Fortnite’s battle with Apple and Google could have an impact on news publishers

Re:Fortnite’s battle with Apple and Google could have an imp... by simonh on Thursday August 20, 2020 @04:06PM (#24228207)

Consoles are mostly sold at slightly above the cost of manufacture, maybe 5%, but that's nowhere near enough to recoup the costs of development, distribution, marketing and maintaining the attached online services. To make a profit on them as a standalone consumer product MS and Sony would to charge another 30% to 40%. The bill of manufacture for a PS 5 is estimated at $450, that's why I said they would probably have to charge $600. The console market is highly price sensitive and we've seen time and again a premium of just $100 can kill a product.

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Re:Fortnite’s battle with Apple and Google could have an imp... by criddell on Thursday August 20, 2020 @08:24PM (#24230583)

Sony is also in the software business. Their hardware margins may be thin, but how profitable is Naughty Dog? Or Insomniac? What kind of money do they make from the subscription services sold on the console?

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Re:Fortnite’s battle with Apple and Google could have an imp... by simonh on Friday August 21, 2020 @03:48AM (#24232947)

I'm not sure what you're implying. Are you saying Sony and Microsoft should just make less money?

It's entirely possible to lose money on consoles. Microsoft wrote off such a huge loss on the first XBOX, between $5bn and $7bn, that counting inflation on the losses they probably still haven't made a profit off it.

The other problem with that is it would make it flat out impossible for any other company ever to enter the console market. The up front cost is device losses would be staggering. It was bad enough for Microsoft as it is.

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Re:Fortnite’s battle with Apple and Google could have an imp... by criddell on Friday August 21, 2020 @08:36AM (#24234355)

> Are you saying Sony and Microsoft should just make less money?

Not at all. I'm merely pointing on that their console business is composed of many streams and focusing on one part of it to the exclusion of others is deceiving. Supposedly, Return of the Jedi has never made money yet they kept making Star Wars movies.

> it would make it flat out impossible for any other company ever to enter the console market

I disagree. It's harder to compete with competitors that are selling their product below the cost of production. I've always wondered if an EU-based company came out with a console, what would happen? I think Sony, Microsoft, and Nintendo would be forced to sell their consoles at or above cost in the EU or face dumping charges.

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Re:Fortnite’s battle with Apple and Google could have an imp... by simonh on Saturday August 22, 2020 @12:48AM (#24241628)

I don’t think it’s deceiving at all. If you don’t think it would lead to them to make less money, can you explain how?

It seems to me that if the consoles cost 1/3 more they would sell fewer of them (Lots of empirical evidence for this), and therefore sell fewer games and make less revenue on services to their smaller customer base, who now can by games from other publishers without the console vendor making a penny. After all isn’t the point of this to cut off their other revenue streams at the knees? I may well be missing something though.

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