Are High Prices For Next-Gen Gaming Consoles Propping Up The Market For Old Machines?

from the the-smurfs-game-never-cost-this-much dept

The talk of the video game industry at the moment is the imminent launch of Nintendo's next-generation Wii console and Sony's long-awaited (and oft-delayed) PlayStation 3. But despite all the hype, recent earnings reports reiterate that it's older consoles that generate all the money in the games business, with analysts surprised by the strength of sales of games for the six-year-old PS2 and the two-year-old Nintendo DS. This is to be expected, on one hand, since there are so many of the older machines in circulation: more than 106 million PS2s have been sold, and though Microsoft is thrilled with Xbox 360 sales, only 6 million of the console have been sold since its launch a year ago. What makes the strength of PS2 game sales so surprising is that as the release of a next-generation system gets closer, many gamers tend to hold off on purchases, wanting instead to spend their money on new systems and games. Game publishers also tend to slow down releases, working to create games for the launch of the newer platforms. However, price sensitivity seems like it is playing a big role here. For instance, Sony recently cut the suggested price of the PS2 down to $129, whereas the Xbox 360 starts at $300 (with no price cuts forthcoming), and the PS3 will start at $500 -- not to mention games for the newer consoles typically run about $60. That might be acceptable to video game companies' core demographic, but as a wider range of people get interested in gaming and are looking for games that aren't necessarily based on ultra-realistic graphics and surround sound, it seems unlikely that they'll jump in at the high end of the market, and flock instead to cheaper systems with cheaper games. This means the supposedly old and busted likes of the PS2 -- which is currently outselling the Xbox 360, incidentally -- and other older machines could have some life left in them yet.

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  1. identicon
    Soze, 31 Oct 2006 @ 11:29am

    Over 30 million shipped to date, but only one-fifth sold, thus far. Please don't take offense, but the Xbox 360 hasn't been selling as well as could have been expected. "Gears of War" will be the one killer app for 360, that will cause gamers to want the Xbox 360... that and "Blue Dragon". Still, there are so much more games coming for the PS3, not the launch titles (personally, I think their launch list is a little weak), games like Devil May Cry 4, Final Fantasy XIII (and Versus XIII), Metal Gear Solid 4, Warhawk, LAIR, Heavenly Sword, (rumored) God of War 3, and so on. Plus, the Nintendo Wii has Red Steel, Wii Sports and Legend of Zelda at launch.

    Sure, Sony is in for some trouble this holiday season, and for the first part of next year... but Sony has strong, third-party support. And there will soon be enough games out to justify the price.

    I'm saddened that I can't get one at launch, I'll still try to get one this holiday season. It's all about justification of price, and with the games I've listed for the PS3, alone, the PS3 for me has been justified. (Also, think life-span. Sony's PS3 has a long life-span... quite possibly. If Blu-Ray fails as a movie medium, it won't fail as a game medium, it will allow developers to expand their horizon so much that they'll be more than eager to utilize all the space offered, I'm sure.)

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