Can we stop pushing the idea that consoles are sold at a loss? The Wii has been sold for a profit since launch (source
). The Xbox 360 has been sold for a profit for four years (source
). The PS3 has taken the longest to get there, but it is now sold for a profit as well (source
). New consoles are often initially sold at a loss, but they do not stay at that price.
The problem with the five-year lag is that the consoles are decreasing the lag the consumer sees. Crytek's CEO claims
that the current generation of consoles was holding back developers. There are some games that are PC-only, but those only appeal to a fraction of the potential market, so most developers have to go for multiple platforms and accept the limitations that the old hardware has. The consumer mostly sees cross-platform games, so it doesn't look like a five-year lag at all. If there were a hardcore PC developer pushing the envelope, it might be different, but now that Crytek has developed CryEngine 3 for all platforms, I don't think anyone could do it.
I wonder how much of this is Nintendo's fault - MS and Sony look over and see their competitor beating them with half the graphics and a bit of a lower price, and they realize that graphics have hit a point that most games won't benefit that much from nicer hardware. Of course, then they think that the magic is all in the motion controls and that they need to have something that imitates that...it's like watching iphone imitators.