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This is something that has bothered me for a while now, I see a lot of people post on forums that consoles are cheaper than PCs, I just wanted to point out that this isn't necessarily the case.
There are some fundamental differences between consoles and PCs which affect the cost, first of all consoles use proprietary hardware where as the PC platform is open to any hardware combination that works. This means that the console hardware is owned by a specific business and they charge other businesses royalties to build games for that platform.
The knock on effect of this is that console manufacturers can offer up consoles that are not only cheap but cost more to produce than they sell for. A lot of people don't seem to realise that their brand new PS3 with Bluray player and cell processor was actually sold to them at a loss, this requires a massive investment from Sony but they recoup that cost over a number of years by claiming royalties from plethora of games sold.
So the core difference is that game development studios have to pay royalties, but this cost isn't simply absorbed out of their own profits, it's passed on to the consumer by increasing the price of the game.
In the UK brand new PC games tend to retail in the £25-£30 price range, and console games tends to retail at the £40-£50 price range. Here are some real world examples from www.play.com which is a popular online store for the UK:
Batman Arkham Asylum Xbox360 = £39.99
Batman Arkham Asylum PS3 = £39.99
Batman Arkham Asylum PC = £24.99
Wolfenstein Xbox360 = £39.99
Wolfenstein PS3 = £39.90
Wolfenstein PC = £24.99
The Godfather II Xbox360 = £39.99
The Godfather II PS3 = £39.99
The Godfather II PC = £24.99
X-Men Origins: Wolverine Xbox360 = £39.99
X-Men Origins: Wolverine PS3 = £39.99
X-Men Origins: Wolverine PC = £29.99
Across the 4 games for the PC we've saved a total of £55, that's an average saving of £13.75 per game. If you buy 1 game per month then you're looking at a saving of £165 per year, over the lifespan of a console which is usually about 5 years that's a saving of £825. This scales up, the more games you buy the bigger the saving.
To put this in perspective this saving could buy you an upgrade of an i7 920 CPU (£200), a decent motherboard (£150), 6Gb of RAM (£80), Nvidia GTX 295 (£350) with change to spare. This is an awesomely powerful system that would pound any console into the ground and provide a far superior gaming experience in terms of much better graphics and smoother more fluid game play.
So consoles are initially cheaper but you spend more on them over time. It's a lot like buying a car, a sensible adult recognises that different cars have different fuel consumptions and so some cost more to run over the years, in the long run the cheapest car may end up costing you more in fuel.
If you only ever intend to buy 2 or 3 games then a console is a great deal, if you're a regular gamer then the cost argument makes no sense.
-Princess_Frosty
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