What Price Next Gen?

Nintendo has always marched to its own beat. The Japanese game giant, which many gaming pundits had written off after GameCube failed to live up to expectations, is steering a course that could prove victorious with Revolution (a code-name that is expected to change by E3).

The cost of next generation gaming is high. Microsoft is selling Xbox 360 for $400 before the $60 per game, Xbox Live and a second controller is thrown into the equation. The base price for PlayStation 3 is expected to come in around $500 (also without a second controler, but with a 60 GB hard drive and no charge for online gameplay). American Technology Research analyst P.J. McNealy believes Nintendo's Revolution will be introduced this fall at $200, making it, by far, the most affordable next generation offering in the market.

McNealy also believes that Nintendo Revolution games will retail for $40 to $50, rather than the $50 to $60 that Xbox 360 and PS3 games are expected to sell for. While these prices won't have much impact on the early adaptors who will gobble up all three consoles, it should have an impact on the mass market consumers.

Nintendo was able to sell 20 million GameCubes by offering the machine for less and then marking the price down sooner in the cycle than either Sony or Microsoft. With a $200 price point to start, that's a huge differentiator for next generation graphics. And Nintendo is also wowing game developers with its innovative one-hand controller, which should breathe much-needed new life into the gaming business at a time when sequels and Hollywood licenses are leaving a bad taste in consumers' mouths.

McNealy points out that with current generation consoles, many consumers opted to buy a PS2 or Xbox in a one-two order, which left GameCubes out of many homes. The cost of buying two next generation consoles this time around will be extremely pricey--$900 for the hardware alone if the same pattern of a PS3 and Xbox 360 were to hold. McNealy said the $200 price point could encourage more gamers to opt for a Revolution for that second next gen system. This would leave an awful lot of extra cash to spend on games.

One of the ways Nintendo is keeping its price down is by going its own route with online gaming and digital distribution. Unlike Xbox 360 and PS3, which need expensive hard drives to store content on, the thousands of Sega, Hudson and Nintendo classic games that will be offered for digital distribution will not be saved on a hard drive. Thus, Revolution will be cheaper to manufacture.

Sony and Microsoft are clearly battling for the living rooms of the world with multimedia offerings. Nintendo is making a new game console. There's always been a difference in Nintendo's philosophy that has separated it from its two rivals, for better or for worse. This next go-round looks like Nintendo will be in a much better position than it was in the last round.