Pay To PlayStation: PS3 vs. PC

One of the largest deciding factors between playing games on computers versus consoles has been the price.  For many households without a PC the gaming console has been the lower price alternative for gaming.  The cost of a top of the line gaming PC can easily exceed $4,000, and keeping up with the constant improvements can mean spending a sizeable chunk of cash on a fairly regular basis. Up until recently, having a top of the line console would only set you back $200 or $300.  What is interesting to see with the advent of the PlayStation 3, is the price of playing games on a console is increasing in a big leap, bringing it much closer to the costs associated with a low-end home computer.

It is difficult to compare the PS3 to a gaming PC, there are not very many side-by-side elements that can be easily analyzed for performance versus price.  I am more interested in the psychological idea of how much people are be willing to pay for a console, especially one that is anticipated to be in short supply on release.  I recently came across this article from BBC Online.  The online store at Play.com has begun taking advanced orders for European customers for the top of the line (60 GB) PS3 for the sum of £549, or around $1,014 US dollars.  I have seen all sorts of projected prices for the PS3 once it is released, but according to the BBC article Sony announced the price for the PS3 at $785 dollars (£425), so this is a bit of a price gouge to be sure.  The combination of the already high suggested price and the projected scarcity of these units on release will likely make this type of pricing fairly common for those sellers lucky enough to have them available before the end of 2006.

It is safe to assume that there will be a good number of people willing to pay $800 - $1,000 for a PS3 at release, so we are now definitely in the same neighborhood as home computers when it comes to price.  This is far from the $4,000 + top of the line gaming computer, and additionally, the specs offered by those systems are often more than is necessary to play most computer games.  To make my point I have this scenario to offer (as an example, not a recommendation):  Computer Games magazine has given the eMachines T6532 their Editor's Choice red star in the July/August issue (see page 73).  This basic computer system comes with an Athalon 64 3500+ CPU, 1 GB of RAM, a 200 GB hard drive, the usual DVD drives, Windows XP, etc, and an Nvidia Geforce 6100 video card that is unfit for playing games.  They suggest swapping the video card for an NVidia GeForce 6800GS or 7600GT, at which point you have a very competent gaming system, including the upgraded video card, for less than $750.  Consumer Games magazine says this:

"For all the folks who say they don't have the budget for PC gaming, show them this small but powerful system."

The price for this PC doesn't include a monitor, but since the PS3 requires a television as well I didn’t include the monitor price into the comparison. And what about that television?  The high price for the PS3 is justified by Sony because of the Blue-ray high definition player included with the unit.  Sony is saying that for the price of the PS3 you will get a great deal on their combined gaming console and HD player.  The problem arises when you consider the price of a HD Television.  THIS article by Aaron Stanton suggests that the addition of a HD television to your gaming package, to take advantage of what you are paying so much for your PS3 in the first place, would add over $1000 to the price tag of your PS3 gaming system. Here is what Stanton has to say:

“The PS3 relies on a feature that can't be utilized without equipment that sells for double the PS3 itself. Sony is hoping the PS3 will be carried by a feature that will go almost unused by the time the PS3 is replaced by the PS4.”

In the end you are paying for features that for most people will remain unappreciated.  When you compare a similarly priced PC & monitor package, you get a lot more functionality for your price.  Ultimately, when you compare both the PC and the PS3 to the Wii, Nintendo ends up looking like they have a pretty clever marketing plan.

The decision on whether to buy a PC or a PS3 will most likely be made based on more than price, and there are any number of reasons why one approach will be better suited for any given individual.  Making this price comparison does provide a different perspective on the future of computer gaming as it relates to the competition offered by consoles.  I see higher priced gaming consoles as being a good thing for computer gaming - the tightening of that price gap will make the value of playing games on the computer (along with all the other functions it offers) more apparent.  The more you have to pay to PlayStation the brighter the future of computer games becomes.

Thanks to Wonderland for the Del.icio.us link!

Comments

[jfpbookworm]

The general consensus out here is that $800-$1,000 represents the "early adopter tax". If Sony is going to adopt the usual practice of producing relatively few units at first, this may actually a smart price - not only do they make more money, but they get the PR of being able to say "even at over twice the price of the Xbox 360, we're selling out of PS3s." But if the retail price of the PS3 exceeds $500 for more than six months, I'll be surprised. Sony is going to need to put consoles in living rooms if it doesn't want the PS3 to be this generation's Neo-Geo.

[Guilded Lily]

jfpbookworm -

If the marketing plan is to sell the top PS3 for $500 6 months after release, and the early adopters pay $800 or more, then if buyers just wait a few months they can get a PS3 AND a Wii for the same amount - with some spare change to boot. Price gouging at its corporate best! - GL

[cassioposa]

Wasn't the high price one of the reasons that the PSP didn't ever get as popular as the DS? Also, even though the PSP seemed to have superior technology, the DS seemed to have a wider variety of games that people wanted to play.

It's not exactly the same scenario, but I kinda feel like Sony is about to make a similar mistake with their PS3. Yeah, the early adopters will probably be there, but they seem to be overlooking the possibility that the larger gaming community will look at the lower-cost console, and as you said, PC options first.

Doesn't seem to be the best strategic plan to have success of your product in some way hinge on consumers having lots of money to burn and needing to be dissatisfied with EVERYthing else on the market.

[Guilded Lily]

Cassioposa -

You make a great point about the PSP. I may be wrong, but I expect the Wii will be much more popular due to the fact that it has been designed to interest those beyond the core gaming market. I personally have never owned a gaming console in my life, but both the DS Lite and the Wii are serious temptations. - GL

[OhNoGirl]

A friend and I were talking about this very issue last night. He thinks the PS3 will fail, but I'm not so sure. The Xbox360 was gouged to ridiculous prices (close to $1k) when it first came out and was scarce on the market. As far as the HD reader... While I'm not sure that HD is the next big thing, the PS is aligning themselves with something that is at least seen as high end and in my community, people want. They might be banking on the fact that HD and PS3 together helps sales for both...widen the market for HD products, prices go down, sales go up, follow the product life cycle, etc. etc. etc.

[Guilded Lily]

OhNoGirl -

I am definitely interested to see how this actually plays out for the PS3. I do think that the initial scarcity for both the 360 and the PS3 are a functional part of the marketing plan used to create increased hype - as a way to make people more willing to buy once they start releasing them in reasonable quantities.

I wasn't very clear about the gouging in my post - but there should be a distinction between opportunistic retailers that sell an item for much more than the MSRP because of the initial distribution shortage. This is the kind of gouging that has people paying $800 or more on an eBay auction for a $400 Xbox 360.

I am more interested in what the actual MSRP for the PS3 is compared to other consoles - and additionally - if that price drops significantly in 6 months as jfpbookworm suggests above. That is a different type of gouging - when a marketing plan includes selling an initial number of units in an environment of self-generated scarcity at a higher price than the planned price point. Thanks for the comment - GL

[GregT]

For me it's all about the experience. If I could have a system that did everything my PC did, to the same standard, but had standardised software, drop-and-play games with no installs, and no questions about which games would or would not run on it, I'd pay MORE than a current PC price for it.

On the other hand, it's about the games. The 360, for example, could for all I care have the processing power to accurately simulate the interplay of subatomic particles over the scale of a continent, and I still wouldn't care because there's not a single killer app for it that I can't play on a system I already own.

The tools are only as good as what you can do with them, and even a splintered bone can be king when it's the only thing you can kill your food with.

[Brian West]

Usually I'm in the early adopter bandwagon. But that is not the case for HD-DVD or Blu-Ray. I have an HDTV and there is not a huge difference between watching a DVD at 480p, and watching the discovery channel at 1080i.

Don't get me wrong, there is a difference, but nothing earth shattering like the transition from VCR to DVD. I think the inclusion of the Blu-Ray drive will be the PS3's undoing, and Blue-Ray will just be another one of those forgotten Sony formats(MiniDisc, Memory Stick, UMD).

[Guilded Lily]

Brian -

It's a big gamble on Sony's part, especially since the delay in releasing the PS3 was due to the Blue-Ray drive. That just can't help things. - GL

[Guilded Lily]

GregT -

With what you describe, it sounds like what a game console would be like if Apple designed it. Consoles become more and more like PCs with each generation, so perhaps eventually they will incorporate more of those functions into the design.

The games sell the consoles - that is what it comes down to. It is hard for me to imagine wanting to play a Playstaion game bad enough to plunk down $800 or more to do it - but that's just me. I'm sure there are many people out there willing and eager to do so. - GL

[Josh]

It is possible to create a gaming rig for less than a grand ... heck I'm still gaming on my latest box which totals out at less than $500 ... but I have to be a bit choosy about how and what.

Still, as you as say, there's a difference between getting a $750 budget gaming PC and a $600 PS3. With SLI and Crossfire, even PCI-E alone hardly seems to scratch into the stratosphere of games coming down the pipe. Many hardcore gamers will pay well over a grand just to have the ability to play whatever games for the next three to five years (I got my R9700 for about $500 when it arrived four years ago and it's only now really showing it's age).

Consoles, on the other hand, actually get better with age. So that $600 will look more impressive a few years from now as the development pipelines figure out better compression and rendering.

It used to be that genre and features defined the demarcation between PC and console. If you wanted to play an online shooter, better get a good PC. With the 360 and the PS3, that won't be true anymore. If MMOs and RTS games get their legs on these machines, spending over a grand for any kind of gaming might seem silly.

[Guilded Lily]

Josh -

You make some great points. What is interesting to me is how consoles are becoming more and more like PCs in their efforts to keep up with the tech advances - the Xbox is of course the most similar to the PC, and looks to become the home Media center of the future. At some point the PC and the game console will be indistinguishable from one another. For now it's just a lot of money to have both computer and game console - in order to cover the best of both approaches. - GL

[Kibz]

It's entirely possible to have an HD console running to its full potential for less than 1k CAN, so it should be in USD. I've got a 360 hooked up to a 19" HannsG widescreen TFT-LCD that I bought for a little over $200, so the whole thing only set me back about $900 CAN. I highly reccomend it to anyone looking for a cheap HD rig.

[Guilded Lily]

Kibz -

Thanks for the recomendation. With the predicted scarcity of the PS3 on release, as well as the price, your set-up may be the way many people decide to go. - GL

[Heart]

why would you buy a ps3 even though there are pcs you can pro custimoze your own pc plus play all kinds of games and internet that will. pcs will play better if you get this system for cyberpowerinc.com its probaly the best pc in the market for extreme gaming and video graphics editing.if you want to pay almost 10,000 us dollars but worth its price.