You guys have touched on this in the past, but I'm curious about your take on the different pricing strategies employed by Sony, Microsoft, and Nintendo.
Sony, at one end of the spectrum, is sticking with a model from the last two generations, taking a big loss on the console itself and trying to make it up on the software. Online will be free, with some exceptions.
Microsoft adopted a similar strategy (which hasn't paid off for them yet and may not until 2008 by their lastest estimate) but seems to have developed a new stream of revenue in the form of Xbox Live subscriptions and the XBL Marketplace.
Nintendo, conversely, is selling its console at a small profit, but will offer most online services for free. However, they too will have a significant online revenue stream in the Virtual Console.
Which strategy makes the most sense to you? What, in your opinion, are the advantages and disadvantages to each? Do you think selling a console at a loss, while ensuring a lower price initially (debatable with the PS3), ultimately guarantees that the customer is going to get nickled and dimed for everything from there on out, including online services? Would it not make more sense to charge what things cost plus a small margin so that aberrations like online consumables do not become necessary to ensure profitablity?
Answer this question insightfully and they might pay Cheapy next time he's on Bloomberg.
