Apple Music Karaoke Mode Musk Briefly Not Richest COVID Variants Call of Duty and Nintendo 'Avatar 2' Director 19 Gizmo and Gadget Gifts Gifts $30 and Under Anker MagGo for iPhones
Want CNET to notify you of price drops and the latest stories?
No, thank you

$199 game consoles aren't worth the money you're saving

Sony and Microsoft both offer stripped-down current-gen consoles for $199, but spending just a little more really can pay off.

The next-gen Xbox One and PlayStation 4 game consoles are both coming in November. In the meantime, current-generation Xbox 360 and PlayStation 3 consoles are more affordable than ever -- both available for the very reasonable sum of $199. But are these entry-level models so stripped-down that they're a bad investment? Or are they a budget gamer's dream?

The dilemma
It's hard to imagine that anyone interested in buying an Xbox 360 or PlayStation 3 doesn't already own one (it's been a half-dozen years, people). That said, there's still a lot of fun to be had. Both the Microsoft and Sony consoles have a huge library of excellent games, and both double as excellent full-on entertainment devices, thanks to streaming apps like Netflix, Hulu Plus, and Amazon Video. And while the next-gen consoles beckon, they're considerably more expensive -- $499 for the Xbox One, $399 for the PS4 -- and they'll have a comparatively small handful of games available before the end of the year (no, you won't be able to play 360 games on the One, nor PS3 games on a PS4).

So there's good enough reason to get an "old" current-gen console. But each of the $199 versions is compromised enough that you should seriously consider paying the extra $50 to $100 for step-up models. Here's how they both stack up.

$199 PlayStation 3

The $199 PS3 officially hit the US this past week. Essentially, it's identical to the 2012 superslim PS3, but it includes only 12GB of flash memory, rather than the 250GB to 500GB hard drive found on the more-expensive model. Unlike the very first version of the console from 2006, the current PS3 trades the original slot-loading drive for a sliding plastic disc drive cover, only has two USB ports, lacks memory card support, and offers no ability to play PS2 games.

None of those feature downgrades is a big deal, but the paltry 12GB of storage is. Download just a few games or some video content, and you'll be stuck. I'm especially wary, as I've spent several afternoons clearing bulky old saved games and installed game content off my original first-gen PS3 hardware to free up a little hard-drive space.

On the other hand, DIYers with a spare eSATA hard drive on hand can drop it into the PS3 and upgrade the storage -- so for some folks, the math may work (more on that option below).

Why you should avoid it: Very little onboard storage; next-gen PS4 coming in November; full 250GB bundles are only $50 more (see below).

Might be worth it: You can still install a standard HDD; smaller, lighter, and more power efficient than earlier versions.

$199 Xbox 360

The model formerly known as the Xbox 360 Arcade (because you were more likely to play lightweight Xbox Live Arcade games on it) is still kicking around for $199. With only 4GB of onboard storage, it reminds me of the original Xbox 360 hardware, where an entry-level model skipped the hard drive entirely, forcing you to rely on proprietary memory cards (one of which I still have kicking around somewhere just to show to people who forgot they ever existed).

Now in its third outer chassis, the latest Xbox 360 is slimmer and quieter than previous models. Like all current Xboxes, it includes built-in Wi-Fi, a feature missing from the 2005 original, but this setup drops the optical audio out found in every previous 360, and has one fewer USB ports for accessories (the optical audio is a big deal if you want to simultaneously send video via HDMI to a monitor and audio to a speaker system).

That paltry 4GB is hardly enough space to download much content at all. This model is good if you're into streaming only (Netflix and the like) and if you're using Xbox 360 cloud saves for your games. But both of them require the Xbox Live Gold plan, which will cost you another $60 per year.

Also, upgraders should note: unlike the PS3, which accepts an off-the-shelf laptop hard drive, the Xbox 360 requires a proprietary hard-drive module, as explained below. But at around $50, it can still represent something of a discount ($250-ish for the 4GB console plus hard drive) versus the $299 Xbox 360.

Why you should avoid it: Minuscule onboard storage; next-gen Xbox One coming later this year; loses the optical audio out of previous models; installing a larger HDD requires proprietary hardware; one less USB port; retail bundles can get you a lot more for an extra $50-$100.

Might be worth it: The upcoming Xbox One starts at a very expensive $499.

Reasonably priced upgrade options
If you think we're trying to steer you away from the $199 versions of these consoles, you'd be right. That's not just because both are about about to be forced into semi-obsolescence by newer hardware. If you shop around, you can actually get better versions of these budget consoles for just a little more.

I'd specifically point you toward this PS3 bundle available various places online, including Amazon, which combines a 250GB PS3, a copy of Uncharted 3 (available separately for $39), and a one-year subscription to Sony's PlayStation Plus service (which normally costs $49), all for $249.

There's no Xbox 360 deal that's as good, but some retailers, including Walmart, offer $250 bundles that include two wireless controllers and your choice of a large list of games, including Halo 4, Tomb Raider, and Borderlands 2. For about $300, another Xbox 360 bundle includes a 250GB console and both Batman: Arkham City and Darksiders II.

In any case, there's a good chance of further price drops when the new consoles are released in/around November, either from Microsoft and Sony, or from retailers looking to clear out old hardware in time for the holiday shopping season.

This USB stick has four times the storage of the $199 Xbox 360. Microsoft

Going the DIY route
There's one case where the $199 version of each console may make sense, and that's if you're looking to invest a little more time and effort, and a little less money, into upgrading your hard drive to a more usable capacity. As noted previously, both the 12GB PS3 and the 4GB Xbox 360 have hard-drive slots you can utilize for additional storage. But the upgrade isn't as simple as slapping a new drive in and powering up.

The new $199 PS3 can take just about any current off-the-shelf 2.5-inch hard drive, but you'll need mounting hardware to fit in the current slimmer console chassis, which is sold separately and can run between $10 and $25. After that, installation is easy, and there are a ton of online tutorials to walk you through the process.

Upgrading the Xbox 360 is a little tougher. Microsoft would strongly prefer you to use its own semi-proprietary hard drive, which runs $99 for a 320GB model. You can use a handful of other third-party drives, but the list can be very specific, such as this model, which gives you 320GB for $48. Another alternative is to use an external USB key with your Xbox 360. Microsoft even sells an Xbox-branded one with 16GB of space for $15 (currently discounted from an insane original price of $59), or you can get a 32GB model, such as the SanDisc Cruiser, for under $25, but the latter option requires drive formatting. You can add up to 32GB of space this way, but some content, including music files and content from original Xbox games, don't work via USB.

In either case, you should be comfortable swapping out hardware and formatting the new drive (mostly just some button presses and patience on your part). It's up to you to calculate how the time and effort expended in our DIY solution translates to cold, hard cash, and if you'd be happier spending a little more for a console with a large hard drive already built in.