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What some of you may or may not realise is that companies such as Nintendo and SONY Computer Entertainment actually lose money on each console sold. They adopt what is know as a 'loss-leader' approach - i.e. by making a short-term loss they realise that they will benefit from long-term overall profit... and how do they get this profit? Simple.
Games...
For each game that is made for Nintendo or SONY consoles, a royalty fee is paid to said companies and this is where the money comes from. Now obviously both companies will make more cash from 1st Party developed software (because they receive more than just royalties in that case), but this is also why so many companies are keen to form partnerships with developers.
To be honest, whilst I like the variety of consoles that are available, is it worth running the risk of Nintendo going out of business just so we can have a new Nintendo console?
I don't think so - and if it means Ninty can continue in business and keep on making great games, then I for one will be able to deal with not seeing a new Ninty console.
- S
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