Microsoft and Sony are destroying their (and each other's) gaming business

[NJ5]

DMeisterJ said:
The MS thing you have a point with, since they are paying out money for price drops, and for the content, but you lost me with Sony.

You act as if Metal Gear Solid 4 and Gran Turismo 5: Prologue aren't bought on their own.

GT5: P has already sold 250k in Japan, w/out being bundled, and I guess if every copy of GT5: P sold in Others last week was bundled you'd make sense, but most, if not all of them weren't bundled, looking at sales. And GT5: P isn't even bundled in the US, so US sales will all help.

And again, with MGS4, Not every game being bought will be the bundle, some won't be bundled. You act as if the eleven million PS3 owners will not buy either of these games, when it's been said that MGS4 "isn't a system seller", and the same has been said about GT5: P. So if it isn't a system seller, then the games must be selling to the people who already own the system.

You're right that I didn't explicitly discuss the games being bought on their own. However, if you look at the othet stuff happening behind the scenes, it's not hard to see them eliminating most or all of the profit they could get from the royalties on those games: Microsoft's $50 million for Take 2, and Sony's likely financing of MGS4 as an exclusive (although this is not for sure), and their aggressive bundling of both games together with hardware that they weren't making a profit on in the first place.

I just don't see Microsoft and Sony making much (if any) money from those games. Given that the loss-leading business model is about losing money on hardware to make it back on software, I think they may be getting a bit late in the "making it back" part.

You can of course disagree and discuss, which is what this forum and this thread exists for.