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That's one thing. The other is price. Consoles can be sold at a loss, particularly early in their 10-year cycle, when early on the loss is high, but close to th
by robertlagrant 3mo ago
That's one thing. The other is price. Consoles can be sold at a loss, particularly early in their 10-year cycle, when early on the loss is high, but close to the end of the cycle the loss is minimal, and so they appear much cheaper.
- dpoloncsak 3mo agoOh, for sure! It's not getting any better with PC part prices lately either... I've never considered that my old 360 was probably sold at a loss, knowing I'd buy LIVE and all the games they take a cut/license fee off of, but that makes complete sense to me
- nemomarx 3mo agoGiven recent price rises for console hardware I think they're struggling with that too though. The model doesn't work as well if the components get more expensive over time and not less?
- Narishma 3mo agoBut PC parts are also getting more expensive, so the difference is still there.
- nemomarx 3mo agoYeah I mean specifically the "sell at a loss, wait for costs to get lower over the generation" thing. if it's at a loss at the start of the generation and component costs only rise, it'll still sell for a loss at the end but also it'll be more expensive for customers. this puts the company in a hard position. a lot of gamers are also used to waiting until the end of the life of a console and getting games used, which might no longer be an option
- Tsiklon 3mo agoThis cycle is different. Prices have increased for both Sony and Microsoft’s consoles and no higher efficiency versions have been released (ala the PS3, X360).
- galleywest200 3mo agoSony released the PS5 Slim earlier this cycle.
- thinkingQueen 3mo agoIsn’t PS5 Pro a higher efficiency version?
- Narishma 3mo agoNo, it's a more powerful version.
- robertlagrant 3mo agoTrue. I think there are two new issues this cycle: 1. They are testing what the market will bear. Ubisoft's silly "quadruple-A game" rhetoric and executives saying "people will have to get used to $100 games" is them testing the water. This should pull back, as most people don't want games that cost that much, unless they're really amazing. They aren't (currently). I imagine this same thinking is going on in hardware-land. 2. Current RAM/GFx card prices are driving up prices all round. It should still be true that for the same spec, console components should get cheaper over time, but I can imagine it's less of an effect at the moment with all the AI data centres hoovering up manufacturing capacity.
- CrimsonCape 3mo agoIt seems like their strategy will be to just raise hardware and media prices. Just keep doing the same at a higher cost. If it's a loss leader today, it will stay a loss leader tomorrow, just at higher cost. The question is whether the customers keep showing up at the higher prices.
- robertlagrant 3mo agoIndeed. No one expects console manufacturers to take unlimited losses, but yes, the price at the end of it all is what will matter.