Are console exclusives good for the industry? For the consumer?

[Shadow1980]

They're definitely good for business. Exclusives add value to a platform and help to differentiate it from the competition, much in the same way that exclusive programs differentiate TV networks (and now streaming services) from each other. If you wanted to watch M*A*S*H you had to tune into CBS, or if you wanted to watch The Simpsons you had to catch in on Fox, or if you wanted to watch Breaking Bad you needed AMC, and if you want to watch The Mandalorian you need Disney+ (just to throw out some examples). The "multiplatform" shows were the ones that ran in syndication and could run on any network, even more than one at the same time.

Likewise, a console brand's entire identity has historically revolved around high-profile exclusives, games that you absolutely could not play on a rival console. Nintendo has Mario, Zelda, Pokemon, Metroid, etc. Sega had Sonic, Golden Axe, Streets of Rage, etc. PlayStation has Gran Turismo, God of War, Horizon, The Last of Us, etc. And, at least until MS recently decided to go multiplatform, Xbox had Halo, Gears, Forza, etc.

And that last entry is a cautionary tale in regards to this subject. If I want to play the next Super Mario game, I'm going to have to buy it for Switch 2. It ain't gonna be on PS5 or XBS. If I want to play the upcoming Wolverine game, I'm going to have to buy it on PS5. It's not coming to Switch 2 or XBS. But if, say, Halo 7 is a next-gen launch title, I could just as easily get it on PS6 rather than the Xbox 5. By shifting towards releasing all of their games on PlayStation as well as Xbox & PC, MS has devalued Xbox by making it completely redundant. If I can play Xbox games on PlayStation but I can't play PlayStation games on Xbox, then what's the point of getting an Xbox unless I just really, really like the brand?

Having these distinct, competing brands is I think good for the business and for the customer, at least in principle. I've seen it argued that since console makers need to have exclusives to differentiate themselves from the competition, it gives them the incentive to take risks with their first-party output or by investing in development with external partners, whereas third parties don't have the same incentive. A recent Video Games Chronicle article addressed this, saying "One PlayStation executive during the PS4 era once told me that the reason it made so many cinematic single-player titles was partly because third-party publishers were struggling to financially justify them at the time, leaving gaps in its platform library." This makes sense, given how the AAA single-player space these days seems increasingly represented by first-party titles.

Also, while it may suck having to buy multiple consoles if you really, really like everyone's first-party titles, the competition keeps the console makers on their toes. If everyone was making functionally identical consoles that shared 100% of the same games, then what's the point of any one of them? It'd be similar to the 3DO, where there would be one standard manufactured by multiple companies. The competition between distinct platforms keeps the companies on their toes, and one platform failing gives the competition an opening to exploit by offering something more appealing to customers.

Nintendo and especially Sega fumbled the ball in the mid 90s, and Sony was able to take advantage of the situation and position themselves as the top console brand for two generations straight after Nintendo had won the previous two. Nintendo's struggles with the N64 & GameCube forced them to try a different strategy, resulting in the Wii, and their strategy of making unconventional hardware continued, which, after a stumble with the Wii U, ultimately resulted in the Switch. Sony dropped the ball themselves with the PS3, giving MS the opportunity to gain a massive amount of market share with the 360. At the start of last generation, Sony had learned from their mistakes and made a more affordable system that wasn't packed with complicated custom components, while MS botched the buildup to and release of the Xbox One. This caused PlayStation to regain most of its lost popularity, with the XBO selling only half what the PS4 did after the 360 and PS3 ended up in a near-tie globally, and even in the U.S., Xbox's best market, the XBO never could catch up to the PS4. This pushed MS to avoid making the same mistakes with the Xbox Series, and while MS could never dig themselves out of the hole they made with the XBO, it wasn't for lack of trying.

TL;DR: Competition is good for any industry, and with console gaming, platforms need quality exclusives to differentiate themselves from the competition and stay healthy. Exclusives aren't the only thing that matters for a platform's viability, but it's arguably the most important.