The Price is Right: Game Console Prices in Perspective

Playing video games is an expensive hobby, even more so in the depressing economic times we have experienced of late. With the price of the gaming platform itself, games, controllers, and accessories, one can easily spend hundreds, or even thousands of dollars every year. But how has the cost of playing games changed over time? When Sony first announced that they would initially release the PS3 in two versions, costing $500 or $600, many gamers were shocked and dismayed. How does this console price compare to previous consoles? With a little number crunching, it wasn’t too hard to find out.

Back in 2006, Curmudgeon Gamer provided a similar analysis by compiling the prices of thirty years-worth of consoles and adjusting for inflation. I’ve updated the numbers and added some more analysis. Figure 1 shows the absolute, or original, price of console systems since the Atari 2600 in 1977. Figure 2 shows the relative price of each console, adjusted for inflation and displayed in 2008 dollars. This conversion accounts for the fact that $200 in 1977 was worth a lot more than it is today. All inflation adjustments were made using the Bureau of Labor Statistics inflation calculator.

Absolute console prices
Figure 1

As shown in Figure 1, out of 27 consoles, 16 of them were priced between $200 and $300. So in terms of absolute console prices, the majority of console prices have been somewhat consistent. However, the trend line clearly shows that the absolute price has somewhat increased over the years, as most of the price increases have come more recently. Some of the exceptions were huge failures (3DO), or relegated to an expensive niche system (Neo Geo).

Relative console prices
Figure 2

Figure 2 shows us that since the Atari 2600 in 1977, the relative price of consoles due to inflation has decreased quite a bit. That $200 Atari 2600 would cost over $700 in today’s dollars. In 2008 dollars, 15 of the 27 consoles are $400 or more. Of particular note is how the 360 and PS3 jump in price compared to their previous cousins. Compare this to Nintendo, whose consoles have actually been getting relatively cheaper since the NES. One reason Nintendo was able to keep their prices from rising was because they didn’t always include the most advanced technology. We’ve all heard the joke about how the Wii is just two GameCubes taped together.

Price isn’t everything. The inflation-adjusted price of consoles can’t account for the inevitable price cuts and the eventual success or failure of that system. If we compare release price with lifetime worldwide sales (Figure 3), we find that the biggest selling consoles have never cost more than $300. The 360 and PS3 complicate things a little, due to their recent price drops, and the fact that they are the current generation and thus still being sold. They could potentially disrupt the trend.

Comparison Cluster
Figure 3

Even though, in relative terms, the price of video game consoles has decreased over the past thirty years, there are more additional expenses for gamers now than ever before. First, while Wii games remain at the traditional price of $50, PS3 and 360 games have become largely standardized at a $60 price point. A survey on Game Daily shows that 43% of gamers would wait for the price of next-gen games to drop, considering the higher price. Second, taking full advantage of today’s gaming systems means investing in wireless broadband Internet. PS3 and 360 owners also benefit from an HDTV, which are still expensive despite recent price drops. Third, it has become increasingly common for developers to offer limited and collector’s editions of games at an increased price, as well as downloadable content over the lifetime of the product. Combine this with increased costs for accessories and controllers and gaming as a hobby seems to be more expensive than ever.

Finally, as gamers around the world are experiencing right now, there seems to be an ever-increasing deluge of high quality, critically praised game releases, especially in the last three months of each year. There is continuous pressure on gamers, as well as the gaming press, to keep up with what’s current. With several games a week marked as “must-buys” by the gaming community, it has become economically straining to keep up with all the newest games.

 

Tools of the trade

And if you’re a fan of music games like Guitar Hero or Rock Band, let’s not forget how plastic instruments have consumed your living room. Multiple sets of instruments not only cost money, but may take the place of your furniture.

The gaming landscape has definitely changed over the last thirty years. While the relative cost of a new video game console has definitely decreased, there are additional costs and pressures in today’s current gaming environment that will keep a pen in your hand, poised above your checkbook. Despite all this, with all the innovative games being released, the explosive growth of the industry, and the slowly growing acceptance of the video game medium, it’s never been a better time to be a gamer.

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