AboutHoward N Smith Expertise I can answer questions pertaining to 3d game programming, Cpp, Pascal, Delphi, and various APIs and libraries including Windows, LUA, DirectX, OpenGL, and other things specific to game programming. I have had experience working in third party engines like Source, OGRE, Irrlicht, and Torque. Design, implementation, theory, specific algorithms and other topics. I will have difficulty answering technical programming questions outside of my domain such as database programming, web programming, IT, hardware, etc and I am not as comfortable as some others when discussing big O time complexity calculations and other academic computer programming questions (I can certainly give it a try but I'm out of practice.)
Experience I've been programming video games (with a slight focus on RPGs) for almost 15 years, and have learned many tips, tricks, and valuable insight. I've written a few articles concerning specifics (Including a workshop on an Object Oriented Approach to 3D Engine and Design) as well as completed a number of personal and professional projects in the field. I've shipped a number of casual and AAA titles, and in my relatively short time in the industry gotten the chance to work alongside some major publishers, including Capcom and Valve. I am currently employed as a Software Engineer at a game development studio.
Expert: Howard N Smith Date: 6/1/2008 Subject: video game industry
Question Why do video game providers chose to sell consoles at break even or even at a loss when it comes to prices, profiting instead from royalties charged to game publishers? Is there any difference between the video industry and PC industry
Answer Hello Michael, these are two really good questions.
I do not pretend to be an economist, but there are a number of factors that I believe to be at least part of the reason for such seemingly break-neck prices on consoles. The first is because of competition. With three companies all fighting for the same market share, the lower and more appealing you can make your console the more likely someone will buy it. Remember that the profit made from a console is extremely insignificant over the long run. I bought 1 ps2 and it lasted me many many years. Console developers realize that trying to make a reasonable profit with just the hardware itself would be a disaster.
The other reason is to sell more consoles. Console developers need publisher support, and publishers are more interested in consoles with bigger sales numbers. The more people who own a system, the more units of a particular game you can sell. By getting more consoles into the homes of the people, even if it's at a loss, is a future investment that allows console developers to leverage things such as "exclusive to this console only" sort of deals from publishers. It's a shaky balance where once the scales tip in favor of the console developers they can start making demands from the publisher.
The truth is that because so much more money is spent through software and peripherals than the actual console, the unit itself is not very important. Developers want to give them away as cheap as possible. Once people have a console, start buying games for it, using services ( see: XBox LIVE ) THAT is where the real money comes from. Like I said before, being able to leverage the publisher or developers for the money to ship a title on a particular console ( see: SDKs ) is a veritable gold mine. Much more money flows through the software.
Your other question I believe was meant to be "Is there any difference between the [console] industry and PC?" If I am wrong please let me know, but I will answer this question to the best of my ability.
Console and PC are two completely different beasts from a development standpoint. For one thing, consoles have very specific hardware and very specific requirements for making use of them. While XBox uses DirectX and operates almost exactly like a PC, there are still subtle differences. In consoles such as the Wii and PS3 these differences are much more pronounced.
Aside from that, there is also the fact that in the console universe, there is one company who controls everything. Developing a game on XBox LIVE requires infinitely more bureaucratic hoop jumping with Microsoft that it would if you just developed on a PC. You have to meet particular standards of the company, for example Microsoft has an entire certification process where you are asked to adhere to TCRs or Technical Certification Requirements. On occasion games are delayed for no other reason than Microsoft asked them to fix a number of TCR violations.
That being said there is much, much, much more money to be had on a console than on the PC. I know this sounds strange, seeing as there are so many more PCs than any one particular kind of console, but the truth is games sold on consoles consistently outsell games sold on PC. In fact, even multiple platform games show that people would rather play the game on a console. This was a statistic that sort of surprised me when I first got into the industry.
You must also remember part of this might be the rampant pirating communities that are on the PC. People who steal games like that are really harmful to the industry. I often find it ironic that the biggest pirates I know are also the biggest PC fanboys. "PC is so much better than Consoles!" It's ironic because people like that are the reason developers are all moving towards console work where at least they get paid for their products. People who tell you that pirating does not effect the developer are naive and self justifying their own misdeeds. The PCs fall from grace is undoubtedly caused by the inability for developers to make an honest living selling their products on the PC market.
So there you have it in a nutshell, of course there is more but I think I am beginning to ramble and rant. If you want more information please let me know, and good luck!
