High cost of PC gaming

Some friends and me were sitting around talking about up grading to a new PC. They have an Intel Celeron D 310 Prescott around 2.13GHz. It has on board video, 256mb of RAM and no AGP port or PCIx16 port for a gaming video card. Bottom line they wanted to play newer PC games and where unable to do so on their feeble system.
We checked many system builders online and found many wanted around $1000 for a so-called gaming system. They wanted well over a $2000 for a dual core CPU with the nVidia 7800 OC (or similar GPU) that can play similar games as the XBOX360. Nevertheless the 360 console can play powerful games for a lesser price. For me consoles are superior for gaming. These days PC’s limit you to about 3 genres of games: online RPG, FPS and strategy. If you like any other kind of games you can be out of luck some times.
For inexpensive gaming: Get a Game Cube, PS2, Xbox, or even an XBOX360. Consoles will not replace PCs; it’s just a better alternative for gaming at a lower price-point. I ask you, what $500 computer can match the performance of the Xbox 360?