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this post was submitted on 07 Nov 2023
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They subsidizing in hopes they can gain monopolistic marketshare.
How does them giving free games have anything to do with their desire for a "monopolistic" market share? Couldn't they just do the same if they wanted any market share?
Because if you have to subdize to get marketshare then how are you going to maintain that marketshare once you stop subsidizing?
This has been the play for the last decade of cheap VC debt in tech. Wework, Uber, etc all these businesses operate at a loss in the hopes they can someday get a monopoly. That's the explicitly stated business goal or Uber!
It's not sustainable. It's stupid and the bill will come due eventually.
Games as an industry is impossible to make money in unless you're a platform owner. That's just how it is. The 1983 game industry crash and Nintendo resurrection showed that. It's just repeating the cycle.
This is literally how amazon works.
They operated at a big loss until people were only using their platform and then hiked prices.
They literally price undercut up and coming websites by a ridiculous margin (20-30% sometimes) subsidized by their rich benefactor loans until they were driven out of business and then jacked up their prices to make profit.
The whole game is getting people using your platform as exclusively as possible and then return to normal prices once you gave enough market share.