A Big Problem with the ‘Inflation’ Argument for Game Console Prices

GenGAME writes: "Ars Technica recently ran a feature suggesting that PlayStation 4 and Xbox One really aren’t all that expensive when you take inflation into account. They used inflation rates to calculate how much the consoles of yesteryears would cost in today’s dollars, then compared them all in a series of nice, fancy charts.

"There’s a pretty big problem with using inflation rates to make statements about average consumer costs, however: even if real-world dollars 20 years ago were worth more than real-world dollars today, that doesn’t mean real-world income has grown at the same rate."

[NYC_Gamer]

The dollar has lost value so it takes more of them to buy products...and guess what?its only going to get worse because the dollar continues to dip everyday on the market...That means people have to break their necks every single day just to earn less in value compared to before...

[legendoflex]

What about between 1977 (Atari) and 2000 (GameCube)? The real dollar costs were exactly the same: $200.

Some games in the 80s were already $60. Yet they actually managed to stay constant at about $50 until last gen.

"Taking more dollars to buy products" is a new phenomenon for the games industry that comes with a difference in design philosophy.

[TruthbeTold]

The other part of the article speaks about the fact, that even though inflation at times is somewhat comparable to before, the rise of wages has not kept pace.

The truth is that while it costs $5 for a loaf of bread and some butter, and $4 for a gallon of gas, Minimum wage is less than that (combined) per hour, unless you live somewhere like San Francisco. While wages overall, unless you are a CEO or executive level employee have stagnated for some time now.

So people have the same amount of money to work with, even as prices rise, when in the past, wages much more accurately rose to match inflation.

[jamz4]

Man, Gamecube the same price as a master system, that really was a brilliant console

[Andersonscooper]

This is a baseless counter argument, inflation and median income have almost nothing to do with one another. This is what most basic raises are which are really just cost of living increases (ie inflation offset). Inflation continues regardless of what the median household income is. Growth in inflation is caused by so many other factors and cares not about how much money you made last year.

Frankly this is rudimentary knowledge and really bad back filling in order to complain about cost seemingly going up.

[Qrphe]

Exactly

[Hicken]

I think the argument, though, is that the cost of living increase- which really ONLY applies to minimum wage, as anyone above doesn't see a similar raise- hasn't kept up with inflation.

[legendoflex]

The fact that inflation and income have nothing to do with each other is EXACTLY why using inflation as a justification for higher prices is nonsense. It's your job to serve your customers by offering the right product at the right price, not by cramming in features to justify a higher price point.

[Andersonscooper]

Inflation does not dictate what job you have, skill or education level... It doesn't not care if you can or cannot afford something, You are not guaranteed nor owed a gaming console. If it is beyond you means to afford one, then I suggest taking that up with you employer or getting a better job... complaining about the price when it is a fact that adjusted for inflation (if you don't understand what that is and how it works thats on you) console and the gaming industry in general is and has largely been in a bubble. A higher price point mean nothing if the value and buying power is lower then then what it is being compared to.

[Supermax]

I paid 499 for my xbox360 when it first came out 8 years ago.