I have a bit of earwax
Was wondering why consoles are cheaper than PC's.
Is it because the console makers get a cut from sales of games?
Thanks
Gimli son of Gloin
Do Console Makers Get Money from Game Sales?
gimli on 29/04/2017 - 20:26
Last edited 29/04/2017 - 21:17 by 1 other user
Last edited 29/04/2017 - 21:17 by 1 other user
Comments
Looking at you Mr. Console Maker, let's hear it.
Fact: Sony lost money on every PS4 sale when it first came out. (Not sure about now). So yeah, they make money on games, subscriptions, accessories and so on.
With better technology and the economics of scale, these "at-loss" products eventually turn into making profit.
Same deal with the PS Vita when it initially released; sold at-cost.
Sony lost more money on the PS3 than it did with the PS Vita or PS4.
That BluRay drive and Cell Processor were mighty expensive, and Online Multiplayer was free.However, not all console makers follow the "sell at cost" route.
For instance, Nintendo actually makes profit on its hardware sales (mainly because they're crappy and overpriced).
Was wondering why consoles are cheaper than PC's.
Without a screen, you can build or buy a PC for the price of a console. Plus get more configuration flexibility (empty slots). The advantages and disadvantages differ between each of them of course. Consoles offer good gaming bang-for-buck for the masses, which is exactly what they are designed for. Consoles are churned out by the millions & are designed to do one thing well (for the price): gaming. So some custom 'tweaked' hardware is used to that end. The platform-holders do what they can to make their platforms a success in order for them to collect nice royalties on every game downloaded (and every disc pressed). So yes, their business model is totally different to PC sales, for example. Though here again the platform-owner tries to make as much money as possible through spying & selling apps & games, but there is no separate royalty like with consoles.
It's like a "walled garden" if you will.
Kinda like iOS vs. Android - I say kinda because Windows is not the security risk that Android is nowadays :D
Funny how the "walled garden" is such an issue with crazy Android fanbois but you don't hear a peep about all the consoles they own lmao.
There's this analysis from Forbes in 2009:
https://www.gamespot.com/forums/system-wars-314159282/how-mu…
A cynic would say that it is the 'Razorblade Model' at work… whereby, they sell you the 'machine' cheaply, knowing that to actually get decent usage out of it you will need to buy their (often overpriced) products repeatedly thereafter in the future. A common strategy.
Some examples include razors (hence the name of the sales strategy), coffee machines (some of those 'pods' are exy!), vacuum-seal food systems, etc.
Yes. Money from licensing deals to offset the cost of console, sometimes loss-leader or sold at cost.