Video Game Systems Are Just Expensive Toys


A couple of days ago Nintendo announced that their Project Reality game system would be a cartridge-only machine. Hardly a big surprise, as nobody, not even Nintendo. would have the ability to bring out new hardware with a CD-ROM drive at an introductory price of around $250.

What’s really important about this announcement, though. is something much more basic. It’s the fact that video games are a part of the toy industry, and that for an item to be a mass market success, there are certain limits as to how much people are willing to pay for a toy. In this economy anything over $250 becomes an item that is thought about before it is purchased. Yes. Nintendo could have easily planned on bringing out a $450 CD and cart machine, but it just wouldn’t sell in the quantity that Nintendo would want to see. That makes it hard for companies to bring out new technology. The way these companies get around this $250 maximum price is to break the hardware into several independent pieces. each one less than $250.

Witness the Sega Genesis and the add-on Sega CD. Put them together in one shell (Wondermega. or X-Eye here in the States) and the $450 system just doesn’t sell. Sold separately, the public was quick to accept the new two piece system with open arms. Another good example is the Atari Jaguar. Since it is selling for only $250. this ‘toy’ is doing well. Their CD, set to debut for under $200, should also meet little resistance from game players.

An example of a ‘non-toy game system is the 3D0. This system is outside of the impulse buying range of the public, and while now it is just starting to move, it hasn’t set the world afire as the system to replace Nintendo or Sega. Matsushita of Japan has noted this, and when they roll out their version of the 3DO later this month, it will be launched at a much more palatable $500 price point. The U.S. (it should be noted) will also reduce their price to $500. This is still quite expensive, but 3DO has also stated that the system could hit S400 by this fall.

As to the newer systems. the same toy price guidelines will apply to Saturn and Sony’s PS-X. Sega. wanting to stay competitive with Nintendo. is now forced to bring out a cart-only Saturn system. While not officially announced yet. this system is tentatively priced at $275 for the Japanese launch this November. Less is known about Sony’s machine, but if it appears as a CD-only system. they could run into the same player resistance the 3DO did.

The same toy pricing also applies to game cartridges. Once the cost of the cart exceeds the system price, there are problems. Sega just might find this out it they actually release Virtua Racing at $99. Fortunately. Sega will soon come out with a separate SVP modular cart, so the prices of all future SVP games (which will plug into the SVP cart) will be back to affordable. Just think, it Nintendo had implemented this split cart format years ago. perhaps we wouldn’t have had to pay full price for each of the (past and future) updates of Street Fighter 2!

Ed Semrad Editor

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