Why was the Neo priced so high?

[it290]

I was watching that G4 TV show thing about the history of SNK earlier, and it got me thinking -- why was the system priced so high? I can understand the cartridges being expensive, since the huge ROMs inside certainly weren't cheap, but it seems to me that the system itself, despite being leagues beyond its 16-bit competition, could have been sold for less. Its internal hardware was state of the art and undoubtedly fairly expensive, but the main processors were the same as the Genesis (although the 68000 was clocked faster). I'm sure SNK didn't have the funds that Nintendo and Sega had access to either, but in a way it seems like they were just trying to sell the Neo at a premium price tag because it was a premium product. If the system had launched at $400, they would have moved a lot more units and perhaps would have still been able to make a profit or at least break even on manufacturing costs. Thoughts? Anyone agree/disagree?

 

[Snuh]

If it was priced better I would not have settled for the Neo Geo CD just for Samurai Shodown 2 when it came out. That game is just too awesome though. Had to get it on some platform.

 

[StealthLurker]

I'm sure that fewer AES units were made in the factories compared to NES, etc. The fewer you make the higher the cost.

Arcade hardware is generally priced high, the AES is basically arcade hardware. I'm sure a 1 slot motherboard had a pretty high price tag back in the day... and it doesn't even have it's own power supply, "high quality" joysticks, pack in game w/ huge amount of costly rom and all that packaging etc.

.

 

[SouthtownKid]

Was there any other system at the time that let you play actual arcade boards? For example, how much do you think it would have cost you to buy CPS-2 boards back then? And arcade operators back then were paying a lot more for the exact same Neo games. You look at it like that, and the Neo was actually kind of cheap.

Even compared to home systems... take SNES/Super Famicom carts which in the early '90s could run $50-$70 each for a 16 meg game. 16 megs. How much do you think Nintendo would have charged for a 100+ meg cart? Might have been expensive.

It cost more to play Neo than other systems, and I had to give up other things in order to afford to do it, but I never felt like the price was at all unreasonable. In a fantasy world of sunshine and rainbows, everything would be cheap or free, but that's just not realistic to excpect in the real world. There was a reason for the Neo's cost, and it was fair, imo. I think they made it absolutely as cheap as they could afford to.

 

[Gameoz]

Was there any other system at the time that let you play actual arcade boards? For example, how much do you think it would have cost you to buy CPS-2 boards back then? And arcade operators back then were paying a lot more for the exact same Neo games. You look at it like that, and the Neo was actually kind of cheap.

Even compared to home systems... take SNES/Super Famicom carts which in the early '90s could run $50-$70 each for a 16 meg game. 16 megs. How much do you think Nintendo would have charged for a 100+ meg cart? Might have been expensive.

It cost more to play Neo than other systems, and I had to give up other things in order to afford to do it, but I never felt like the price was at all unreasonable. In a fantasy world of sunshine and rainbows, everything would be cheap or free, but that's just not realistic to excpect in the real world. There was a reason for the Neo's cost, and it was fair, imo. I think they made it absolutely as cheap as they could afford to.

I agree. I remember being blown away by the Neo Geo at the arcades. Then realizing I could order a system and the games for it and have that arcade experience at home. The Neo Geo was way ahead of its time in that regard and well worth the money.

 

[evil wasabi]

small production runs, expensive parts. even over time when the parts got cheaper, the production runs would still be costly.

 

[it290]

OK, I guess I didn't really factor in the cost of the joystick. Microswitched AES sticks certainly cost more to manufacture than your average console controller. And the small runs were definitely part of it. As for the cartridges, as I said, the price on those was totally justified given the expenses involved. However, I still think the price of the console was too high. If Sega could provide 7mhz 68000 and a Z80, packed in with a cartridge and controller for $200, then surely SNK could have offered a 12mhz 68000 and a Z80, plus far better video hardware and a high-end joystick for $400, perhaps $450.

It could be argued that there was no reason to sell the system for less money if only those who could afford it could buy the games, and there's something to be said for that, but with a lower price on the base system SNK could have achieved more market penetration and gotten more 3rd party supprort because of it. Instead, they chose to focus on the arcade market -- and that's what makes the Neo awesome IMO -- I'm just positing a 'what if' type of situation, and I think maybe with a lower console price SNK could have been more financially successful, and the AES might have seen games that it didn't see -- more RPGs and action adventures, for starters.

I'm a huge Neo fan, but even more so I'm a fan of the 16-bit era of gaming, and I really think that something as minor as a price adjustment could have changed the landscape of that era completely.

 

[SouthtownKid]

OK, I guess I didn't really factor in the cost of the joystick. Microswitched AES sticks certainly cost more to manufacture than your average console controller. And the small runs were definitely part of it. As for the cartridges, as I said, the price on those was totally justified given the expenses involved. However, I still think the price of the console was too high. If Sega could provide 7mhz 68000 and a Z80, packed in with a cartridge and controller for $200, then surely SNK could have offered a 12mhz 68000 and a Z80, plus far better video hardware and a high-end joystick for $400, perhaps $450.

Okay. How much do you suppose Capcom CPS-2 "A" boards ran for back in the early '90s? I still think the Neo was reasonably priced for what it was. I don't hear people complaining about how expensive an AW setup is now (not that I want one or would really consider getting one). I think it's more apt to compare the Neo to other arcade hardware of the day than to other home consoles of the day.

 

[SPAZ.]

one question about the discussion :?

how many cartridges did snk in 1996?

Over Top
Ultimate 11
Ninja Masters
Kizuna
Magical Drop 2
Metal Slug
Neo turf Masters
Pulstar?

Blazing Star... in 1998
etc... now i don´t remember all

KOF 96 and Samurai IV were a lot of but those rare games? why?

around 500 of each?

 

[topher]

Because it was...why is a porche so expensive? Because it is.

This has been asked a million times, use the search function.

 

[Tehcno]

Well it was a nice discussion while it lasted... you knew someone would have to ruin it like that.
You know I never really thought about it that way. I too have allways wondered why the system was so expensive. But I thought it was $500-600 when it was first released.
What I always just figured is they didnt want every Jo Shmo to buy a system and never buy any games for it. Maybe after buying the system they never realized that the games were $400 a pop. So then they were stuck with an AES that did nothing but sit there.

 

[crazycanuck]

Back in year 90's, the system price was not an issue. I remember when I bought the Neo Geo AES, the price was about 450USD for the system. But compare to the game sold at 300 USD, it was nothing. One game and half and you had the system so people who could afford the carts weren't really caring of the price of the console.

 

[topher]

Well it was a nice discussion while it lasted... you knew someone would have to ruin it like that.

Wasn't trying to be a downer, but this question gets asked about twice a week with the exact same replies...I swear people start these threads to try to up their post counts, if they really cared they would use the search function. And to answer the question, it is because of the tecnology at the time and the fact that they didn't have the marketing power of sega or nintendo, either in production capabilities or POS positioning capabilities. Like has been said before, there were only a handful of places willing to sell the neo while everyone with counter space was carrying the nes and genisis (case in point, you could walk into a 7-11 and buy a nes when they were new and fresh...ever seen a neo at a 7-11 for sale?). It is all about supply and demand, the neo always was and still is a niche console that only appeals to hardcore, oldskool playas. SNK knew this when they designed it and priced it...it's cheaper to make 10million units of something then it is to make 500,000. Well, that's my 0.2 cents.

 

[SouthtownKid]

Maybe after buying the system they never realized that the games were $400 a pop. So then they were stuck with an AES that did nothing but sit there.

I don't know who was selling you your games, but over here the games were closer to the $200 price point in the early '90s.

 

[aria]

Just to emphasize the point made earlier by Master Wasabi, the parts (particularly in the cartridges) were actually expensive to begin with.

However, the prices are actually far cheaper as compared to the arcade prices.

Remember: the reason MVS and Home Carts are different shapes isn't to keep home users from buying MVS games, it's to prevent arcade owners from paying $600-1000 for an MVS and instead buy a $200-300 home game.

In fact, I would guess that the reason later Neo Geo games had a delay between arcade and home had everything to do with the "conversion" market in Asia turning home carts into cheaper MVS carts for shady arcade ops.

And that's the WØRD.

 

[Xian Xi]

R&D especially is not free. You can just build a unit and not test it. If the units were price any lower, SNK would have closed their doors right after launch.

 

[Hidden Character]

So it can keep the Halo/EA Sports miscreants away from sullying the arcade experience that so many of us have come to love and enjoy all these years.

 

[Murray]

Purely speculation:

The larger console companies have had a long-standing tradition of selling the hardware at a loss so they can profit from the games. Because SNK's console business was smaller than, say, Nintendo's, and because they knew it was never going to be that big, they couldn't afford to do that. They had to price the hardware to at least break even on the production costs.

 

[it290]

Okay. How much do you suppose Capcom CPS-2 "A" boards ran for back in the early '90s? I still think the Neo was reasonably priced for what it was.

No, I agree with you, but arcade board prices are always artificially inflated because the arcade owner is not only buying the hardware and software, but also in effect a license to profit from it. It's just like how you can't just set up a LAN cafe and start charging people to play off-the-shelf PC games without getting into trouble. I know Capcom had their own short-lived CPS-based home system in Japan (the CPS Changer), but I have no idea what they charged for it.

I apologize to those who feel this thread is just a rehash of others -- certainly this topic does come up a lot, but the ones I have seen are all about the high price of Neo stuff in general. I'm more interested in just the system itself, and particularly how SNK would have fared had they priced it for say $150-$200 less. Unfortunately I don't think there's any way to find out their exact manufacturing costs. I don't think there's any way they could have gotten by with selling the system at a loss as some manufacturers do today, but it's interesting to speculate what their margins were on the AES.

 

[aria]

I apologize to those who feel this thread is just a rehash of others -- certainly this topic does come up a lot, but the ones I have seen are all about the high price of Neo stuff in general. I'm more interested in just the system itself, and particularly how SNK would have fared had they priced it for say $150-$200 less. Unfortunately I don't think there's any way to find out their exact manufacturing costs. I don't think there's any way they could have gotten by with selling the system at a loss as some manufacturers do today, but it's interesting to speculate what their margins were on the AES.

I think it was a good thread, at least for the reason that I finally got to spell out my opinion on why there was a delay between MVS-AES releases in the same explanation as why the home cart prices are also high.

 

[crazycanuck]

Purely speculation:

The larger console companies have had a long-standing tradition of selling the hardware at a loss so they can profit from the games. Because SNK's console business was smaller than, say, Nintendo's, and because they knew it was never going to be that big, they couldn't afford to do that. They had to price the hardware to at least break even on the production costs.

Totally right, huge companies are selling the hardware with a loss to be able to make profit on the game, that's a fact !!! The problem with SNK is that it was too small to afford this concept...

 

[it290]

I don't think Nintendo has ever sold a console at a loss, although I may be mistaken. Not sure about Sega.

 

[Tehcno]

I don't know who was selling you your games, but over here the games were closer to the $200 price point in the early '90s.

I was only in like 5th or 6th grade when the Neo came out in the US so I'm trying to go by memory. I guess I was saying $400 because of the prices that the new games were after I actually started buying neo games in the past couple years.

Wasn't trying to be a downer, but this question gets asked about twice a week with the exact same replies...I swear people start these threads to try to up their post counts

But then you could say the same about the people who reply "That's been discussed to death.

If they really cared they would use the search function. And to answer the question

But I do agree with you here.

 

[Neo Si]

Remember: the reason MVS and Home Carts are different shapes isn't to keep home users from buying MVS games, it's to prevent arcade owners from paying $600-1000 for an MVS and instead buy a $200-300 home game.

In fact, I would guess that the reason later Neo Geo games had a delay between arcade and home had everything to do with the "conversion" market in Asia turning home carts into cheaper MVS carts for shady arcade ops.

And that's the WØRD.

Makes you wonder how many Japanese AES versions of Metal Slug or Blazing Star could have suffered this fate. If only they'd known.....

In order to make a fair comparison with Capcom's CPS Changer, I've converted the prices found in the Wikipedia entry with the Yen/$ rate from 1994.

CPS Changer system, CPS Fighter Stick & SF2 Turbo = 39,800Yen / $360
Games (the other 9) = 20,000Yen / $180 per game
SF Zero Special Version = 35,000Yen / $315

Although the CPSc itself is really just a Capcom supergun. So considering you were getting a complete CPS1 board each time you got a CPSc game for £180, that's quite good.