Topic: The console industry is completely backawards

[idolminds]

Interesting read.

[K-man]

For a game with a $60 retail price, approximately 43%, or $26, goes to covering manufacturing costs, retail profits, and subsidizing console hardware. With digital distribution, if we stop subsidizing hardware with software, nearly all of that $26 in costs can be eliminated. Developers and publishers would sacrifice none of their profits, consumers get cheaper games, and console makers can make profits on selling their hardware.


See, this is a good idea in theory.  But so far in digital distribution, the pricing is exactly the same as hard copies in store.  And I don't know about you folks, but If I'm going to spend 30-60 bucks on a game I sure as hell want something to show for it.

There's a lot of potential for good with digital distribution, but I'm afraid there's much more potential for bad.  I don't think developers and console manufacturers see cheaper distribution with DD, they see a higher profit margin.

[Cobra951]

I don't buy it at all.  That up-front hit of the console price is what makes or breaks that console's market.  If it doesn't get out of the starting gate, it makes no difference how good things might have become eventually in the software and peripherals markets.  Plus I don't agree at all about where he attributes the lack of scarcity.  Who cares that the blank media is cheap and plentiful?  What's scarce is the properly working media containing the games.  Piracy has not penetrated into the console market at anywhere near the levels of PC piracy.  Now if this changes, the console world may well be in for a serious upheaval.  I don't see that happening any time soon.

I think he misses the mark even more dramatically with his take on Xbox Live and what MS charges for download content.  Give that away to increase what people will pay for the console?  Please.

[idolminds]

I agree with your points cobra. Sure, you could try selling an expensive console and give away lots of free games, but no one wants to spend a lot on a console. Consoles are still "kids toys" to most people, and no one wants to spend $1000 on a kids toy, even with free games.

And honestly, those games have a cost involved in their creation. Whos going to want to buy a console that MORE expensive and has a bunch of free games like Geometry Wars? Instead, we spend less on the console and pay for games like Gears of War.

Though I agree with the article that the Wii Virtual Console games should be dirt cheap/free. Those games already made their money.

[Jedi]

I agree with Idol it's a better idea to have a cheaper console (entry cost) and charge a little more on the games which are far cheaper. If the console was too expensive then fewer people would buy it until the proce came down, this would lead to fewer game sales regardless of how much cheaper they were ~ there'd be fewer people with the console to play them.