why are consoles cheap and games expensive

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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

The idea behind selling consoles at a loss is that lower prices will lead to much higher sales, leading to much higher video game royalties. The idea is that if twice as many people are willing to spend $300 on video games as are willing to spend $600, you'll have twice as many sales. Also, the bigger spenders will have more money saved to buy video games, giving the company even more royalties.

To answer your second question, the main difference between the video game industry and PC industry is that consoles are mostly for gaming, with a few other functions, while personal computers are mostly for work with a few games. Only about 15% of the applications on my Mac are games, with a similar rate for my Windows, and I own a lot of games. By contrast, everything I own for video game consoles is either a game or is used to enhance games.

Another difference between consoles and computers is that computers are designed to have high RAM and lower processor speeds, to run many things simultaneously. However, a console will rarely be running multiple simulations, so it has a much stronger processor than a PC with similar RAM.

Finally, the control systems must be considered. Entering text is tedious on a console, but can be done easily on a computer. Also, the existence of a mouse, as opposed to a pair of joysticks or a Wiimote, makes precise actions easier with computers. As a result, many more RTS games are for PC while many shooters, fighters, and platformers are for consoles.
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