| EricHiggin said: $100 for the console is absurd, $200 min would make more sense, if not higher. I'll use $100 though to follow your example. You ironically left out the most important parts. MS also spends hundreds of millions if not billions on buying/creating more first party studios, their games, and new IP's. This combined with the $100 retail performance console (which we're going to assume is very close to being on par with the PS console since they cost the same in your example and MS isn't going to do something stupid like DRM, or kinect again), leads to MS grabbing a much much larger market share than even the 360 had. It would be more like taking this gen, and flipping it so XB had the huge lead, but their lead would be even greater with a much larger gap. Now this goes on for one or two gens straight. PS is now broke and gets sold and MS has the market to themselves, for at least one gen lets say. All of those billions lost, is now made up in one gen because MS has little competition in the performance console market, and they make all that money back very very quickly since they can charge what they want, within reason of course. You may even see DRM come back. If you also assume MS is the one who is able to buy PS by some chance, then the payback is now even faster. The shareholders who were furious with the losses, are now erasing deserts with tears of joy. MS has the money to do this overall, no problem. You are correct in saying businesses don't operate to lose money, but many times businesses lose money on purpose now, knowing they will reap the rewards later. The console sector is the perfect example of this. Consoles have almost always been subzidized each gen, which wasn't a problem because the companies knew that the amount of games sold for each one of those consoles would easily cover the initial loss. While there are hardcore PS fans who would still only buy PS, if PS charged $400 for theirs, and MS $100 for theirs, the amount of people who would flock to XB would be unbelievably high. If MS also had more first party, more quality games, and also the third party exclusives now, do to their PS4 level console sales, those sales numbers would then outgrow even that, at record rates, and PS would be screwed. Period. I am not saying I want this to happen, because I don't. It would almost certainly lead to terrible console experiences going forward, if not another market crash eventually. I own a PS4 this gen and don't plan on buying an XB1 and probably not Scoprio either, we'll see. This isn't because I'm a PS only gamer, I was a fan of both XB and PS2 and well as 360 and PS3. Each console had its pros and cons, and it also kept them both as honest as possible. All I was saying is why would MS compete just for the heck of it? The one thing that stands out to me is that MS probably saw PS becoming a "computer entertainment" company, and were scared that PS may start walking into their territory, so they did what any large animal would do. They got up and started chasing the intruder back to the boundary, and continued to patrol that boundry until the intruder learned their place. |
All I'll say is this. The example I gave, accounted for 20M in sales amounting to a $6.4B defecit.
But in ttruth, of something like that happened MS could very well go onto sell 100M consoles if they can make them fast enough. By the time its all said and done, thats a loss of $50B.
You still think that is feasable?
