Which game consoles would I buy If I had USD 500-600, and why not to buy a PlayStation 3

ALSO SEE: A related post by me on Facebook [link].

Currently, the Sony PlayStation 3 starts at about $500 for the standard version, and goes up to $600 for the premium version. Although many people are buying the $600 PS3, I believe that they could have got much more value for their 600 dollars. If I were to spend $600 on video game consoles, what I would not have done is to buy a PS3, and what I would have done is:

• Buy a Sony PlayStation 2 for $125, plus a Nintendo Wii [$250], as well as a Sony PSP [$200], for a total of $575. With the remaining $25, I would have bought a Wii classic controller [$20]. I would have spent the remaining 5 dollars feeding myself with a burger and a coke - celebrating a wiser buy! It is not hard to observe that this deal provides significantly higher value for money [VFM] than a PS3 alone. Specifically, this deal allows one to use the huge library of now-cheap PS2 games, the fun-filled modern gaming of Wii, and the portable entertainment and gaming experiences of the PSP. This deal is also more suitable for those households which have more than one kid. However, this package lacks the ultra-advanced graphics of PS3 games.
• An alternative deal, suitable for those who don't want to sacrifice graphics quality is - an Xbox 360 Core [X360] for $300, a Wii [$250], 2 Wii classic controllers [$40], and double the amount of burgers and coke... This package provides two next-generation game consoles, without sacrificing on graphics quality. Undoubtedly, this deal is better than the $600 PS3.
• Yet another alternative is to go for the X360 Core [$300], the PS2 [$125] and accessories/games worth $175. Once again, this package provides more VFM than the $600 PS3.
• Yet another alternative is to buy the standard X360 [$400], a PS2 [$125] and accessories worth $75. Again, a better buy than the $600 PS3.

PS3's VFM increases if one goes for the $500 version. It's more difficult to produce an alternative package that provides as much VFM as the $500 PS3. Some individuals may find more value in the X360 Core + PS2 + accessories [total $500] package, while others may find more value in Wii + PS2 + accessories + some games [total $500] package.

Of course, one can work out a similar alternative deal for the $400 X360 - a $250 Wii + $125 PS2 + a Wii classic controller.

The whole idea behind these alternative deals is to maximize the VFM while minimizing loss of functionality. One must also remember that these alternative deals get the owner multiple devices, providing redundancy [decreased usage of each device will increase their life; since there are multiple devices, more people can use them simultaneously].

Two things to note here:

1. The PS2 can play DVDs, as well as games from the first generation PlayStation [PS1].
2. The Wii can play NES, SNES, Sega Genesis, Turbo-Grafx 16, Nintendo 64 and GameCube games, in addition to Wii games. It is 7 game consoles in one body.

As a side note, it must be remembered that the PS3 can play all PS3, PS2 and PS1 games. One must carefully weigh one's gaming requirements before choosing a particular package. It must also be remembered that the PS3 includes an inbuilt Blu-ray player, which may be provide more value to select individuals.

Update (April 2009): It is now possible to buy an Xbox 360 Pro ($299) along with a PS2 ($99) for the price of one PS3 ($399 - and this PS3 does not even have backward compatibility with PS2 games). It is also possible to buy an Xbox 360 Arcade system along with a Blu-ray player for $399 total, a more sensible deal in my opinion than a PS3.

Update [Jul'16]: Following article is directly related to this idea - "Why The US Navy Should Build Smaller Aircraft Carriers".

Update [Mar'21]: Other things I could have spent that $1,000 on while waiting to order an iPhone X at 3am [link].

Update [May'21]: One of my relatives bought a Kit Seltos HTX and also got accessories installed from the showroom for a total of about INR 15.5 lakh [current Seltos prices are about 50K higher than when he bought]. This is his only car and he really needs two cars. He could've bought two cars while spending the same amount of money - a Skoda Rapid and a Nissan Magnite. I don't know about others, but to me this dual car deal looks much, much better than the single Seltos.

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Update [Jul'21]: The general idea of choosing more "value" applies even to picking a single product. It isn't just about splitting a costlier product into two, higher-value-received products. For example, there's no comparison between the MG Hector / Hector Plus and the Skoda Kushaq - size, grandeur, body weight, road presence, solidity, etc. The screenshot below shows that only a fool would buy the Kushaq instead of Hector / Hector Plus.

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Update [Jul'21]: We booked Hector Plus 7-seater diesel Super variant for approximately INR 18.5 lakh rupees on-road price. Did we violate my own principles and ideas outlined in this post? Likely yes. Could we have bought two good cars for this price instead of one great car - theoretically yes, practically no, since the reason why we bought the Hector Plus was specifically related to the current situation and requirement.

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