| mchaza said: how does SONY, MS and NIntendo or who ever does this make money off the hardware when they are giving away free enhancments. your concept is flawed because 20 dollars an month from lets say 50 million people is 1 billion dollars. An the amount spent on games an month is much higher than that figure. But something like this could happen but it will be cloud and not free upgrades |
Sony and MS, at least for the start of each launch, have lost money on the hardware. But the focus here is not the hardware, although using your figures, $150 * 50 million = 7.5 billion dollars of money that sits in an escrow earning interest for your company -- that's not too shabby. The cost of the hardware is basically break even. The real profit is in the monthly subscriptions.
For the developers, it isn't a one time shot of 2 to 3 million copies at $60 for real blockbuster games (not all that common), most of which is eaten up by retail and distribution costs. Instead, it's a monthly revenue stream -- WAY MORE VALUABLE -- that could end up lasting years, and years.
