I agree. I think that with the huge expansion and prominence of the internet, broadband capabilities, and various other outlets, that for each company, multimedia and DLC is a more lucrative and profitable market for many companies, and atleast in Sony/MS, their video game divisions are more intertwined with other entities.
For MS, XBLA is a huge issue of profitablility. I'd say on an equal level with actual X360 hardware. Why? At $4/mo, and 4m+ gold users (or so), buying content, it's a very lucrative market. If hardware was being sold at a loss, would it matter if each customer was buying hundreds of USD worth of content a year (and MS getting a % of the profits from each thing for bandwidth, which turns a profit)? On XBLA, you can download movies, watch trailers, get demos, ect, ect, ect. MS makes cash on ALL of that. It's very lucrative.
For Sony, the Blu-Ray issue is huge. It's obvious (atleast to me) that it's a big selling point for many video and audiophiles in various countries, and made the Blu-Ray format much more viable vs. HD-DVD (not that it wasn't in the beggining, but when you have an extra 3.6m sold BR players, it tends to help a bit). How does Sony factor that in? Do they at all? Simply put, Sony's entire goal for the PS3 might of just been pushing Blu-Ray, as they felt that licensing the BR-DVD technology would be more profitable in the end. Of course, that's speculation. Also, like XBLA, licensing alot of Sony movies for download could be VERY VERY VERY lucrative. Sony pictures is HUGE. What if Sony was able to start making lots of money in-house with Sony movies downloadable on the PS3 like XBL is doing right now? Unlike MS's cash, they wouldn't make money merely off of the bandwidth, the entire corpotation would make huge amounts of money, as 100% of revenue would stay in-house.
Likewise, Nintendo has a huge advantage with VC. ROM piracy has been huge for the past few years for NES, SNES, and various older titles. Nintendo can never stop it, as the internet has always had (and will always) have a way around the ISDA and lawyers. VC has done remarkably for Nintendo, and having a huge VC library is very lucrative - do you think that during the GameCube years that Super Mario 1, or old NES games sold 1m+ copies? Unlike many other things, even XBLA, VC titles will always sell - and always make Nintendo, millions of dollars. Think about it, at $5 (a very low average), Nintendo has already sold somewhere near 5m VC titles. I'd say a vast majority were Nintendo IPs, therefore they make 100% of the profits. It's not like porting the Mario NES and SNES games were expensive, so the vast majority of the sales are big profits.
Ultimately, one day we'll see VGChartz start with virtual sales via VC, XBLA and PSN. When that day comes (I wish it was tommorow), we'll see the second front of the console wars open up. Regardless, whats only a few million dollars today will wind up being a mult-billion dollar industry (content/game downloads) in 5 years.
Back from the dead, I'm afraid.
