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> Smart people realised that in open market profits will go to zero as competition increases. This has been observed and written about since at least the 18th
by haileys 2y ago
> Smart people realised that in open market profits will go to zero as competition increases.
This has been observed and written about since at least the 18th century
- aikinai 2y agoParent didn’t say when smart people figured it out. This is also why Nintendo (when they moved into video games) set up their business model as platform-holder, not just game developer. And their own games are primarily there to seed the platform.
- yobbo 2y agoRather, the goal was to lower ("subsidise") the purchase price (initial barrier) of the NES/SNES and then recoup it on licenses for cartridges. It makes each purchase of a console cheaper. It's the rational way to maximize revenue. But Apple is not subsidising phones in any way.
- aikinai 2y agoI'm not sure how you're framing that as a subsidy. It's a killer app that gets people over the threshold to purchase the platform (console). And then once the install base is established, everyone else wants to make their own games and has to pay you (a lot) for the privilege. Developing first-party games costs more money, to both Nintendo and consumers, so it's the opposite of a subsidy. But they're compelling enough, they clear the purchase threshold and establish the platform on which the rest of the business is built.
- kaba0 2y agoParent commenter meant subsidizing the actual hardware costs. The same is true of pretty much every other console, they can also sell the hardware cheaper for this reason
- rcxdude 2y agoNintendo is a funny example here though, since they are notably the one major player which actually makes a profit on their hardware sales directly. They do also make a cut on the other games still, though.
- amelius 2y agoSo, is that good or bad in your opinion?