fooflexible on 19 March 2007
Happysquirrel said: Kwaads $8 figure (probably) comes from the reported royalties that were paid on PS2, XBox and Gamecube games. You could assume that the higher price point ($60) includes a higher royalty fee (say $12) ...
Even if that figure is acurate for last gen games, it simply cannot be true for this generation. Even a $12 royalty demands too high of an attach rate. Even figuring in figuring in blu-ray films, and higher profit margins on their own titles, you then have to calcuate their studio expenses, marketing on titles and system, and how about their free online services? It might be free to use but royalty fees have to pay for it. The only factor that can offset this equation is the decrease in production cost over time. Which is relatively impossible to calculate, and as that goes down so does the price of the system. And as is it seems consumer price will go down BEFORE production cost decreases dramatically. And I assume at some point they'll also have to cut royalty fees to continue to attract exclusive titles. Which also cuts into them recouping cost. Personally I don't see how the system will make money, unless the attach rate shoots above 10.
