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Consoles ship at a hardware loss, iPhones don't. The business comparison has always been a tough stretch, and the functional comparison of an iPhone to an Xbox/

Consoles ship at a hardware loss, iPhones don't. The business comparison has always been a tough stretch, and the functional comparison of an iPhone to an Xbox/Keurig/dishwasher has always been absurd. Apple's service revenue channel is unprecedented, and so far unchallenged. In cases like Apple Music and the App Store, it is unquestionably at-odds with fair competition. Now, countries like Europe and Japan are using their markets as collateral at the negotiation table. Seems fair to me, given that Apple and Google are comfortable treating their userbases the same way.

codedokode 3y ago
> Consoles ship at a hardware loss First, it might not be true (because all console contains is a PCB and several chips). Second, if you sell something cheaper than you could it doesn't mean you get some kind of privilege and exception from the law.
- smoldesu 3y ago
  There are definitely cases where console hardware does sell at a profit, but even late in a console's lifecycle it probably won't make half the hardware margins of an Apple product at launch. They're different markets, and while they do have overlapping jurisdiction it doesn't contradict legislation like the EU's DMA.
crazygringo 3y ago
> Consoles ship at a hardware loss, iPhones don't. This isn't true anymore. Consoles don't follow the razor-and-blades business model anymore -- that's long since gone. Sometimes they don't make a profit at launch, but they do soon after in the hardware cycle, which is fine because they sell for years and years. Nor are things like extra controllers or headsets subsidized either. So the idea that consoles need to make up losses via a cut of game sales isn't true, and hasn't been true for at least a couple of decades. And so there's no good reason to treat them differently from smartphone app stores. (The idea comes from the 80's and 90's, back when it was widely understood to be the business model.)
- klausa 3y ago
  I will eat a hat if XSX or PS5 made money at launch.
- smoldesu 3y ago
  It's true. Name me an iPhone model that shipped at a hardware loss, then name me a modern console that hit shelves making a profit. You can't; iPhones don't ship at a loss. Not on day one, not on day one-hundred, not ever. It's not necessarily a knock against Apple's business model, but it is a fact of the modern market; iPhone hardware margins are extreme. They do not correlate with the profit margins of modern consoles, even later-on in their lifespan. Despite being someone who wants consoles to be a more open platform, it's trivial to see why they have an argument and Apple doesn't. Apple is a hardware company using their de-facto software control to bolster profits and prevent competition. Sony, Microsoft and Nintendo are essentially software companies, selling DRM-enabled clients to ensure their continued profitability. It's up to the court to make a ruling, but I have a hard time believing consoles are any more relevant than Blu-Ray players or Nespresso machines.
jeroenhd 3y ago
I don't see why selling at a loss would warrant exclusion. If anything, that just grants these companies the power to undercut incentives for competition that would allow fair competition. Apple treats their iPhones like Microsoft and Sony treat their consoles: some kind of brand experience that makes you part of a distinguished group of Brand Name customers who enjoy their Brand Name lifestyle. If we're preventing Apple and Google from pulling this bullshit, we should take on consoles too. It doesn't really matter what functionality consoles offer or not. These things could run Windows if it weren't for the DRM that locks them down, and some Chinese stores will sell you boards using the same CPU/GPU but running Windows instead. They have HDMI, USB ports, ethernet, and all the hardware to be used as a serious device. Their OS and APIs are a bit weird but I can't see a reason why you couldn't used them as a basic home PC if you install a browser and an office suite, other than that their vendors won't let you download software outside of their walled gardens.

codedokode 3y ago

> Consoles ship at a hardware loss First, it might not be true (because all console contains is a PCB and several chips). Second, if you sell something cheaper than you could it doesn't mean you get some kind of privilege and exception from the law.

smoldesu 3y ago
There are definitely cases where console hardware does sell at a profit, but even late in a console's lifecycle it probably won't make half the hardware margins of an Apple product at launch. They're different markets, and while they do have overlapping jurisdiction it doesn't contradict legislation like the EU's DMA.

crazygringo 3y ago

> Consoles ship at a hardware loss, iPhones don't. This isn't true anymore. Consoles don't follow the razor-and-blades business model anymore -- that's long since gone. Sometimes they don't make a profit at launch, but they do soon after in the hardware cycle, which is fine because they sell for years and years. Nor are things like extra controllers or headsets subsidized either. So the idea that consoles need to make up losses via a cut of game sales isn't true, and hasn't been true for at least a couple of decades. And so there's no good reason to treat them differently from smartphone app stores. (The idea comes from the 80's and 90's, back when it was widely understood to be the business model.)

klausa 3y ago
I will eat a hat if XSX or PS5 made money at launch.
smoldesu 3y ago
It's true. Name me an iPhone model that shipped at a hardware loss, then name me a modern console that hit shelves making a profit. You can't; iPhones don't ship at a loss. Not on day one, not on day one-hundred, not ever. It's not necessarily a knock against Apple's business model, but it is a fact of the modern market; iPhone hardware margins are extreme. They do not correlate with the profit margins of modern consoles, even later-on in their lifespan. Despite being someone who wants consoles to be a more open platform, it's trivial to see why they have an argument and Apple doesn't. Apple is a hardware company using their de-facto software control to bolster profits and prevent competition. Sony, Microsoft and Nintendo are essentially software companies, selling DRM-enabled clients to ensure their continued profitability. It's up to the court to make a ruling, but I have a hard time believing consoles are any more relevant than Blu-Ray players or Nespresso machines.

jeroenhd 3y ago

I don't see why selling at a loss would warrant exclusion. If anything, that just grants these companies the power to undercut incentives for competition that would allow fair competition. Apple treats their iPhones like Microsoft and Sony treat their consoles: some kind of brand experience that makes you part of a distinguished group of Brand Name customers who enjoy their Brand Name lifestyle. If we're preventing Apple and Google from pulling this bullshit, we should take on consoles too. It doesn't really matter what functionality consoles offer or not. These things could run Windows if it weren't for the DRM that locks them down, and some Chinese stores will sell you boards using the same CPU/GPU but running Windows instead. They have HDMI, USB ports, ethernet, and all the hardware to be used as a serious device. Their OS and APIs are a bit weird but I can't see a reason why you couldn't used them as a basic home PC if you install a browser and an office suite, other than that their vendors won't let you download software outside of their walled gardens.