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justinian said:

Good point. From this prospective size does matter. The more DVDs the bigger the production costs so that eats into profits.

I don't know exactly how the whole thing works but say, for example that FFXIII comes out on four DVDs.

My guess is that equates to 4x production costs for x360's FFXIII being sold at the same price as the PS3 version.

Not necessarily, the more DVD's you buy, the better the deal you get. I can get one DVD for $0.25 or 8 for $1 if bought in bulk.

justinian said:

Is the game then sold at a higher price on the x360 to recuperate costs?

For pennies? No point, at best it would be a rounding error.

justinian said:

Doesn't really matter to MS, I suppose. They can afford losses.

Microsoft gets royalties for every third party game made for the Xbox 360 console, they'd actually make money on FFXIII's release than if it wer not.

justinian said:

But sure as hell matters to pubishers packaging the game.

Obviously not enough or they wouldn't even consider releasing it on the system in the first place.

justinian said:

If the rate of multi disc games increase dramatically then it may be a problem but if MS don't seem to care about this neither should I.

A dozen games for a system in it's 5th year is a lot better then most would have predicted in 2005, at that time some people were questioning whether DVD would be enough for "2nd" generation games and here we are 5 years later guess which systems running games better, why it's the DVD based PC and Xbox 360.