Grimfarrow

The chart is for sales of consoles during the week of 4/8 - 4/14. The "total" number is the total number of units sold during the current year (2002)

Flay

This is the preliminary list of games that will be available for the early adopters free of charge. The final list will be up April 26th.

Amped
Azurik
Blood Wake
DOA 3
Fuzion Frenzy
Halo
Oddworld: Munch's Oddysee
NBA Inside Drive
Nightcaster
Project Gotham Racing
RalliSport Challenge


Not a bad selection at all.

ScandalUMD

I've never heard of a console maker slashing their price less than two months after release.

This whole thing reeks of desperation. It really shows how the power is distributed in this market, when Sony has kept their US price at $299, while MS is already doing price drops to try and get a piece of the European market.

I don't think this will do much to really help the XBox though. It may keep their numbers above the GameCube in Europe.

The people who got XBoxes at slashed prices on release, and now get the free games get a good deal, though.

belboz

I think desperation is too strong a word. They earned a profit of $2.74B last quarter. This brings their cash and near cash assets to over $38.5B. There's no need for them to panic about anything.

That said, obviously they recognize now that their high launch price in Europe was a huge mistake. This move simply corrects that. All the consumers there who were sitting on the fence about picking one up will likely snap one up now. Also, it should help them pick up a little momentum heading into the GC's May 3rd launch in Europe.

Most importantly, of course, is this signals to 3rd party developers that MS remains commited to seeing that the XBox succeeds, regardless of short-term costs. The price cut is going to hurt MS (they're guiding 4Q earnings slightly lower) , but when developers see MS putting their money where their mouth is, it is very reassuring.

gcribbs

I agree somewhat. However of course it is a sign that the arrogance of thinking that they could sell the system at a higher price than the PS2 was rewarded by horrible sales.

matching the PS2 price will not do it. they are being outsold in the US with the same price. they really need to be lower than the PS2 in order to have a chance to outsell the PS2. The negative is that they will take a horrible hit on earnings to be below the PS2 price. Sony can get down to $199 and probably break even with some recent cost savings. The XBox would lose around $185-200 a unit at $199 or to hit 1 million units of sales they would lose around 185 million dollars. they can aford that. of course do they want to.

dvdordie

Can I buy an x-box from Europe or Japan and play US sold x-box games on them and vice-versa?

Do they have region coding for games, also as they did with Sega Saturn and Playstation?

ScandalUMD

Those numbers seem a little high for the quarterly earnings, but I don't know. I am certain that they are not willing to invest that much into the XBox. The XBox is expected to turn a profit, and if it does not make a profit by the 2004 promised date, I don't expect Microsoft to make another console.

Bill Gates probably isn't losing sleep over the low sales, but I'd guarantee the XBox promotion teams in Europe and Japan are. The XBox launch flopped in both of those markets. Now Microsoft is taking a huge loss to try and salvage the console.

Gallant Pig

Did Internet Explorer ever make a profit when they developed seperate from the Operating System?

Josh H

I hate to nitpick, but that's a poor comparison. IE is software. The X-box is hardware. Plus IE is available for free, and the X-box is sold.

MS wants to make a profit with the X-box. However they do have the money to take a loss. Personally, I think they'll take huge losses if necessary in order to get a large user base. Then they'll have a solid foundation for being profitable and closing in on Sony in the next generation.

At any rate, the X-box will last this generation and IMO the size of it's user base, when the time comes to think about the X-box, will determine whether they continue in the console business past this generation.

MS has always been successful, so my guess is that they will find a way to get the user base up, and be much more successful in the next generatoin. After all, has MS ever failed at anything?

Gallant Pig

IE wasn't free to develop. They took a loss to gain marketshare and recognition. Do you think if they just cooked up IE and put it on the OS without ever having released it before people would have wanted to use it? They developed the hell out if it, spent plenty of money doing so, and then eventually beat out Netscape before they fused it into the browser.

My point is MS knows how to take a loss to gain marketshare. Some people sound like broken records here with all their gloom and doom over a system they don't own.

Josh H

Read my whole post buddy. I say that exact thing at the end. That MS will take a loss this round to build a user base for next round.

IE is still a poor comparison as it's something they never intended to make money off of. They gave out free when it came out, and they still do. Their only goal was to kill of Netscape and have a Monopoly on the browser industry. Which I've never understood as you'd have to be a retard to actually purchase a browser.

jeffdsmith

No offense Gp, but software is software. That's why MS is so rich. It takes very little investment for large returns on software. No to mention you get added cash everytime there is an update.

Besides, MS charges for it, just not home users. And they didn't really "beat" netscape. They just started installing it on machines with windows. So... if you have no need to download a browser, why would you? (I do agree that now exployer is superior, but it wasn't always that way. This is a huge road we are going down...)

If MS wants to start giving away Xboxes and makes them so they can play all the PS2 and GC games as well, no doubt it will be number 1.

Gallant Pig

MS is smart, controlling the browser they can control how things look on it and that FrontPage stuff looks better than Dream Weaver stuff. etc.

Anyway, it's all good. I was referring mainly to scandal, to him MS can't do right, if they lower prices and get more competitive, they are desperate, if they don't they'll lose anyway. Whatever!!

Peace out

Josh H

That's a good point. Though a sad one as I think Dream Weaver is a much better program than Front Page. Well the MAC version anyway. Besides everyone know's MACs are better for design type stuff. I love the MAC vs. PC debate. My fiance is a Graphic Designer and just got a super fast G4. I love to rib her about, even though I don't care one way or the other as all I use computers for is Internet/e-mail, writing papers, and balancing my check book. Any way, enough off topic.

I'm glad you weren't directing that at me, sorry for misunderstanding. I just like pondering the console market, I really don't have any system preferences. It's the games that matter anyway. If I come across negative on the X-box in these threads, it's just my assesment of the sells and their strategy, not any kind of biased reflection on the X-box or MS. If Nintendo wa in as bad shape in Japan, and didn't have the games that I think will sell well coming out, I'd post the exact same sentiments about the GCN.

I'm a journalist. I call'em as I see'em. I don't let personal bias interfere with my assessment of what is going on. To the best of my ability anyway.

ScandalUMD

Well, you're looking at a console that has its price slashed weeks after release. The European and Japanese launches were basically flops. MS is cutting the price to the level that many retailers already had cut it, just to maintain any interest.

Have you ever heard of a console getting its price reduced after such a short time? Let's face it; Microsoft is poised to take a bath on XBox. Playstations continue to outsell XBoxes in every market. Microsoft may control the software market, but, in this case, Microsoft has f**ked with Sony, in Sony's house, and they are paying for it.

As for the Internet Explorer comparison, that was a different situation. First of all, he days of endless economic expansion are over. Investors won't let a company take losses to gain market share. They got burned on all the dotcoms, and are now very finicky about money losing operations.

Microsoft cannot pour billions into the XBox with no plans to make that money back and then some.

Second, Internet Explorer had relatively fixed costs. They spent a lot developing it, but beyond that, the costs were limited to server maintenance for the distribution. Internet Explorer can be infinitely replicated for no cost.

XBox, on the other hand, takes a little bite out of Microsoft with every unit sold. Under the original price structure, the XBox was not expected to emerge to profitability until 2004. Now it may never make a profit. Despite Microsoft's deep pockets, their investors demand maximum profits, and they cannot indulge in a console that is not lucrative.

Remember, those investors are regular people with pension plans, and when they see that MS is losing $150 on every XBox, which is cutting into profits, that's also cutting into theses peoples' retirement funds. If there's no profit off of the XBox, those investors will expect Microsoft to do damage control and cut those losses. And if I'm right and XBox buyers get burned on this, will they buy Microsoft's next console? Only the die hards who buy EVERYTHING will. XBox and NextBox will look good with the Jaguar and the 3DO.

gcribbs

of course MS is smart they used tactics like forcing companies to install the IE browser as a way to erode market share from Netscape. They reduced the price to nothing as a way to reduce the income that netscape had coming in. In fact after a short time they had turned a company from the dominate market player in the world to an also ran.

Of course they are being sued for this behavior. which is probably why they have not given the XBox away to take the console market away from Sony. This might be the only reason that MS only matches the PS2 price instead of going below it.

when MS has to compete on a level playing field they have not always been successful.

Flay

Wasn't this covered already earlier in the thread? Only a couple major retailers in Germany cut the price. The rest of Europe sold them at full price.

Again, covered in the thread earlier. MS has never said how much they lose per XBox. Analysts have guessed anywhere between $15 to $125. You seem to be taking the worst case scenario. Big suprise.

In any case, they are certainly making thier money back with software sales from the info in the Q3 conference call.

joshd2012

Flay - don't forget about the $500 million in advertising that has to be divided into every X-box sold.

In the end, the only thing that matters is customer loyalty, which is the exact reason why Microsoft is doing this. As long as they can keep their customers happy, they will continue to gain new customers and keep the old one coming back for more. If Sega would have been more loyal to their customers, who knows, the DC might have become the number 1 console and we would be sitting here discussing how Microsoft, Nintendo, and Sony where going to over throw Sega from the top spot. Sony has always been loyal (or am I missing something) to their customers, which is why their customer base is so huge. And just cause I'm throwing out these "what if" statements, what would have happened if Nintendo didn't push Sony away and used the technology for themselves?

jeffdsmith

???
How was Sega unloyal to their customers?

Flay

Sega was very loyal to their customers.

Their problem was cash flow. Sega didn't have the resources to continue supporting the Dreamcast.

Josh H

It was Sega's past disloyalty to fans that killed the Dreamcast. The Genesis was the only success Sega ever had, and consumers were very wary of buying another sega system after they ditched support of the 32X, Sega CD, and Sega Saturn. Many people figured it would only be a matter of time before they stopped supporting the Dreamcast. As a result, it didn't sell nearly as well as it deserved.

Ironically, it was these people who were afraid Sega would stop supporting the DC after a year or two, where the main cause for the DC to die.

jeffdsmith

Actually, I feel that it was the PS2 over hype machine. I remember Sony spitting out numbers like 80 million polygons while the DC only had 3-5. It made people feel that it was obsolete way before it was, so they waited for the PS2.

That and Piracy. I would name those two things as large reasons for its death.

Josh H

Jeff,

I agree about those points, but Sega's poor image was a huge strike against them right from the start. They were introducing a new system after two add-ons that flopped, and a horribly underpowered next-gen system in the Saturn that did worse than flop. I'd rank the factors for the DC's failure as follows.

1. Sega's reputation for abandoning hardware. This kept many from buying the DC in the first place.

2. The PS2 hype. Made many people decide to wait.

3. Piracy. It was extremely rampant, cost Sega lots of money, and likely made some third parties hesitant to put games out on the DC.


That said, I got a decent couple years out of my DC, but I still feel short changed as I wasn't as ga-ga over a lot of the games as many were. For exampe I hated Jet Grind Radio and Shenmue. I mainly just loved the sports games and the fighters.

joshd2012

Sega was disloyal to there fans, and I was there on the frontline. I owned both the Sega CD and Sega 32X. The very few games I had for each were amazing, but I should beable to have more than a few great games per system. This is the main reason I didn't purchase the DC.

mr.snowmizer

What about a $50 price reduction just a week or two before a console even launches? Or how about a price drop a month after a system's first Christmas, at the age of 4 months?

[That would be N64 in the US, in both cases.]



Why this is surprising to anybody baffles me. MS priced it too high in Europe, and they had to lower it, no matter what the costs.

There's no way from now on MS will let Sony have a price advantage in any territory. There's no way, in mile 1 in the marathon to control the living room in the broadband era, that they'll shoot themselves in the head with such short-term thinking and let Sony dominate uncontested.