Is it true that consoles are sold at a loss?

[bump]

I doubt that Microsoft and Sony are selling their consoles below cost, as neither is a huge game publisher. They do both publish games, but other companies like EA, Activision, etc… are far bigger.

I’m sure there are licensing and certification fees involved that are non-trivial, but for the console manufacturers, the whole point is to get a good game ecosystem, and good game franchises going… to sell more consoles and console accessories. Otherwise, if they made their money off the games, they’d just publish them for each other’s consoles, which as far as I can tell, they don’t do, and limit their exclusives to their own platforms.

So in essence, if you want to play Halo on a console, you’re getting an Xbox, and if you want to play Gran Turismo, you’re getting a PlayStation. And game franchises are a big deal to a lot of people; there are likely a LOT of people who bought Xbox Ones because they like to play the Halo games, just like there are people who bought PS4s because they like Gran Turismo.

[DinoR]

@ftg

Not just gaming systems.

Currently, Amazon is selling things like Kindles, Amazon FireTV Stick (and during sales the original Amazon FireTV) at a loss. The goal is to get you to buy content from Amazon.

That’s similar revenue stream for current generations of consoles too now that they are not just game consoles but fully networked entertainment centers. Aside from game sales there’s a revenue piece from subscriptions for online gaming and sales of non-game related content.

[Reverse]

@bump

I’m sure there are licensing and certification fees involved that are non-trivial, but for the console manufacturers, the whole point is to get a good game ecosystem, and good game franchises going… to sell more consoles and console accessories.

No, the point of getting more consoles out there is to collect more licensing and certification fees. Sure, the hardware will eventually make a profit, but collecting a fee for every game published on their system is a much bigger profit source. You only sell a console once.

[TBG]

@bump

I doubt that Microsoft and Sony are selling their consoles below cost, as neither is a huge game publisher. They do both publish games, but other companies like EA, Activision, etc… are far bigger.

Well, you’re wrong.

And they get a license fee from EA, Activision, etc for every game they sell on their particular platforms.

Back in the NES days, Nintendo actually made more off each 3rd party game sold than the publishers did. But they also were the manufacturer of all NES carts (except the unlicensed ones like later Tengen releases and those crappy Color Dreams and Wisdom Tree ones).

@Reverse

You only sell a console once.

RROD… just sayin.

Also I had to buy multiple PSX and PS2 systems, thanks to cheap ass faulty lasers in Sony systems.

But you’re right in principle.