Is releasing a $400 plus console a bad Idea?

[KHlover]

Chark said:

KHlover said:

And yours is the exact opposite :P

@Bolded 1 (B1): Might be, but will the number of hardcore buyers be sufficent? PS3's sales started really slow and did not get better until a price cut + 1st party titles arrived. I don't think Sony can afford their console to sell so slowly in their current situation. For $400 with a "traditonal" controller they can already build a far superior console (compared to the WiiU) graphicswise that should sell at an acceptable rate.

 @B2: Erm, you do know inflation is actually bad? You get less for the same amount of money. As we say in Germany inflation "eats away" the wage increases. Also, wages were more likely to be cut in the wake of the crisis, not to increase. People won't shell out $600 for a console again.

They could pull something off at $400 and we might be surprised what kind of hardware they can get for that, especially with their off the shelf approach. But the possibility of being more is there and I think people are just a little to quick to regard it as a catastrophe so I explained the reasoning behind it.

Inflation is what can spur on wage increase. I know with the economy many wages have become stagnant but there was a wide sweaping minimum wage increase in the US after the last consoles launched. Small amounts of inflation are what occurs in the economy and a decent job would expect at least an annual increase to take in for account of the increased cost of  living because of it, 3%. You must be thinking too much on hyper inflation.

We can't put our blinders on when evaluating this kind of business decision. What will the economy be like over the course of 5+ years? Why make business decisions on a market that just experienced a deep recession and is starting to come out of it. While public opinion is fickle, consumer growth is occuring. Maybe $500 is a tough sell this year, but is $450 next year? or $400 the year after? I'm just not sure where this sentiment that consoles should be dirt cheap upon launch. The current console are still selling at $200-$300. People are too demanding and will undershoot the expected price because cheaper will always benefit them. This is an expensive hobby and we can't fool ourselves into thinking it isn't.

They shouldn't be dirt cheap, but they also shouldn't be too expensive. Starting into the Gen overpriced to reduce the price each year seems to be a bit sketchy for me...