Demographically, video game players now skew heavily to men between the ages of 20-40. Many of these men have more disposible income than time. Now, to me, paying $2000 to get the latest and greatest video game system ASAP is not worth it, but I’ve heard far more stupid purchases ($300+ for a bottle of champagne?)
Calling it a “toy” is an understatement. It’s an entertainment system, and arguably a computer in terms of technology. Experts guess that each unit costs $800-900 to make. This is fairly typical of videogame devices and cell phones, where the base unit is sold at a loss, but made up for in accessories or services (the $25 extra controller probably didn’t cost more than $5 to make)
In January you will (probably) be able to go to a store and buy the PS3 for its $499 sticker price. But the current price is not a bubble… it’s supply-demand, as Sony fell behind schedule and was not able to produce nearly enough units to meet Christmas demands. There’s no way they will sell for less than $499 until at least Fall 2007.
