Why this generation has already been decided

[johnlucas]

Game_boy said:

It's all very well discussing unit sales, projections and price points, but in truth the seventh generation of video game consoles has already been decided.

Microsoft and Sony are massive corporations with over forty billion dollars of annal revenue and massive profits. In contrast, however, their game divisions each show significant and sustained losses - Microsoft ever since it entered the console market and Sony since the PS3 started to lose them $200 on each one sold and the PSP was a virtual flop against the DS.

This means that if it weren't for their other business, both companies would be dead and bankrupt already.

Nintendo, on the other hand, has always turned a large profit and has had their share value (and therefore how much money the market expects them to make) triple in 18 months due to the DS and Wii.

Result: If the market was fair and Sony and Microsoft couldn't afford to lose billions of dollars every year just to stay in the game market, Nintendo would be the only major competitor left.

I believe if sales continue their current trends Sony and Microsoft will give up and pull out of the console market altogether. I see no financial reason to stay in it for either company.

 

 

The common sense is strong in this one.

Thank you for detailing the reality of this situation to those who may refuse to hear it. It is a foregone conclusion. I've remarked similarly in my time here.

And keep up the good work.

John Lucas