Why the smartphone model is wrong for consoles

[NightDragon83]

VGKing said:

NightDragon83 said:

VGKing said:
Do you guys think that an iPhone 5 really costs $750? Because that's the price you'll have to pay to buy it unlocked.

Subsidized hardware is an excuse to rip off those who don't like contracts. These things are so overpriced without a contract that many will have no choice but to buy into one. A bad thing about this is that if this becomes the norm for consoles, we'll end up seeing a lot of cheap copy-cat consoles from other manufactures. It would no longer be risky to get into the console biz. Anyone could build these PC-like consoles and sell them at huge profits.

If these subsidized consoles become successful we're either in for a huge industry boom or a huge industry crash. Is that really want you guys want? An LG-branded StationBox and a Samsung GalaxyCube?

So the solution is for console manufacturers, specifically Sony and M$, to just continue to take huge losses, potentially for several years, when launching new consoles?

Do you think the PS3 really cost only $499-$599 at launch, or the 360 a mere $299 for the core/arcade model at launch?  Would you rather they had launched their consoles at actual cost, which would have been over $800 for the PS3?

M$ is doing a smart thing here... giving consumers options, while ensuring that they won't be hemorrhaging cash the way Sony was when they launched the PS3.  The subscription thing has been around for decades now... first cable / satellite TV companies, then mobile phone providers, and now videogame console manufacturers.  Except with videogame consoles, they aren't subsidizing the hardware out to a variety of 3rd party manufacturers, driving costs up even more.  Panasonic did it with the 3DO, and Phillips with the CD-I, and look how that turned out.

There's nothing wrong with M$ or even Sony (if they wanted to) giving consumers a subscription-based option to their own services to lower the up-front cost of their consoles.  Seems to me that this all comes down to Xbox Live and how people are still whining about M$ charging for it.  Yes, in a perfect world it would be free... and consoles would still cost under $200 and come with 2 controllers plus a AAA pack-in game.  Sorry, but nothing's perfect.

It is Sony and MIcrosofts decision to launch expensive consoles. I'm not worried about their financial situation. I really don't care. All I do care about is them providing affordable consoles. If that means cutting back on power and going the Nintendo route, I'd be disappointed, but I'd learn to deal with it.

This seems like a great idea. Giving consumers options while increasing profitability for the the console manufacturers. We're already seeing the negative effects of this though. The Xbox 360 hasn't had a price cut in years. Instead, its advertised on TV as "starting at $99". This has nothing to do with Xbox Live or whether or not it should be free.

While true in the literal sense, they've had several different bundles / SKUs over the last few years that have given added value to the console.  Sony has done the same thing with the Slim since introducing in back in 2009... it's received one $50 price cut and has been at $250 for the past couple of years with various bundles / SKUs.  Both consoles are still selling very well considering the fact that they are going into their 7th and 8th years on the market, so why drop the price further if it's not necessary?