Chapter 6 - Determination of National Income

Blu-ray Possibility for Microsoft's Xbox 360 Game Console?

In the article i found, ITMedia, Microsoft head, Peter Moore talks about a rumor that the new Xbox 360 game console will have an add on blu-ray drive launched for it in the future. Right now there is a "DVD war" with HD-DVD and Blu-Ray, two of the newest advances in the video market, for the next standard of video disks. The new Sony Play Station 3 is currently using Blu-Ray (which was created by sony) and Microsoft Xbox 360 is using HD-DVD. Moore stated that if Blu-Ray wins the DVD war then it is most likely that there will be a Blu-Ray add on to the Xbox 360. Although the Xbox 360 prefers to use HD-DVD, it has an external DVD drive which allows them to adapt to whatever standard wins.

Now how does this have anything to do with chapter 6? Well first of all, there is a huge aggregate demand for video games. Almost every family household should have a game console. In order to buy one of the next generation consoles, you need money. When new video game consoles are released, they are usually priced around three hundred to seven hundred dollars. The distribution of income will affect the number of people who can afford one. If the consumer is wealthy, they will be able to buy the more expensive consoles by taking money out of their savings rather than transferred from other purchases. On the other hand, if the consumer is not wealthy, they might not be able to afford a console or the more expensive ones. Since the prices of newly released consoles will usually be fairly expensive, consumers can expect to have to save some money. But since consumers can expect prices to be high, they may want to wait for prices to drop. Which means no money going into the circular flow of money. Consumers might be persuaded to buy a new console because of psychological reasons. If all the cool kids at school have the latest gaming console, one could be influenced into getting a new console as well.

Microsoft is pressured to make changes in technology because it is expected that Blu-Ray is going to win the DVD war. Xbox will have to make replacements from their HD-DVD to Blu-Ray. I predict that the prices for the updated console will increase by a bit because of the cost of capital goods.

Personally, I think that Blu-Ray is going to win the DVD war because it's so advanced compared to everything else on the market. I can guess that Microsoft will probably have an add on for Blu-Ray as well because it is getting very popular. I do not have one of the new gaming consoles yet because of the price. I am going to wait until they drop then i will consider buying a new console. I will probably go with Sony's PS3 if they have any better games comming out.