Andrew Milgate, an analyst for NPD Group Australia, has written a guest article for MCV today looking back over the shift in console pricing over time...
---
Traditionally, we’ve seen pricing rise with the introduction of new home platforms, and steadily decline throughout their life cycle. Looking at the current generation of platforms, we’ve seen a different pattern emerge, with prices falling at a much slower rate.
For console hardware, from 2002 to 2004 the average price of a console dropped $100 from the peak of last generation. This generation the average hardware price has remained steady for nearly 4 years after the initial peak of new hardware hitting the market, with a very slight rise in 2009. Only in the second half of 2011 behind console price reductions did we see a significant drop, with the 2011 average price decreasing to $45 below this generation’s peak of hardware prices in 2007.
The reason this slower decline in average price is important is that since 2000, over 61% of all console units have been sold under $300, and taking out handhelds (leaving just home consoles) over 42% of units were sold under $300. The market is now only starting to drop below that threshold for HD consoles.
One of the interesting things is that the average price of software in 2011 was actually 1 cent lower than it was in 2003 ($52.05 v. $52.04), and since 2000 the difference between the highest and lowest yearly average price has not broken $7.
Software pricing also hasn’t declined as it has previously – the average price of a title dropped almost $7 between 2002 and 2005 after reaching last generation’s peak. If we look at this generation, the average price of a game has declined just 40 cents from 2008.
Obviously there a range of different reasons that those prices aren’t easily comparable, including new platforms, the rise of digital distribution, a different retail landscape, the global economy and the strength of the AUS$. Whilst the overall software price hasn’t changed significantly, the biggest change would be in the distribution of pricing, shifting from an even spread under $100, to the higher and lower ends of the scale.
---
For more information from NPD Group, head to the official web site.
To register for the MCV Pacific News Digest, head to the registration page:http://www.mcvpacific.com/user/index/register/journey/register
Advertisement
