NJ5 said: I know that this is pretty obvious for some of you, but I think it deserves to be discussed in its own thread:
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:
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.
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they get the games cheaper then the retail cost though.