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Comment by elif | Hacker News Reader

Nintendo, Sony, and Microsoft are creating a game ecosystem by selling hardware at a loss or near loss, footing R&D, supporting devkits, and running promotions mutually beneficial for developers. The value of creating and enabling an entire ecosystem is found to be worth 30%.

An iPhone is sold for a substantial profit regardless of gaming entirely, and offers none of those services or promotional benefits to developers/publishers.

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This may have used to be true to a degree, but the console makers don't really sell consoles at a loss anymore, or a minor loss at launch knowing that they will turn a profit soon enough on the hardware once they reach volume.

Not sure what the point is supposed to be with "The value of creating and enabling an entire ecosystem is found to be worth 30%", and making the judgment that Apple hasn't done the same. Without some harder numbers on both sides, it's not a conclusion that anyone is in the position to make. It's also worth remembering that Apple has amassed an extremely loyal customer base that has shown that they are willing to spend an immense amount of money on App Store purchases over the period of decades - Apple does deserve to cash in on that value created such as being the single point of contact for easily addressable issues with app purchases, fraud, & such for the customer, secure & frictionless payments, and most of all, creating the situation where users want to go and spend $ on their platform over alternatives.

The value created is in developers/publishers being able to make more $, which is the ultimate value.

how do you turn a profit by volume if every console is X$ and the cost to make it is Y$ where Y > X? Is that because you include NRE in the Y figure?

This is true, but until Free-to-play arrived, the companies would get a cut from every single piece of software that was published through licensing. The advent of downloads reduced the trade in used-games, meaning higher revenue.

The selling at a loss is just another business strategy to drive hardware sales of a limited-functionality device (ok, you can watch videos and surf the net, but it's hardly an actual computer) compared to the iPhone, where other factors drive sales and increase the user base.

I mean, I love my Switch and I'm definitely a profitable customer but it's a specialized device. If Nintendo's loss-leader strategy is worth 30%, why isn't Apple's strategy? Or really, who gets to decide what the correct % is? And how?

in theory, that is the responsibility of the markets.

but when you have a duopoly there is no one to decide the correct %, and we start to not have a functioning capitalist market.

It's almost like we're all discovering that there may be problem with the underlying system.

That seems like an incredibly arbitrary distinction for why consoles are justified in taking 30% but Apple isn't. Apple created a software platform that has made developers billions of dollars, it seems to me there has been value created there.

So did Microsoft, but win32 apps aren’t taxed and MS is doing just fine.

I'm sure Apple would be just fine as well, I just found it a little funny that the previous poster claimed Nintendo/Sony/Microsoft were justified in taking 30% because of the "value of creating and enabling an entire ecosystem"... as if Apple hadn't done the exact same thing.

Actually MS isn't doing just fine as they would gladly that everyone migrates to Windows Store, which was also part of Windows 10X plans, store only installations including Win32.

Now that Windows 10X seems to go nowhere [1], and Project Reunion is still trying to find out how to merge Windows 7 and 10 worlds [2], one more reason not to do just fine.

[1] - https://www.thurrott.com/windows/windows-10x/238014/windows-...

[2] - https://github.com/microsoft/ProjectReunion/issues

You compare a company ( Apple) who invested billions of dollars in ecosystem, hardware etc. In dev tools. It's not even fair to compare it with parasitic company Epic. That is leveraging platform been developed and pretty much created a market to leverage human weaknesses ( gaming). They don't bring any real in this world. And yet they dare to say they not happy with market that brought them billions. Such kind of ideas can only appear in such kind of company, that don't bring any value to the world and thinks that the world owns them something. Huge part of Epic success is apple marketplace that users trust. Even google play is a derivative from Apple's ideas due to Eric copy pasted while been a board member of apple. You got access to billions of people thanks to apple and google, using their tools. I think it's logical apple and google want their cut for that.

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