The business is about revenue and profit. Selling more consoles certainly helps that, but it isn’t the only factor. Nintendo made a lot of money selling much less console amounts during the N64-GCN era.
You’re going to see all three companies go all in on subscriptions and recurring revenue. It’s the future, just like it has become in pretty much every other entertainment avenue. It will become less and less about selling the boxes.
Those profits came from Nintendo selling tens of millions of handheld HW, which led to tens of millions of SW sold from that HW. It definitely didn't come from underperforming home consoles.
And yes, digital subs and sales are important, but it is the combination of both that and physical retail that makes one very successful. And more boxes sold means more profit from HW and higher potential for sales of physical and digital goods.
Phil - "If you think about games that are in development today, most of the studios out there are using engines that span multiple platforms, whether it’s Unreal or Unity. Many of the games are using engines that are on multiple platforms. You’re probably shipping your game on four or five platforms if you’re trying to reach as many customers as possible anyway. You’re going to ship on PC, which means multiple GPUs. You’re obviously going to ship on PlayStation, you’re going to ship on Xbox, you’re going to ship on Switch."
More games on your platform means more opportunity for success. The more people who purchase a certain platform, the more reason to put your games on it. The reason isn't so much about how many people PS has playing consistently, while that does come into play to some degree, it's the fact that there's close to 100 million PS4's out there, vs half that many XB1's.
There is also customer/consumer loyalty to take into account. While it matters less with casuals in western nations, if you live in a country where your internet is garbage or just weak, you're much more likely to end up a fan of PS or Nin vs MS if they keep pushing in the digital services and cloud direction. Customers from poorer countries with less options tend to be more loyal overall. If they were able to buy a certain companies hardware and physical games for an extended period of time, odds are good they will stick with them if possible when they can go digital through the cloud later on.
MS seems to understand the long game from a tech perspective, they just don't understand it from a present consumer's perspective overall and how that leads to a future customer worldwide. Either that or they're just more worried about making money, and focusing on digital is a safer bet vs physical in terms of profit in general.
Last edited by EricHiggin - on 13 June 2019