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| Soundwave said: STEAM is welcome to subsidize/take losses on their Steamboxes if they want, my guess is they don't want to, in which case, Microsoft has a huge, huge advantage. $500 gets you shit in PC terms, but $400-$500 today would let MS release an XBox that takes a giant shit all over the PS4. |
Why do you think MS would heavily subsidize a box that takes a giant shit over the ps4.
You forget that consoles can be sold at cost or a slight loss because of the promiss of big profits when the majority of sales happen, when the margins are bigger and all the R&D, factory retooling and marketing costs can be recouped. The price and components of a console are based on a sales projection over the 6-8 year period. The same has to be done for your premium mid gen upgrade. Yet those shorter cycle devices will have lower sales projections, still have all the R&D costs, factory retooling and marketing costs again, which leaves a lot less room to subsidize the console. That $400 shit Alienware box, maybe MS can sell the shit $500 model for $400. Meanwhile the price of the older model drops faster, second hand models flood the market, lower profit margins all around. It's a simple case of lower efficiency over all.
Sure if MS had started the gen now, with the promiss of selling this console for 8 years, they could launch a $400 console 3 years more powerful than the ps4. Which isn't a giant shit, yet still very significant. Now reduce that to 3 years sales forecast, hmm that console now needs to be $600 or more.
Everything else stays the same, same xbox live revenues, same game license fees. Although margins could become a bit smaller on games with more choice and more old games competing for the same user base.
