I was thinking if they really make one game exactly the same to run on both, they can't charge $100 just to play it on two platforms and with cross-buy how they would prevent people got two games for the price of one?
People wouldn't get two games for the price of one, they'd get one game for the price of one, but would be able to play it on two different devices. Exactly as if I buy a game on an iPhone or iPad, I can (usually) also play it on the other device.
I don't think this is a case where you can buy one piece of software that is the exact same experience on portable and home console, I think that's a dumb idea. Why sell one piece of software when you can sell two.
Think of it this way: why make two pieces of software when you can make one? Let's do a few calculations:
Let's assume a game costs $X to make for a single device, and an extra 20% for a second device (we're assuming tools and system architecture are designed to make this as simple as possible, so I'd say that's fair). You have two different devices, one with a 50m install base and one with a 20m install base. Let's also assume that Generic Videogame Franchise (GVF) will have about the same sell-through ratio on each device, say A%. And, because there's going to be a high level of crossover of GVF fans between the two devices, let's assume that 50% of the people who buy it for the less popular device will also buy a copy of the more popular device. And we'll say that you make $Y per copy sold for either device.
Therefore, if you make two separate games, one for each device, your total cost is $(2X), and your total revenue is:
$(Y*50m*A/100 + Y*20m*A/100) = $(Y*A*700,000)
Return on investment, then, is:
(revenue-cost)/cost = $([Y*A*700,000 - 2X]/2X) = $([Y*A*350,000 - X]/X)
Now, let's look at making a single game for both devices. Cost here is $(X*1.2), and revenue is:
$(Y*50m*A/100 + Y*20m*A/100 - Y*20m*0.5*A/100) = $(Y*A*600,000)
Then for the return on investment:
(revenue-cost)/cost = $([Y*A*600,000 - X*1.2]/X*1.2) = $([Y*A*500,000 - X]/X)
So, under our assumptions, you would make a 43% higher revenue per dollar invested by making a single game for both devices rather than building two separate games.
The result is surprisingly resilient to changes in my assumptions above, by the way. Even if you assume that a dual-platform game costs 50% more to make than one for a single platform
and you assume that 75% of those who buy it for the less popular platform would also buy it for the more popular one, you still end up with a better RoI by making a single game for both platforms.
Furthermore, this misses a number of important aspects of a "cross-buy" scenario for a company like Nintendo. Firstly, as I mentioned previously, it would free up their internal studios to release more games in new franchises, which increases the chances they'll create another "killer-app" a-la Wii Sports. Secondly, Nintendo could use cross-buy as a means to encourage people into purchasing digitally, by only offering it with digital purchases. While I don't have numbers in front of me, I'd be fairly confident in saying that Nintendo would make as much off a single digital purchase as they would off two physical purchases of games, which would make it worth their while even ignoring the above RoI calculations.
Fundamentally, it becomes more profitable for Nintendo to move to a cross-buy model the closer the home console and handheld hardware come to each other,
even if a large proportion of customers would otherwise buy both games. With the coming generation, it's entirely feasible for Nintendo to use identical architectures for both CPU and GPU across both their devices, and although performance levels would still differ quite considerably between the two, with appropriate tools the cost of scaling assets down for the handheld version shouldn't be at all prohibitive. I can't really see any scenario where Nintendo wouldn't be more profitable by treating both of their hardware devices as a single platform when it comes to software development.