With an AAA budget you can make a game with multiplayer and 30+ hour’s gameplay that people will not resale right away.

With a limited budget you might only be able to make a great single player experience that last less 10 hours. Limited budget also mean limited marketing and this would result in lower first week sales.... by week 2 this game will still have the same competition from all the AAA games, indie and other video game on the market. But, they are also being undercut by their own game which is selling for cheaper used. From week 3-5 there might be a buzz about the game great single player but people are buying used version from the initial buyer or slightly discount used copies from used game store or major retailer like best buy and future shop. By week 5 the game might have been resold and enjoyed by more than 5 gamer. But, the retailer only got a cut of the initial sale. This game will flop due to lack of sales and we never see a sequel to a great single player game.

That's why we now see the rise of indie games, which tend to be much smaller project and with a very limited budget. Indie scene is very volatile and we see so many failures and cancelled project. On top of this the Major AAA companies are making their own version of indie games backed with marketing budget. AAA companies are now taking away revenues out of the indie scene; they see this as an untapped opportunity. If this trend continues more and more start up and indie games will also fail. All we're left is with company like EA, Activision, Ubisoft, etc. Were overzealous ideas will be shut down because they don't see the profit in it!

Funny Sony doesnt seem to have a problem selling their Uncharted series and they have MP to boot and the didnt spend a ton. For every one series that fail (darksiders) we can find one that was successful. Lets not make excuses for these companies frivious spending. Funny you mention Ubi, they MUST be making money on AC otherwise why even make the game annual? Hell they are doing two this year.

Are you kidding me right now?? Uncharted series is AAA games and budgets.... Uncharted 3 cost more then 25 million to develop and there no figure on how much was spent in Marketing.  

@ bolded 1 But imagine how much MORE they could make without spending on nonsense like timed exclusivity that doesnt really benefit anyone except whatever publisher they are giving money too. Cause right now their actual 1st party output doesnt even beging to match that of Sony or Ninty. Not saying it has too but MS isnt even close.

@ bolded 2 online passes and DRM arent the same thing so lets not even act like they are. Sure i needed a coded to play the online mode of Uncharted 3 but my entire console didnt break without it and i could still play the game. 

@bolded 3 i agree that they didnt put it in for themselves but they sure as hell didnt do it because they thought thay was the direction the industry was going, if that is true then they truly had stupid people running the company cause no one in their right mind was going to accept their whole DRM policy, and they were warned and the other two didnt do it.  Sony files patents all the time. So what? it means very little. We cant say for sure but we can def say so for MS. e3 thats my point it should not have even gotten THAT far. They should have never gone through with it after rumors appeared and people were like "you better not" or at the very least should have dropped it after the intial reveal. Naw they stubbornly waited till after e3 and PS4 full reveal to change tune.

Sorry for the late reply, but anyway...

They're just trying to be competitive. Timed exclusivity/DLC/marketing; give people a reason to buy the console however I do agree that they overspend. Microsoft knows they need more 1st party games, why do you think they've opened new studios? 

Online passes and DRM aren't really the same thing, but they represent the same initiative: Kill used games

No one in their right mind? Developers certainly did. Gamers didn't. AFAIK the PS4 rumors didn't go either way, even though publishers wanted DRM on both consoles. Sony may/may not have been planning anything, but the patent certainly made it LOOK like they were. Sony played the cards close to the chest, and it paid off. Like I said, pubishers pushed for DRM, and this is part of the reason MS came out in full force at E3 (and why EA in particular was all over the XB1). Microsoft probably would have pulled a 180 long before E3 if there was concrete evidence that Sony wasn't going to do it, but there wasn't, and they got burned. I wouldn't call that stubborn.