The above stated model is close but not exact. The console makers take huge losses from the console itself without regard to software. As there is no guarantee that the software itself will sell enough to recover it’s own costs much less the costs of the platform it’s on. The consoles primary hope of eventual profit comes from the cost reduction that can come only through time as the manufacturing process becomes less expensive.

Great article by the way.

I’m probably wrong in this, but take EA’s gambit with the new upcoming Battlefield game on the PC. People will download it at first and praise it for being “free”. When the DLC or “micropayments” is slowly but inevitably introduced, people will start to whinge and call it a con, even though EA have been quite honest from the start. For want of a better explanation, its just “human nature”. Or being British lol.

At least with WoW, it tells you from day one when you sign up that there is going to be a monthly charge plus extra for all the new content thats going to be introduced, and If you want to be “in” the current action, your gonna have to buy it. Theres also this perception, possibly erroneous, that you “gets what you pays for” and that firms like Blizzard more or less deliver on that .Yeah, theres a monthly cost, but everyones paying and grumbling, and everyone is on a level playing field. No haves or have nots. I dont know anyone that is a WoW player who doesn’t own all the added-on content. Sounds completely counter-intuitive, but i believe people would rather pay and whinge than be in this slightly confusing grey area of playing a free game (even if its a good indicator of whether you would actually like it and is worth the time/money ratio-investment) that needs bolt on goodies relative to how involved you are in the game.

Sounds off-topic but look at xboxlive. One of the early reasons for its success, and why people “bought it” was because it offered a more clear payment structure than Sonys proposed offerings at the time. One payment, for a blanket use of all online games. Yeah, people moan, but they rationalise it by arguing that there is less “lag” and the comms are better etc.

Its funny, but the xboxlive system is possibly MS’s undoing with regards to having an MMO on their system. Publishers/Gamers/MS are all at odds more or less as to how they are going to make money and who will get what.

Its late and my ability to structure cohensive sentences are even worse than usual, so many apologies if I havent explained myself competently enough lol.

Competition is not a de facto effect of capitalism, and over here we have a good number of services and consumables which have seen their prices rise as they became private affairs, even with several companies battling for the same market.