Why Is The New Xbox So Expensive?

[saraphen]

Most other consumer electronics have plummeted in price over the years, but not videogame consoles.

On Wednesday, Microsoft announced that the new system, due this fall, will retail for $399. That version comes with most of the features that Microsoft has been hyping for months: a hard drive, wireless adapter and membership to the Xbox Live online gaming community. A stripped-down version of the console without any of those features will sell for $299, the same price as the original Xbox in 2001. Other systems have been just as costly. The Sony PlayStation 2 in 2000, the original PlayStation in 1995, and even Mattel's Intellivision console in 1980 all initially retailed for $299.

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The nature of gaming hardware might also be a factor in keeping prices high. One reason CD, DVD players and personal computers get cheaper is because they're made from standard building blocks. Most PCs use the same type of off-the-shelf chip, storage, graphics and software. The same is true for lots of audio and video equipment. But game consoles are different. Each generation uses cutting-edge or custom components. Economies of scale therefore rarely reach a magnitude that drives prices down.

Videogame consoles do tend to drop in price after they've been released. The Xbox and Playstation 2 initially cost $299, now they sell for about half that. Of course, for many gamers, waiting to play until the price comes down is about as appealing as kissing Donkey Kong.

http://www.forbes.com/2005/08/19/vid...dia_newsletter

I'm still stuck in the Space Invaders time-warp, so what do I know? :whistling

[MochaLove37]

I'll stick to my Nintendo thank you very much. LOL.

I put my 50 dollars down on it monthes ago and I cant wait to get it.................Its more than just a video game console. It saves music, plays dvds and mp3 format files. It also plays high definition games that actually look and feel like the real thing. Uhuru warriors. www.XBOX360.com

[Godssoulja]

The demand for the unit always drives up the price intially, but once the demand and popularity of this new game set in the price will come down. I remember when that nintendo was $299.

[MochaLove37]

Originally Posted by Godssoulja

The demand for the unit always drives up the price intially, but once the demand and popularity of this new game set in the price will come down. I remember when that nintendo was $299.

Yup I remember that too and I got it when it went down to $99.00. That's when I got mine. I guess I am just one that isn't swayed by the hype so I just wait.

[DBlack]

Console prices are driven by more than just demand, but because of scarcity and technological advances.

less than a handful of companies make consoles, and this creates a pseudo-monopoly due to scarcity.

With each console release comes a sweeping array of hardware, and platform coding improvements. Not trying to justify the costs, because in my view, it's a waste of money. If you like to game, your money is much better spent on a pc.