Video Gaming Cheaper to Xbox 3 and PlayStation 4

Every industry by now feels the effects of the economic slowdown. The good news for gamers is that it's not just the price of gas that’s being throttled back, it's also your favorite hobby. Research suggests the cost of not only consoles but the games themselves is going to get cheaper until the release of next generation consoles from Microsoft and Sony – and we're already hearing rumors about future console's technology.

Rumors of an imminent price drop for the PS3 console is supported by analysts at Wedbush Morgan Securities. They say the PlayStation 3 should see a new U.S. retail price of $300 by April. To stay ahead Microsoft should pull back the price of its console to $250 by June. Don’t expect a cascading effect to ripple through to Wii. Analysts say the number one selling game console is likely to stay put at $250. As long as Wii keeps selling like free beer at a football game - who can blame Nintendo for sticking to its price?

But it’s not just consoles that are getting more affordable. A recent study by Electronic Entertainment Design and Research (EEDAR) says new games are getting cheaper too. The price point for a new video game has previously sat around $60. But the EEDAR study found that long-standing average has recently declined to about $53.

The main reason is probably belt tightening from retailers in the face of declining consumer confidence. But EEDAR suggests there is also a paradigm shift in game-play is contributing to lower prices. It seems that lighter, more family-oriented fare is on the rise at the expense of the serious and sometimes darker games that have long been the gaming industries staple.

EEDAR says that as the current generation of game consoles go through even more price reductions the cost of games will only decline with them. The current generation is likely to stick around a very long time and continue to decline in price, making games a more affordable hobby.

Rumors Mill: Xbox 3 and PlayStation 4

Given the difficulty Microsoft and especially Sony has had in deriving profit from their console sales – the current generation is likely to stick around awhile. Both companies want to extend the sweet-spot of profitability from console sales for as long as possible. Early sales of Xbox 360 and PS3 have been at a loss. Sony and Microsoft both have their respective misfires that heaped financial losses from which they must recover before seriously considering their next generation.

An article out of The Inquirer tech-news site contains premature rumors about the future direction of the major console manufacturers. It says both companies are securing deals with chip-makers to meet a 2012 launch for new consoles. Although this seems very early, it still extends the previous five-year life cycle for game consoles. But Sony has long said it foresees a ten-year life cycle for PS3 making 2012 difficult to believe considering it was only released in 2006.

The Inquirer says Sony and Microsoft are securing contracts with chip makers to fill their next consoles. But it might be more accurate to say that they’re both just dumping one manufacturer – Nvidia.

Nvidia has apparently harvested some bad blood with the console makers because it overcharged for prior graphics processors. Next gen consoles are likely to combine duties of GPU and CPU onto a single chip and both Microsoft and Sony are set to shun Nvidia as a potential provider, if the Inquirer is to be believed. The article’s rumor suggests Intel and its unreleased Larrabe architecture is in the running to provide for Sony and AMD would side with Microsoft.

Last week’s Inquirer article may read like editorial speculation on a slow news day. But even its premature speculation speaks to an extension in the current generation game consoles lifespan. According to the research from EEDAR that means we’ll enjoy cheaper consoles and cheaper games well into the foreseeable future.

Game On!