Wednesday, May 31, 2006

In defense of the PS3 price

So the gaming public has talked a lot about the price of the PS3 at release, more than $500. Most of the buzz has been overtly negative or apprehensive at best. I can understand the concern of the public, that's not a small figure considering that Nintendo has just announced that the Wii will be $250 and you can buy a decent Xbox 360 for a hundred dollars less than the proposed PS3. Have no doubt, the console wars will be waged on a price-based battlefield, but I don't believe the PS3 is starting off gimpy.

The target markets for the different consoles are (based solely on my own analysis):

  • Wii: Young and families
  • Xbox360: Teens and college crowd
  • PS3: Xbox targets and young professionals
The fact is, gamers have matured and those of us that grew up with the original Nintendo are pulling in quite a bit of disposable income. My guess is that PS3 is banking on the fact that a significant portion of their buyers are never going to utter the words, "Mom, can I have a PS3?" We are the generation that grew up with consoles and having one in the home is not a luxury but a commodity. If you're a young professional, you're not going to buy a child's console (Wii) and given the choice between an Xbox or a PS3, why not shell out an extra $150 and get the best in class?

I have no worries that the PS3 will do just fine (though not as well as they will want). You just won't see the success of the prior Playstation generations because I think the market has grown beyond the ability for a single console taking significant share. What you'll see is the three consoles catering to their respective audiences and fighting viciously where those audiences cross over.

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