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First I would say this the development costs for the high definition platforms are not the same. During 2007 I read an insightful article where the development costs were sighted. Mind you these are for for high end games. Not your run of the mill shovel ware. The development costs for the Wii were sixty percent of the 360, and the 360 was sixty percent the development costs of the PS3. Do not treat all platforms as if they were the same. Further more the 360 shares a lot of common architecture with the PC. So that always permits porting, or dual launch.

These studios ate terrible losses by developing exclusively for the PS3. Not necessarily, because they developed for HD. Had those titles been exclusive to the 360 they may not have sold any better, but the developers would have lost less, and they would have had an option to port the games to the PC. That might not seem like much, but it may have given these studios at least one more chance, before they ran out of money.

Secondly as others have said this will effect PS3 exclusive development, and it should. Perhaps Sony needs to take this into account. Provide more effective middle ware, reduce the licensing fees, or provide greater technical assistance with physical assets. Sending staff to developers to help them with game development. All as a means to reduce development costs. A developer having to sell over half a million copies is unsustainable. Yes the credit crunch did not help, but it was made worse by poor performance making them less promising for venture capitalists.

Thirdly Factor 5 was over acclaimed as a developer. Yes the games were fun, but they were also hardly ground breaking. Anyone who had to wage a war with auto orientation in the Rogue Squadron series knows that as space shooters go it is less then authentic. You could not fly arbitrary to orientation. Ever try to bomb a star destroyers shield generator on the undercarriage with a Y Wing. Yes it was all sorts of fun to watch bombs fly upwards. After all everyone knows that space has both an up and down.