A breakdown of gaming profits for the last 3 years.

[Bodhesatva]

Frasman said:

Bodhesatva said:

It sounds good, in theory. Lots of money, somewhere in the future, and both MS and Sony are after it. But what if they're wrong, and the "convergence" box doesn't really materialize? Or what if they're right, but they lose out (as in, MS or Sony gets marginalized, and the other takes over... or even Nintendo takes over, although they've shown no proclivity towards it) . In short -- what happens if MS/Sony spend billions and billions of dollars... and then don't get that enormous, theoretical mother load payout in the end? Well.... that hurts, really badly. It's a gamble. It's why both Sony and Microsoft seem to be willing to lose billions of dollars years on end, with no clear end in sight. If this were the toaster business, they would have been out so long ago! There has to be a limit as to how far they're willing to go, but it's unclear what that limit is. Are they willing to go a few billion dollars in the hole? Clearly the answer is yes. Are they willing to begin significantly hurting their other assets in order to pump money in to the 360/PS3? I think that's where they'd draw the line, but we'll see.

 

Not just the corporations, but the consumer as well. If both Sony and Microsoft both pack up shop, it could create another videogame crash. If third parties are dumping millions of dollars into next gen projects, only to have Sony or Microsoft jump ship, it could spell diaster for third parties, who are already (like you said) barely breaking even or loosing money. All the internal studios would get shut down too. Nintendo may be fine, but not everybody will want to play Nintendo esque games all the time, and yearn for the wiggle free days of Gran Turismo, Halo, God of War and Fable.

But they're losing money because of Microsoft and Sony platforms. The companies that put their money behind MS and Sony are seeing their profits fall. The companies that put their money behind Nintendo are seeing their profits increase.

If anyone is going to cause a crash here, it's MS/Sony, who are making everyone lose money (including themselves), while Nintendo (and the few companies that backed them from the start) see their profits increase (and in the case of Nintendo, skyrocket). 

I'm not meaning this to be cheeky, I just don't understand how you reached this conclusion. How could Nintendo cause a crash here? Everyone who invested heavily in the other systems is bleeding money, or seeing their profits free fall! Evidence: of the few companies that announced significant support for the Wii pre-launch, all have seen increased profitability (this includes, to my knowledge, Majesco, Ubisoft, and of course Nintendo itself):

http://www.gamesindustry.biz/content_page.php?aid=25380
http://www.cubed3.com/news/7832/1/Majesco_Profits_from_Nintendo
http://ds.ign.com/articles/783/783710p1.html

By contrast, several of the major companies that publicly stated that they were backing Sony and Microsoft have seen their profits fall or have even seen significant losses:

http://www.ibtimes.com/articles/20070508/electronic-arts-earnings-shares.htm
http://www.vgchartz.com/news/news.php?id=453
http://seekingalpha.com/article/38017

The middle being, of course, Sony itself, which has lost well over a billion dollars since the PS3's launch.