Steep Next-gen Price Increase Expected

CNN Money has an excellent article up, detailing the expected steep increase in console prices, game prices, and the introduction of high-definition gaming. In fact, they say to expect to spend upwards of $1,700: $399 towards a new system (PS3 or Xbox 360), $250 for a home theater system, and $1,000 for a HDTV, which is just the average. Then add another $60 for a game.

Publishers have actually been testing consumer reactions to higher prices for over a year now. Many highly-anticipated games have launched with $55 or $60 price tags, with no negative effects on sales.

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“I think in 2004, quite a few people were surprised about how successful the (more expensive) collectors editions were,” said John Taylor of Arcadia Research. “‘Madden’ was a good example of that. Most recently ‘Doom 3’ came out on Xbox and the premium version outsold the standard edition.”

“In the past, the perception that something has a premium price point has led to the demise of the platform,” noted Taylor. “You can look at Sega as an example of that. You can look at 3DO as an example. Microsoft is going to be incredibly sensitive to that.”

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