How Will the Price Affect Today’s Console Race?

Perhaps, a good way to analyse the prices of today’s gaming consoles is if we look back on a brief history of the prices of yesterday’s consoles. A lot of people are speculating that the PS3 is priced way too high and Microsoft and Nintendo might just take advantage of this situation- they may lower the prices of their consoles a bit just to make the PS3’s price tag ridiculously high. But let’s just take a look at the historical comparison of the gaming console so we can have a different perspective on the issue.

Historically speaking, consoles with mid-pricing reigned supreme (such as the PS1 &2, & the Atari 5200) whereas gaming consoles priced above $500 had languished in the console race.

Take for instance SNK’s NeoGeo, released in 1990 with a price tag of  $650 (in 2006 US$ it is priced at roughly over $1000). Although it sold roughly 3 million units during its run, ordinary gamers perceive that it cost too many benjamins- even if they released a cheaper bundle, the prices of the NeoGeo games, which is $200 a pop, is just too much.

Another good example is the 3DO gaming console. It was being packaged as the next-gen console during that time (which is 1993). Next gen because it introduced a CD-based video game system which would be manufactured by various partners and licenses; 3DO would collect a royalty on each console sold and on each game manufactured which was appealing to game publishers because Sega & Nintendo’s demand higher royalties.

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Perhaps, a good way to analyse the prices of today’s gaming consoles is if we look back on a brief history of the prices of yesterday’s consoles. A lot of people are speculating that the PS3 is priced way too high and Microsoft and Nintendo might just take advantage of this situation- they may lower the prices of their consoles a bit just to make the PS3’s price tag ridiculously high. But let’s just take a look at the historical comparison of the gaming console so we can have a different perspective on the issue.

Historically speaking, consoles with mid-pricing reigned supreme (such as the PS1 &2, & the Atari 5200) whereas gaming consoles priced above $500 had languished in the console race.

Take for instance SNK’s NeoGeo, released in 1990 with a price tag of  $650 (in 2006 US$ it is priced at roughly over $1000). Although it sold roughly 3 million units during its run, ordinary gamers perceive that it cost too many benjamins- even if they released a cheaper bundle, the prices of the NeoGeo games, which is $200 a pop, is just too much.

Another good example is the 3DO gaming console. It was being packaged as the next-gen console during that time (which is 1993). Next gen because it introduced a CD-based video game system which would be manufactured by various partners and licenses; 3DO would collect a royalty on each console sold and on each game manufactured which was appealing to game publishers because Sega & Nintendo’s demand higher royalties.

It looked promising until it was announced that this baby will have a price tag of $700. All of a sudden, publishers were shying away from the 3DO which lead to the company selling its next generation console, codenamed M2, to Matsushita and changed its business to develop and publish games for other game consoles including the Playstation.

So what is the point of all these? I am not saying that the PS3 will suffer the same fate as these two, what I’m trying to put across is that pricing isn’t the only issue here, a lot of people seem to forget that. However, PS3’s price is definitely going to put the PS3 in an uphill climb towards console supremacy. With the lower-priced Nintendo Wii and the MS’ Xbox 360, the competition is going to be stiff.

People who are speculating that the PS3 would be a failure because of its price tag is forgetting the fact that when you buy one, you are not only getting a gaming console but you’ll also be owning a Blu-ray player, that Sony has already made a name for itself in the console genre, and that Sony have a very loyal following. Price isn’t the only thing- it is an important factor- but not the only factor.

In the end, I myself won’t be surprised if consumers will buy more than one gaming console. Unless you’re a fanboy, choosing between the consoles of today is quite challenging.