Gaming Consoles or PC Gaming?

phobicsquirrel

I'm wondering if companies such as Sony or Microsoft are losing money on their systems why do they continue to make them? Nintendo seems to making money, so why is that the case, price, different interface? This is something I've been wondering and while I love playing on my xbox or my wii, the PC is still the best place for gaming. I love the graphics and the every day applications I can do on it. When the 360 and PS3 came out, a lot of people said it was the death of PC gaming, well if the companies that are making them are losing money does that mean Next Gen gaming will be solely on the PC? Any thoughts....

nsezell

Companies like microsoft and sony take a loss on the consoles so that they can get one into your home, because, if you blow 3-400 bucks on a system, you're gonna use it, which means buying games at 50-60+ a pop. Even if they had nothing to do with developing these games they take a huge chunk of the profit. This is where they make their money. I game on all of em. I think that a console offers a much smoother simulation for many games. PC's, while they are power houses (if built right) are great for pretty pictures, but mouse sniping just isn't for me. I grew up on consoles, so I'll stick with them often, but there are many great games that are developed solely for a PC. Also, PC games are cheaper, (and free if you're a poor college student living in a dorm) I love my PC, but consoles just offer a more streamlined experience with less chance for bugs (in theory).

cabinetmaker

I'm just too old for the console. I spend more time looking at the controller than the game. Maybe if I'd have growA button while holding the B button down and jiggleing thumb on the thing connected to the other thing and now press and hold the side button while hitting the jump button ...and .... damn, how'd i just die??

Garen B

Sony is the big loser on the profits side because of a few things, firstly they came out with their offering last and with the biggest price tag attached to it. Also they tried to bridge the gap between the Wii and the 360 by putting a crappy motion control system in their controller, then not really going wholeheartedly into promoting the use of it in games that are developed for the PS3 (If you want to look at a game that tried and failed at it, look up a game called Lair.)

The death of PC gaming is due a few things, and it really shouldn't be called a death, but rather a weakening of the industry. Anywho, the biggest flaw of PC gaming is that you have to put down a good chunk of change to get a computer that can run the game well and won't cause framerate lag. With consoles, everyone has the same hardware, there isn't a difference between certain guy's Xbox running faster or loading the game quicker. Right now my brain is shutting down, but tomorrow I'll edit this when I can string together a coherent sentence.

Lasabar

phobicsquirrel:

I'm wondering if companies such as Sony or Microsoft are losing money on their systems why do they continue to make them? Nintendo seems to making money, so why is that the case, price, different interface? This is something I've been wondering and while I love playing on my xbox or my wii, the PC is still the best place for gaming. I love the graphics and the every day applications I can do on it. When the 360 and PS3 came out, a lot of people said it was the death of PC gaming, well if the companies that are making them are losing money does that mean Next Gen gaming will be solely on the PC? Any thoughts....

The Gaming industry is one based on the long haul and also on market share.

Every Playstation and XBOX sold when they first were released the companies typically lost anywhere from $50 to $150 a unit. So why would they sell there material at a loss??? Isn't that unprofitable? Well in the gaming industry the unit is just the launching pad for money-making.

I'm no expert and do not claim to be one, but as an avid (used-to-be) gamer and researcher of the industry and I came into to my "Disposable Income" phase right when video games were becoming more and more popular I can attest to what I've read and back it up by working in electronics retail and seeing the trends

Let's follow the PS2
When it first came out Sony was losing about $100-$150 depending on what reports you read, on each unit sold and the hope was to make it up with some games or some kind of accessory (and hoping you bought the "SONY" branded accessories) but the first few quarters when a video game system is released the stock goes up but NOP goes down, way down. Now fast forward to when some MAJOR titles were released later on and the production costs finally caught up with the price of the unit, now sony was making a marginal bit on the units and games like "Tekken" "Metal Gear Solid" and others made Playstation 2's fly off the shelf, now they are selling millions and slight profit. Now fast forward again and the hardware in the Playstation 2 is downright cheap and Sony comes out with a "PRICE REDUCTION FOR THE HOLIDAYS" They are still making a ton of money and everyone wants the popular game system and now it's cheaper AND Sony now has some killer "Exclusives" that are only on PS2 so you have to have one! Sony is selling more and more units, and replacement units that broke for a substantial profit and the games that are exclusives either Sony is creating themselves or they are paying the software companies to make them exclusive to sell more units. Sony does this until the capital turns are slowing and then they start it all over again with the PS3... the circle of life continues

Now this isn't a wall street journal recap and play-by-play but that's how the industry "Kinda" works. Take loss right away but make market share and money off of games, reduce production costs and be profitable, release killer game and sell more, reduce price and sell more, release game and sell more, reduce price and sell more... Release new unit all together and repeat.

The market has changed though since microsoft has come into play, they have the billions and billions of Billy boy to buy back the exclusives (Grand Theft Auto was a SONY staple until the Gates' millions bought the rights and now the game is released on both systems...)

The tricky part is how to make money with little or no exclusives and that is why you are seeing the gaming industry change into New technology and new ideas, microsoft jumping into the market has made the consoles less stagnant and made companies like sony put a bluray in and nintendo reduce prices and use motion...

If you look up some things about a new XBOX project you will see a fully interactive camera, not just a Wiimote to capture motion but a camera to capture full body motion and you have to kick the ground to push your skateboard or if a character needs you to draw something that you can draw on any piece of scrap paper with any color ink or marker and then show it to the camera and the character on the screen will literally grab it from you and show you your exact drawing with squiggles and everything and use it in the game!

The future of gaming is going to be exciting... too bad I'm getting older and older and care less about it

phobicsquirrel

I know the PS2 did well, and the Wii is doing very well. The money from games and assesories bring in some profit, but would that be enough? I don't know. I for one am glad that consoles are getting better. I know that PS3 is losing the most and though I think adding the blu ray addition was a good idea, I think the price was the killer. Though they do have a more powerful unit than the 360 though the developers aren't really using it. Good info there lassy.

Lasabar

phobicsquirrel:

I know the PS2 did well, and the Wii is doing very well. The money from games and assesories bring in some profit, but would that be enough? I don't know. I for one am glad that consoles are getting better. I know that PS3 is losing the most and though I think adding the blu ray addition was a good idea, I think the price was the killer. Though they do have a more powerful unit than the 360 though the developers aren't really using it. Good info there lassy.

Working at Best Buy as a Sales Manager I have come across TONS AND TONS of info around where the economy and where consumer spending is going these days and here's something to chew on (and some insight as to why the PS3 is not doing as bad as everyone thinks)

In fy08 consumer electronics spending (and I'm paraphrasing a little bit, this was a powerpoint that I was presented) reached upwards of 5 billion dollars and in fy09 the number had reached up to 8 billion dollars and this is just spent on products alone (i.e. TVs and MP3 players etc.) over the next 10 years we are looking at seeing consumers spending over 220 billion dollars on "Connected Devices and media"

What I mean by "Connected Devices" is what the PS3 is geared towards... You can download a 1080P movie right to your PS3 HDD and then you OWN the movie for you purchased it and watch it whenever you want, and you can stream that movie to other TVs and computers, and you can download movies on your computer and stream them your PS3 and your pictures as well, you can surf the full fledged internet on the PS3 making it your "Multimedia Hub" not a gaming system
(Look at PS3 latest release the "HOME" application, an application that is not a game, but a networking service in which avatars can converse and walk around a virtual world, yet you can meet your friends online in HOME and then go the the Marcus Movie theater in the virtual world and then purchase a rented movie and you and your friends can watch the movie on your big screen, and when the movie is over you are now back in the lobby of this virtual world (all of you each now spending anywhere from $5-15!!!)

I wish I had a link in which BILL GATES has said that in the future he will have all hardware be free to consumers and then they just have to pay to "activate" the software. (I.e. Free laptops from uncle billy but Windows costs $800)

At BBY we may see the CD and DVD sections go away and the digital revolution to come down the pipes (Best Buy just bought Napster, and we already own Rhapsody to get a foot in the digital music stuff) and we will see more and more relationships with Netflix and with Pandora etc... the content will end up costing you and the hardware will get cheaper and cheaper just like today you can buy a laptop for under $300 but then you need the $150 Office and the $60 Virus and the $100 photo editing software and the $40 spyware software and etc.... the software is $$$$$ the hardware has become moot...

Kind of a crazy thing, but my suggestion is buy stock in any up and coming digital convergence technology company!!!