Next Gen Consoles - Is Price Truly No Object?

By: Nick Crane
Submitted: 2007-01-17 16:09:24
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When the Xbox 360 was released, it certainly seemed as if a new bar in console pricing had been set. Throw out the immensely overpriced fringe systems of the past (the CD-i and its initial $700 price point for example) and the 360’s $400 premium console became the standard.

While no one was mystified to see Nintendo clock in at $250, keeping the company's promise of undercutting the competition on price, Sony's announcement of a $600 premium Playstation 3 model came as a surprise to many. True, lower price models of the Playstation 3 and Xbox 360 exist, but even a $500 basic model gives the Playstation 3 the distinction of setting a new bar in expense.

It is impossible to escape the reality that the Playstation 3 is buoyed by its Blu-ray capabilities. Incorporating technology in a build that had to be finalized months before that technology becomes commercially viable on its own is expensive. Blu-ray technology is cutting edge even now and the Playstation 3 had to have its capabilities finalized long before now.

Two chief models are in play here and where the Xbox has released its HD-DVD add on more as a response to the Playstation 3 bullet point of next generation movie-playing capabilities, the Playstation 3 assumes that desire and packages it, along with its cost.

The motivations here are clear. Sony has long been a proponent of the Blu-ray platform and as an early adopter of the technology stands to gain should Blu-ray win any kind of platform war. The debate will inevitably rage on about which format is truly superior, but Sony is doing its best to make sure it really doesn't matter.

With an install base subsidized by consumers eager for the next generation in Sony's gaming lineage, Blu-ray may well gain a foothold in the market irrespective of whether it actually does more for movies or not. It's an interesting gamble, packaging a new technology, for which the rewards could be immense for Sony, in a product, the Playstation 3, which will almost certainly have a strong early adoption.

The gamble comes in if consumers take offense to having Blu-ray capabilities forced upon them, upping the price in the process, for a machine that might have come in with the same graphical power at a lower cost. Sony's answer to that is the Playstation 3's planned 10-year life span, requiring an early use of cutting edge technology to minimize the degradation of the hardware over time. Putting out a Nintendo Wii, for example, with a planned 10-year life span would leave graphics that are only a moderate improvement now severely out dated by then.

So, the Playstation 3 stands at an interesting crossroads, an extreme combination of gaming software and multimedia equipment that has elevated the costs and thus, elevated the stakes. The issue may seem moot as early sales will be strong given the low available supply and the success of the Playstation and Playstation 2. As the Playstation 3 travels the product life cycle, then we will see just how price impacts the large-scale adoption of the system and whether Sony has achieved an early foothold for the Blu-ray standard.

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