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Is the market ready for a $500 console yet?

Forums - Gaming Discussion - Is the market ready for a $500 console yet?

What should the PS5 & Xbox 4 cost at launch?

$500 (high specs) 45 60.81%
 
$450 (moderate specs) 8 10.81%
 
$400 (low specs) 21 28.38%
 
Total:74
DonFerrari said:
JRPGfan said:
Personally I feel 500$ is a little to high..... consoles start to get attractive at the 300$ price point imo.

I get that the rumored specs of the PS5 more than justify a 500$ price tag to go along with it, so even if you paid 500$ for it, you wouldnt feel cheated.
PS5 is looking to be a really powerfull system for its price. Still I guess Im just not as focused about graphics as most are, I feel like 1080p is still fine tbh.

Personally I would have prefered they did a small "jump" going with PS5 and then made a cheaper system instead.
Keeping that 400$ price point.

However if we're getting 8c/16 zen2, 16GB GDDR6, Navi GPU at 12TF+, SSD HDD,... raytraceing (for sound & graphics) ect
I doubt it ll be 400$..... 500$ is more likely.

Why bother doing small jumps?

For someone minded like you would be better that they at the time PS5 launch cut PS4 basic to 149 and PS4 Pro to 249, so for the next couple years due to the crossgen (and also BC) you have very cheap HW. And then when you are going to upgrade to PS5 the 499 became 299-349.

I don't think you realize the irony in how much your statement mirrors 2 major marketing PR flops by Sony and Microsoft from recent memory:

Sony wants you to earn that PlayStation 3!

"During a recent interview with Japanese economic website Toyo Keizai, ever-charming Ken Kutaragi had this to say about Sony's goal for the PS3: "for consumers to think to themselves 'I will work more hours to buy one'. We want people to feel that they want it, irrespective of anything else." In other words: Get a job!"

https://www.engadget.com/2005/07/06/sony-wants-you-to-earn-that-playstation-3/

Microsoft: No Internet? We have a product called the Xbox 360

"We have a product for people who aren't able to get some form of connectivity," says Microsoft's Don Mattick, "it's called Xbox 360."

https://www.cnet.com/news/microsoft-no-internet-we-have-a-product-called-the-xbox-360/



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Mandalore76 said:
RaptorChrist said:

Until reading through this thread, I had no idea that people would look at $499 as such a high price point. For me, as a consumer, I want to see Sony release the PS5 with super powerful hardware that costs more than what the average consumer would be willing to pay.

Money is relative to the person spending it, and for some people, $499 is steep. Me ten years ago would have had concerns over the price, back during a time when the price of something played a much bigger role in my ability to buy it. Today, however, at the end of the month, once all the bills are paid, my wife and I usually have upwards of $1000 leftover, maybe more.

But those situations are always changing, and maybe ten years from now I'll be broke again, so it all depends on one's situation.

You're not the average person though.  Just recently it was estimated that 4 out 5 US workers live paycheck to paycheck.  So yeah, to the average consumer, in the US anyway, the difference between spending $400 or $500 on a video game system (with no games or extra controller) is indeed a big deal.

The government shutdown spotlights a bigger issue: 78% of US workers live paycheck to paycheck

https://www.cnbc.com/2019/01/09/shutdown-highlights-that-4-in-5-us-workers-live-paycheck-to-paycheck.html

To be fair, though, in today's consumerist society that includes an endless variation of clothing, entertainment and travel expenses etc. So that would be just shifting a small sum of money from one superfluous expense to another, not like it would take away from the kids' lunch or anything. Not for the average American household, at least. Of course, it doesn't mean there aren't people out there burying themselves in debt in the name of social acceptance etc.



 

 

 

 

 

Mandalore76 said:
JamesGarret said:
I would hope so, this isnt 2006 anymore, we live in an age where people pay more than $1.000 for phones and other devices so some of that "disposition" should rub off a little on the console market, and considering its something thatll last you for ~6/7 years and help insure a more significant leap over the previous generation, I say bring it.

Why are people bring up the cost of phones as if it is remotely relatable?  Your monthly phone plan pays for most of the cost of the device.

Mine doesn't. Most people who can calculate the total costs of a phone contract will buy the phone separately.



I bought the ps3 for CAD 650. No doubt the ps5 will be at least CAD 600. It was a fluke that the ps4 was only CAD 400 when the Canadian dollar was on par or even higher than the US dollar. No chance of that now.



If the specs are true than the 500 price tag is cheap as chips. Those specs are already higher than my custom built pc and should be able to do 4k native easily at higher settings. You cant get a pc like that for that orice 😂. Sadly a 500usd wpuld mean it will be 700 nzd 😂. To put into persoective my oc when u built it 5 years ago roughly cost me 3.6k nzd 😂



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ptofhearts said:
RaptorChrist said:

Until reading through this thread, I had no idea that people would look at $499 as such a high price point. For me, as a consumer, I want to see Sony release the PS5 with super powerful hardware that costs more than what the average consumer would be willing to pay.

Money is relative to the person spending it, and for some people, $499 is steep. Me ten years ago would have had concerns over the price, back during a time when the price of something played a much bigger role in my ability to buy it. Today, however, at the end of the month, once all the bills are paid, my wife and I usually have upwards of $1000 leftover, maybe more.

But those situations are always changing, and maybe ten years from now I'll be broke again, so it all depends on one's situation.

To put it in perspective: I am from Brazil and here, when the PS4 was released, it cost us around U$1000 to buy one officially, which is very, very steep, specially considering our minimal monthly wage at the the time would be around U$229. I bought mine only on February of last year, and I was fortunate enough to be able to afford one at it's U$399 price tag (since the price had been cut by then), which is still steep, as most people here still can't afford it.

A console at U$499 will have a surreal price here in Brazil, and I believe Sony would lose a lot of ground. Besides, there are other things to consider, like is it going to be advantageous for developers to invest more money to develop a high end game to sell it on a console that could potentially have a much smaller userbase, specially at launch?

Yikes. I guess ideally, in my opinion, a hardware generation would start out on the more high-tech side of the spectrum and only get cheaper with time, as once Sony releases the PS5, the specs are locked in, and all future development on that platform must be playable at those standards.

The issue with that is that in general, whichever console tends to sell the best during it's first year has a good chance of snowballing ahead for the rest of the generation. As a result, it would be in Sony's best interests to focus on having the system launch at an affordable price for everyone, despite personally wishing they would cater a bit more towards the tech enthusiasts.

Edit: Out of curiosity, do you sort of prefer Sony waiting to release the PS5 for as long as possible so as to prolong the value of the current generation? I'm not sure what my opinion is on the topic of short or long generations. I like the things I buy having value for a long time, but I also like getting new things, so that's a tough call.

Last edited by RaptorChrist - on 18 April 2019

Depends on the feature set ...

Backwards compatibility is starting to gain more value so I imagine that more consumers will probably start expecting game consoles to have that functionality. Backwards compatibility has benefits for both consumers and developers. For the former, the customers get to keep their built up valuable backlog of games and for the latter, the studios can more easily maintain their tools ...

Hardware accelerated ray tracing is probably going to be THE main selling point of next generation consoles which will incentive developers to start making better experiences thus customers will be convinced that more value is added into their games ...

Just having backwards compatibility and ray tracing alone would probably make the new systems well worthwhile at $500 since it's just all around easier for the developers to author better content for their customers. Faster loading times and better remote play functionality would just be the cherry on top of everything else ...



OTBWY said:
I don't think this price has ever been attractive. It seems to me the right pricing most consumers are willing to take the leap for is 400.

In the 90s, $400 was outrageous. The Neo-Geo price itself out of contention. The basic SKU was $400 in 1991, which translates to $773 in today's money. The Saturn was released five years later at the same $400 price point, which comes out to $668 in today's dollars, and that price is almost certainly one of the key factors in its failure.

But $400 isn't so bad these days, because a dollar doesn't go as far as it did 25-30 years ago. The 360 launched for $400 and did well. The PS4 launched at $400 and did even better. In 20 years, $400 will be dirt cheap for a console (assuming 2% average annual inflation, $400 in today's money will be about $260-270 in 2040).

And people are cognizant of inflation, even in the short term. We know that, as a percentage of our income, a hamburger or a TV doesn't cost more now than it did 30 years ago. The ticket prices may have doubled, but the value of a dollar has halved.

And as I mentioned, $400 in 2013 dollars will likely come out to around $450 in 2020 dollars. $400 could produce an even less significant jump than the PS3/360-to-PS4/XBO jump

melbye said:
I think it will be an easier pill to swallow when both PS5 and xbox4 is $500, and not just one of them.

Depends. If the price difference results in meaningful spec differences and thus meaningful differences in game performance, I think it could be a deciding factor. The XBO cost $100 more than the PS4 at launch because of forced bundling of Kinect, not because it was a graphical powerhouse. The PS3 cost $100 more than the 360 ($200 more if you went with the 60GB SKU), but that was primarily because of the Blu-ray drive (which was still expensive at the time) and the complex custom CPU, not because it clearly outclassed the 360 in terms of raw power.

Mnementh said:

That is true for us here in the forums, who buy and play probably 10 games or more a year. But as many people watch one movie a year in the cinemas - and these are the customers who create a blockbuster - so are gamers who play one game a year (probably FIFA). And they make a successful console. If a company targets only gamers dedicated enough to visit regular gaming forums, they probably sell 5M lifetime. Let's be generous and say 10M - exactly this was the case with PS Vita and WiiU. Many dedicated gamers liked these devices. But not the majority, who plays fewer games.

$500 in 2020 won't be as bad as $500 was at the start of last gen. $500 right now is the equivalent of about $389 in Nov. 2005, when the 360 was released. And as mentioned it will likely be only about $50 more than the likely inflation-adjusted launch price of the PS4 in Nov. 2020 dollars.

Also, the price of the system will come down over time.

Mandalore76 said:

It's literally the difference between $500 getting you a console and having money left over for a couple of games, a game and a controller, etc.  Or, $500 just getting you the console and having to spend $600 just to be able to use it.

As far as payraises and inflation goes, you do realize the cost of living increasing is also a thing, right?  My dad bought a ColecoVision in 1982 for $175.  You can tell yourself that purchase would have cost $460 today.  But, I will tell you that in 1982, my dad was able to raise 4 children on a single family income.  Today, every married person I know needs a dual income to get by (both spouses working).  And, a lot of them don't have children because they fear not having the money to properly care for another mouth to feed in the household.  Declining birthrates are a thing too, you know.  But, you keep telling everybody that a $500 base purchase for a toy isn't a big deal.  I hope Sony busts out another $600 PlayStation just for you.  Because if an adjusted for inflation ColecoVision cost $460 in 1982, then a $600 PlayStation today shouldn't be a problem for anyone.  Even though we already saw in 2006 it was an absolute disaster.

Your family is only a single data point. On average, most necessities have either stayed the same or declined in inflation-adjusted terms. Food has gotten a lot cheaper, and many common food items have nearly the same sticker price now that they did 30 years ago. The price of electricity has come down from 30 years ago. The price of gasoline is near historical averages (for now). While wages for the average worker have indeed stagnated, lack of growth is not the same as a decline. The console market continues to thrive to this day, showing that the average console-buying consumer still has the discretionary income to do so.

Also, hardware isn't the only component to the cost of gaming. Software continues to decline in price. Let's assume the average gamer buys ten games for a system, all brand new at launch. That comes out to $600. Add a $500 system to that, and that's $1100. Now, imagine you bought a PS2 at its original $300 price point in March 2001 (the tax season after launch), and ten games for that between 2001 and 2006 (two in each year) at their original $50 price. Now, that's a sticker price of only $800, but adjusted for inflation it comes out to around... a bit over $1100. So, even if we have a console that has an inflation-adjusted price $50 more than the PS2's (which a hypothetical $500 PS5 will be around), that increase is offset by declining software prices. I hadn't done so in four years, but I took the time to update my software price charts:


Now, before you bring up online subscriptions and DLC, those are things that are, for the most part, optional.

JRPGfan said:
Personally I feel 500$ is a little to high..... consoles start to get attractive at the 300$ price point imo.

I get that the rumored specs of the PS5 more than justify a 500$ price tag to go along with it, so even if you paid 500$ for it, you wouldnt feel cheated.
PS5 is looking to be a really powerfull system for its price. Still I guess Im just not as focused about graphics as most are, I feel like 1080p is still fine tbh.

Personally I would have prefered they did a small "jump" going with PS5 and then made a cheaper system instead.
Keeping that 400$ price point.

However if we're getting 8c/16 zen2, 16GB GDDR6, Navi GPU at 12TF+, SSD HDD,... raytraceing (for sound & graphics) ect
I doubt it ll be 400$..... 500$ is more likely.

I would prefer a larger jump, one big enough to not need a mid-gen refresh, as opposed to a smaller jump with a mid-gen refresh. While I did get some money back off my base XBO when I traded it in, the upgrade to a One X plus that original XBO purchase cost me $700 in the long run. I'd rather pay $500 at launch, then the mass market who might want to wait a while to take the plunge can do so when it gets dropped to $400 or $350 (which will inevitably happen).

Mandalore76 said:
DonFerrari said:
Yes it is, PS3 launched at 599 and had sales, X1 and X1X also had sales launching at 499. But still for obvious reason there is more initial sales when launching at 399 and good product than at 499.

Are you seriously using 2 stumbled launches that cost their platform owners nearly half the customers they had built up from the previous generation as a sign that the mass market consumer wants to pay $500 or more for a video game console?  The PS3 had sales at $599, sure.  But, was it "good sales" if there were 70 million less PlayStation owners from the previous gen?  The Xbox One had sales at $499, sure.  But, were they "good sales", if Microsoft may have lost 50% of it's own customer base from the previous gen?  I would say no based on just the fact that Microsoft does not even announce sold numbers for the Xbox One or Xbox One X.  When you aren't announcing milestones, you aren't exactly happy with your sales, are you?  

To reiterate what I said before, the XBO cost $100 more than the PS4 at launch because of forced bundling of Kinect, not because it was a graphical powerhouse. The PS3 cost $100 more than the 360 ($200 more if you went with the 60GB SKU), but that was primarily because of the Blu-ray drive (which was still expensive at the time) and the complex custom CPU, not because it clearly outclassed the 360 in terms of raw power.

The launch prices of the PS3 and XBO did not justify themselves, hence why they didn't sell as well as the 360 and PS4, respectively.

SKMBlake said:
Nope, 500$/499$ is way too high. Remember, these are made for gaming, a small part in your average entertainment schedule. Yes, it does Netflix, Youtube and other stuff. But so do your TV and/or your last gen console. Or even your Smartphone/tablet through Miracast/Google Cast/Air Play.

You won't spend 500$ in a Blu-Ray player either, it's just for watching movies.

See prior comments regarding inflation.

Mandalore76 said:

You're not the average person though.  Just recently it was estimated that 4 out 5 US workers live paycheck to paycheck.  So yeah, to the average consumer, in the US anyway, the difference between spending $400 or $500 on a video game system (with no games or extra controller) is indeed a big deal.

The government shutdown spotlights a bigger issue: 78% of US workers live paycheck to paycheck

https://www.cnbc.com/2019/01/09/shutdown-highlights-that-4-in-5-us-workers-live-paycheck-to-paycheck.html

See my prior point about personal economics. 78% of U.S. workers might be living paycheck-to-paycheck, but that clearly isn't harming their ability to buy consoles. The console market has appeared to be bulletproof against anything going on in the economy. Not even the Great Recession did anything to it, as console sales continued to grow despite many people struggling. People do still get tax returns, and splurge on big-ticket items like consoles.



Inflation has no effect whatsoever on what people are willing to put in a console. 500$ is way too high



"Quagmire, are you the type of guy who takes 'no' for an answer ?"
"My lawyer doesn't allow me to answer that question"

PSN ID: skmblake | Feel free to add me

SKMBlake said:
Inflation has no effect whatsoever on what people are willing to put in a console. 500$ is way too high

This is an incredibly unsound argument that ignores basic realities of economics and economic history.

A new Toyota Camry started at about $16,400 25 years ago. That's about $28,000 today. To rephrase your argument for a car buyer from 1994, "Inflation has no effect whatsoever on what people are willing to put in an automobile. $20,000 is way too high." Except $20,000 isn't way too high by historical standards, and a new Camry starts at about $25,000 now, a bit less than a 1994 model.

Inflation matters.

$300 is dirt cheap for a console today. It was a bit exorbitant 30 years ago, because a dollar was worth twice as much. Assuming inflation stays about constant, a $500 PS5 will be only 11% more expensive than the PS4's adjusted launch price. Hardly bank-breaking. It's not like going from the PS2 ($438 adjusted) to the PS3 ($631 adjusted, 44% higher than the PS2 and 45% higher than the PS4).