3 ms·

I see it differently. I think we are seeing that console makers are realizing all the money is in games and not hardware, so they are buying up studios left &

I see it differently. I think we are seeing that console makers are realizing all the money is in games and not hardware, so they are buying up studios left & right. They also want to offer subscriptions to games which is easier when you own the games themselves.

ogazitt 5y ago
Console sales have always been a break-even business over the lifetime of the generation. You lose LOTS of money up front, and eventually (in year 6 or 7) you may turn an overall profit on console sales. Hardware accessories (e.g. controllers) are a bit better. Assuming you can produce hits, first-party IP has always been the most profitable part of the value chain. But having 90% of your ecosystem come from 1P (like Nintendo) limits the size of the ecosystem. Xbox traditionally had 30-40% of the overall content revenue come from 1P IP, and 60-70% were from 3P. Sony perhaps a bit more than that. Both were ecosystem plays. It seems like both ecosystems are recognizing that they need exclusives to sustain their franchises.