Console contracts were a CRITICAL necessity to maintain powerful systems and innovation. Now hear me out first.
The simple truth is, manufacturers have always done a horrible business practice, selling their consoles at a loss (mostly with the exception of Nintendo, they are smart). This business method puts the manufacturers deep in the red. Microsoft and Sony lost millions and millions doing this. The business model has to change. They can no longer take huge losses. They all want to be profitable day one, its the only way to survive. Nintendo has mostly always been profitable day one, they demonstrate how to run a business for profits.
So, the only way to be profitable nowadays, it to keep costs low. This will result in a far stripped down hardware console, lossing substantial potential power to remain profitable. The powerhouse consoles we all waited to hear and be announced and drool over specs, will all be long gone with this business model. Innovation and leaps forward, will be killed.
OR
They can have both powerful hardware and profits, IF the manufacturers adapt to the current industry, rather than stick to archaic business modeling.This new way of allowing powerful hardware, and remaining profitable, is contracts. Offer a powerful console with a cheap investment year by year contract. In the end, you pay a little more than you would have if you saved up.
What people need to realize is, this is an OPTION. A necessary one in fact. The masses will surely love it, but some hardcore gamers wont. The thing is, you don't have to get into the contract. There will surely be a separate console without a contract for $400-$500 separately, but many families wont be able to afford it.Please realize the good things in this model. It will allow a leap forward in tech, while remaining profitable. We would have barely better than current gen tech if someone didn't come up with this plan.
Its a great, and necessary option for the industry to offer powerful consoles and not take huge losses. You don't have to be in a contract, you can still buy an expensive separate product. There is an option for both hardcores and casual. It is not a bad thing, but a necessity for the industry to adapt and survive in the current environment, the old powerful hardware/huge losses model is heavily outdated, and no company will ever use it again.
reach3
This is what nintendo does... make consoles with old tech keep cost down but games suffer power.ya real smart. TWO they attemp to sell 3ds but had take a loss because cost to high for what cussumor gets. This is where selling games come in. For every game sold on a system the maker of that system gets a cut. This is why console makers really dont care about selling the hardware at a cut
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