July 12th, 2008. Price drops and gaming trends.

It takes alot of resources to create a game console. Most of that money is actually in building the prototype circuits and CPU. But what happens when you finally have that console ready for consumers?

Well, you sell it of course. But Microsoft marketing decided that one 360 isn't enough. So they divided the market into the basic, pro, and now elite packages. What's the difference? Besides color, the hard drives are bigger or smaller for those who like to save crap on their 360s.

And they throw in a couple of extra cables and useless crap that costs them $2 to make in China or less. It's all good, cause they charge a couple of hundred for the "extra stuff".

So now you can get a 60GB 360 for $349 and $279 for the basic. The Elite costs $449. Is it a good time to buy? Yes, because the 360 has a great lineup of games and plenty of top titles for cheap. There's also the downloadable content for GTAIV coming for GTA fans.

If you're still waiting for the very popular $199 price point, you have to wait until Christmas. It's well known that the $199 price point is the most popular point in which consumers will buy a gaming console.

But why aren't consoles selling for that price point right now? The answer is because they can still make money. Marketing is all about dividing buyers into levels of how much they are willing to spend to buy a product. And simply put, the people who are willing to pay $279 for a console, will spend $279 for a console. Then, it's $249 and finally, $199.

So gaming is about money as well as games. As long as there is marketing, there are ways to make money from stuff you haven't thought about. Like paying extra for content or subscriptions, or slowly lowering the price to fish for customers.