Hadn't even occurred to me that inflation was the explanation for increasingly expensive mass consumer consoles. I still remember the $650 Neo Geo with its $200 game carts and the $900 3DO, but seeing as how those were niche products, most people don't count them.
But I still consider that $399 Saturn to be a general consumer product, not a niche product like the Neo Geo and 3DO. And yes, at $399, it was expensive, particularly when compared to the $299 PS1.
The PS2 was actually underpriced upon debut. The DVD functionality alone made the price undercut all the stand alone players of the time.
While again, it was unrealistic to expect a $500/600 PS3 to sell well after the initial frenzy, for what it does and what it is, it wasn't overpriced. Technically, it was underpriced since the per unit production cost was something like $250 over MSRP. It was just expensive.
When consoles do more, I'm willing to pay more. I know not all gamers feel that way, and that's why we have seen success with the Wii.
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