Phil Spencer: Sony buying third party games, all to do with money, not market share

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celador said:

Xbox boss Phil Spencer has said that market share has nothing to do with the third-party exclusive we are seeing on PS4, it's all about the money.

Speaking to GameSpot about third-party exclusives on PS4, Spencer said: "So, they don't "gobble" the deals up. They buy them. You know, I read the same things you do, and I know some people think it's somehow less expensive to sign third-party exclusives if you have a bigger market-share. I can tell you, it has nothing to do with market share."

He added: "When you go in to do a deal, with a third party, that third party has its own view of the global market and the value of it. And they should, they should think about their assets and how valuable they are, just like anyone would when they are selling their goods."

http://www.videogamer.com/xboxone/halo_5/news/sony_is_buying_third-party_exclusives_for_ps4_says_xbox_boss.html

This is double-speak. A publisher has a view of the short term and long term value of their product. Essentially, "how much of this can I sell". The first thing you need to know to answer that question is what is the size of your market? The maximum possible size of your market is the install base at the time you release the game plus the growth of the install base over the year or so after the game releases (when 80-90% of your game sales will occur, esp for an existing franchise). When you enter into exclusivity discussions then both parties will be looking at the value of the install base that remains and the value of the install base that will be excluded. If the install based that remains as the potential market is assessed as substantially larger than the install base being excluded then clearly what the benefactor has to pay to secure exclusivity will be based at least partly on this determination. Install base isn't the be all and end all, because each platform has games that sell well compared to their install base and sell not so well compared to their install base. So potential market needs to look deeper than just install base, but install base is a starting point.

There is no doubt whatsoever that install base is a factor that influences exclusivity negotiations. It's why MS had no hope of making RoTR permanent console exclusive, and why Sony was able to make SFV a permanent console exclusive. If Xb one and PS4 had even-ish market share I don't think SFV could have been made permanent console exclusive, even though SFV would still sell considerably more on PS4. The reason for that, is because perceived market value of Xb one would be higher, and hence the asking price for permanent console exclusivity would be more.