During my morning reading, I ran across this rant about the pricing on the XBox 360. Apparently, it's pretty darn expensive in Europe:
The XBox 360 is nearly upon us (in Europe) and guess what? It’s a rip-off! Why is that? Vendors who took pre-orders estimated the price to be around €410 for the 360 with the hard-drive and extra goodies. So imagine my shock when I went into GameStop in Waterford yesterday to see the price listed as €609! For a console? This is absolutely ridiculous!
Even at a 1-1 exchange rate (and it's not 1-1), that's pretty high. I touched on this topic awhile back. There a couple of rough segments in the game console space - there are hardcore gamers, and then there are recreational gamers. The first bunch is not immune to price, but it's close. The people who stood in line on the day of the launch are hardcore, for instance. I don't think this group is large enough to make up a profitable target though. There are more recreational gamers than there are hardcore types, and I would guess that it's a decent size difference.
Meaning? Well, the recreational gamer is not immune to price. As I touched on before, the current generation of systems (especially the Nintendo GameCube) fall into the impulse purchase zone. Like candy at the end of the grocery store line, the GameCube is at a low enough price point that it can be picked up on a whim. The PS2 and (old) XBox are slightly more expensive, but still come pretty close to that impulse buy - or, failing that, to the "big present for the birthday/holiday" line.
Now there's the 360. In the US, you are looking at $300/$400. That gets you to the outer edges of "big gift" territory, and is well outside of the impulse zone. In fact, for a lot of people, I'd say that the price point makes it a competitive decision with things like a new TV, or a new stereo, (etc, etc). In other words, we've moved from impulse all the way up to "your mom and I have to talk".
Now let's take that price that Digital Excess is talking about - over 600 Euros. That gets out into "now we're talking about real money" territory for an awful lot of people. Heck, you can get a whole PC for that price, and a pretty darn nice one for just a little more.
I have no idea what MS' manufacturing costs/sales costs are on these things. The high price in Europe may not be off the wall in those terms. However, in terms of the game console space, and the market that MS is trying to reach, it looks very, very steep to me.