Every time the next-generation consoles are released, avid gamers all around the world prepare themselves for pretty graphics, and awesome marketing to come. I call them “avid” gamers because they are willing to shell down the hundreds of dollars for their new toy. But that one time fee isn’t the last thing they’re going to see.
When I bought my Xbox 360 the hardest part was finding one, the second was how much it was going to cost me. Although that thought was subconscious and muddled by all the hype, it bothered me, it still bothers me. It may come as a surprise but the companies such as Microsoft, Sony, and Nintendo are losing money every time you buy their console, lots of money. Reports a few months back indicated that it cost Microsoft around $900 for them to produce one “premium” Xbox 360, a lot higher than its retail price of $399. This concept is nothing new, and it isn’t exclusive to Microsoft. Almost every gaming console that has been released in the past 15 years has been losing money on the console itself. Why would they do this you ask? It’s a very simple answer: it would simply cost too much per console if they decided to make a profit initially. The $399 for the Xbox 360 was hard enough to explain to my family, but $1000 would be insane.
The object of lowering the price is to sell enough consoles to secure a user-base in order to sell accessories and games to the users. That’s where they make-up the money lost for the console and eventually turn-up a profit. Microsoft released their accessories for the Xbox 360 several days before the console even saw store shelves; at that point they made millions of dollars. I purchased my Xbox 360 from Bestbuy.com and was scheduled for arrival in 3 days. During that time, I bought a wireless controller ($49.99), two games ($129.98), and 3600 Microsoft Points ($39.99). If you have sharp math skills, you would have calculated that I spent $219.96 (Without sales tax) on games and accessories before I even got my Xbox 360 (Add $399.99).
Although the concept of making money from games and accessories hasn’t really changed, there has been creative ways in getting you to fork over your hard-earned cash. One interesting way is the Xbox Live Marketplace which is still a beautiful feature, but if you’re not careful, it could end up costing you a lot of money. Instead of purchasing items with cash, you pay through a system of Microsoft Points (The closest thing Bill Gates can get to his face on money). Their claim is to make a universal currency system which people around the world would have the same standards of payment. What this actually does is it keeps you from knowing exactly how much you’re spending on the Marketplace. Instead of spending $10 on an Arcade game, it’s 800 Microsoft Points!
The Xbox 360 released with its impressive games which most cost around $60, more than the $50 gamers were used to paying last generation. Many publishers blame the higher prices on development cost. This does have some sense to it; games don’t get that nice-looking without some extra cost and they still need to become comfortable with developing on a new platform. But they were already making a lot of money on the games, why raise the price that much relatively? Well, there is some blame that is placed on the pirating community. There’s no doubt that this criminal practice cost companies a lot of money, but what caused the recent increase? Some, along with myself, believe that the recent increase in price has brought more and more people into illegally copying games. That’s pretty ironic.
While consoles can get pretty expensive, PC gaming has the potential of being a lot more expensive than owning a console. Almost everybody has access to a PC; whatever it’s used for, it can easily double for gaming. But if that computer doesn’t have the muscle to pull the games, there are going to be major slow-downs and ultimately less enjoyment. In the quest for faster frame-rates and prettier games, PC gamers can spend thousands of dollars keeping their computer up-to-date in order to play the latest games properly.
The PC hardware industry has made a lot of money out of the prospect of continually releasing a more powerful or simply better piece of hardware. Many companies design their computer components with the sole purpose of gaming. ATI and NVIDIA are the top two competitors in the GPU industry. Out of many components that you may buy to increase game performance will be the video card. Both companies have capitalized on this fact by releasing a major upgrade about every 6 months and smaller iterations in-between.
When a new card series is released, prices at launch are regularly $500 to $600. In some cases, one of the manufactures releases the same card with slight variations that improve performance. Those “special edition” video cards can cost as much as $700. If that wasn’t enough, ATI’s Crossfire and NVIDIA’s SLI Technologies allow gamers to purchase two cards along with a specially designed motherboard for the technology. With two cards in the system, it allows the computer to render the image faster and thus a faster frame-rate in games. Let’s add up how much that would cost: Two Crossfire-ready or SLI-ready cards ($1200), and 1 motherboard for SLI or Crossfire ($140); that’s $1340! But what if you get a new motherboard? You’ll probably need a new processor, let’s tack on another $300. With all these upgrades, I don’t think my power supply can handle it; another $100. Now you have one beast of a computer, but let’s go 6 months into the futureÃ¢Â?Â¦ A new video card! New processor! It’s time for another upgrade.
So it’s pretty easy to see where PC gaming can get a little crazy and definitely expensive. But it isn’t just PC gamers; most people that get their entertainment from all video games have a large bill that adds up over time. Ever wonder why the video game industry is doing so well? Well there’s probably just over 100 million gamers in the world (Really rough guesstimate), and each one is spending at least over a thousand dollars over time. That’s makes for a large Swiss bank account. But in the end, it’s up to the person spending the money whether not they want to be entertained. For me, I’ll spend $500 anyway to get that great feeling of playing video games.