Foolproof said:
Yes, try to end a competition war by adding another party to it. Because that always works so very well.
You clearly don't have any idea what Yatzee is saying. He isn't saying add another party he's saying create an industry standardized format instead of every game needing authorization to run on certain consoles. In essence any game can run on any console, just like with DVD players or CD players.
The only problem I see with this is it discourages people from expanding outside whatever the industry standard becomes.
I'll use Microsoft as an example:
If you're Microsoft and you produce the XBox, and only games made for the XBox which you create and/or authorize can run on it, then when you decide to put out the new shiny XBox 360 you can simply stop producing/authorizing XBox games so that people who own XBox's have no choice but to upgrade if they want to play the new titles. Since you control the market you can
force people to switch when you upgrade hardware.
However, if there's a standardized format that you don't control, then companies will be able to keep producing games that run on the XBox's format without your consent. Sure, you can put out the superior XBox 360 and hope people adopt it, but people will have little incentive to since XBox games will still be coming out that run on the system they already own. Then in turn rather than make games solely for a new console only a few people have bought, developers would prefer to continue making XBox games which already have a large market base. And with the XBox still getting full support gamers in turn have less reason to buy the new console. Thus it forms a cycle that's hard to break out of.
This is pretty much why Bluray has had so much trouble taking over for DVD.
Sure, the new XBox 360 format might catch on eventually, but it'll be slow and thus Microsoft will be discouraged from making new consoles or anything that requires new hardware like the Kinect if adoption is so sluggish. Thus new hardware will be made less frequently and progress and innovation is stifled.