devoted to them at my local EB), I'm getting a little concerned that people may hold off on buying new systems for a little while in favor of just sticking with current systems no matter what the launch prices are. Some people have been arguing another crash is coming for a long time, and I've always argued against it - I still don't think a 1983-style near-complete stoppage of the industry is coming, but a slowdown leading to a medium-sized shakeout seems pretty possible at this point.

Obvious XBox price

[dbretton]

Here are a couple of ideas:

MS may release the XBox 360 with a marketing-driven retail price.

Xbox 360: $360

I could even see MS doing something similar to what cell phone companies and ISPs are doing by subsidizing the cost of the 360 with a guaranteed commitment to Xbox Live. Possibly the following:

XBox 360: $299 with a 1 year Xbox Live commitment

Why not? It seems win-win for MS. They can entice more people with a lower cost of entry, and sell them on the service.