Mental wrote:Consoles have been loss leaders since forever in this industry, from what I know, though I don't really know any specifics. I believe that, in the generation before this one - if not even the 16- and 8- bit eras - all of the consoles were money losers as well. As a business, you make your money back on software.
If I'm not mistaken, in the past it was lose money for the first year, year and a half, be even for the next year or so, then make money the last two years or so on the hardware, assuming the life cycle of a console was 5 years. The Saturn screwed that up as they were losing money right from the beginning and I don't think ever made any coin. Sony builds their own (they are an electronics manufacturer, after all) so they actually make money on the consoles but have such a large investment in the facilities, they have large break even points (Gray's article said about 20 mil for the PS2, which they've destroyed). The DC apparently made $1 a system off the bat. Xbox never made money since Microshaft used off the shelf parts. The N64 I believe followed the cycle but the 'Cube apparently was very close to being even right off the bat due to its sleek design (ie. no bottlenecks, thus no extra power required in certain parts). I think even now they're making coin, even at the cheap price it it's at.
