Cyberpunkd
Member
There are some bizarre assumptions with this strategy, all of which can be explained by solid business fundamentals.They lose $$ on every hardware console they sell. What's the point of even producing them, especially if your consumer base doesn't even buy a lot of games either?
If Xbox publishes its 1P games on Nintendo and PS, they will make their Xbox hardware even more redundant. It'll reach a point where only a handful of people will buy Xbox. So the revenue/profit from selling software will not be financially viable anymore.
1. Yes, platform holders except sometimes Nintendo take a hit on consoles sold AT THE BEGINNING. Then better yields and more experience in production makes the costs go down, which nicely lines up with people YoY sales of a console (you never have peak sales in the first one, two years)
2. By selling consoles you tie people to your ecosystem, add to that your storefront where you pocket 70% of the sale price vs. 10-15% at retail.
So in order to make money Microsoft needs to:
1. Drive down the cost of producing consoles.
2. Provide compelling argument to purchase the Xbox over it's competitors, which historically has been done via exclusive games.
It seems like someone at Microsoft just fundamentally does not believe they will ever have a strong enough exclusive offerings to drive console adoption, which is just crazy thought to me, because that's like saying you do not believe in your business.