Putting Xbox 360's Price in Context

August 20th, 2005, 03:09 Posted By: wraggster

After the announcement of the Xbox 360 pricing plan our reader response has been a fiery mix of anger, jubilation, and confusion. The total package which includes the hard drive will cost gamers $399.99 meaning that a typical holiday bundle including a second controller and a game will run about 500 dollars. The Core unit is $299.99 (the launch price of the first Xbox) but lacks the wireless controller, HD cables, and hard drive which will enable backwards compatibility.

There is no question that four hundred dollars is a good chunk of money, but how wide is the gap between this console launch and the price of previous gaming hardware? What follows is a list of previous consoles with their prices adjusted for inflation according to the Consumer Price Index. NASA.org is kind enough to provide an array of inflation calculators including a separate calculator based on the Employment Cost Index which is based on employee wages and benefits.

As pointed out by Erik Brudvig, our guides editor and resident smart aleck, computer technology doesn't exactly follow the same rules of inflation as other products. This is due to the decreasing cost and increased capabilities of the guts of a machine. So while the value of the $650 smackers paid for a Neo Geo is an exorbitant amount of cash by today's standards, the actual hardware could now be produced for a tiny fraction of that cost.

Perhaps the best illustration of this principle is the evolution of the PS2 architecture. What was originally a 300 dollar system was later re-released with a more compact design and a lower price tag. This was basically done a third time with the PSP which is only slightly less powerful and of course portable.

Another factor contributing to the worth of a console is the functionality of each system. For a short time the Nintendo Entertainment System included a robotic opponent for gamers without friends but this is hardly comparable to features like DVD playback, custom soundtracks, online capability, and a remote control.

For the purpose of this article we'll be looking at the price of a video game console statiscally and comparing its cost to today's dollar value.

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