Booze, Baseball, and another "B"

Monday, August 22, 2005

X blah 360...

I was asked why I didn't post anything regarding Microsoft's announcement on the Xbox 360's pricing structure, and I guess it's because the answer is I thought the announcement was a big non-issue.

Don't get me wrong, it's great that we now know that it's going to cost $400 just to get into this new system (the $300 system is worthless, "only a complete idiot would buy the $299 model." - Michael Pachter, Industry Analyst), but really there won't be too many retailers who allow you to just purchase the system by itself; there will be bundles enforced (which was what happened with the original Xbox, and was pushed by Microsoft).

So let's break this down.
  • System = $399
  • 3 games = $180 (the assumption that retailers are making is $60 per game, which is highway robbery)
  • 2 Accessories = $100 (for 2 wireless controllers)
Which gives you a grand total (pre-tax) of $679. With Washington sales tax (Microsoft is in Redmond, where in August 2005 retail sales tax rate is 8.8%), this purchase would come to $739.77.

That is one expensive game system. Retailers still have yet to announce what the exact bundle is going to be, but that bundle is what the original Xbox had when launched, so this structure would make sense.

While I sympathize with the notion that the skyrocketing (and completely unchecked) rise of oil prices will have an impact on the cost of goods, back in 2000 the Xbox bundle was $500. This represents a 36% increase in the price for the consumer. I don't think that most videogame buyers are making 36% more now than they were in 2000, only 5 years ago. Of course gas is more than 36% higher in price, with no end in sight with stupid and hollow excuses given for the rise in price.

On top of the high cost of getting the system, not only has the release date not been decided, but neither have the games for launch! Combining all of these factors, I believe that this nice announcement by Microsoft worked well to get them some press and remind the public that they have a new system on the way, but is really not news at all for most people.


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