Game_God said:
So let's sell X1 at 1$, shall we??? Sales skyrocket ensuing massive profits, right??? There are a quantity of variables, factors to take in account wich you happily swept of the picture like they are nothing... Thresholds, diminishing return, profits from games go tho said game publishers, not all games make profit etc. etc. While your "More consoles = more games sales = more profits from games" formula isn't necessarly false it's not necessarily true either! Futrhermore, user base is not dictated only by the price, look at Iphone, not the cheapest phone on the market, yet... Rather than parting money with a price cut, better & a lot more marketing would do marvels IMO. |
and how has that anything to do with what MS is doing ?
at the end of the gen, people will own more than 10 (physical) games for X1. Not even counting MS own developed or published games (which would generate much more revenue), all of them will give MS a profit in royalties.
http://latimesblogs.latimes.com/entertainmentnewsbuzz/2010/02/anatomy-of-a-60-dollar-video-game.html
Approx. over 10% of the selling price. If all those games were sold at $60, that means $70 in pure profits. More realistically the average price is probably closer to $40, still $47 dollar in total profits.
+ additional money from buying MS exclusives (Halo, Gears, Fable, Forza etc.)
+ royalties from digital games
+ royalties from DLCs
+ money from peripherals (Kinect, headset, 2nd (3rd, 4th) controller, play and charge kit etc.)
+ money from Xbox Live subscriptions (~50% of XBL members have a gold account)
Sure some of these new owners won't buy enough to make it worthwhile for MS, but the vast majority will. That's (probably) not going to happen within the first year, but easily over the whole generation. That's why it's important to build a high userbase at the beginning of the gen rather than at the end.
