> The moment gaming became genuinely profitable, console manufacturers realized they could control their entire ecosystem. Proprietary formats, region systems, and lockout chips were all valid ways to ensure companies could levy hefty licensing fees from developers.
This is historically inaccurate. All console games were originally produced in-house by the console manufacturers, but then 4 Atari programmers got wind that the games they wrote made tens of $millions for Atari while the programmers were paid only a relatively small salary. When Atari management refused to give the programmers a cut, they left and formed Activision. Thus Activision became the original third-party console game development company. Atari sued Activision for theft of trade secrets, because the Activision founders were all former Atari programmers. The case was settled, with Atari getting a cut of Activision’s revenue but otherwise allowing Activision to continue developing console games. I suspect this was because the 4 programmers were considered irreplaceable to Atari (albeit too late, after they already quit).
The licensing fee business model was a product of this unique set of circumstances. The article author's narrative makes it sound like consoles switched from open to closed, but that's not true. The consoles (like the iPhone) switched from totally closed to having a third-party platform, after the value of third-party developers was shown.
> Consumers loved having access to a library of clean and functional apps, built right into the device.
How can you say they're "built right into the device" when you have to download them? Moreover, you were originally able to buy iPhone apps in iTunes for Mac, and manage your iPhone via USB.
> Meanwhile, they didn’t really care that they couldn’t run whatever kooky app some random on the Internet had dreamed up.
I'm not sure how you can say consumers didn't really care. Some people have always cared. It's a tradeoff, though: you would have to care enough to not buy an iPhone altogether. That's not the same as not caring at all. Also, remember that for the first year, iPhone didn't even have third-party apps.
> At the time, this approach largely stayed within the console gaming world. It didn’t spread to actual computers because computers were tools. You didn’t buy a PC to consume content someone else curated for you.
I would say this was largely due to Steve Wozniack, who insisted that the Apple II be an open platform. If Steve Jobs—who always expressed contempt for third-party developers—originally had his way, the whole computing industry might have been very different. Jobs always considered them "freeloaders", which is ridiculous of course (for example, VisiCalc is responsible for much of the success off the Apple II), but that was his ridiculous view.