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April 4, 2012 03:05 pm

Dysfunctional Console Industry Struggles For New Profit Centers

MojoKid writes "The rumor mill is still churning out quite a bit of information on new consoles this week, including new data on Nintendo's upcoming Wii U. According to unnamed developers, the Wii U actually isn't as powerful as the Xbox 360 or PS3, despite boasting HD graphics and significantly improved hardware. Meanwhile, the Xbox 720, codenamed Durango, is reportedly targeting the holiday season of 2013 as a launch window. Rumors are floating about of a required always-on internet connection and of locking out the used game market. What this discussion truly highlights is just how dysfunctional the entire console industry is and how skewed its profits are. Profits on hardware sales are so small, game shops can't survive on console sales alone. $60 MSRPs are subsidized by exchange and trade-in programs. Kicking Gamestop in the teeth may occasionally sound like fun, but the idea of killing the used games market doesn't make much sense. If used title values collapse and MSRPs stay the same or rise, the entire industry could hamstring itself in the name of higher profits."

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