Does the Mighty New Xbox Have a Key Weakness?

Nov. 22, 2005 — -- With stunning, movie-like graphics and sophisticated gameplay, Microsoft's new Xbox 360 aims to dominate the next round of the video game wars. But despite its cutting edge technology, it may have one key weakness: its price tag.

The new video game console goes on sale today for $400, though a stripped-down version is available for $300. Players must also fork over an extra $50 or more for each game, and may still need to buy other key accessories, such as an extra controller. All in all, hardcore video game fans might leave the store $500 or $600 lighter today.

But will everyday gamers -- or their parents -- be willing to fork over the money to stay on the cutting edge of interactive entertainment?

Sixteen-year-old Justin of Queens, N.Y., is so excited about the new Xbox, he's been holding on to a gift certificate he received last Christmas to help pay for it.

"I still had to save up a bunch, but it's worth it," he said. "Everyone my age plays video games."

According to the Entertainment Software Association, it's not just 16-year-olds who are playing. Their data shows the average gamer is 30 and that may be what Microsoft is counting on to make sure the 360 is a hot-ticket item.

The unit debuts at least several months ahead of Sony's much anticipated PlayStation 3, whose specifications, price and release date are still in flux, and Nintendo Revolution, whose details are also still not set in stone.

Those devices will likely be formidable competition for the 360, but for now Microsoft has the "next-generation" video game market all to itself -- just in time for the holiday shopping season.

"My dad gave me $100 towards it because he plays too," said Justin. "He said it was my Christmas present, but I know he'll be pushing me out of the way to get the controller."

There's virtually no question that early adopters, eager fans and spoiled children will make sure the initial supplies of the 360 fly off retailers' shelves this holiday season. But what about the video gaming middle-class?

"I have no interest in it at all," said Robert Kushman, a 22-year-old account executive for a public relations firm in New York City. "They already got $250 out of me for the first Xbox not to mention what I spent on games and stuff.

Kushman says he loves playing games and is sure the 360 will be great, but he's tired of spending hundreds of dollars on electronics that become outdated moments after you open the box.

"I bought a Game Boy; they came out with the PSP [Sony's handheld PlayStation Portable]," he said. "I bought an iPod, they came out with an iPod that plays videos. They have enough of my money."

He admitted, however, he'll be more likely to buy one if the price goes down.

Microsoft says it plans to sell 3 million Xbox 360s within 30 days of today's launch, but they won't meet their target if they're counting on mothers like Vicki Stone to buy one for her 16-year-old son.

"I was planning on getting him one [Xbox 360] for Christmas this year, but due to their cost, this will not be happening this year," she said in an e-mail interview.

Many retailers have elected to create their own "bundles" where they package together the system, controllers, several games and selected accessories for a higher price.

Those prices are too high for Debra, a mother who'd also love to buy the unit for her son.

"I would love to get my son the game [system]," she said, "but unless I can put it on layaway at Wal-Mart, he's going to have to wait."

But for every naysayer, there's a rabid fan who's willing to do just about anything to get their hands on the latest video game system.

"I have owned every video game console since the Sega master system (circa 1981), and am anticipating the Xbox 360 release. I will be going to a retailer at midnight tonight to get my Xbox 360 that has been reserved since late 2004," said Bernardo Ferreira in an e-mail Monday.

Ferreira isn't alone, as retailers like Best Buy and Wal-Mart are expecting long lines and some are even planning midnight openings to satiate fans ravenous for next generation gaming goodness.

"I already have it," admitted one gamer who didn't want to be identified. "It's awesome."