7 ms·

Anyone who calls the Xbox a failure has no clue. It's the big winner in this round of console wars. It's the only multimedia device that's networked to millions

Anyone who calls the Xbox a failure has no clue. It's the big winner in this round of console wars. It's the only multimedia device that's networked to millions of PCs and hooked up to millions of computers. It maybe hasn't sold as many units as the Wii, but the games per console stat is a blowout. As are paid downloads of content, third party games, etc. And yeah, the red ring of death sucks (has happened to me a few times) but that's how they beat the PS3 to market and won the generation. In the end the 1 year lead is worth whatever they had to eat on that.

imajes 17y ago
@matt: what's their per unit cost vs their income of the consoles? i thought they were mostly loss leaders. so how have the games been selling?
- inerte 17y ago
  Lifetime, Xbox lost money. Their bet is that Project Natal will crush Wii. MS lost on the first years, they're making a profit since Halo 3 launch (yearly, at least until 2008 fiscal quarter) The Xbox 360 has been a success for MS, it displaced Sony. But they made the mistake of focusing on replacing the number one, and forgot the whole, which Nintendo acquired. If the market was a cake, 360's won a slice, but Nintendo baked more.
  - rbanffy 17y ago
    I thought Project Natal belonged more to the Cairo, WinFS and Windows for Pen Computing bin, namely, vaporware products that don't work nearly as well as advertised (Milo and Kate? gimme a break), pre-announced by many, many months (if not years) and designed to create a FUD atmosphere that hurt the sales of competitors.
axod 17y ago
What's the total profit from Xbox? Considering the complete package - total investment etc from start to finish? Quite a large loss. There's been one clear winner and that's the wii - unless you're looking for something other than cold hard cash profit, and I suspect number of units in peoples living rooms. In terms of hardware, the xBox absolutely sucks. I use it rarely because the thing is so loud with its 100 fans. I have a quieter washing machine. If MS were going after the 'living room multimedia device', they failed spectacularly. The large HDD is also rendered useless, since you still have to put game discs in for 'copy protection purposes'.
- berntb 17y ago
  You miss the point of a monopoly -- Microsoft is able to eat losses to take over markets as long as they have a safe cash cow. Then, the monopolist have a new "owned" area to milk money out of, for taking over the next application type. The result is that in the process of getting a monopoly of something, there is lots of development. Then, the developers/money is being sunk elsewhere and the development speed in the monopoly areas are really low. That is why you haven't seen any revolutionary changes in e.g. office products for quite a few years. Which we all lose by, since productivity isn't increased. (Or maybe there just haven't been any new possible ideas in writing documents? Hardly. Computer linguistics hasn't been standing still the last decade.) Edit: Clarity.
  - ssharp 17y ago
    The problem is that unless the 360 can make up for the losses of the first XBox, they are still losers. They'll either need that to happen or they'll need to continue profitability with their 3rd console. It's easy to say that MS has taken over the "gamer" market but we thought the same thing when Sony dominated with the PS and PS2. It's clearly a market whose leader can be taken down: The rise and fall of Sega. The rise and fall and rise of Nintendo. Sony and Microsoft coming out of nowhere to take over.
    - berntb 17y ago
      My point was that Microsoft only need to up the investment speed enough that everyone are in the red. The non-monopolists will have to give up in the end. Then the monopolist can stay and earn lots of money for generation n, n+1, n+2, ... (I think this is a classic example in economy, but for bakeries (?). A big chain goes into a geographic area and undercuts the prices of the small bakeries. After a while they close. Then the prices are raised to higher than ever before -- to pay for undercutting prices in the next area.)
      - ssharp 17y ago
        There are two things working against that idea: 1) monopolies are illegal in most countries that you'd be targeting and 2) achieving monopolies in most markets is difficult. In your bakers analogy, the barrier to entry is low enough that other bakers could set up shop and create competition. The video game console market is large enough that there will always be some company that could pounce on an opportunity. In fact, it's happened twice in recent history. Sony with the PS1 and Microsoft with the XBox.
ZeroGravitas 17y ago
How did such a lame fanboy rant get upmodded so highly? Wii sales are double Xbox 360 and PS3, the sales of Wii Fit (bluetooth connected bathroom scales!) are more comparable in number. Microsoft invested Billions in this and after two generations they're sparring with a self-destructing Sony for a distant second place. I agree that it's not all about games or marketshare, but building a big, noisy, failure-prone box and backing the wrong horse in Hi-Def media aren't exactly great moves in the media centre space even if the latter failure got them belatedly onto the right track of movie downloads.

imajes 17y ago

@matt: what's their per unit cost vs their income of the consoles? i thought they were mostly loss leaders. so how have the games been selling?

inerte 17y ago
Lifetime, Xbox lost money. Their bet is that Project Natal will crush Wii. MS lost on the first years, they're making a profit since Halo 3 launch (yearly, at least until 2008 fiscal quarter) The Xbox 360 has been a success for MS, it displaced Sony. But they made the mistake of focusing on replacing the number one, and forgot the whole, which Nintendo acquired. If the market was a cake, 360's won a slice, but Nintendo baked more.
- rbanffy 17y ago
  I thought Project Natal belonged more to the Cairo, WinFS and Windows for Pen Computing bin, namely, vaporware products that don't work nearly as well as advertised (Milo and Kate? gimme a break), pre-announced by many, many months (if not years) and designed to create a FUD atmosphere that hurt the sales of competitors.

axod 17y ago

What's the total profit from Xbox? Considering the complete package - total investment etc from start to finish? Quite a large loss. There's been one clear winner and that's the wii - unless you're looking for something other than cold hard cash profit, and I suspect number of units in peoples living rooms. In terms of hardware, the xBox absolutely sucks. I use it rarely because the thing is so loud with its 100 fans. I have a quieter washing machine. If MS were going after the 'living room multimedia device', they failed spectacularly. The large HDD is also rendered useless, since you still have to put game discs in for 'copy protection purposes'.

berntb 17y ago
You miss the point of a monopoly -- Microsoft is able to eat losses to take over markets as long as they have a safe cash cow. Then, the monopolist have a new "owned" area to milk money out of, for taking over the next application type. The result is that in the process of getting a monopoly of something, there is lots of development. Then, the developers/money is being sunk elsewhere and the development speed in the monopoly areas are really low. That is why you haven't seen any revolutionary changes in e.g. office products for quite a few years. Which we all lose by, since productivity isn't increased. (Or maybe there just haven't been any new possible ideas in writing documents? Hardly. Computer linguistics hasn't been standing still the last decade.) Edit: Clarity.
- ssharp 17y ago
  The problem is that unless the 360 can make up for the losses of the first XBox, they are still losers. They'll either need that to happen or they'll need to continue profitability with their 3rd console. It's easy to say that MS has taken over the "gamer" market but we thought the same thing when Sony dominated with the PS and PS2. It's clearly a market whose leader can be taken down: The rise and fall of Sega. The rise and fall and rise of Nintendo. Sony and Microsoft coming out of nowhere to take over.
  - berntb 17y ago
    My point was that Microsoft only need to up the investment speed enough that everyone are in the red. The non-monopolists will have to give up in the end. Then the monopolist can stay and earn lots of money for generation n, n+1, n+2, ... (I think this is a classic example in economy, but for bakeries (?). A big chain goes into a geographic area and undercuts the prices of the small bakeries. After a while they close. Then the prices are raised to higher than ever before -- to pay for undercutting prices in the next area.)
    - ssharp 17y ago
      There are two things working against that idea: 1) monopolies are illegal in most countries that you'd be targeting and 2) achieving monopolies in most markets is difficult. In your bakers analogy, the barrier to entry is low enough that other bakers could set up shop and create competition. The video game console market is large enough that there will always be some company that could pounce on an opportunity. In fact, it's happened twice in recent history. Sony with the PS1 and Microsoft with the XBox.

ZeroGravitas 17y ago

How did such a lame fanboy rant get upmodded so highly? Wii sales are double Xbox 360 and PS3, the sales of Wii Fit (bluetooth connected bathroom scales!) are more comparable in number. Microsoft invested Billions in this and after two generations they're sparring with a self-destructing Sony for a distant second place. I agree that it's not all about games or marketshare, but building a big, noisy, failure-prone box and backing the wrong horse in Hi-Def media aren't exactly great moves in the media centre space even if the latter failure got them belatedly onto the right track of movie downloads.