Is the “5 Year Rule” for Consoles a Thing of the Past?

No matter how well (PlayStation 2) or poorly (GameCube) your system is doing sales-wise, about five years of technological advancements tends to make anything on a current-generation system look like old news. Thus, the major video game hardware providers have more-or-less adopted the “five year rule,” meaning that they will release a new console every half-decade. Up until now, gamers have been able to rely on this rule to base whether or not they should commit to a system or wait for the next inevitable iteration.

However, the times are a-changing when it comes to predictable system release schedules. In 2005, just four years after the Xbox released, the Xbox 360 stormed onto the gaming scene. More recently, rumors persist that the successor to the Wii will be available by 2011, possibly before. Furthermore, who’s to say that five years will actually produce a system with better graphics (I’m looking at you, Wii)? The formula we once abided by has become unreliable. So how can we possibly know if we should take the plunge and buy a new system, or if we should just wait for the next generation of consoles?

Fortunately, there are some aspects of the game industry that will remain relatively stable even as the lifespan of each system gradually grows smaller, which I have listed below. Knowing these details will hopefully help you make a more sound decision as to when you’ll purchase a console, or whether you should just wait a few years for the next wave of systems.

• Multiple Versions of the Same Console

I like to call this the “Steve Jobs Business Plan,” as there are currently more versions of the iPod than there are permanent residents in Minnesota. Every major system has been given a facelift at some point throughout its lifespan, a fact best represented by the Game Boy series—check out the next iteration, the DSi. So far there have been at least three versions of both the PlayStation 3 and the Xbox 360, all with varying features, storage space and price tags. When news of upgraded consoles starts to trickle, chances are a new system is just around the corner.

• Price Drops

The price drop is an inevitable part of the business if a console hopes to survive. After the initial waves of fanboys have snatched up their system for a premium price, developers must drop the price if they hope to appeal to the majority of consumers. So, if a system hasn’t had a price drop yet, you should a) wait until it does, and b) be assured that the system still has a fair bit of life left in it. The rules of supply and demand can be both friend and enemy, however: PlayStation 3 saw several price cuts in its first year, yet the ever-popular Wii will likely stay at $250 until it stops selling like gangbusters.

• Backward Compatibility

Even if you buy a system just before a new one is announced, take heed: developers have finally realized that gamers like to play their old games. It’s true! Sony received major complaints when it pulled support of PS2 games on the PS3, so I think it’s unlikely that they or other companies will make the same mistake twice. So don’t worry too much about not being able to play Turok: Evolution on your snazzy new system.

• Who was first last time?

It never hurts to be the first out of the gate when it comes to new technology. The PS2 was released in 2000, a full year before both the Xbox and GameCube, immediately cementing itself as the harbinger of the next generation. The same thing occurred in 2005 with the Xbox 360, which is only second to the Wii (discounting handhelds, of course). Now, with the supposed release date of the next Wii set for 2011, can we expect another race for first? If the five year rule were still intact, then the next Xbox should hit in 2010, yet we’ve heard no real news either way. Will it hit earlier? Only time travelers and fortunetellers know for sure.

But I’ll act like I know the answers anyway. Taking all of these aspects into account, I’d say now is a good time to invest if you’re interested in the Xbox 360 due to its recent price drops, yet you might want to hold off for another year or so for PS3—I can see a price drop coming within another year. As for the Wii, I would hold off for a few more months just to see what Nintendo has up its sleeve. Whatever you decide to do, one thing is for sure: the five year rule may not be as dependable as it used to be, but there are plenty of indicators to help you estimate whether or not you should wait for that new console smell.