Oct 12, 06:43 AM

The True Cost of Next-Gen

Okay, it’s been said a thousand times plus one – PS3 is expensive, 360 is sorta expensive, and Wii is just right.

But is this really true? These price points are purely for the console system themselves. But if you think about it, what does that really have to do with the real cost of owning these systems? Going deeper, the price differentiation between each of these consoles isn’t very clear at all.

I think a better way to evaluate the cost of each of these new systems is to first start off with each of their value proposition. From there, we can then calculate how much the true cost. Why is this better? Buying a console by no means guarantees the consumer the “full experience.” The razor-and-blade model of the next-gen console business necessitates that the consumer buys all sorts of extra stuff (accessories, subscriptions, extra content) if they really do want to get that full experience that Sony, Microsoft, and Nintendo are all marketing.

Consider the Wii. When you see a Wii ad, you see four people sitting in front of the console, each with a Wiimote in their hand, jumping around and having a lot of fun. What will it cost you to get this experience? Certainly not just the introductory $250. Just to start out, you’ll need to buy the console and 3 more controllers. $250 + $60 + $60 + $60 = $430. And that doesn’t include any games ($50-60 a pop) and any of those great small $5-$10 games via WiiConnect. So the real price of the Wii is up in the $500s, just to start out! Doesn’t sound so cheap anymore!

So what about the 360? The main value there is in XBox Live. So that means to get a true price of a 360 you need the base console price, an XBL subscription + headset, and a few games.

What about the PS3? Hard to tell. Its cost still trumps these two. Free online here starts to make a difference. But this raises another question: what is the PS3’s value proposition? There just isn’t a clear one yet, and so evaluating the cost of that full experience is still up in the air.

My point is, the console price, as time goes on, is starting to mean less and less. Starting to think about the cost to get and keep that “full experience” is a lot more useful.

-Jon
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