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BBC Ponders Another Games Industry Crash 219

Posted by Zonk
from the just-like-clockwork dept.
weirdguy writes with a link to a BBC article that poses the same question asked by journalists every couple of years: is the games industry headed for another crash? "Yes, gamers are snapping up the new generation of games consoles — Microsoft's Xbox 360, Nintendo's Wii, and Sony's Playstation 3 [PS3], but at huge cost to the industry. Hardware makers are losing hundreds of dollars on every console sold, and games publishers face an "increasingly difficult environment, as rising development costs and small user bases [mean] that return on investment in next generation games development is unlikely to be achieved before 2008," according to media analysts Screen Digest. More importantly, though, the video games publishers are facing a revolution of their business model."
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BBC Ponders Another Games Industry Crash

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  • eh... (Score:5, Insightful)

    by Dance_Dance_Karnov (793804) on Monday April 16, 2007 @11:47AM (#18751247) Homepage
    Nintendo figured out the secret to not losing money. They make money. Crazy I know.
    • Re:eh... (Score:5, Insightful)

      by wframe9109 (899486) <bowker.x@gmail.com> on Monday April 16, 2007 @11:52AM (#18751325)
      Not to mention the fact that up front development costs are smaller for the Wii... And I would imagine development costs and time would be lesser as well, seeing that there is less horsepower to work with, and thus spending days getting the acne or sweat right would be pointless.

      In any case... It's a good time to be a gamer :)
    • by T0wner (552792) on Monday April 16, 2007 @12:31PM (#18751927)
      Unfortunately you have to pay $1500 view the detailed report [screendigest.com] BBC used as it's source. There other source is a "Gerhard Florin, executive vice president at EA and the general manager of its international publishing business." The article itself resides in the Business section and was written by Tim Weber Business editor. The article reads like an EA advertisement for investors. It talks about future revenue streams such as in-game advertising user-generated revenue, online tie ins etc... I really have to question the neutrality of the source when the main interviewee has such a huge vested interest in the revenue streams he's hoping for his own wallet will come to pass. especially in the online sector where he incidentally berates the Wii

      Nintendo's efforts, scoffs Mr Barton, are "frankly stone age compared to the others".
      As well as the parent poster mentioning the Wii isn't losing money on the console. Aren't the sales figures wrong on Screendisgest's graph. That to me is suggesting as of this month the PS3 is outselling the Wii by 30%. I was under the impression that these sales figures are still be released for independent review and that the Wii was selling better than the PS3 was in at least 2 of the big 3 territories.

      Heres something which really caught my eye:

      Players will be able to create new levels for games and share them online. "Users could create revenue for games," says Mr Barton. "The potential for this is absolutely enormous".
      Step 1. Community makes maps, mods, skins etc.. for a game.
      Step 2. Publisher claims it as there own IP
      Step 3. Profit

      This really annoys me. They can go **** themselves if they think I'm going to spend 40 hours programming something interesting for a game I enjoy just to have them take it and make money out of it to subsidise the inadequacies of their retarded business model.
      • by nick_davison (217681) on Tuesday April 17, 2007 @01:09AM (#18763185)

        This really annoys me. They can go **** themselves if they think I'm going to spend 40 hours programming something interesting for a game I enjoy just to have them take it and make money out of it to subsidise the inadequacies of their retarded business model.
        How many copies of Doom were sold because everyone wanted the full version that would allow them to play the WADs everyone else were creating?

        How many people with both an X360 and a PC chose to buy the PC version of Oblivion because they could get a ton of free mods to upgrade the PC version whereas Microsoft insisted the publisher charge a couple of bucks for every "upgrade" that really should have been a patch?

        How many people bought the original Half Life so they could play the free mods that came out for it?

        A publisher doesn't have to charge for mods in order to make money. They can make an easily modable game, let people download the mods for free, then rake in the extra sales of the original product.

        It's a shame that Microsoft seems hellbent on forcing "microtransactions" that aren't that micro, demanding 500 XBL points for things that should really be free and closing the doors on things that normally would be.

        Hopefully, the quote was about making extra revenues in original media sales that are spurred by free mod content.

        Sadly, after reading previews of the forthcoming Tiger Woods game, I don't trust EA with that for one moment.

        Their model is apparently to let users share their best games, etc. in order for others to try beating various aspects of the game like number of spectators hit, fewest shots to the green, etc. This content that enhances the game and thus, hopefully, drives EA sales is only free for three uploads. After that, you have to start paying to make their game more valuable to others.

        This follows Battlefield 2 where they figured out how to charge people for the most interesting servers and make people feel grateful for it and Test Drive Unlimited where Microsoft made people fork out for Gold XBL service in order to share user created challenges.

        So... User created content is a great way to make more money by selling more copies of the original media. Sadly, much as that's a viable model on its own, it really is becomming yet another area to try charging people more for something the publisher simply enabled but certainly never created.

        Funny how free mods in Doom, Half Life, Morrowind and Oblivion has turned them in to beloved games that kept selling WAY past their shelf life while screwing every last penny out of their users turns games like X360's Morrowind, Test Drive Unlimited and the upcoming Tiger Woods in to resented money sinks with short shelf lives.

        The sad thing is, I actually started this post to protest there was a more innocent interpretation but then, realizing the sad state of consoles where you're locked in - plus Microsoft's plans for XBL's port to Vista - and I kind of lost faith. It'd be great if they showed a little forethought and built valuable franchizes rather than raping every last dollar - sadly I don't believe that of them anymore.
  • by FadedTimes (581715) on Monday April 16, 2007 @11:47AM (#18751251)
    Nintendo doesn't take any loss when someone buys the Wii.
    • Re: (Score:3, Informative)

      by AndersOSU (873247)
      Neither does Microsoft apparently. So I guess, "Hardware makers" means Sony...
  • Nintendo (Score:4, Funny)

    by cyphercell (843398) on Monday April 16, 2007 @11:47AM (#18751253) Homepage Journal
    This would be where Nintendo laughs on it's way to the bank.
  • I was under the impression that most consoles have been loss-leaders for some time now, at least at launch, with the real money coming from licensing.
    • I think the difference is at which point the consoles become profitable. The 360 and PS3 are going to be leading for a while and the question is whether or not market penetration will make up for the losses. I think it's safe to assume that Microsoft will be able to survive. Once again reiterating the fact that this gen of consoles has Sony fighting it's way out of a corner.
    • by Guppy06 (410832)
      "I was under the impression that most consoles have been loss-leaders for some time now, at least at launch, with the real money coming from licensing."

      "It's the way things have always been done" doesn't mean it's sustainable.
    • by ADRA (37398)
      From my recollection, PS2 was the first console to be sold at a loss for launch. After maybe the first year they started making profits on the unit. The xbox units have never made a profit off just the hardware. Maybe the make it up in Live, which could arguably be considered a part of the hardware depending on your mindset. For Nintendo, I was under the impression that they make it their mission to not sell consoles at a loss. I don't know specifically if they've ever had first year losses like the PS2 did
      • by rjung2k (576317)
        The only Nintendo console to be sold at a loss, from what I heard, was the Gamecube -- and the loss was only $10 per unit.
    • Re:This isn't new (Score:4, Informative)

      by Akaihiryuu (786040) on Monday April 16, 2007 @04:23PM (#18755135)
      Urban legend. The first console to ever be sold at a loss was the Sega Saturn (it lost around $100 IIRC). The Playstation was profitable from day 1. The Dreamcast followed the Saturn model in an attempt to recapture market share...even though it was successful it lost a ton of money and drove Sega out of the hardware business. The PS2 was profitable from day 1. The Xbox followed the Sega model (only difference is that Microsoft could afford to write off the loss). The 360 lost money at first (not sure how it's doing now). The PS3 is losing more money per console than any manufacturer has ever done before. The Wii is profitable on hardware. Before the Saturn, the concept of "selling hardware at a loss and making it up on the games" was absolutely unheard of. This rumor got started because when Sony announced the launch price of the PS1 in the US, it was quite a bit cheaper than in Japan at the time (but the launch was still months away and costs dropped in the meantime - they were thinking ahead). Atari accused Sony of "dumping", claiming that the PS1 was going to be sold below cost when it actually wasn't...due to costs dropping significantly before the launch. Sega dropped the price of the Saturn to $299 when the PS1 launched, thus they were the first to start losing money.
  • by div_2n (525075) on Monday April 16, 2007 @11:49AM (#18751285)
    Hardware makers are losing hundreds of dollars on every console sold

    Since the Wii allegedly only costs about $158 [younewb.com] to make and is sold for $200, I don't find a compelling reason to take the rest of the article seriously.
    • by LWATCDR (28044) on Monday April 16, 2007 @12:07PM (#18751537) Homepage Journal
      Nintendo's plan,
      1. Sell the console for a profit,
      2. Make fun games.
      3. Make it cheap and easy to develop for.
      4. Profit.

      I still find it all very interesting. I still see the occasional article about how the PS3 will win in the end but I don't know anyone with a PS3 yet but I know a lot of people that have 360s and that want Wiis.

      I predict that Microsoft will win the hardcore gamer market and possibly the video delivery market. The Wii will win the broad based gamer market. IE even the hard core gamers will have a Wii next to their 360.
      Sony I just don't know. They may end up in third place this time.
      • by Ant P. (974313)
        Sorry, but 3 should be "?????", unless Nintendo released a linux dev kit for free without anyone noticing.
        • Sorry, but 3 should be "?????", unless Nintendo released a linux dev kit for free without anyone noticing.

          No, 3 shall stand at "cheap and easy to develop for", which the Wii is, even if they aren't giving away Linux devkits for free.

          Anyone serious about developing for the Wii will find the experience cheap and easy (compared to other consoles). I'm sorry if it's neither cheap nor easy enough for your tastes.
      • by shoptroll (544006) on Monday April 16, 2007 @12:50PM (#18752123)
        I think your prediction is on target if the current trends stay the course. They did a poll on GameFaqs a day or two ago asking who owned what "next-gen" system. The ranking (from top pick decresing) goes: None, Wii, XBox360, Xbox360 + Wii, PS3, All 3, PS3 + Wii, and finally PS3 + Xbox360. I'm not going even going to suggest that this is the most accurate polling system ever to grace mankind. Here's the poll results: http://www.gamefaqs.com/poll/index.html?poll=2722 [gamefaqs.com]

        That said, I would not classify GameFaqs as a casual gamer's haven. Most of the traffic is going to be generated by Hardcore gamers looking for info. Maybe casual players looking for info on Zelda or Final Fantasy, but if you look at the Top 10 lists, this isn't casual corner.

        So, the Wii is making inroads on the hardcore gamer. Actually, I'm surprised that the system is the only next-gen system in almost 25% of the responses. With 17% dual-booting with the Wii60 combo and about 12% going it alone with the 360, I think it's very very understandable why there have been a large number of PS3 exclusives going multi-platform. Sony has, for lack of a better word, been shunned big time by the community at large.

        However, it's still to early to tell if we're truly in the middle of a paradigm shift. Nintendo's strategy of appealing to a large audience with a cheaper system is obviously working. MS is holding their own, and Sony can easily get back into the game if they want to. This is still too close to call.
      • by CastrTroy (595695)
        Also, there's a lot of people that want Wiis, but can't find them. On the other hand, if you want a PS3, it's quite easy to find one [futureshop.ca]. And still, nobody is buying them.
      • Make it cheap and easy to develop for.
        Except for microstudios. For a development team working out of their homes with a nearly complete title that runs on Windows OS, it costs a lot of money to meet Nintendo's demands. The team needs to have incorporation or limited partnership papers. The team needs to have office space that is detached from any residence. (Source: Warioworld.com)
        • by LWATCDR (28044)
          Compared to PS3 and the even the 360 the Wii is cheap and easy. The cost of tools really is a small cost when you look at development costs.
          As far as I can tell none of the consoles are all that friendly towards microstudios. Low cost PS3 requires you to install Linux and prevents access to the graphics chip and I think the 360 makes distrbuting your own software not so easy but I really don't know.
      • I predict that Microsoft will win the hardcore gamer market and possibly the video delivery market.

        US or Japan? I agree with you if we're talking about the US market, but the 360 is dead in Japan in spite of already having some great releases out. In Japan, Wii is already the best selling next-gen home console, but the PS3 has also overtaken the 360. Now, I guess it's possible that the 360 will bounce back in Japan, but I just wonder why it hasn't done that well yet. I think what we're going to be looking
  • Sign me up!

    Well, okay. I don't actually wish ill on game devs, but I am kinda blase about the hardware end of the business. And the article fails to note that Nintendo doesn't sell its hardware at a loss, correct?
  • Correction (Score:4, Insightful)

    by adnpryde (563071) on Monday April 16, 2007 @11:50AM (#18751297)
    Microsoft and Sony are losing hundreds of dollars on each system sold, while Nintendo makes a profit on every console. This just seems like a sky-is-falling article that doesn't take into consideration the massive growth of the online and casual markets, as well as the huge growth of portable.
    • by Maul (83993)
      There have been thousands of articles written since around since the 16-bit days (or earlier) predicting the "second crash." I tend to take each one with a grain of salt. That isn't to say a second crash could never happen.

      At worst case right now, Sony and Microsoft could fold out of the console business. Nintendo will likely stick around because they know how to make money, even when they don't have the top selling console. As long as Nintendo sticks to that, I don't see a "full crash."
  • Lack of Innovation (Score:5, Insightful)

    by bhunachchicken (834243) on Monday April 16, 2007 @12:07PM (#18751549) Homepage

    The main problem stems from the fact that there is just a constant deludge of first person shooters and racing games. The Xbox 360 is by far the worse offender in this regard. There seems to be little else on the platform worth looking at.

    The other issue is that the cost of development is becoming so high now that devs are less willing to take risks on new IPs and gameplay styles. Look at Clover Studios - They made Viewtiful Joe, Okami and God Hand, all great games that did nothing but cause the company to fold.

    I wouldn't be surprised if as this console generation moves on developers make more money from the smaller downloadable games on Playstation Network, etc. than from the big box retail ones.

  • In short, no. (Score:5, Insightful)

    by MeanderingMind (884641) on Monday April 16, 2007 @12:14PM (#18751647) Homepage Journal
    There will be no Video Games Industry Crash. However, we may see a dramatic shift in the industry.

    What we are seeing is the end of hardcore dominance of the industry, nothing more or less. The perceived demands of the hardcore are insustainable, driving companies to make consoles that lose them money in order to gain some ill-defined future benefit. Whether it is the companies or the hardcore themselves that are to blame for the previously shrinking industry is uncertain and largely irrelevant.

    What we are seeing is the introduction of video games as a true form of mass media. Talk to anyone on the street and you will be hard pressed to find someone in this nation who hasn't read a book, watching a movie, or viewed a painting or photograph. What's more, each of these forms of media has subsections that cater to particular tastes. Video games have not been mass media because they didn't reach everyone, only an elite few who knew what was going on. Now the "casual" gamers and even those who do not game at all have been targeted, and they will be the driving force in the future.

    Right we are in transition, and it's confusing people. Depending on the person, some hardcore gamers are afraid that the Wii and DS are the harbingers of the end. Will games like Guilty Gear, Counter-Strike, and Armored Core survive in an industry focused on the majority? Having been catered to for decades, the prospect of losing attention is frightening. However, the fear is unwarranted. Despite the fact that games like the Sims, Bejeweled and all manner of "casual" games have invaded and perhaps dominated the PC, we still see games such as Supreme Commander, Hellgate: London, and the odd MMORPG tax video cards in SLI and quad-core CPUs.

    In the future, the majority of games will be like summer blockbuster films. This is not bad, because the volume of games will increase such that we will still see the same number of "hardcore" titles, including AAA ones.

    There will be no crash, but there will be a paradigm shift/revolution.
    • by rlp (11898)
      Interesting analysis, but I disagree that games will go entirely to the 'mass market' blockbuster. If anything I think games will move to the 'long tail' model. There still will be blockbusters, but there will also be small games that will find their own marketable niche. These will be developed by small companies, or even individuals and sold as downloads. Review sites and on-line word of mouth will steer people to these games.

      I'm most familiar with Nintendo's Virtual Console which offers various game
      • by AndersOSU (873247)
        I don't know about the long-tail. My take is that video games are far too expensive to produce to succeed with that type of a business model. Really the only media that do well in a long tail economy are books and webpages, and both of those can be done well by a single person. Now there might be some single author video games out there, but they in no way resemble half-life.

        I think the movie analogy is apt. The video game industy can do better with the movie model IMO because the serious money will be
    • Re: (Score:3, Insightful)

      by blahplusplus (757119)
      "In the future, the majority of games will be like summer blockbuster films. This is not bad, because the volume of games will increase such that we will still see the same number of "hardcore" titles, including AAA ones."

      I think you're not understanding the market nor the nature of the beast that is gaming and game devleopment, the market is more complicated then your post will admit.

      Right now there is major economic upheavel in North america. While you made one valid point: that theres tension and shift
  • I was an avid gamer about 6 months ago, and I have been excited about a few games to come out recently, but I just don't see a reason to buy them anymore. The games I was excited to see come out this quarter I could live with or without now. Am I.. growing up?!? nooOO!
  • Outdated business models? Costs that aren't offset by the revenue? Prices that don't match the value?

    Usually, when those stars are aligned this way, the culprit is someone copying the content.
  • by tgibbs (83782) on Monday April 16, 2007 @12:26PM (#18751841)
    Ah, the perennial "is another game crash around the corner?" article. Always a good bet if you can't think of anything substantive to say.

    The answer, of course, is no. The "game crash" of '83 marked the end of the game fad. Electronic games had become a novelty, and virtually anything would sell...and then the novelty wore off. And like the end of any fad, what was once cool became decidedly uncool for a time.

    But something is only a fad once. Videogames are now just one more form of entertainment, competing with movies, TV, music, etc. The industry is transforming. Improved technology has driven up the cost of development, so that game production is more and more characterized by the same hit-driven economics that is typical of the entertainment industry as a whole, posing new challenges for the industry.

    But at least we don't have to worry that everybody is going to simultaneously lose interest in videogames.
    • by DaveCBio (659840)
      I agree. The market now is substantially different. This is like saying, "Are we headed for a movie or TV crash?"
    • by LKM (227954)

      But something is only a fad once.

      It's very rare that I read something on /. which actually changes what I think. Truly insightful point, thanks!

  • by cgenman (325138) on Monday April 16, 2007 @12:27PM (#18751869) Homepage
    The BBC article seems pretty well thought out, and only mentions the word "crash" once, under a picture of Burnout Revenge. For the most part, it's an article about the alternative revenue sources that have been rising up to defray the additional costs of development, including advergaming, Korean-style online accessory sales, and cell-phone game tie-ins. They even go out of their way to point out that total game sales are expected to rise by 800 million dollars this year, even if the console transition will make it difficult to break even on a next-gen only title.

    This isn't the worlds most accurate article about the state of costs and revenue sources in gaming, but it's a good overview of how things probably look from within a large publisher.
  • Failed attempt (Score:4, Interesting)

    by Anonymous Coward on Monday April 16, 2007 @12:39PM (#18752007)
    This is another succesfull attempt at disinforming the masses.

    We all know the reason for next gen consoles, excluding the Wii. They are here to satisfy another agenda.

    Microsoft: Monopolise the gaming market. (DX 10, VISTA, Entertainment system)
    Sony: Monopolise the DVD format market.

    Move along nothing to see here.
  • by Tord (5801) <tord.jansson@gmail . c om> on Monday April 16, 2007 @01:42PM (#18752835) Homepage
    There is always a shakeout between game companies at the beginning of each new generation. A few things combine to make this happen every time:

    1. Many people stop buying games for the old system since they already have decided to buy the new system... as soon as it falls a bit more in price. This makes a gap in the market until the next generation has moved enough units. Many developers and publishers don't have enough cash to survive this.

    2. Timing is hard. When should you stop developing for the old system and start developing for the new? With 18-24 months time-to-market it's hard to know if your new game should be made for the old or new generation. Make the wrong choice and you might find yourself move as much as two years too early or late.

    3. Every new generation has so far demanded higher budgets and larger teams. Many companies that are too small will fail to make the switch.

    4. It takes time and costs money to learn a new system and you will also need to develop new tools and engines. Either you will have to invest extra heavily in your first title for the new platform or settle for lower quality, which is likely to give you less sales...

    I've been working in the industry for almost ten years (not anymore now though) and I'm surprised that everyone seems to be caught off-guard every time it happens....

  • by 7Prime (871679) on Monday April 16, 2007 @02:03PM (#18753103) Homepage Journal
    I've had a Wii for a while now, and while I enjoyed it, my personal opinion, alone, hasn't convinced me, one way or another, what the draw of the console will be. Last night, this question was proven to me, once and for all.

    I brought it to a BBQ that another friend of mine was hosting. Half of the people there were gamers, and half of the people there were decidedly NOT gamers (Chinese students, a few hippies, some others). At first, all my gamer friends screamed for some "SMASH!" and that went on for about 45minutes in the other room while everyone else went outside and sat around jawing.

    Then I pried the GameCube controllers away from the gamers, and stuck in Wii Sports. The other half of the party suddenly rushed inside and grabbed controllers. They'd obviously never played or seen the games before, since they had no idea what to do, but within 5 minutes, everyone had made their own Miis, and were smacking tennis balls around to their hearts content. We alternated Wii Sports and WarioWare for the next few hours. By the end, many of the non-gamers were coming up to me, asking me how much the Wii cost, and where they could get them. I was pretty shocked, myself. I'd heard stories like this before, but hadn't really witnessed it in person, and was pretty amaized at the degree of involvement everyone had. Also, it was a party... none of us were sitting around, alone, brooding over a scummy screen. We were joking with eachother, making cracks all the time--we were interacting with each other even more than if we'd been doing most other normal party activities. In the end, the host came up to me and thanked me profusely, saying that everyone there had had a blast, and bringing the Wii was exactly the thing we needed.

    Just the other night, NBC news ran a piece on how retirement communities were getting into games... although the only games they showed were Wii games, there was no mention of PS3 or 360 titles. It's clear, the Wii is a phonominon, like no other we've seen in videogame history. We are entering a period of unknowns, in gaming... this is the LAST time to be making doomsday prophecies for the game industry.

    This guy from the BBC needs to get out more, see what exactly is going on in the world. He sounds as closeted as a 15-year-old gamer in his mother's basement.
    • Re: (Score:2, Interesting)

      by fhage (596871)
      The source of this analysis is Ed Barton of Screen Digest http://www.screendigest.com/about_us/analysts/ed_b arton [screendigest.com]. They want $3600 for an analysis that forecasts the PS3 as dominating. While they seem to have reasonable insight as to the past, they've completely missed the mark as far as the Wii goes. They have failed to predict the very strong mass market appeal the Wii has and how this will open up new markets. Perhaps the sea change is hard to see without actually owning a Wii. However, as a long time
    • I think you are correct in most regards, however, I think it can depend on the game. Guitar Hero will draw a crowd. But the Wii has the advantage in that most of the games draw a crowd. It's as if they really went for party games with the wii instead of imersive games like the PS3.
      • by 7Prime (871679)
        Guitar Hero III has been officially announced for the Wii, btw.

        Anyway, as a gamer, I still do want to see a steady influx of more immersive, involved games on the Wii, but I'm not too worried. As of late, it's only 5 months in, developers haven't had the time to make those big, juicy epics yet, as they take a long time to make. I just think we're going to see more games, and more game developers come into their own, over the next few years. I think the Wii will inevitably have just as many immersive games a
    • by buswolley (591500)
      My dad, mom, and three girls in the family are all decidedly anti-gaming (meaning they HATE and ridicule video games); they spent an entire evening bowling on Wii Sports, drinking wine and being merry this last weekend. My grandma even wanted one, but I think she was kind of expecting a price tag in the $60 range. She is frugal. :)

      Sorry Sony.

  • by Bearhouse (1034238) on Monday April 16, 2007 @02:04PM (#18753127)
    This gem tucked away at the end of the article: 'As it turns out, software piracy can be good for you. "We have extremely strong brands [in Asia] thanks to the pirates; they have created millions of consumers - not customers,"...' That's why copy protection / prevention has been so weak in Microsoft products for years, and will probably remain so as long as 'free' alternatives exist. Quoting St. Francis Xavier: ''Give me the children until they are seven and anyone may have them afterward'. (Sometimes mis-attributed to Joseph Goebbels, albeit in a deformed way). In other words, get 'em young and they'll be asking for Vista & Outlook instead of Ubuntu & T'bird...
  • Nintendo is selling oodles of consoles and games, which is obviously their game plan. I don't think anyone doubts that they're happy with this generation so far.

    Xbox 360 is selling decently, they're well on their way to being the "mainstay" system for hardcore gamers, and they're selling all sorts of crap that used to be free through their online service. Plus, they've got some great exclusives lined up (Mass Effect woo!) and they haven't even played the Halo card yet.

    Sony isn't selling as well as they migh
  • by tkrotchko (124118) * on Monday April 16, 2007 @02:52PM (#18753875) Homepage
    I think for the most part the analysts are lying when they say Microsoft or Sony is losing hundreds of dollars on each console. When you look into all these pricings, they generally including costs that are comparable to retail.

    Not to mention that when you look at this article:
          http://www.ps3focus.com/archives/167 [ps3focus.com]
    It claimed a $100 loss if Sony sold at $500. But the retail is closer to $600 suggesting at worst Sony is breaking even.

    But then you look at this article:
            http://news.cnet.co.uk/gamesgear/0,39029682,492853 30,00.htm [cnet.co.uk]
    Which suggests at $600 Sony is losing $240.

    I say it's all nonsense. I think Sony & Microsoft like this analysis of pricing because people lap it up and think "Oh gee, for $600, I'm getting something worth almost twice as much! What a deal!". It plays on greed.

    The only people who know how much the console makes (or doesn't make) aren't saying. Everybody else is talking out of their ass. Everybody.
    • by 2nd Post! (213333)
      Microsoft (MSFT)'s quarterly and annual reports detail exactly how much the XBox and XBox 360 is losing them money.

      Every quarter except for one, so far, they have lost money on those products. The only profitable quarter was the release of Halo2. That's it.
  • The video game industry crashed back when video gaming was a rather less developed market... also, video games where so simple that it was easy to make a knockoff. (A knockoff of space invaders was almost exactly like space invaders... A knockoff of half-life, or halo, or splinter cell, will not be remotely enough like those games to steal their market). Now that the video game industry is larger than the movie industry, and there are several generations of people who grew up with video games, home video ga
  • by kinglink (195330) on Monday April 16, 2007 @05:37PM (#18757163)
    Let's be honest here, Sony's lost 1 engine, and in a tail spin, they're likely going to crater or step out of the industry, they have given us no reason to remain and arn't looking like it in the future, but Microsoft is the young up and comer who's going to follow's sony's example (last generation it was Sony who was pulling a Microsoft, mega sales, great games, nothing could go wrong.)

    Nintendo has the key to avoiding another 1983 level crash. They sidestep all the problems and go in a new direction. A direction that lowers development cost (most development cost is to get better graphics or bigger games). Instead of a race to climb the next mountain they are going around the mountain.

    Essentially the problem with this generation is everyone wants more content, more game, more graphics, and they want them all to look bigger and better. The problem is this costs money. GTA style games are big bucks now but they are even bigger budgets because you have to make a huge world.

    I don't see a 1983 crash happening, however I do see Xbox struggling next generation, Sony being driven to a sink or swim level, but Nintendo's the fuzzy factor, if the industry starts working with the Wii, and developing lower budget but more innovative titles then you can see millions saved just from that move and the market is saved, otherwise you're going to see an epic level crash when we get to the question "what's next" after the 360? Better physics, better graphics? We're just killing ourself with every step we take on that path because the gameplay which has always mattered is ignored yet again.

    Personally it's getting to that point. What's the difference between command and conquer 3, Company of heroes and Warcraft 3? Different motif, pretty much same game. What's the difference between Halo 2, Half-life 2, and Doom 3? Most JRPGS? Kotor 1 vs Kotor 2 vs fable vs the next western RPG. Most SRPGS based on disgaea typed engines (not even just nippon ichi titles)?

    We are getting the same game over and over with slight changes and slight modifications and people are starting to realize that not every game is a completely unique and new experience, and from the sound of it we are getting pissed.
  • Absured (Score:2, Funny)

    by HotDogWater (1084827)
    I find it hard to believe that many game industries like Playstation would produce something like the PS3 knowing that they would loose money on it. What did they hire the team of monkeys from career builder. Maybe blueray dvd in the PS3 was not a great idea after all. At least Capcom is making shit tons of money from their awesome games like dead rising and lost planet.

The superior man understands what is right; the inferior man understands what will sell. -- Confucius

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