PS3 and 360 Price Cuts, Before Holidays End

A lot of people have purchased the Xbox 360 and a growing number have had new interests in the PlayStation 3. The summer time is winding to an end and fall will bring us a new host of video games and reasons to keep playing our current generation consoles. Many analysts and industry leaders believe the 360 and PlayStation 3 will undergo a USD $50.00 price cut before the Holidays begin.

With holiday madness comes momentum and sales, a USD $50.00 price cut would help bring new momentum to both consoles, especially with Nintendo lapping them in sales. Nobody has considered the direction of the Wii as it doesn’t need to be priced competitively given this is going to be the third year it’s impossible to find in stores.

Do the consoles really need a price cut? It’s hard to argue the PlayStation 3‘s dire need for cutting in price given its already outrageous costs for a console with the least amount of desired titles. The Xbox 360, for most, has the best lineup of titles with a strong fall series of games. The Wii… well, titles don’t really matter just yet because people still buy the console upon sight. The PlayStation 3 is showing off some impressive graphics for this fall and early next year, it may almost be time to invest in the product.

The fall games will keep hardcore gamers buying titles but it will do little to inspire new console sales. If GTA IV, Halo 3, Gears of War and Metal Gear Solid 4 couldn’t drag a gamer to buy, what fall titles will do so this year? Probably very few.

It’s time for the big console vendors to broaden their audience by opening the console to a demographic of gamers that just can’t afford the higher graphic consoles. No, USD $50.00 won’t bring in everyone but it may inspire those on the fringe of consideration to change their minds. With their new consoles in hand they can use their USD $50.00 savings to purchase a new holiday release title.

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UK developer David Braben from Frontier Developments believes smaller development studios are in the worse position when it comes to re-sale of “pre-owned” video games. Since a developer only gets their cut of the profits when a game is sold new, pre-owned titles allow gamers to play games without paying the developer for the effort.

This also hurts larger publishers, but they’re able to recover because of the sheer volume of games and game titles. One idea David had, was to code each game with a unique license key like a PC game that gamers must enter before playing. This would kill the ability to re-sell video games back to the market for others to buy at a cheaper price (translation: better value).

The future shows a higher degree of downloadable games, which cannot be re-used or sold back to the market, but for now, developers have to deal with pre-owned video games cutting into their profit. Presumably you could have a great game with smaller sales and a high degree of resale in the pre-owned market.

Problem with this take on development? Besides large scale video game sellers like GameStop making 80% profit margins on resold games (rather than a 10-15% on new), gamers want a way to make back some of their money on expensive titles. When you’re paying $60 for a game and you beat it in a week or two, you want to resell it so you can invest in a future title.

My theory… make games more affordable so we don’t feel gouged on the price. We may decide to hold on to it longer and tell our friends about it. A good game reference and a reasonable price will increase sales every time. Don’t try to solve pre-owned problems when the problem is the publisher and the industry making huge game prices.

(Thanks, Kotaku)