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
    Hecatoncheires, 31 Oct 2006 @ 12:05pm

    hasn't it always been...

    It has always been a graphics race. When the original nintedo was released and rocked the gaming world, it's graphics were considered amazing. Same goes for the Genesis/ SNES era of consoles. I know by todays standards those games may seem to not focus on the graphics and be driven solely by gameplay. This wasn't the case when these systems were released. Back then those games were $50 a pop and you still had a big group of people saying "Why do I need some high powered graphics machine, when my c64/2600 is still fun to play?"

    I don't foresee this generation of consoles killing the market. I think it may take some time and price drops to get the unwashed masses to flock to the next generation of consoles, though.

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