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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."
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!
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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.
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.
Who wants to bet the Revolution will be cheaper than both of them... again.
I already know i'm going to hell, now i'm just trying to get cable down there.
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...
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.
I have a lot of opinions about Cyborgs and Architects
Which in some cases could cost over $200 just to walk up to your new console.
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.
.. what parent in their right mind is going to shell out this kind of money for their kids?!
.. 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.
If a console costs $500, doesn't include any games, and the games are $60 - $80
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
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.
To get the full PC gaming next gen experience (64 bit everything, SLI cards, etc.) it could cost me over 4,000 easily.
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.
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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.
"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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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.
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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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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.
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.
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.