Mmm. Yes. I did completely forget about the retailer variable. What you say makes sense, but is there verifiable information to support it? If XBO hardware sales were increased from this SKU at a lower price point, and the retailer was profiting from each unit sold as it does, presumably, from every XBO SKU, would this not be a positive? Broker a deal. Shift orders slightly from software to hardware.
Assuming you're bang on correct, it's even worse than I realized.....So, such a concept, one that cannot inherently be executed well, went ahead for what reason(s) in your opinion? It's my day off and I'm exhausted. Be nice Rol.
The behavior of retailers should be enough verification. Retailers either refuse to stock the SAD or it's sold at the same or a higher price than the regular S which is cheaper to manufacture.
The benefits of a disc drive for a retailer are:
1. Physical games can be sold. This doesn't hold true for the SAD.
2. Selling physical games means that there is also a market for used physical games. This is something that retailers profit off more than selling new physical copies.
3. More store traffic because customers walk in for game purchases. When people are in a store, there's always a chance that they buy something in addition to the thing(s) they came in for in the first place.
Selling an all-digital console has multiple negative consequences for retailers, so even a much higher profit margin on the hardware sale is not necessarily enough for retailers to support a direction that ultimately removes from the equation of video game sales. From the retailers' perspective, it's in their best interest to stifle growth of digital game sales as much as possible, hence why a console manufacturer would have to make a tremendous concession to the price that they charge retailers for a console. That's why I talked about gifting in my previous post.
As for why Microsoft went ahead with the SAD anyway, it's late in the generation and therefore presents a good opportunity to try something out for the sake of hard data in the form of both retailer and consumer feedback. There's no real damage that Microsoft could take here, so what they learn from this endeavor can be applied to their strategy for their next generation console. They can either decide that there's no point whatsoever in pursuing this direction or try to make adjustments to achieve a better result than this time.