[dataangel]

You are correct, but mostly because console lock in simple doesn't matter as much. New console doesn't play your old games? Your old games probably suck more than the new ones anyway. New office suite can't open your customer spreadsheet? You're fucked.

[hackinthebochs]

Also consider that consoles have been largely unprofitable for Microsoft until recently. The console wars were a proxy for the set-top future that these companies were predicting. If consoles had to be profitable in their own right, Sony would have won a long time ago. Nintendo has been a niche for a few generations now so they don't really count (though I'm not sure how you'd classify the Wii here).

[lmm]

Sony eats enormous upfront losses to establish its consoles. The PS2 is now the best-selling console of all time, but even with their PSX profits they would've struggled to attract the investment needed to develop it and spend the first few years selling at a loss without the Sony mothership bankrolling them.

Nintendo by contrast makes a profit on every console it sells from day 1. IIRC the Wii is the most popular of the current generation, so I don't think you can dismiss them like that.

I suspect that in a world where console businesses had to stand or fall on their own we'd've seen a less ambitious PS2, with a higher initial price, which would ultimately have attracted fewer developers and been a more modest success. And the PS3 would look a lot more like the Wii in terms of specs and price. How much this would've damaged bluray adoption and HDTV sales is an interesting channel for speculation (and is one of the big reasons sony is happy to subsidize its console division a bit).

[dagw]

Nintendo by contrast makes a profit on every console it sells from day 1. IIRC the Wii is the most popular of the current generation, so I don't think you can dismiss them like that.

Not only that, they've made 4 of the top 10 selling console games this year. By contrast Microsoft Studios has 1 game on the top 10 list and the best selling game by Sony is on 26th place. The numbers are basically the same for 2011. So not only are they make healthy profits by selling more consoles than anybody else, they're also running an incredibly successful (and I assume profitable) games studio selling games for those consoles. That's not too shabby for a niche player.

[lmm]

The fact that Nintendo profits from games actually goes along with the great grandparent's point though. IIRC a large part of the death of Sega was a "sell consoles cheap, subsidising them with the profits we make on games" model.