When does Sony reach the point of no return in Japan?

[Erik Aston]

Also, a quick point that can be found on other threads, but PSP/PS3 games cost more to develop than DS/Wii ones. Twice as much seems to be the consensus, though the do sell for 20% more. Ignoring what effect higher game prices will have on longer-term sales that means that Sony 3rd party games have to sell 67% more than Nintendo ones. In general then if a PS3 game needs 500,000 sales to break even (or nearly 60% of PS3 owners in Japan at this point), a Wii one would only need 300,000 (15% of Wii owners). Devs care about profit more than user base or units sold which helps explain why they would go to the Wii and DS even if they would sell less than on the PS3 and PSP.

Obviously the numbers aren't exact, but this is a very good illustration of the way third parties have to think. On some boards, after the announcement from Eidos that they were withholding PS3 support until mid-2008 to wait for the install base, some people were actually chastizing that decision, saying "don't they know the install base won't grow without games!" First parties time games to sell systems. Third parties time games to sell games. And exactly as you pointed out, they estimate the appeal of the game not on how many consoles they think it can sell, but on what percentage of the install base they think it can sell to. Early on, demographics and attach rates might matter as much as install base, but as the install base gap explodes, they won't be enough to keep games away from the better selling system.