4 ms·

What about video game consoles? Early in a generation, they are sold at razor-thin (or negative) margins, with the expectation that the manufacturer will recoup

by dpiers 6y ago

What about video game consoles? Early in a generation, they are sold at razor-thin (or negative) margins, with the expectation that the manufacturer will recoup losses from licensing fees over the life of the console and that costs will come down in later revisions. If manufacturers lose their substantial licensing fees, they would be forced to charge more upfront for the consoles which is objectively worse for consumers.

manfredo 6y ago
Consoles are much, much narrower in use than smartphones. Most consoles have a few thousand titles, if that. By comparison the App Store had millions of applications. And as you point out, manufacturers are building these consoles at a loss. Apple builds it's phones at a profit. Getting a game approved for sale on a console is much more involved than releasing an App on the App Store, and involves significant manual review not just of the quality of the game but also the content.
- itake 6y ago
  Apple does a manual review of the quality of their apps as well as their content (e.g. if you own a social app that allows users to publish images, they will verify there are no adult images being published and there are systems in place for banning these images.)
  - ecshafer 6y ago
    That doesn't sound like a good thing to me. Why must we be held to some extra moral laws for the ability to allow ios users to use our software?
- GloriousKoji 6y ago
  Everyone here seems to be obsessed with the fact that a console is a "computer" in the turing machine sense but the fact is that people buy consoles with the strong primary purpose of entertainment. Smart phones and tablets have gotten to the point where they are expected to be able to do hundreds of different things, with some peoples livelihood dependent on it.
- tedunangst 6y ago
  Can't wait for Apple to cut the App Store back to a thousand apps so they qualify as a console.
- vlozko 6y ago
  There’s no legal way to define the boundary between what’s classified as a computer vs a console. Game consoles have apps that are traditional to a computer, such as streaming video and even video editing. Portability isn’t a reliable indicator as you have systems like the Switch. Nor is it realistically possible to create legal guidelines based on profit margins. I don’t see how it makes sense to apply a different set of rules on devices that are sold as a loss and make up for it in software sales vs the inverse or even both being profitable.
- inopinatus 6y ago
  And yet even then, console games such as MMOs are not required to actively mislead the consumer about their account management options.
TaylorAlexander 6y ago
Would it be objectively worse for consumers? You buy an expensive machine once every ten years and then the games would be more reasonably priced for that whole time? How can you say with certainty that would be worse?
- colejohnson66 6y ago
  Because consumers don’t think long term. If your console costs $600 but games are $40 while your competitor’s costs $400 but games are $60, the vast majority of consumers will choose the $400/$60 one.
ulucs 6y ago
Unless they are Nintendo, where they make money on both console sales and licensing fees. Microsoft also appears to have solved that issue with their game pass opening and many game studio acquisitions.
apsanz 6y ago
Would consumer really be objectively worse? The small margins are only early in a generation that last 7 years. The hard core gamers will need to pay more to get a console but the consoles would quickly drop in price. Also, the games would likely be much cheaper.
searchableguy 6y ago
I don't know how this myth keep perpetuating but ps4 pro was profitable from day one and ps4 6 months in. Hardware has gotten a lot cheaper. > The European Commission has fined Qualcomm €242 million for abusing its market dominance in 3G baseband chipsets. Qualcomm sold below cost, with the aim of forcing its competitor Icera out of the market. This is illegal under EU antitrust rules. https://ec.europa.eu/commission/presscorner/detail/en/ip_19_4350 https://ec.europa.eu/commission/presscorner/detail/en/ip_19_...

by dpiers 6y ago

manfredo 6y ago

Consoles are much, much narrower in use than smartphones. Most consoles have a few thousand titles, if that. By comparison the App Store had millions of applications. And as you point out, manufacturers are building these consoles at a loss. Apple builds it's phones at a profit. Getting a game approved for sale on a console is much more involved than releasing an App on the App Store, and involves significant manual review not just of the quality of the game but also the content.

itake 6y ago
Apple does a manual review of the quality of their apps as well as their content (e.g. if you own a social app that allows users to publish images, they will verify there are no adult images being published and there are systems in place for banning these images.)
- ecshafer 6y ago
  That doesn't sound like a good thing to me. Why must we be held to some extra moral laws for the ability to allow ios users to use our software?
GloriousKoji 6y ago
Everyone here seems to be obsessed with the fact that a console is a "computer" in the turing machine sense but the fact is that people buy consoles with the strong primary purpose of entertainment. Smart phones and tablets have gotten to the point where they are expected to be able to do hundreds of different things, with some peoples livelihood dependent on it.
tedunangst 6y ago
Can't wait for Apple to cut the App Store back to a thousand apps so they qualify as a console.
vlozko 6y ago
There’s no legal way to define the boundary between what’s classified as a computer vs a console. Game consoles have apps that are traditional to a computer, such as streaming video and even video editing. Portability isn’t a reliable indicator as you have systems like the Switch. Nor is it realistically possible to create legal guidelines based on profit margins. I don’t see how it makes sense to apply a different set of rules on devices that are sold as a loss and make up for it in software sales vs the inverse or even both being profitable.
inopinatus 6y ago
And yet even then, console games such as MMOs are not required to actively mislead the consumer about their account management options.

TaylorAlexander 6y ago

Would it be objectively worse for consumers? You buy an expensive machine once every ten years and then the games would be more reasonably priced for that whole time? How can you say with certainty that would be worse?

colejohnson66 6y ago
Because consumers don’t think long term. If your console costs $600 but games are $40 while your competitor’s costs $400 but games are $60, the vast majority of consumers will choose the $400/$60 one.

ulucs 6y ago

Unless they are Nintendo, where they make money on both console sales and licensing fees. Microsoft also appears to have solved that issue with their game pass opening and many game studio acquisitions.

apsanz 6y ago

Would consumer really be objectively worse? The small margins are only early in a generation that last 7 years. The hard core gamers will need to pay more to get a console but the consoles would quickly drop in price. Also, the games would likely be much cheaper.

searchableguy 6y ago

I don't know how this myth keep perpetuating but ps4 pro was profitable from day one and ps4 6 months in. Hardware has gotten a lot cheaper. > The European Commission has fined Qualcomm €242 million for abusing its market dominance in 3G baseband chipsets. Qualcomm sold below cost, with the aim of forcing its competitor Icera out of the market. This is illegal under EU antitrust rules. https://ec.europa.eu/commission/presscorner/detail/en/ip_19_4350 https://ec.europa.eu/commission/presscorner/detail/en/ip_19_...