XBox 360 launched in Japan

[Sis]

The thing is if there was a consolidated group making hardware the could make much bigger profits then they are now off of the hardware. And would have almost no incentive to push the envelope.

Instead of selling consoles at a loss for 1 or 2 years, and providing the most powerful GPU's on the market at manufacturing cost, we would get something that cost $80 to make, and retailed for $200, and they would all cash in, it would be far cry from the awesome deals we get today.

But what would stop a startup from creating a console that took a loss on materials to combat the new conglomerate monopoly?

.Sis

 

[scooby_dooby]

Nothing. But in the meantime we would all suffer. And that company would have one hell of an uphill battle, and would need a DEEEEEEEEEP pocket book to go against MS, Sony and N.

It would be good in the sense you only need to buy 1piece of hardware, it would be bad in the sense that the hardware itself would be weaker, and the amount of big-budget high-quality games would also be reduced.

So for a person who only buy 1 piece of hardware every generation, it's alot better. For someone who buys 2 or 3 pieces of HW each generation, it would be far worse.

 

[AlphaWolf]

But what would stop a startup from creating a console that took a loss on materials to combat the new conglomerate monopoly?

.Sis

If sony/nintendo and MS were working together and had contracts with devs what startup would have a chance?

Monopoly = Bad, Oligopoly = Bad

There's a reason for the laws.

 

[avaya]

Monopoly = Bad, Oligopoly = Bad

There's a reason for the laws.

Anti-competitive practices are bad; that's why there are laws - they all go back to the idea of a contestable market. There is no conclusive evidence from any theory of economics that a monopoly or an oligopoly is bad. There are just pros and cons.

Different markets work better with different structures.

 

[Bobbler]

and the amount of big-budget high-quality games would also be reduced.

I would think it would actually be quite the opposite. You have 1 platform that reaches the entire audience and that can be coded for and learned very well (no multiplatform watered down stuff). There won't be the cost of porting things to reach the entire market either. It would be far more ideal for developers, or at least less of a concern as to what platform to target, and instead concern themselves with what their content targets in the medium of gaming.

(the rest isn't really responding to you, Scooby - just in general and more clarification)

Additionally, as I said something like this wouldn't really work for another 10+ years or so when hardware power won't matter so much as the content in differentiating it from something else (now there can be quite a big difference between a couple years... in 10 years we'll have probably well passed the diminishing returns on graphics for everyone but the pickiest of people, arguably it has already -- not sure what they'll try to do then).

It's a strange way of thinking about it, no doubt.... think of the the PS/Xbox consoles as something akin to blu-ray vs hd-dvd and not a Bravia vs an Aquos. Unless you have an issue with DVD being a monopoly on the video disc market... otherwise I don't really understand being scared of being abused by it.

I think it's an interesting topic, regardless of if people agree or not. It seems to be a natural progression of the market when content is the only real differentiator (where "quality" of the content is the "same" regardless of format), and that might not be the case now for consoles, but it certainly is getting closer to that point every generation.

 

[scooby_dooby]

BUt most big-budget games from 1st parties are intended to capture marketshare, if there's no marketshare to capture, why spend 20million dollars on a game(3x to 4x the average costs) when you don't need to?

Why not just spend 5million? Why even bother with high production value 1st party titles at all?

I agree 3rd party devs may have more time with the system, and would invariably have better skills, but when you accept the HW they are working is already much weaker than the alternative, I still don't see how it's a win. Less big budget games and less overall power for the developers to use.

 

[Sis]

BUt most big-budget games from 1st parties are intended to capture marketshare, if there's no marketshare to capture, why spend 20million dollars on a game(3x to 4x the average costs) when you don't need to?

Why not just spend 5million? Why even bother with high production value 1st party titles at all?

There seems to be an implied statement here that first party titles lose money, since if they actually made money (which I'm guessing they do), then you already have your answer.

.Sis

 

[one]

BUt most big-budget games from 1st parties are intended to capture marketshare, if there's no marketshare to capture, why spend 20million dollars on a game(3x to 4x the average costs) when you don't need to?

Are you serious? Making money is a very basic business in a capitalism society and you need larger investment to create an attractive software as you see in the movie industry.

 

[scooby_dooby]

There seems to be an implied statement here that first party titles lose money, since if they actually made money (which I'm guessing they do), then you already have your answer.

.Sis

I'm not saying 1st party titles would cease to exist, just that there would be less of them due to the fact there will be no motivation to capture marketshare creating complacency within the console makers.

 

[Bobbler]

BUt most big-budget games from 1st parties are intended to capture marketshare, if there's no marketshare to capture, why spend 20million dollars on a game(3x to 4x the average costs) when you don't need to?

Why not just spend 5million? Why even bother with high production value 1st party titles at all?

I agree 3rd party devs may have more time with the system, and would invariably have better skills, but when you accept the HW they are working is already much weaker than the alternative, I still don't see how it's a win. Less big budget games and less overall power for the developers to use.

Why do studios still spend insane amounts making movies? By that logic every movie made would be small budget, because they don't need to capture marketshare for a format they are exclusive to (movies are the content for the dvd/blu-ray/hd-dvd/etc formats just like games are content for the a console format). Instead of software trying to sell the units of hardware they'd be directly competing with each other to just sell the software itself (which is the optimal thing -- at this point some genres on consoles don't have any real competition... look at Doa series on Xbox? what does it compete with... if there was one console it would have to compete with every other 3d fighter out there). The software is all directly competing with each other. It's really hard to tell if it would suffer, is all the software competing directly worse than it indirectly competing? I think the average quality would probably go up -- it's hard to tell... I have a feeling we'd still see the huge budget titles that are trying to be a step above the others, there would be no reason to stop -- the competition between individual game titles would be much greater... do you think Sony would have dumped more into Killzone if it had to directly compete with Halo to get sales on the same platform? It wouldn't be as if Sony, MS, and Nintendo would drop their first party studios (as they would be a large income source), they would just all have to compete more directly.

Also, what does HW being weaker have to do with it? Weaker than what? I'm talking about a point where it being "weaker" won't matter because the experience difference is going to be negligable at best. Are videos on HD-DVD worse quality because it has less capacity than BR? This is the point I'm talking about, where the content is the limitation of the quality, not the hardware (which will be very much what happens in the coming years). Weaker is meaningless at that point.

 

[<nu>faust]

I'm not saying 1st party titles would cease to exist, just that there would be less of them due to the fact there will be no motivation to capture marketshare creating complacency within the console makers.

exactly.
I can't beleive that some people actually beleive a monopoly in videogame market can be good thing. Laws against monopoly(most importanly Sherman Antitrust Act )are not there for nothing, competition is essential part of a healthy functioning capitalist market. Why do you think standart oil was broken up in to many different companies? Why do you guys think energy companies are forced by us government to be broken into smaller pieces?

 

[Carl B]

There is a place for 'natural' monopolies since the conversation is going that route. Encouraging competetion in certain fields can lead to waste and redundant infrastructure being laid, both things outside of the public interest. Cable, telephone, power, water, etc... all of these are examples of traditional 'natural' monopolies, and it's only recently that regulations have forced the owners of the infrastructure to open up their networks for useage by competitors - a sort of way to split the difference between competition and waste. That's if we're talking about the US of course, which it seems we are.

And of course transformational technologies all play their role as well. Cabel facing competition from sat, landline from cell, both from VoIP, etc etc...

In any event I think there are very real cases to be made for certain industries to be nationalized, but that's neither here nor there.

Ok, now all of that being said - video games is *not* a natural monopoly. But I do think their are both benefits and drawbacks to several combinations of market dominance.

 

[Sis]

exactly.
I can't beleive that some people actually beleive a monopoly in videogame market can be good thing. Laws against monopoly(most importanly Sherman Antitrust Act )are not there for nothing, competition is essential part of a healthy functioning capitalist market. Why do you think standart oil was broken up in to many different companies? Why do you guys think energy companies are forced by us government to be broken into smaller pieces?

Other than "the price will triple for the consoles" and "they'll make less first party games at cheaper budgets", where is this overwhelming evidence that an in-generation monopoly of a console manufacturer is bad?

Please note again that no one has said, "there should be one lifetime console manufacturer", which is what it seems people are arguing against. Mostly, I am suggesting only that during a generation of consoles, a single format is preferable to a splintered set of similar formats.

I arrived at this thinking based on the idea that a) innovation happens at generational end points, not in-generation b) multiple consoles splinters development and publishing house budgets and forces risk taking where none need be and c) confuses the market.

On the other hand, the penalty to an in-generational monopoly is that a) the price cuts of a system probably won't come too often--though, it should follow normal and natural market pricing trends.

I dismiss out of hand the notion that first party titles will be made less often or cheaper, since this implies that their sole purpose is market share, as opposed to generating revenue by way of increasing console and unit sales.

Finally, stating that "antitrust laws exist for a reason" is not really an argument, so I don't have a response to that.

.Sis

 

[scooby_dooby]

It doesn't imply the "sole" purpose is to increase marketshare. It simply acknowedges that it "one" very large contributing factor, if you remove that factor then there is less motivation to produce these titles.

You have to think about the business model behind 1st party exclusives, the main purpose of them, and the main pay-off, is to increase your marketshare, bringing more consumers to your console, increasing overall games sold, increasing the royalties from 3rd party game sales.

They also make some money, that it true, but to think that companies would pursue and invest in 1st party franchises with the same intensity they do now, while holding a vast monopoly on marketshare is being naive IMO.

For example, do you think we'll see more 1st party RPG's coming from Sony if A) MS captures 2% japan or B) MS captures 30% of japan? Anwser is obvious to me, if MS began to encroach on Sony's installed base in japan, they would heavily invest in some 1st party RPG's in an attempt to take-back marketshare, or at least stop the bleeding.

For consumers that's good, we get more games.

 

[Bobbler]

It doesn't imply the "sole" purpose is to increase marketshare. It simply acknowedges that it "one" very large contributing factor, if you remove that factor then there is less motivation to produce these titles.

You have to think about the business model behind 1st party exclusives, the main purpose of them, and the main pay-off, is to increase your marketshare, bringing more consumers to your console, increasing overall games sold, increasing the royalties from 3rd party game sales.

They also make some money, that it true, but to think that companies would pursue and invest in 1st party franchises with the same intensity they do now, while holding a vast monopoly on marketshare is being naive IMO.

For example, do you think we'll see more 1st party RPG's coming from Sony if A) MS captures 2% japan or B) MS captures 30% of japan? Anwser is obvious to me, if MS began to encroach on Sony's installed base in japan, they would heavily invest in some 1st party RPG's in an attempt to take-back marketshare, or at least stop the bleeding.

For consumers that's good, we get more games.

You're missing part of it... The question isn't "would sony make more RPGs if MS had 30% of the market rather than 2%?" the question is "would Sony make their first party RPGs better if MS had first party RPGs competing on the same platform?" The software would do the fighting for itself. Answer me this (I asked it but nobody answered): If MS, Sony, Nintendo, and an assortment of other companies made a platform and MS made their Halo to make them money (that would be the reason to make fantastic games now, and it would be enough reason to do it, too), don't you think Sony would have dumped more into Killzone to make it better? It's all abuot making money in the end, and if pushing out good first party titles does that they I don't see why anyone would think they wouldn't (first party games would be a much bigger source of income than the system we have now, so they'd be even more important to Sony, MS, and Nintendo's profits, so I'd bet they'd actually put more effort into them rather than hardware and paying off third parties for exclusives).

 

[fearsomepirate]

Other than "the price will triple for the consoles" and "they'll make less first party games at cheaper budgets", where is this overwhelming evidence that an in-generation monopoly of a console manufacturer is bad?

I dunno, ask 3rd parties how they felt about Nintendo's strong-arm tactics during the 8-bit era. Just supposing we had a monopoly this generation, who would have it? Sony, probably, so no Xbox or Gamecube. If monopoly was achievable and sustainable, the first thing to go would be heavy investment in R&D. I'll warrant that had there been no Dreamcast for Sony to blow out of the water, the PS2 would have either been less powerful than it was or delayed longer. Why sink a billion into some ultra-fancy architecture when you can spend a quarter that and still have the best-looking console graphics anyone's ever seen--or what if it was a true monopoly to the point where Sony controlled the PC graphics chip market as well? Competition is a key driving factor in technology--it's all about coming up with something that makes the other guy's box look like last year's news.

Or on the other side, does anyone thing the Xbox would have had 64 MB of DDR400, a hard drive, and the NV2a graphics chip all priced at $299 if they hadn't been trying to put the technological beatdown on Sony?

 

[Sis]

I dunno, ask 3rd parties how they felt about Nintendo's strong-arm tactics during the 8-bit era. Just supposing we had a monopoly this generation, who would have it? Sony, probably, so no Xbox or Gamecube. If monopoly was achievable and sustainable, the first thing to go would be heavy investment in R&D. I'll warrant that had there been no Dreamcast for Sony to blow out of the water, the PS2 would have either been less powerful than it was or delayed longer. Why sink a billion into some ultra-fancy architecture when you can spend a quarter that and still have the best-looking console graphics anyone's ever seen--or what if it was a true monopoly to the point where Sony controlled the PC graphics chip market as well? Competition is a key driving factor in technology--it's all about coming up with something that makes the other guy's box look like last year's news.

Or on the other side, does anyone thing the Xbox would have had 64 MB of DDR400, a hard drive, and the NV2a graphics chip all priced at $299 if they hadn't been trying to put the technological beatdown on Sony?

Why not reverse the question and say, "Ask Sony how they were able to come into a market dominated by Nintendo and Sega and somehow release a 100+ million unit seller?"

This, to me, is a perfect example of contestable monopoly.

Also, your point about Dreamcast and PS2--this is exactly the scenario I'm looking at. Two consoles release, both in competetition with each other, one folds and one becomes a temporary monopoly.

Now, is the suggestion that had the GC and Xbox not come out, we would not have seen God of War? Or Katamari Damacy? Or Dragon Quest 8? Or that if they did come out, they would not be of a high quality?

.Sis

 

[Edge]

People who wish for a Sony monopoly in japan are not thinking it through. If MS captures 30% of japan, sony's response will be to dramatically increase their production of high quality 1st party RPG's.

I don't believe the market works this way, especially when one could argue that the PS2 is experiencing a glut in the number of RPG's.

Throwing more money at development does not guarantee a good product or good sales. Sure certain franchises sell well, but they are building themselves off of a good game to begin with, even though succeeding versions of the game may not match or exceed the original.

The main benefit I see from more competition is lower prices.

I think Nintendo provides adaqate competition in the market, that Microsoft is not needed.

Your response, sounds like a MS way of thinking, that throwing more money at something solves the problem, but that is not always the case, with MS failing to take Japan.

 

[Carl B]

Well I have to say I rather have MS in it than out of it. Either them or SEGA or somebody. Three seems to be a good number of players, even if only one is ever 'the king.' That's not to say I'm not amused when I see the definition of hubris (MS) bleed a bunch of money, but I do think that it would be a loss if their pullout left us with only Nintendo and Sony. And clearly they have contributed something innovation-wise as well, in Live and the hard drive utilization. I don't see them pulling out anytime soon though.

 

[scooby_dooby]

If MS, Sony, Nintendo, and an assortment of other companies made a platform and MS made their Halo to make them money (that would be the reason to make fantastic games now, and it would be enough reason to do it, too), don't you think Sony would have dumped more into Killzone to make it better? It's all abuot making money in the end, and if pushing out good first party titles does that they I don't see why anyone would think they wouldn't (first party games would be a much bigger source of income than the system we have now, so they'd be even more important to Sony, MS, and Nintendo's profits, so I'd bet they'd actually put more effort into them rather than hardware and paying off third parties for exclusives).

I just don't think there wouold be the same amount of incentive there. I mean, sure Halo 2 will sell alot of copies, and they'll make some money, but won't the vast majority of their income is be from 3rd party royalties?

In this scenario you have 3 companies, all collecting a ton good royalties, so they have big fat bottom lines, alot of black ink, and everyone is happy. What the incentive to go out, basically be a glorified publisher and make a few more million dollars? When you're making 100's of millions from milking 3rd paty game developers?

Without knowing the hard numbers it's hard to say, but it seems to be the money they make from selling the game titles must be a drop in the bucket compared to the money they make from royalties. Sure there's still potential there to make money, but only off of game sales, much less reward for the risk.

I guess you could make the argument they will have a much larger installed base...bah..all I know is I love the staus quo. This is perfect, this is where I want to be, with retarded hardware wars, and both companies throwing tons of money at exclusive titles. Good time to be a gamer.