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Pricing

Consoles when originally launched in the 1970s and 1980s were about US$200−300, and with the introduction of the ROM cartridge, each game averaged about US$30−40. Over time the launch price of base consoles units has generally risen to about US$400−500, with the average game costing US$60. Exceptionally, the period of transition from ROM cartridges to optical media in the early 1990s saw several consoles with high price points exceeding US$400 and going as high as US$700. Resultingly, sales of these first optical media consoles were generally poor.

When adjusted for inflation, the price of consoles has generally followed a downward trend, from US$800−1,000 from the early generations down to US$500−600 for current consoles. This is typical for any computer technology, with the improvements in computing performance and capabilities outpacing the additional costs to achieve those gains. Further, within the United States, the price of consoles has generally remained consistent, being within 0.8% to 1% of the median household income, based on the United States Census data for the console's launch year.

Since the Nintendo Entertainment System, console pricing has stabilized on the razorblade model, where the consoles are sold at little to no profit for the manufacturer, but they gain revenue from each game sold due to console licensing fees and other value-added services around the console (such as Xbox Live). Console manufacturers have even been known to take losses on the sale of consoles at the start of a console's launch with expectation to recover with revenue sharing and later price recovery on the console as they switch to less expensive components and manufacturing processes without changing the retail price. Consoles have been generally designed to have a five-year product lifetime, though manufacturers have considered their entries in the more recent generations to have longer lifetimes of seven to potentially ten years.