Tom Goldman said:
"They have very few first-party studios at Microsoft," he says. "Bungie's next Halo is the last one, Rare rarely puts out anything, you've got Peter Molyneux with his Fable stuff... but they don't have first-party development studios inside at Redmond or anywhere for that matter. We do. So rather than putting their money behind that, they've been going to Epic or Valve or BioWare to do what they did with Mass Effect, and that's where they throw their dollars."
Okay, I'll bite. I don't get it.
What is the inherent virtue in a first party studio?
In a first party studio, you own the developers. You pay their salaries. They make games for you and only for you.
In a third party studio with a timed exclusive, you pay the developer a fee. They make a game that is, for a limited time only, for you and only for you.
Call me crazy, but this sounds to me like a win-win scenario.
It's a win for the console maker. The console maker limits its risk. It is not footing the bill for the entire cost of game development, just a portion of it. If a third party game fails to be successful, all they've lost is the exclusivity fee. If a first-party game fails, you're on the hook for the entire development cost.
It's a win for the developer. The developer limits its risk. Because exclusivity is temporary you can still get more revenue later on other platforms, and if the platform on which you agreed on exclusivity fails your titles and your company do not fail with it.
It's a win for gamers-- regardless of what platform(s) they own, more games will theoretically be available for it because the eventual possibility of ports to other platforms exists for third-party developers, whereas for first-party it does not ever exist-- there is no reason for a first party studio to develop for competing platforms.
Lastly, the speaker is wrong-- Microsoft owns the Halo IP but no longer owns Bungie, developers of Reach. Sure, MS is publishing it, but they are not developing it.
So... I don't get it. Is Sony supposed to get extra credit because it employs its developers instead of contracting for them? Does it really matter which way a console maker spends its money?
If the accusation against MS is that they are buying excellence instead of making it, isn't Sony paying MORE to foot the bill for first-party development? Isn't that the same thing?
Seems to me this is an empty expression of corporate loyalty; the speaker is proud that the best games on the PS3 are made by Sony employees instead of third party developers. Seems to me that this is a positive for the 360 ecosystem-- not a negative.