[quote name='Strell']Lots of things wrong with this post, but this was the most glaring. Ninty still makes a profit on the Gamecube's sales, hardware and software included.
The same cannot be said for Sony or Microsoft.
It's a simple concept, really, I'm always astounded by people not understanding it.[/QUOTE]
Don't be silly. Sony has reaped US$Billions on the PS2. So much so that on several occasions when the video game operations were the sole source of net revenues in a quarter, they were sufficient to show positive net revenue for the entire company. This is one of the reasons SCE in all its regional forms was folded back into the parent company. for a while it showed stunningly good profits but the rest of Sony, except for the movie business if you caught them in a good quarter, was deep in the red. Having the games folded back in made the company as a whole look better.
This is in spite of longtime subsidies of the hardware costs and $Billions spent in PS3 and other products' R&D. After the current model PS2 paid off its development costs, its COGS (cost of good sold) fell well below the $150 SRP. Sony could drop the price at any time without loss but has no motive to do so because it just keeps selling.
The reasons for Microsoft's losses are well documented. It wasn't for lack of sales of either hardware or software but rather that structure of their supply agreements with a certain chip company acting as a vendor rather than a designer. That no longer applies in the Xbox 360 parts list. It should also be noted that Microsoft's Entertainemnt Division includes some large investments in areas not related to their video game business and add considerably to that division's losses.
The biggest fallacy that prevents people from being able to discuss this in any depth is the idea there can only be winners and losers. None of the companies need to wipe another from the video game business to reap great profits. They just need to have their own house in order. Nearly all of the great failures in this field were caused more by internal issues than any act by competitors. The competition just did what they saw as best for their products and let the other guys be their own worst enemy. For instance, if Nokia's decision to ship the N*gage with the incredibly brain damaged game-card-under-the-battery design was due to influence by a competing firm, that would be one of the most amazing feats of industrial espionage ever achieved.
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You obviously didnt read my first post.
