| greenmedic88 said: The reason for that gap in logic is the assumption that the console market is a zero sum business. While there is unquestionable overlap, particularly with the PS3/360, the ultimate goal of any platform is to produce enough success to stay in the game for the next generation. Being first simply guarantees pole position in the next round. When sold at an initial loss, the assumption is that early lost revues will be recovered through license fees from software in the future, which becomes more feasible the more titles being produced (profitable or not; doesn't matter to the platform manufacturer, so long as they receive their license fee). So long as license fees continue to keep MS profitable, the Xbox is still in good standing. There is no danger of "losing" all its major licenses to the Wii, so long as the PS3 and PC guarantee a market for hardware intensive softs that are diluted at best on the Wii. |
I'm assuming (which is dangerous business) that MS will not reduce the (MSRP)price of the 360 below their cost, now that they have been selling them at a profit...
I've never said MS game division used logic or reason though.
If I were them I wouldn't drop the price, they are selling 100k+ a week at a profit, why the hell would you drop the price.
The late comers and value buyers are generally not the people who buy 5-10 new $50-60 games per year.
The reason why Nintendo still makes consoles and no other major console manufacturer from the eighties or early nineties does is because they run their business like a business. You know: maximize profit, cut costs, etc.
Atari, Sega, Panasonic, NEC, Hudson, Magnavox....
You want me to keep going?
This gen Sony and MS learned that the video game industry isn't a zero sum business, and has never been a zero sum business... they are big companies though, and should be able to survive these losses.
I would cite regulation, but I know you will simply ignore it.
