Did Kwaad honestly say that he hates Nintendo because their goal is to make money? I had to do a double-take on that one. Not going to touch that further, I think it speaks for itself...
Legend11 said: Why do you criticize something that benefits the consumer? |
I criticize because the business model Sony and Microsoft are using is a flawed one, plain and simple. In the long run, neither company will turn a profit; I decribed this in more detail in a post you can read here, if desired. Here's the (relatively) short version:
Pursuing market share at the expense of profit can allow a company to win one particular generation, without a doubt. The best example of this is of course Sony's runaway victory with the PS2 during the last (6th) generation of consoles. Now in some markets, you can use a market share strategy to establish a virtual monopoly, from which your position is so strong as to be unremovable. Microsoft's Windows operating system is a good example; even though we all know that the competitiors are much better, 90% of us are still using some kind of Windows OS because that's what most software requires. Microsoft pulled those shady market share tactics back in the 80s, and is still reaping the benefit today.
The problem for the console industry is that new systems are released about once every 5 years. And no matter how deeply entrenched one console may have been in the previous generation, it's a whole new ballgame every 5 years when the system wars start all over again. (The best examples being the 95% marketshare enjoyed by the NES, which was essentially halved by the Genesis/Megadrive, as well as the ongoing collapse of the PS2's dominance in the current era.) In the console industry, no matter how great your victory in one generation, you cannot carry that victory over into the next one. And for this reason, pursuing market share at the expense of profit is a losing venture, long-term.
I criticize because this is a stupid way to run a business. The Sony/Microsoft strategy only works if you can win a gigantic, PS2-level victory over your competitors, and in this industry, it's impossible to continue to do that over and over again. You're going to lose at some point, or at least win a less dominant victory. And when that happens, your company gets killed financially, in the mold of the XBox or PS3. Billions of dollars down the drain. Microsoft's lifetime balance sheet for the XBox line is now approaching 6 billion dollars in losses. From a financial standpoint, this is a dreadfully poor business! By the end of this generation, Sony's SCE won't look a whole lot better. These companies hide their horrendously bad records by leeching money away from other, profitable divisions of their corporations. The XBox has never been anything but a financial parasite for Microsoft. Are we supposed to praise these companies, for creating products that suck money away like a black hole? I certainly am not about to do so.
Notice I said nothing about the games on any of these systems. That's irrelevant to the point I'm trying to make; I simply want to look at the console manufacturers as corporate entities. And from that standpoint, the 360 and PS3 are dismal failures, even if their games turn out to be quite good (which I think that they are, actually).
Now, as far as the second part of that statement... do you really think that Sony and Microsoft are selling their consoles at a loss to "benefit the consumer?" That's nonsense. They don't care about me, the consumer, any more than Nintendo does - which is to say, not at all. These companies sell their product at a loss because that's the only way they can get even close to a mass market price for their systems. This notion that companies are somehow "helping" us by selling their systems at a loss does not make logical sense. This ascribes an objective value to each product, when in fact value can only be determined subjectively by each individual. In other words, Sony can scream about how great a value their PS3 is till the cows come home; I don't care if it is "worth" $800 and being sold for $600, I'm still not buying it until the price comes down.
In the end, no one is "right" or "wrong" when it comes to setting a price in a free market. For some people, the PS3 may be a steal at its current price, and they are not "wrong" to say so. Heck, I paid $300 for a DDR dance pad - how ludicrous is that? 
But it was a good value from my own subjective viewpoint, even if it would have been an insane luxury purchase for 99.99% of the rest of the market. If I criticize Sony and Microsoft, it's because their business models have set price points beyond where the market will allow them to turn a profit. They can claim that we're getting a great deal objectively on the component parts, but their products are failing to meet the subjective criteria of most potential buyers. And if you can't turn a profit from your product, losing billions of dollars in the process, well, that's a dumb way to run a business.
A long answer, but you asked a complicated question.
