Square Enix, the publisher of the Tomb Raider games, announced that the latest installment of its franchise would be exclusive to Microsoft’s Xbox, and would not be available at first on Sony’s PlayStation. This has surprised and upset gamers as the Tomb Raider franchise has typically been a cross-platform one. Kyle Orland outlined the business reasons for the decision:

• Games these days have monster production costs that approach $100 million.
• This means that publishers have to sell millions of copies before they can begin making a profit.
• There is a lot of risk, but an exclusivity deal mitigates that risk. Microsoft will have paid Square Enix a substantial amount for exclusivity rights, reducing the game’s breakeven point.
• Exclusivity will also mean that Xbox will better promote and market the game, further driving sales.
• As this is a “timed exclusive” the game will eventually launch on other platforms after a delay, meaning that in the long run the publisher eventually will reach its entire customer base.
• From Microsoft’s perspective this will help sell more Xbox consoles, and a greater install base mean it’ll eventually be able to charge more software licensing fees, creating a virtuous revenue boosting cycle.

Read about the likely business details of the arrangement, why the internet rage will die down, and more over here.

Source: ArsTechnica