5 ms·

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 win

by 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.
      - berntb 17y ago
        Are you trolling me? 1) Uhm, hello... Microsoft pays their fines and laughs all the way to the bank -- or use regulatory capture. (How many years has the EU been trying to get usable documentation for network standards?!) 2) Uhm, hello... Microsoft and different application areas? History contradicts you here, too. (Then, I don't know enough about Sony/PS1, but Microsoft entering areas like this is a bit outside of their normal behavior, but open source will change their home market.)
encoderer 17y ago
If you include the 1st generation, you may well be correct. But the 2nd generation has been profitable. And that first generation as a loss-leader was essential to produce the results of this current (and future) generations. So that seems far less like a loss than it does an investment. Truth is, every company in the hardware space (Apple, Microsoft, Sony, and lesser companies like Tivo) all understand that when it comes to moving hardware units, we've got them in the cubicles first, then the home offices, then the bedrooms. The big untapped markets are the living rooms, pockets and cars. And it seems obvious as anything to me that the xBox, PS3, etc, are not about gaming consoles. They're about getting a multimedia PC attached to your TV. Gates saw this as the next big thing 15 years ago. That's why they bought WebTV! Microsoft and a score of other companies have determined that the living room will be a very profitable market and they've been willing to drop a few dollars to get there.
- axod 17y ago
  >> "They're about getting a multimedia PC attached to your TV." The problem is, the xBox is absolutely unusable as a media thing. It's ridiculously noisy, big, and useless. A mac mini beats it hands down. Or any small lightweight PC. The xBox still doesn't even have a browser for the love of god. We live in a time when new calculators probably have web browsers included.... but not the xBox.
  - mattmaroon 17y ago
    I've used the Xbox to watch media almost every day since the day it launched. I download all my files through bittorrent, stream them to the Xbox. I also use PlayOn to let me watch Hulu there. It's not too noisy if you have the latest version and aren't running a DVD. A Mac Mini is not better (though it is smaller and quieter) and it's significantly more expensive and harder to use for living room applications. I know because I tried. The Wii has a browser, and I've used it once and then only to check it out. Wtf would I want a browser on my TV for? All the Xbox needs is a YouTube app, and then there'd be no reason for one.
    - axod 17y ago

by axod 17y ago

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.
    - berntb 17y ago
      Are you trolling me? 1) Uhm, hello... Microsoft pays their fines and laughs all the way to the bank -- or use regulatory capture. (How many years has the EU been trying to get usable documentation for network standards?!) 2) Uhm, hello... Microsoft and different application areas? History contradicts you here, too. (Then, I don't know enough about Sony/PS1, but Microsoft entering areas like this is a bit outside of their normal behavior, but open source will change their home market.)

encoderer 17y ago

If you include the 1st generation, you may well be correct. But the 2nd generation has been profitable. And that first generation as a loss-leader was essential to produce the results of this current (and future) generations. So that seems far less like a loss than it does an investment. Truth is, every company in the hardware space (Apple, Microsoft, Sony, and lesser companies like Tivo) all understand that when it comes to moving hardware units, we've got them in the cubicles first, then the home offices, then the bedrooms. The big untapped markets are the living rooms, pockets and cars. And it seems obvious as anything to me that the xBox, PS3, etc, are not about gaming consoles. They're about getting a multimedia PC attached to your TV. Gates saw this as the next big thing 15 years ago. That's why they bought WebTV! Microsoft and a score of other companies have determined that the living room will be a very profitable market and they've been willing to drop a few dollars to get there.

axod 17y ago
>> "They're about getting a multimedia PC attached to your TV." The problem is, the xBox is absolutely unusable as a media thing. It's ridiculously noisy, big, and useless. A mac mini beats it hands down. Or any small lightweight PC. The xBox still doesn't even have a browser for the love of god. We live in a time when new calculators probably have web browsers included.... but not the xBox.
- mattmaroon 17y ago
  I've used the Xbox to watch media almost every day since the day it launched. I download all my files through bittorrent, stream them to the Xbox. I also use PlayOn to let me watch Hulu there. It's not too noisy if you have the latest version and aren't running a DVD. A Mac Mini is not better (though it is smaller and quieter) and it's significantly more expensive and harder to use for living room applications. I know because I tried. The Wii has a browser, and I've used it once and then only to check it out. Wtf would I want a browser on my TV for? All the Xbox needs is a YouTube app, and then there'd be no reason for one.
  - axod 17y ago