The loss is the significant point here. They weren't making money on the consoles when they were more expensive, and dropping the price as a loss leader was necessary to get machines out the door. Further dropping the price would be difficult at any point that the hardware is still anywhere close to cutting edge.
More to the point, the XBox 360 is in the exact place now that the PS2 was last generation. They were the first out, they were the first to a strong userbase, they were the first with a mature and diverse game line, and they're now a given as the platform you need to develop for if you want to make your development money back. The PS3 had a number of mis-steps along the way -- the biggest question was would they end up as this generation's XBox (significantly behind the leader but solid) or would they become this generation's Dreamcast.
As for Blu-Ray? We're seeing the apex of a technology that is itself being transitioned out. That Netflix stream on my television is the future of in-home media distribution, more than anything on a PC or Mac. There will come a day when stores won't have DVDs or Blu-Ray discs, they'll have laminated cards a la game time or points cards for the specific movies or shows, and you'll swipe or input their code into your system to download it. Every major media format had a major niche market driving its early sales into a ubiquitous presence. VHS beat Betamax because VHS would license to porn, so people who wanted their porn at home bought VHS machines, which meant that they bought their mainstream stuff on VHS too. DVD eclipsed videotape as quickly and completely as it did in large part thanks to the anime and other foreign niche markets driving imports and usage. Eventually, everyone had a DVD player. While Blu-Ray's beaten HD-DVD, it hasn't found that killer niche market that must have Blu-Ray. And, with most niche video markets going to direct download or BitTorrent, they're not likely to.
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Date: 2009-01-02 10:14 pm (UTC)More to the point, the XBox 360 is in the exact place now that the PS2 was last generation. They were the first out, they were the first to a strong userbase, they were the first with a mature and diverse game line, and they're now a given as the platform you need to develop for if you want to make your development money back. The PS3 had a number of mis-steps along the way -- the biggest question was would they end up as this generation's XBox (significantly behind the leader but solid) or would they become this generation's Dreamcast.
As for Blu-Ray? We're seeing the apex of a technology that is itself being transitioned out. That Netflix stream on my television is the future of in-home media distribution, more than anything on a PC or Mac. There will come a day when stores won't have DVDs or Blu-Ray discs, they'll have laminated cards a la game time or points cards for the specific movies or shows, and you'll swipe or input their code into your system to download it. Every major media format had a major niche market driving its early sales into a ubiquitous presence. VHS beat Betamax because VHS would license to porn, so people who wanted their porn at home bought VHS machines, which meant that they bought their mainstream stuff on VHS too. DVD eclipsed videotape as quickly and completely as it did in large part thanks to the anime and other foreign niche markets driving imports and usage. Eventually, everyone had a DVD player. While Blu-Ray's beaten HD-DVD, it hasn't found that killer niche market that must have Blu-Ray. And, with most niche video markets going to direct download or BitTorrent, they're not likely to.