Before the PS3 and XBox 360 were released, how many people payed more than $300 for a console?
Before the PS3 and XBox 360 were released, how many people payed more than $200 for a console?
By quite a wide margin the majority of console purchases in the last generation (Dreamcast, PS2, Gamecube and XBox) were made when the systems were $200 or less; there are reasons to believe that people are willing to pay a little more this generation (due to inflation) but the limit is probably around $50 more than they have previously spent. There is lots of competition in this sub $250 category (Gameboy Advance, PS2, PSP, Wii, Nintendo DS, Gamecube and XBox) and YTD this category accounts for 80% of hardware sales, and 66% of home console sales.
In 2008 the PS3 will remain out of reach of (at least) 2/3 of gamers and will have some pretty stiff competition from the XBox 360 for the other 1/3 of customers; if the overall economy remains strong the PS3 and XBox 360 will have 'decent' sales but they will be at greatest risk of losing sales in the case of an economic slow down.
The line-up of the PS3 in 2008 is very strong but one has to consider Microsoft and Nintendo's 2008 line-ups as well. The second half of 2007 for the Wii is probably one of the best line-ups Nintendo has had (in terms of both quality and quantity) since the SNES; there is reason to believe that 2008 will be a much better year overall for the Wii than 2007 was. At the same time the XBox 360 has had a very good year of releasing titles which apeal to that top 1/3 of gamers which Sony is currently fighting for, and in 2008 will likely share many of the best games that are on the PS3.