~/Simon's Blog ❯

Hardware Loss. Software Profit.

Nowadays, a lot of the consoles on the market are released at a loss, as companies know that they can make back money using their subscriptions or other methods of making money with their software. Xbox consoles for instance are sold at a loss, because Microsoft knows a big part of the user base will buy Xbox Live Gold, Gamepass, or Gamepass Ultimate. The same goes for Sony, which bets on the fact that you'll buy into their PS Plus subscription

Of course, this is nothing new. Companies have been doing this for so long that a lot of the people growing up with games today don't even remember the times when you bought a console and used it without an internet connection primarily.

This has caused the public to shift their perspective of how Game Consoles should be priced. Whenever a new indie-console gets released, many people are quick to point out how it is more expensive than the competition, yet most don't seem to remember why that is. Most people are then just as quick to deny the idea of even buying the console, sometimes going as far as stating they could make a better/faster/more flexible console whilst entirely missing the point of why a console even exists to begin with (and it's extra expenses, e.g. dev time)

The fact that the landscape has changed in this way is kind of interesting to me, as it's something that I never saw cooperations to get through with this. Especially because on these consoles, you essentially have to pay a second time for access to the internet, as everything is routed through your console manufacturer's servers. I would have expected an uproar in disappointment for having to pay twice, yet that is not what we see.

It's baffling how, instead of failure of this model and an uproar of users complaining, we see huge success for the companies. People are indeed buying into their subscriptions, and even those which do complain simply submit to it. And it doesn't seem like this is going back anytime soon, as indicated by companies introducing MORE subscriptions, like how Xbox started with Xbox Live Gold, then expanded with Gamepass, and later with a combination of the two (Gamepass Ultimate).

Of course, many of these consoles also collect a lot of data to advertise to their users and make money in software that way. Especially Microsoft is known for this, as they place advertisements directly on your homepage and advertise in other places in their console, like their store or using their search engine. But that might be a topic for another day.

A lot of companies have started with this and have shifted the expectations of what a console provides. Where back then you really only had it as a medium to play the games, whilst nowadays, it also provides you with many other features. Remember how the Wii U had support for controlling your TV using the Gamepad? Whilst that isn't a thing anymore, we see how consoles nowadays strive to add more and more features, look at the Discord integration for Xbox and PlayStation for instance, which isn't required for the console, but was added anyway.

Because of all the extra features, subscriptions, and selling consoles at a loss to make profit later, we have strayed away from what we thought a console should be and more importantly: What it should cost. Indie Consoles like e.g. the PlayDate are considered to be expensive nowadays due to the loss that other consoles are sold at. And whilst this isn't necessarily a bad thing in of itself, it causes indie console developers to have a hard time selling their product due to users considering it "too expensive" or "Not worth it", no matter how unique the ideas they introduce might be. Though, this also creates a new opportunity for these developers, as they can advertise the fact that they don't use your data for ads, or plague you with subscriptions to get an advantage.


Thanks for reading! I wish you a good rest of the day, evening, night, or whatever other time you're reading this!

#consoles #games