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I was talking to a friend a bit about the state of the console gaming market, especially in light of recent price cuts by Sony on their PS3 systems (as an example the $399 40GB Playstation 3 model with the free pack-in of Spiderman 3 on Blu-ray disc, along with the promise of 5 free Blu-ray movies from a select list of titles). It seems to me that both Microsoft and Sony are still somewhat having their collective rear-ends handed to them by Nintendo who continues to experience shortages and immediate sell-outs of the Nintendo Wii system whenever it happens to show up in a store (I saw a Gamestop store sell out of 15 of them in less than 15 minutes on Black Friday).
Microsoft has done fairly well on selling the Xbox 360 console, and done a very good job with their Xbox Live network, and I suppose that Sony fan boyz and galz would say that Sony has been selling plenty of PS3s, but I still suspect that they could be selling a lot more if they would perhaps follow one little piece of advise in the not too distant future: cut prices on the software. $59 for video games is just too much for most customers. Instead of keeping games in libraries at home for later play, the games wind up being played for a little while and then get traded away to be sold at whatever price the market will bear, typically resulting in a glut of used versions of games sitting on store shelves.
I grudgingly give a little credit to Sony in this area as they have been working on releasing games for the Playstation 3 system via their PSN (Playstation Network) where customers buy a download only version of a game. That move is one of sheer brilliance as it reduces packaging costs, media costs, costs for providing manuals and such, and oh yeah, by the way, it also eliminates any ability to sell off the used copy of a game when you are done with it. That last little bit is part of why I haven't, as of yet (besides a general non-interest in the games that are available on PS3 systems) bought any of the downloadable games for the PS3. Warhawk looks interesting, but I just can't make myself buy the downloadable copy. Give me the box, the disc, and all that stuff and if I decide later I don't want the game I can sell it off by selling those materials (as a package).
To me the real answer is still that both companies need to find a way to cut the prices of their games by about $10 per title. I know that once a game hits the classic stage, it becomes a $19 - $29 greatest hit, or something similar. The problem is waiting the year or more for the title to hit that level. Basically Sony and Microsoft are asking the early adopters to pay 2 to 2.5 times that amount up front and then they wait until the sales are basically dried up before dropping the price again to catch sales to people that were too cheap to buy initially.
How about just splitting the difference a bit and dropping the price level at the start and wait a lot longer before dropping the price down into that bargain bin level? I would expect fewer used games to hit the shelves as people that bought their copies would find that the trade-in prices aren't going to be that good on lowered cost gamesand they would likely just hang on to their copies rather than selling them back. Prices over all stay a bit higher, a bit longer, and the profit levels don't change all that much. What would happen, though, is that more people might buy games and turn them into bigger hits earlier in the life cycle of the games.
