Costs of video game consoles?

Video game consoles are an interesting example of the way that products are sometime priced. You will actually pay quite a bit less for them than you really should given their complexity and the cost to produce them. This is because the makers of the games know that the real money is in selling the titles so they price the consoles very cheaply to get them into as many hands a possible.

One of the reasons that video game consoles have become so popular is that they are available at a very low price. Despite having considerably more processing power than your computer does they are available at a fraction of the price. Rarely are the consoles price at more than five hundred dollars and usually they are priced much lower than this. There are a few reasons for this, the biggest being that the manufacturers don't actually expect to make money on the sale of the consoles.

One of the biggest innovations in the history of video games occurred in 1985 when the Nintendo was released with the game pacman. This console was revolutionary for a number of reasons and one of those was who it was priced. It was actually sold at a loss. The reason for this was that Nintendo realized that the real money to be made was in selling the games. The more people they could get to buy the consoles the more games they would be able to sell, a much more profitable strategy in the long run. As a result the console was sold a loss leader to get it into as many hands as possible.

There are now of course several makers of video game consoles and this has helped to push the price down even further. Now in order to get your console into as many hands as possible you not only have to convince people that they need a video game system but that they should choose yours over the other guys. While it is unlikely that we will ever see the day when consoles are offered free the way that cell phones are you can expect that the cost of game consoles will remain significantly below the actual cost of producing and marketing them.

While the cost of the game consoles is quite low you will notice that the games themselves are quite expensive. This is in keeping with the way that the industry works. They are well aware that you will buy far more games than you will consoles. The result is that this is where they make their money. To be fair the cost of producing a modern video game is very high so the price is not unjustified. However it is important to keep in mind when you are looking at video game consoles that the price of the console is just the tip of the iceberg when it comes to what you will have to pay.