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Are High Prices For Next-Gen Gaming Consoles Propping Up The Market For Old Machines?

from the the-smurfs-game-never-cost-this-much dept

Tue, Oct 31st 2006 7:54am — Carlo Longino

The talk of the video game industry at the moment is the imminent launch of Nintendo's next-generation Wii console and Sony's long-awaited (and oft-delayed) PlayStation 3. But despite all the hype, recent earnings reports reiterate that it's older consoles that generate all the money in the games business, with analysts surprised by the strength of sales of games for the six-year-old PS2 and the two-year-old Nintendo DS. This is to be expected, on one hand, since there are so many of the older machines in circulation: more than 106 million PS2s have been sold, and though Microsoft is thrilled with Xbox 360 sales, only 6 million of the console have been sold since its launch a year ago. What makes the strength of PS2 game sales so surprising is that as the release of a next-generation system gets closer, many gamers tend to hold off on purchases, wanting instead to spend their money on new systems and games. Game publishers also tend to slow down releases, working to create games for the launch of the newer platforms. However, price sensitivity seems like it is playing a big role here. For instance, Sony recently cut the suggested price of the PS2 down to $129, whereas the Xbox 360 starts at $300 (with no price cuts forthcoming), and the PS3 will start at $500 -- not to mention games for the newer consoles typically run about $60. That might be acceptable to video game companies' core demographic, but as a wider range of people get interested in gaming and are looking for games that aren't necessarily based on ultra-realistic graphics and surround sound, it seems unlikely that they'll jump in at the high end of the market, and flock instead to cheaper systems with cheaper games. This means the supposedly old and busted likes of the PS2 -- which is currently outselling the Xbox 360, incidentally -- and other older machines could have some life left in them yet.

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shag, 31 Oct 2006 @ 8:38am

the old days
This is why the C6 stuck around for so long.

They had millions of people still buying games for the system long after the Amiga was released.

this was for the same reason. The C64 was only 400$ with a drive, the amiga started a 1000$.

The one thing about the c64 tho, was the fact that because the platform was not upgradeable, it forced the manufactures of the games to better and better the games in such a tight frame.

Games like Bardstale, and others pushed the limits of the system.
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Alex, 31 Oct 2006 @ 9:00am

Actually I just bought a second hand xbox (not 360) last month. All the games are dirt cheap, and the wheat has been sorted from the chaff. I'm basically just working my way through every top ten list I can find.

What will happen to the second hand market for the 360? What if they stop supporting games like GT HD? You buy the game a few years down the line, and find that you're stuck with like one track or something. That wo
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Alex, 31 Oct 2006 @ 9:02am

..uld suck. who knows where the end of that message went.
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misanthropic humanist, 31 Oct 2006 @ 9:32am

New games are bad value
This is not just a social/economic issue. The target audience can't afford the products, that is the obvious first problem. But as a lifelong gamer I can't get excited about any new technlogy. Every new console provokes a revolution of lowered expectations for me. The games suck because they are poor uncreative rehashes of the same old rubbish. The hardware is crippled by design.

The market is already flooded with more second hand copies of games titles than I have time to play in my life. I can get an old console for 10 bucks and games at $2 a throw from the local charity shop, so why would I be interested in new broken technology I cant afford?

Also, my friends all have old consoles as well and none of them could afford a PS3 because they have kids to raise too. If I get a PS3 I am just alienating myself from them and can't play or exchange games with them anymore.

There are so many reasons why I'm not interested in a new $400 console I could be here all day listing them.

One, in my opinion, is that games have simply lost their "cool". Nobody but a very small group of rich teenagers who are still gullible, insecure and exposed to a lot of advertising are interested in the latest offerings. 5 or 10 years ago there was a healthy adult games market, I played games with the kids all through my 20's.
That has gone now, or it's fast dying.

Basically I think the development cycle is too fast and the corps are too greedy and they will lose a lot of money because they cannot understand this.
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- Chronno S. Trigger, 31 Oct 2006 @ 9:46am
  
  Re: New games are bad value
  Wait until the Wii comes out
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Verum, 31 Oct 2006 @ 9:56am

So true
I work at a place that sells all the old systems (Jaguars, Turbo Grafix, and the Sega Nomad included). People pick up these things left and right, Super Nintendo's are in more demand than any other system at the moment. I feel it's more than nostalgia, because if it was nostalgia, NES would be the number one seller. Gamers want a system that allows them to play great games, not a system that immerses them in a world focused on 'hardcore' graphics or realtime physics.

Hat's off to games like Contra: Shattered Soldier.
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- Adam, 31 Oct 2006 @ 10:09am
  
  Re: Sigh to the old 2D games
  I think one of the biggest problems with games today is that while there are some games on the market, everything's categorizeds into either 1st person shooter in a 3D environment, a Sports game, or a Starcraft type game. Granted, these games can be fun, but where's the creativity in something different? (yes, yes, I know, wait till the WII comes out). But why? With all the power these consoles can muster, where are some truly innovative type games that can be played with a normal controller? I used to love games like R-Type, skyforce, etc. I don't see anything like that anymore. :( Adam www.bridgednetworks.com
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  - The Dukeman (profile), 31 Oct 2006 @ 11:11am
    
    Re: Re: Sigh to the old 2D games
    I remember when a "normal controller" was a joystick with one button. You could play the game instead of the controller.
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    - 360, 31 Oct 2006 @ 11:20am
      
      Re: Re: Re: Sigh to the old 2D games
      Lol… I was playing frogger on xbox360 with the new controller, only using one of the joystick thinking the same thing the other day.
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360, 31 Oct 2006 @ 10:00am

The “high price” is not in the consoles…
I had just about every xbox game ever made, but when 360 hit the shelf I quickly sold the xbox (for dirt cheap) and got a 360… at first only a few of my old xbox games worked and I’m still waiting for over half of my old xbox games to run on my new xbox 360. It would suck to have $5000+ worth of games and only be able to use $2500 worth.

That said, the new games on the 360 are amazing – the graphics are the best ever created in consol gaming and Xbox live is a true success. Fingers crossed on the future success of Wii and PS3. (Can the market support them all?) Think back to what happened to Dreamcast, Genesis, and even Nintendo with the saturated market and success of PS1. As for now Sony and Nintendo are still the clear market winners both with over 100 million units in existence, but the new player (Microsoft) keeps gaining ground with over 30 million units already shipped to date.
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Beav, 31 Oct 2006 @ 10:18am

Retro
I for one like the older games. We have a 360 and have a rare preorder for the Wii, but I still play my SNES more than any other system. Legend of Zelda: A Link to the Past anybody? Super Mario World? I agree with one of the above comments, the SNES has good enough graphics to still look "ok" and the gameplay is awesome. Back then nobody worried about having sweat roll off of the main character's forehead or how water looked. It was all about the gameplay. (yes, i know obviously some was about the graphics, but you get my point) I would rather wait until the bugs are worked out, the price falls, and something better comes out before spending my hard earned money on most new consoles.
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360, 31 Oct 2006 @ 10:39am

Wait unitl the Wii...
Yes, the Wii will have thirty retro titles at launch the good old games like: the Super Mario’s and Zelda’s with 10 new titles promised every month. Which is awesome!!! But Xbox 360 Live Arcade also has some fun “game play” games like: Assault Heroes, Megaforce, Bugs of War, Lumines, mutant storm, geometry wars, zuma, astropop, minigolf, and lots of “improved” classics like contra, scramble, frogger…
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Beat um up, 31 Oct 2006 @ 10:44am

Cash Machine
The corporations expect a big pay out from sales and the game publishers are cutting down game developer ideas for what they consider is marketable. When old games came out, content and game play always came before eye candy graphics. But people will save for these Next-Gen and buy that High Def TV, why? Cause it has graphics that seem to sell right now. Everyone wants to keep spitting out great games that are a hit with everyone, investing in games that have been rehashed for years. It's no surprise that old consoles have more respect right now.
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Jacco, 31 Oct 2006 @ 10:52am

Old School
Hey, I am still playing games on my 16-bit sega, and even own an atari 2600. You can't beat Megamania, or H.E.R.O. on the old 2600!!

A lot of game producing companies still don't get that no matter how slick the game looks, it is game play that will make or break a game.

Why do you think today's arcades still have Ms.Pacman?
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The Dukeman (profile), 31 Oct 2006 @ 11:05am

Price is still King.
What the newest generation of console, be they already born (XBOX 360) or in gestation (Wii, PS3), bring to the party is compatibility. The point could be made that what these consoles really are is a standardized version of what the high end PC gamers have been building for years, without the compatibility issues. You could call it a hybrid of game console and high end game PC. As I see it, the high end gamers are the only real market for these so-called consoles, especially with their prices. Or maybe those that want to be high end PC gamers who almost, but can't quite afford the hardware. Either way, the market is very limited compared to the multitude of household console gamers around the world.

The PS2 can be purchased all day long new or refurbished for under $100, and can be repaired with a new drive for $60 (retail) or less. It will continue to lead a healthy life for years to come. The useful life of a game console is over 20 years, and depends mostly on the availability of compatible software and parts (the same goes for cars: parts and compatible fuel). I'm sure if anyone has an old Atari game system in storage somewhere, they could plug it in and it would function just fine. The current generation consoles have now reached a new market: those who couldn't afford to be console gamers at the retail prices. And there are many, many, of those people. Just as many middle class people become poor as become wealthy in todays economy.
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Soze, 31 Oct 2006 @ 11:29am

Over 30 million shipped to date, but only one-fifth sold, thus far. Please don't take offense, but the Xbox 360 hasn't been selling as well as could have been expected. "Gears of War" will be the one killer app for 360, that will cause gamers to want the Xbox 360... that and "Blue Dragon". Still, there are so much more games coming for the PS3, not the launch titles (personally, I think their launch list is a little weak), games like Devil May Cry 4, Final Fantasy XIII (and Versus XIII), Metal Gear Solid 4, Warhawk, LAIR, Heavenly Sword, (rumored) God of War 3, and so on. Plus, the Nintendo Wii has Red Steel, Wii Sports and Legend of Zelda at launch.

Sure, Sony is in for some trouble this holiday season, and for the first part of next year... but Sony has strong, third-party support. And there will soon be enough games out to justify the price.

I'm saddened that I can't get one at launch, I'll still try to get one this holiday season. It's all about justification of price, and with the games I've listed for the PS3, alone, the PS3 for me has been justified. (Also, think life-span. Sony's PS3 has a long life-span... quite possibly. If Blu-Ray fails as a movie medium, it won't fail as a game medium, it will allow developers to expand their horizon so much that they'll be more than eager to utilize all the space offered, I'm sure.)
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Soze, 31 Oct 2006 @ 11:31am

Also... the PSP, soon after the PS3 is released, will expand its gaming library so far, it will compare with Nintendo's GameBoy series. It's official, Sony will try to have 10 PSone games online every month, and it accumulates, and is playable on the PSP. Soon, PS2 games will be available online for PSP, also. And the PS3 when its PS emulator is finished.
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Information Scientist, 31 Oct 2006 @ 11:43am

Hardware then software.
The good news:

Moore's Law: States that computer processing capacity will double about every six months. This could be why good 'ole' systems seem to have considerable longevity for our entertainment purposes.

The bad news:

The reality is, that these computers that can run and compute at incredible speeds--speeds we can just barely understand. Our code and algorithms that deal with the amount of data that can be processed is almost never optimized for the machine it runs on. This means for the consumer, who is looking for new gaming paradigms (outside of the FPS, RPG, etc...) is going to have to wait until human intelligence makes it up a little higher--and fully program these new machines to their potential.

Right now, graphics are the focus--because its a technology that affects our interface with the machines and its something that is marketable. Until people invent new ways to interact with the computer, ways that will actually enhance our ability to escape into the 'code'; our gaming experience will be limited to the code that a few programmers can write.

Finally, everyone has a different opinion. Some people love FPS and some will love RPG. Go figure-- the bottom line is--with the right marketing, no matter how expensive, crappy, fast, cool, fun, unique, same, or whatever it is-- YOU'RE STILL GONNA BUY IT.
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Guy, 31 Oct 2006 @ 11:44am

This reads like a Wii ad--you are all asking for things that the Nintendo Wii seems to promise to deliver. I'm surprised the author didn't do his research on that. Nintendo has repeatedly stated that their price points and games are marketed to bring in new gamers (older folks, women) because they realize all the downfalls of M$ and Sony's hard-core gamer appeal. (See comments 1-17.) I think Nintendo is on the right track.
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Sanguine Dream, 31 Oct 2006 @ 11:45am

All I have to say is...
I just went out to my dad's storage unit and retrieved my two NES consoles (I don't know if they work yet) a few days ago. Bought a Sega Genesis (I have a lot to catch up on since I was a Nintendo child) a few months back. It's time to start getting my old school game on. And since the games are harder to find than the system I've started to collect Dreamcast games. One down (a copy of Project Justice that I coughed up $55 for with no manual or original case) and many more to go.
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David Beoulve, 31 Oct 2006 @ 11:57am

Some of you are missing the point
I have four kids and a loving Latin wife. I can't ever play so much as an MMORPG and expect to be a good father. I cannot afford an XBOX 360 or PS3, and though I want a Wii, it's kind of out of my price range too because the the cost of each controller ($40+$20=$60, and I have three kids that are old enough for it, which is another $180 on top of the $250 for the base system).
So what do I do? I play computer games, or buy cheap "old" console games for my PS2 or XBOX.
I invested in a GP2X linux-powered handheld so I could run emulators; the investment was $180 plus an SD card, but now I have 900 Genesis games and a slew of NEO GEO games I can run on it. (Just google GP2X)
So it's about dollars, and Sony and Microsoft don't quite get it. (comic link)
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Hecatoncheires, 31 Oct 2006 @ 12:05pm

hasn't it always been...
It has always been a graphics race. When the original nintedo was released and rocked the gaming world, it's graphics were considered amazing. Same goes for the Genesis/ SNES era of consoles. I know by todays standards those games may seem to not focus on the graphics and be driven solely by gameplay. This wasn't the case when these systems were released. Back then those games were $50 a pop and you still had a big group of people saying "Why do I need some high powered graphics machine, when my c64/2600 is still fun to play?"

I don't foresee this generation of consoles killing the market. I think it may take some time and price drops to get the unwashed masses to flock to the next generation of consoles, though.
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Anonymous Coward, 31 Oct 2006 @ 12:05pm

Nostalgia
There are going to be retro titles on all next gen titles (I'm not sure about PS3 though). You can buy heaps of classics on Xbox Live Arcade and the Wii really is innovative. I still have a Nintendo 64 and just recently, I finished 007 Goldeneye. Old consoles are great because you remember them as a fond part of your childhood but if you start playing them hardcore you just realise they are crap. You can't compare the games from back then to today's games. Today's market is still innovative. Personally, I'm getting a 360. It was released first, it has Xbox Live (realise PS3 has a Playstation Online but there's only a dozen people using it) and most importantly, it's for hardcore gamers like me.
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Anonymous Coward, 31 Oct 2006 @ 12:06pm

RE: Nostalgia
The first line is meant to read as: There are going to be retro titles on all next gen consoles. I don't where I made that typo.
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NGUVU, 31 Oct 2006 @ 12:07pm

If you want intuitive gaming...you'll get the Wii. If you want a great online experience with good graphics...you'll geet the Xbox360. If you have spent a lot of money on PS2 games, and used to own a PS1...you'll buy a PS3. If you aren't a moron, you'll sell your PS (or PoS) games, use the money you would have spent on a PS3, and buy a Xbox360 and a Nintendo Wii. People that buy Sony products remind me of the zip faced retards who buy generic Honda Civics and put a fake exhaust on it so it sounds fast. No matter what you put into a Civic, it's still a Honda. Sames goes for Sony... Don't get me wrong...if Nintendo or Microsoft tried to charge $600 for their premium system, I'd tell them to suck my b@lls too.
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NGUVU, 31 Oct 2006 @ 12:07pm

If you want intuitive gaming...you'll get the Wii. If you want a great online experience with good graphics...you'll geet the Xbox360. If you have spent a lot of money on PS2 games, and used to own a PS1...you'll buy a PS3. If you aren't a moron, you'll sell your PS (or PoS) games, use the money you would have spent on a PS3, and buy a Xbox360 and a Nintendo Wii. People that buy Sony products remind me of the zip faced retards who buy generic Honda Civics and put a fake exhaust on it so it sounds fast. No matter what you put into a Civic, it's still a Honda. Sames goes for Sony... Don't get me wrong...if Nintendo or Microsoft tried to charge $600 for their premium system, I'd tell them to suck my b@lls too.
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Sairen, 31 Oct 2006 @ 12:09pm

That's how it is for me
I know my husband and I (20-somethings, with plenty of nostalgia for SNES) are waiting for the next-gen models to come out -- so we can buy the old stuff. We already have a PS2, but would like to play some of the Nintendo games. So we're hoping that when Wii is released, we can buy a GameCube much cheaper than it is today. Hell, if Sony does cut the price of the PS2 enough, I might "upgrade" to the newer, skinny model just for the multitap ability.

So I'm pretty excited about the new game consoles...just so long as they bring the old consoles into our price range. And I'm sure I'm not the only one doing this.
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- NGUVU, 31 Oct 2006 @ 12:19pm
  
  Re: That's how it is for me
  I'll sell you my gamecube/memory card/two controllers for $50!
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Anonymous Coward, 31 Oct 2006 @ 12:21pm

Moore's Law is the empirical observation that the transistor density of integrated circuits, with respect to minimum component cost, doubles every 24 months.

Moore's law doesn't deal directly with speed. It's cost/uint. Even today, the law may be "adjusted" for 18 instead of 24 months.

:-)

granted there is a whole set of theory that deals with speed vs. transistor size. shrink the transistor, faster the gates can switch. faster switching leads to fasterclock speeds....
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Anonymous Coward, 31 Oct 2006 @ 1:06pm

from moore's law, most reasearchers say that microprocessors double in speed every 3 years
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360, 31 Oct 2006 @ 1:09pm

Selling old consoles to pay for new ones.
Next gen is propping up old consol sales mainly because people are selling old consoles preparing for new ones. I know I sold all my old consoles:

Xbox 360 is/will be awesome because:
1. Spectucaluar graphics, without being to experimental with technology (unlike the risky cell / blue-ray tech of Sony).
2. Games: Gears of War, Halo 3, Mass Effects…
3. Xbox Live Arcade games are just as fun as the other games. Lumines is great – it’s like a cool better-than-tetris game.
4. Optional HD-DVD (sucks because can’t use the extra storage for games, but nice option for my HD theatre system).

Wii will be fun because:
1. All of the cool retro Nintendo games
2. innovative game play / controllers
3. more reasonable price

PS3 “could” be great (after the price drops some and the technology proves itself) because:
1. Blue-Ray (not just a Blue-Ray DVD player but as an enormous data format game storage solution)
2. I can’t wait to use my 7.1 surround sound system
3. The games should be great (may not compete with the 360 games – time will tell)
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MOJO, 31 Oct 2006 @ 10:46pm

Experientialism
I'm not a retro-gamer I admit because I am a gadget freak who likes everything new and shiny... anyway, my observation is that games nowadays are not "games" like the retro games were, but are more intended as "experiences", more than even a movie is an experience. If you like to have new experiences then you will want the nextgen and the next-next-gen consoles... BUT! My theory is that the "games" will become so confusingly realistic that they will merge with our normal experience and therefore instantaneously and without warning become DULL just like our ordinary lives are!! (That's probably an argument in favour of retrogaming and I'm a bit surprised I got there but what the heck, nobody is reading this anyway).
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Animal Crossing for Gamecube, 26 Nov 2006 @ 4:09pm

Retrogaming & Nostalgia backlash against Next-Gen
I'm truly against Next-gen gaming (Seventh Generation) for 4 reasons...

1.> Costs of rebuying hardware, games, accessories.

I currently own a Gamecube system and a couple of games. I plan to get Twilight Princess for Gamecube for Xmas because I don't have a Wii, nor I plan to purchase one. I'am I required to? Nope.
I have other bills to pay and life to tend to, but in my freetime, I love to spend at least 25 minutes playing Animal Crossing, or sailing in Wind Waker, or even playing my beloved Intellivision Lives! compliation disc.
People would tell me, ditch the Gamecube and upgrade to a Wii? Why? So I can give my money to Reggie Fils-Aime so I can download DRM restricted Virtual Console games that I can't even run on another Wii. I'm happy with my wired controllers, my Gamecube (yes, it is underrated!), but underrated consoles have more creativity than these hyped up mainstream consoles, and I'm not just talking about the Wii, it also applies to PS3 and Xbox 360.

2.> Lack of originality in creating games, this also goes for the Wii.

Twilight Princess on the Wii, I played on a store kiosk, yes its the same Gamecube graphics, but Nintendo delayed it for x number of months for what? so they can use it as a launch title for Wii.
Xavix came out before the Wii was implemented.
Rehashes is all I hear! Sequels, Prequels.
I really don't understand this generation, before Nintendo came out with the Wii, they dissed it.
When the Wii name came out, they dissed it.
As long as the color of the product is "White" just like an iPod, they flock to buy it because it is freaken sexy! I don't want my games to be "SEXY!", hip and to look like MySpace!, I want fun, engagement, satisfying gameplay. Is that difficult to ask. I guess it is.

3.> Next-Gen Gamers are jaded and lack a sense of history as long as the games have motion sensing, 20 billion polygons, HD, and iPod Compatible. They are set for spending a grand.

These gamers also lack a sense of tangibility, as long as they finish a 70 hour game, they rush to Gamestop and trade it in for the next Peter Jackson game. Now, I've been watching videos of Twilight Princess, I've seen about 4 dungeons already, I will still get the game and finish it. But one thing is I won't trade the game for some other stupid $50 game. I'll replay Twilight Princess because I know it will be a great game, just like a great movie was, like lets say Back to the Future.

4.> Next-gen Consoles are Wireless and Online.

Call me geezer, but I grew up in the late 80s and early 90s. So I'm not some stupid 14 year old kid complaining. I had an NES, Genesis, N64, Dreamcast,
old IBM PC 8088, iMac G3. So I know what I'm talking about. Gaming is about fun! not connecting online. I still prefer 2-Players next to each other.

Why is it that these next-gen gamers especially these DS people love Wifi, Achievements, Virtual Consoles (not even real), Bluetooth, Points, subscriptions. I want my games on Disc, not on some download where I don't even own the damn product. Anyone see this? Tangibility? People who buy music on iTunes say its the best because its sooo convenient. Wheres the CD Booklet, Cover Art, Lyrics? I still buy my CDs. This is what I see about gamers today is that online is sweet. Give me a break. I'll buy a disk that has the booklet, artwork, than some stupid download from a Virtual Console.

So personally, I don't like the Next-Gen, so don't call me NooB, fanboy, or this or that because the last-gen (Xbox, PS2, Gamecube) is the last set of consoles that were "Gaming Consoles".

Even the Wii has this WiiConnect24, to attract non-gamers, but who are they attracting. It seems that Video Gaming is down the toilet and a crash will occur if this nonsense goes on. I don't want email or a web browser on my game console, nor watching movies on it. Everything has to be online! If I want to have fun, I must be online! What happened to good ol' clean fun playing games the quiet way!

I want gaming consoles to be gaming consoles.
I'm happy with my Gamecube, GBA SP. Thank You very much! I don't have respect for the seventh generation of gaming (Xbox 360, PS3, Wii, DS, PSP) because they aren't giving us what we really want: That is fun. As long as the console is sold on eBay, people flock to it (just like the PS3 line). I hate Hype!

I'm for last-gen, real retrogaming (compliation discs or old hardware), and Nostalgia. Don't forget, I'm for the Underdogs! because Underdogs deserve more respect than (PS3, Xbox 360, and Wii, DS, PSP)

Hey I may even get a used Dreamcast soon or even a nice looking Commodore 64. Even that Jaguar looks nice playing Bubsy.
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