Wednesday, September 20, 2006

360 = payments with no interest

At the arrival of the Japanese $170 360 HD-DVD attachment and 1080p support, it appears that ravenous PS3 fanboys are quick to point out that the PS3 is clearly a better deal because of the pricing (if HD-DVD is included). While it is fair thinking, it is a bit too focused on Sony's blasphemous realm of gaming.

We all have to admit that the premium PS3 may require some to go the route of the credit card. With credit cards come the luxury of payments but the lament of interest.

Even if the Xbox 360's price disparity with the PS3 appears to be growing thin, there's still some obvious benefits that cannot be ignored. The two main benefits being choice and smaller "payments".

Fanboy logic dictates the following:

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Xbox 360 Premium ($400) + HD-DVD add-on ($170) + Wireless ($100) = $670
PS3 Premium ($600) with Blu-ray, Wireless, 40GB more HDD space and HDMI

At first glance, the choice may seem obvious. But the average consumer isn't going to consider the Xbox 360 to cost $700. Those items aren't bundled together, so they will see the 360's $299 and $399 price tags compared to the PS3's $499 and $599 price tags. It's a sure bet that most consumers aren't ready to jump on either the HD-DVD or Blu-ray bandwagons. Choice plays a big role here, as even the educated consumer will question how much he/she will need those extra features.

Then comes the building your system via smaller monetary chunks. You can get started for $300, and add a hard drive later for $100. If you decide HD-DVD is for you, then you can add that option for around $200. If wireless is a supposed must, then it can be purchased for $100. The point being, is that a few sparse $100-300 purchases are much easier to handle than one up front $600 purchase. And there's likely to be little to no interest, leaving these "extras" as potential "impulse buys!"

This "price chunking" along with "choice" is very pro-consumer while still being good for manufacturers and retailers.

Our society is built on credit and payments. The majority of consumers are going to go for the smaller "payment" chunks. This is why 6-month pre-pay plans for things such as Auto Insurance, Cell Phone Service, and Internet Service are less popular. Not only does a lump sum payment hurt the pocketbook more, it gives the illusion of the loss of choice, whether it's a better deal or not.

In the end, if price is an only concern, consumers are going to go with the option that best suits them. In this console war, price appears to a big issue thus far.

*The above picture does not imply any sort of actual offer in existence and is intended only to iterate the point of this article


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