by Tina Nelson

Created on: May 18, 2010

Personally I do not believe that video game consoles are too expensive because I have worked in retail that specializes in electronic items. I know that most businesses loose money on the game consoles. Most game consoles have a markup of only 5% and during holidays, specials, door busters, and just special sale weekends there is usually a markdown that can be as low as 100%.

The true money for retailers lay in the accessories and the games. People are required to buy extra game controllers, or else someone can't get in on the fun, and there are also popular games that play best with more then one person playing. Memory cards are a must, and even newer game consoles require separate cooling fans that must be purchased to protect the unit. Most of those items have a markup of 50% all the way to 300% is the highest I had seen. That 300% was over a decorative console covering that was selling for $20 dollars.

Then if you look at all the available games for people to buy, there are so many of them. Most people who do play video games also do not replay them once they have beaten the game. The way that gaming companies advertise their game consoles they do not advertise for the game console as much as they are advertising the games. They show how detailed the graphics are, how fast the game moves, loads and lets the players interact.

If you look in advertisements for businesses you can see they spend more time advertising for games and accessories. Also you will notice how much detail, space and time they put into promoting such great prices for those accessories and games. The way that television, advertisements and family dynamics work, is that spending $20 dollars on a game as a gift is a great deal. The best I can explain it is, that I have noticed is that usually it’s the parents that will buy the game console itself, which I can easily say that a business probably lost $100 dollars on for each unit. So instead they spend time advertising and promoting the accessories. Parents will encourage family members and friends to buy the other accessories like the games, extra remotes, memory cards and so on. Easily for each system sold, if this family dynamic method works, the company can make $300 dollars over the loss of the cost of the unit.

So no, the unit prices are not outrageously expensive, but if you were to ask me I think they could lower the cost of some of the accessories, because even if that decorative plate only cost $20, its quality is not worth it.

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