I know that this is pretty obvious for some of you, but I think it deserves to be discussed in its own thread:
In some ways, 2008 is proving to be a big year for the HD consoles... Third parties are giving them a lot of support, launching big games which are expected to be the climax of those consoles' success. The biggest such games for 2008 are obviously GTA4 and MGS4.
Given this, what do Sony and Microsoft do regarding those games?
- Microsoft does huge price cuts in Europe before GTA4 launches, positioning their console near Wii's price, which is obviously a much cheaper console to manufacture (thanks for that BTW, it enabled me to get their console for GTA4 and a few other interesting games). It's still unclear whether they'll do the same thing for USA, but it wouldn't surprise me if they did.
- Microsoft spends $50 million on downloadable content for GTA4, much of which they'll probably never gain back.
- Sony bundles MGS4 and GTA4 with zero added cost for the consumer vs the console's price. This negates any gain from royalties on those two games. They'll be losing money in two ways when someone buys one of those bundles:
- Manufacturing cost vs retail price. They have gone on the record saying that they are still losing money on hardware, and that they only expect to start breaking even towards the end of the fiscal year.
- The games themselves which they have to buy from Konami/Take 2, instead of taking royalties as it would be expected.
When I put that together with the losses that they have sustained before this point (especially Sony in terms of the current-gen), I get this picture:
This is a like battle between irate giants, who keep pounding each other (and themselves) to the ground at every step, even when they're getting near the climax of their product's life.
They're not just competing, they're competing so fiercely that the only winners in the business seem to be the consumers and a few lucky third parties.
My Mario Kart Wii friend code: 2707-1866-0957
