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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."
"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
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$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.
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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.
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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.