Every once in a while, I come across another news post reporting that Microsoft wants to court casual gamers, not just hardcore gamers. (See links here and here; both links via Kotaku. Oh, and meanwhile, Kotaku also reports that Nintendo want to make sure everyone knows it won’t alienate the hardcore.)

Now, I’m no businessman, but from here it looks like Microsoft is being either disingenuous or self-delusional. The only way you’re going to get “casual” gamers to play games on a $400 console is if someone else in the household happens to be a hardcore gamer, which doesn’t boost console sales. Also note that the $300 version of the Xbox 360 doesn’t have a hard drive, so you can’t use it right out of the box to download casual games. Anybody who does want to play inexpensive games is much more likely to do so for free on a PC.

That doesn’t mean that Microsoft can’t tap this market with console sales, I think, but I don’t see the full-price, full-functionality Xbox as the way to do it. Rather, I’d be interested to see them release a small console with a small hard drive and limited processing power—the “Xbox Mini” or something—which can download casual games off Xbox Live and allow people to play together online. (You’d think it would be obvious that the $50 a year Xbox Live fee would also be a major deterrent for a market you identify yourself as “casual.”)

I have talked to plenty of people (and read enough comments online from people) who would love to play stuff like Pac-man Championship Edition, explaining, “I don’t like modern video games, but I like older stuff.” I’m not sure “casual” is really the right adjective for this market, as I imagine you could find some hardcore Geometry Wars and Pac-man CE enthusiasts if you only knew how to get a controller into their hands. Microsoft has acknowledged that $199 seems like the sweet spot for console pricing, but I’m saying they could shoot even lower. Live Arcade games shouldn’t be seen as a gateway drug to more expensive games or a quick-fix between big releases; I actually spend much more time playing the cheap stuff on my own 360 than I spend playing discs.

Video game download services like Xbox Live Arcade could bring a renaissance for non-narrative video games, but Microsoft seems to have missed its chance. Instead, that chance may be picked up by Nintendo, which will be offering a similar service (and not just repackaging old games for download) on a less expensive console that’s already got the attention of the non-hardcore players. I guess we’ll have to wait for the next next generation of consoles to see what we should have learned this time around.