game cost comparisons

[Ingall]

Can anyone explain to me why, in general, PC games are cheaper than the same game on XBOX or PS2?

[ObsoletE]

probably because piracy is more widespread for PC software than console software... so reducing the price makes it less attractive to pirate the games...

or maybe because the hardware performance increases are more substantial for PCs so games keep getting better, so older games are no longer as popular sales-wise, whereas consoles produce a set limit on performance (typically) so older games can be just as good as newer ones and so people are still likely to buy a 12 month old game...

as far as new release games are concerned though, the prices are usually comparable... certainly not more than $10 more or less for the same game on different platforms...
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[LeonJ]

Another factor is in the console world Nintendo, Mircosoft and Sony all charge royalites for games sold. Hence the publishers passes this cost onto the general public.

[merlingt]

Piracy is the main reason I believe. If you notice, Xbox games are slipping below the price of ps2 games (at least they are here), I assume to make up for the huge spike in xbox game piracy (HD Copying\Modding the OS to Play Games from the HD), which works out well for those of us who don't pirate.
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[warney7]

The way I see it, we pay more for console games becuase every ps2 is the same as the next one. With computers, some go faster than others. Do you follow?

I think we pay for the priveledge to just put the disc in the console and it will work. Computers games need requirements i.e windows 2000, xp, and spare mg and 64 bit grapgics cards.

[dc0079]

All of reasons above. And also computer games are being released in much larger numbers, although we don't get as many of them in Australia (in US and other country, many crap games get released), they have to reduce the published price to keep itself selling. Look at something like UT and Doom/Quake, they are directly fighting each other. Something like this doesn't happen on console as often (if ever).
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[Revenant]

Surely if PS2 dropped their price but X-Box kept it the same, wouldn't sony make a huge increasen in sales? The fact that the gamecube was so cheap was why everyone bought it, to make up for it Nintendo charged massive prices for games though. Also GC disks can't be pirated [the mini disk idea was brilliant, I wouldnt be suprised if the PS3 copied].

[Gtpod]

1) PS3 won't copy, it's using Blu-Ray.
2) If Sony dropped the price of the PS2 pre-PS3 any further, they'd probably lose profit.
3) People bought the Gamecube because the N64 was such a hit, just like PS1 is to PS2; and the PS2 out-sold it by millions (correct me if I'm wrong).

(Also, seriously pay attention to what I said on MSN - Don't dig. )
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[David]

1) PS3 won't copy, it's using Blu-Ray.

Uh, Blu ray is just another Disc. Couldn't copy DVDs much 3 years ago, now with a $40 mod you can burn PS2 games all you like. Blu ray will be copyablle soon eneough.

3) People bought the Gamecube because the N64 was such a hit, just like PS1 is to PS2; and the PS2 out-sold it by millions (correct me if I'm wrong).

In Australia, people DIDN'T buy the Gamecube (much). IN Feb this year, the figures (from SMH) were 1 million PS2, 400,000 XB and only 150,000 GC.

Worldwide right now, it's about 70 Million PS2, 16 Million GC and 15.5 Million XB.

I reckn the Problem is that the Market always Splits at around 60/40 or 70/30 (eg SNES/MD, PS1/N64). But all M$ has done is split the '2nd player' Market, giving Sony a massive advantage over everyone.

Usually the 3rd place player runs out of money becuase it's not profitable (Eg sega). GC is just breaking even, but M$ have lost US$3,000,000,000 on the XB (yes, US$3 BILLION) So far. It's the firt time a '3rd player' is in a situation to lose money but keep trading.

It's a worry. Which is Why I think M$ and Nintendo should make their next consoles compatible, making it a standard like DVD or VCR. It doesn't mean they have to merge, just create a 'third party' which they own 50% of each to licence the games.

[ObsoletE]

can you post some sources for those numbers, namely the MS loss (i can see your SMH reference)?

i find it hard to believe MS have lost $3B... and i don't think they will be exitting the race anytime soon... i seem to remember it took Sony several years to break even with the PSX (i don't have a source, i just seem to remember reading an article several years after the PSX launch that Sony had finally turned a profit on the consoles, though no doubt they made profits much sooner if the game profits were taken into account), so it just takes peserverance

all media is copyable eventually... which i think is your point regarding Blu-Ray, even the NGC mini-discs, albeit they are harder to copy (though not as hard as cartridges were, and the cost involved in doing so hardly made it worth it, but the storage space was the reason for their demise)
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[David]

Here's an exerpt from an article on Gamesarefun.com from Feb this year. It can be found here:

http://www.gamesarefun.com/gamesdb/editorial.php?editorialid=4


Microsoft's first fiscal quarter (July 1 to September 30)SEC filing shows that the Home and Entertainment Division lost $273 million dollars between July 2003 and September 2003, despite an increase of revenue by $96 million over the same quarter the previous year (IE the Home and Entertainment Division brought in $96 million more than the previous year's same fiscal quarter, but ended up losing $28 million more than the previous year's same fiscal quarter's loss of $245 million). And Microsoft's most current SEC filing shows a loss of $241 million in the Home and Entertainment Division for the final calendar quarter of 2003. For this quarter, though, Microsoft actually managed to lose less money than the same fiscal quarter a year before.

Since the Xbox launched, the Home and Entertainment Division has seen financial losses approaching $1 billion per year. The losses are $880 million and $990 million per fiscal year, respectively. Add in the $273 million lost in Microsoft's fiscal Q1 (calendar Q3), and $241 million lost in fiscal Q2 (calendar Q4) and we get $2.384 billion lost since the launch of the Xbox. [up to the end of last year]

I'd also like to know what kind of math Microsoft is using for their financials, since they state for the six months ending December 31, 2003, the Home and Entertainment Division only lost $471 million, yet normal algebra seems to show a six month loss of $514 million; when we add $273 to $241, we get $514. There may be some unused revenue or write-offs or something else in business that I don't know about that allows Microsoft to cut $43 million off their six month losses in the Home and Entertainment Division, though; I'm not an accountant.

So news pieces lament (and anti-Nintendo fanboys rejoice) that Nintendo saw a financial half year loss. Yet, there is almost nothing ever said about the incredible losses Microsoft sees on the Xbox? I mean, consistently losing over $100 million a quarter? To put it bluntly, that's bleeding money.

Someone had said to me that if any other company, besides Microsoft, was making the Xbox that they'd be in financial trouble. I say, if it wasn't for Microsoft's huge cash horde, any other company trying to market a product that has been a major factor in losing almost $2.4 billion in two years, that that company would be out of business. Microsoft is one of the few companies that can withstand such an enormous loss in one division and still survive.



and here's an article from earlier (2003) showing the same thing:

http://www.megagames.com/news/html/console/microsoftdeclarexboxlosses.shtml


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As for Sony, they took a few years to make money on the hardware (as with the PS2 as well), but their Playstation buisness as a whole has really never lost money.

With M$, however, it's not just hardware, it's the whole division that has lost that much (It was 2.5 Billion half a year ago, and ramping up at the time, so I am guessing the $3 billion right now).

These sources are based (and link to) on M$ofts own stock reports, so they're legit.

So if they'd lost 2.4 Billion as of december last year, and the direction the console has taken constantly has it losing more and more (xbox price drops really hurt M$ since they outsourced for parts to intel and nvidia and the prices for the components were hedged), I think it's quite conservative to say they've lost US$3 Billion.

Based on their' loss curve, they'd now be at a loss of US$4 Billion.

That's (possibly up to) US$4,000,000,000 that's now not in their bank account. More then the GDP of 100 UN recognised countries.

[ObsoletE]

thats kinda insane really...

i didn't mean to call you a liar (if thats what you thought) it was just so much higher than i thought it kinda bowled me over...

it seems that the Japanese marketshare really is that important...
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[Matt Bassos]

I think Microsoft went into the console markets knowing they would lose billions. They never had a chance of dominating the field, but it's all about getting you foot in the door, where possibly the 3rd or 4th Xbox console we make the profits. What is 4 Billion to Mircosoft really? Sure it's the biggest console lost in history, but for Microsoft that's like losing $4.

[David]

[ObsoletE]

[David]

Sorry, it was 15% of their overall profit since the machine's conception (1-2 years before it's release until now, I've lost the link, I'll try to find it later), not their cash hoards. I confused a few articles there!

Although as you've pointed out with your figures, the losses have ramped up to around 25% of their yearly profit ($1 billion loss a year compared to the whole company's $3 billion profit a year)

Any yeah, Sony and Nintendo's profits are down, but not negative (Nintendo's half year loss was still part of a full year profit).

SORRY about the CAPITALS, I'm just too lazy to USE italics.

Also, I'll stop going on about xbox losses (for now). I's just that I'm sick of people assuming it's a success just because there are a lot of ads, when in market share it's #3 in the world and in money made it's 10 times worse then the saturn.

I'm not having a go at xb owners for having one, it's a pretty good product (I'm getting one for Ninja gaiden and online 3rd Strike soon myself). But the M$ spin on their losses and market position is as false, disgusting and appaling as Dick Cheney (and his puppet Bush)'s propaganda. Ok, maybe not that bad.

[armageddon12]

Hey it's in my home, thus its a greater success than the saturn.

You really have poor maths; $1 billion compared to $3 billion of the profit is 33/1/3% of their yearly profit.

I'm sick of people assuming others care if its a success for the company. I couldn't give a toss if microsoft games studio went under tomorrow (so long as Bungie and Rare weren't destroyed), like I said I'm enjoying using the product, so what does it matter.

[Hyperworm]

Where the crap is everyone getting $3bn. as yearly profit from?
ObsoletE said that was profit from the first quarter.
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[armageddon12]

I was just using the number in the post above. Wasn't really paying attention to whether it was true or not.

[David]

[ObsoletE]

hmm, it doesn't really work like that...

the quarterly profit takes into account all the gains and losses already, so $1B is only comparable to $3B... therefore it is 33/1/3%...

true, if there was no XBox, it could be said that their profit would be $4B, but this is un-verifiable since it we can't travel to an alternate reality where XBoxs don't exist... but you can't compare since you don't know all the profitable and unprofitable ventures MS is involved in... else you'd have to remove every other sector making a loss, and then the possible profit would be higher again...
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[David]

Hey, you've got to compare losses of a division to profit overall somehow, to calculate how much that division is hurting the company's profit. And the method I used is entireley reasonable.

(although It's already been established that the figures were wrong, lets go along to prove my mathematics, although based on false assumptions, were correct)

We're not talking about other losses. If XB made a 1 billion loss, that's 1 billion in profit negated. So if you ignore the XB division, the company makes a $4 billion profit.

Now if XB makes a loss, that's called a 'negative profit' (which on accounts is shown in brackets)

eg (1,000,000,000).

Now the company without it makes a profit of 4,000,000,000, leaving the overall profit at 3,000,000,000, then you can say that XB has reduced their profits by 25%.

[ObsoletE]

sorry, it still doesn't work that way...

i understood what you meant, but thats not the way it works...
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[Hyperworm]

...yes it is... ?
$3bn profit overall including a $1bn loss => $4bn made overall (ignoring other losses which don't affect the calculation)
This $4bn would have been their profit if not for the $1bn loss, which reduces their profit to $3bn, i.e. a drop of 25%.
How the heck's that "not how it works"?

On topic, if Microsoft want to go throw money down the drain to create another console which lots of people enjoy, that's fine by me
I'd like to see how quickly they make that back, though... (from console sales)..
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[ObsoletE]

ok now i've re-read i do see what you mean now... i had another image in my head before, which wasn't how it works, and thats not how you were trying to make it work...

so in actuality i didn't know what you were trying to say...

my bad

i also don't mind if MS want to spend money to make me happy
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