Taking a look at MS and Sony's strategy when it comes to acquisition of exclusive contents, one can identify two distinct business models.

Microsoft is shrinking its inhouse developments, dissolving studios and using its availible resources to acquire third party exclusives, timed exclusives and dlc. It probably all comes down to cheaper operational budget which can hypothetically translate better resource allocation for MS, thus giving it the ability to acquire more contents than they could otherwise with their own studios.

Sony by contrast have used their resource to acquire more and more studios, thus generating a gauranteed quota for exlusive games, this seems more costly in the short term due to the ongoing operational cost in running a studios but could hypothetically be more worthwhile in the long run as talented studios are gauranteed to continue making games for your console.

I am not a business analyst, so from a business prospective I can only see this through an amatour's eyes and conclude that MS's model is more sound and cost effecient. But as a gamer, I much prefer Sony's approach, as it gives me a secure expectation that a fantastic studio (Naughty Dog, Santa Monica etc) is always making a new game for my chosen console. I believe this to be irrational, but its something that I cannot shake.

From the perspective of a gamer and/or a businessman, which approach do you think is better?

they don't own Naughty Dog last I checked... as for Microsoft's approach... it's been that for a long time outside of games... they are applying what works in the rest of their buisness to games slowly... and it's panned out for them so far... sucks that some of the studios got closed, but that just released a bunch of talented people into the market to help make other games. I'm sure they will find jobs or make their own studio. As for Sony... they made some good purchases... but Guerrilla wasn't one of them.

Naughty Dog is a sony studio since 2001.

We shall see how Guerilla pans out with KZ2 as this is their first entry to the current gen.

There is no better choice. Either one could work or fail. Sony's is a higher risk with a potential higher reward. Sony is more in control of their exclusive games. MS is a lower risk, lower reward system. They are not as in control of their exclusive content however they are in a much better situation to easily adapt and adjust to the market.

I would probably go with Sony's from a business perspective, especially if you plan on being in this industry for the long run. But I do see the benefits of MS's strategy.

I think best to look at it in the possibility that Sony's or M$ consoles fail and they decide not to make another one.

If this happens, Sony are left with 15-20 (not sure exactly how many) game development studios all with a varying degree of profitability that can and will make games for whatever is the then console market. Microsoft will have maybe 5-6.

That maybe a weird way of looking at current exclusives deals but if M$ waste their money on exclusives and the the console still fails, then they have less chance of making money in the industry after then Sony does if their hardware fails. M$'s plan only works in shorterm and if your console succeeds.

To be honest I think Microsoft is thinking about moving out of game development in favor of something else (maybe shoring up windows development, giving the media PC thing a try again, who knows). I mean if you're in it to win it why would you shut down one of the handful of studios you have? They have one exclusive studio now I think, Rare. They killed Ensemble and let Bungee go independent so is there anything else they own?

Nintendo has proven one thing. First party titles are where the money is. Sony has learned this lesson well; there are a lot of big sellers on the PS3 that carry the SOE logo (and Sony gets a lot of the profits from the games that carry that logo) like the GT series, Ratchet and Clank, Jak and others.

One reason I'm almost positive Sony isn't headed to the door is they keep acquiring a lot of very very good developers, contrast that with Microsoft letting developers go and closing their few studios and it seems someone is sticking around while someone else is heading for the door.

RV is right though, its risk vs reward. On the plus side you get more of the money if the game is a hit (GT), but if its a flop you're left holding the bag (Too Human, MS published it and you can be pretty sure they fronted money to do so).

The really smart money for Sony would be increasing their stake in Square as it continues to drop (its been as low as 18 dollars, less then half its 52 week high of nearly 40 bucks). They could almost certainly turn Square around from the crappy 2nd rate developer it has become since the merger with Enix. The company that made Parasite Eve, Vagrant Story, Final Fantasy 7 and Xenogears can live again! Sony already owns about 10% of Square/Enix, they could easily pull in another 10-20% of the company and get a controlling interest going from there.

It is unlikely that Microsoft lost money (certainly not significant money on Too Human).

k looked it up. Seems MS has 6 studios, 4 of which make games for the Xbox.

Lionhead makes Fable plus some PC games (The Movies, Black and White). They are almost certainly spent for at least 2-3 years after Fable 2 as they work on something new.

Rare....Who knows what the Hell Rare is doing, they haven't released an N64 quality game yet on the 360. Their last good game was Conker on the N64 in what....2002? Maybe the new Banjo will be better then it looks, who knows.

Wingnut Interactive which only works in collaboration with bungee (seemingly on something halo related, maybe that Recon game. Sam Fisher/Snake in space!)

Turn 10 with their Forza games.

Other then that there are just a few live development studios that are loosely affiliated and ACES which makes the flight simulator PC/Iphone games.

On the other hand they've killed 6 studios in the last 18 months or so, more then they left open. At the same time they have not opened any new ones at all.

@ Starcraft you might be right about Too Human not losing much, esp for the publisher. I still see it being the bullet that does Silicon Knights in. It might not have lost that much, but it almost certainly didn't make anything given its generally good (read, expensive) graphics, REALLY long development time and exclusivity.

I strangely really liked it after a rental for the first chapter. Then somehow they sucked all the fun out in the 2nd. Suddenly they add groups of 15 enemies that are more or less immune to gun fire in a game with gun specific classes, they add poisons that last FOREVER so you can clear a room out and have half health left then slowly bleed to death. It was a decent game with horrific execution on things like status effect duration and enemy design, kind of sad since I like Diablo games and norse mythology. Maybe they'll fix it and make it into a decent PC game. I kept wishing it WAS a PC game the whole time I tried it out.

1.  Lionhead has been hard at work on another game for at least a year.

2.  Rare made Viva Pinata and Viva Pinata 2, both of which are easily N64 quality.  Kameo is also awesome (though admittedely not AS awesome).  Judging by demo impressions, the next Banjo appears to be N64 quality.

3.  Rumour has it Turn 10 are making Project Gotham Racing 5 AND Forza Motorsport 3.

4.  Microsoft is in the process of opening a new studio (starts with an "s").  Apparently it's absorbing a lot of the people that were left when they decided to close Ensemble.