jeffdsmith

salamander2: I can't verify your dates in any of those mags I have sitting around my house. Could you please tell me what issue you read this in? If you don't have that on hand, do you remember what was on the cover?

About the N64 in general: I do know that at times the N64 was selling better then the PSX. At one point Nintendo had 30 million units sold just like Sony, it was a dead heat. It actually looked like it was going to be another Nintendo revival ala Sega Genisis days, but it wasn't. Shortly after that point N64 hit it's peak and PSX kept selling in high volume and ran away with a much larger user base. This is attributed to all the new gamers of the era brought in my Sony's wide advertising capaign and audience. Nintendo still did quite well and made lots of money. This is all pulled from the last 3 pages of Game Over: Press start to Continue if anyone is interested.

ScandalUMD

But it looks like they wrote the article from Microsoft's press release citing the NPD numbers rather than the NPD numbers themselves. Which would be right about on par for IGN at this point.

Microsoft's claims of selling 30% more software than Nintendo and Microsoft's high tie-in ratio both come from them counting the two bundled games as software sales.

The fact is, the Gamecube really should be "under the shadow" of the Xbox. Microsoft has been very aggressive in their pricing and their promotion, and they've pushed the Xbox very hard, and they've been willing to lose a lot of money to gain market share. But Gamecube is running pretty much neck-and-neck while operating on a model that makes money.

Michael Corvin

The Xbox also maintains the highest attach rate to date for a console that's thirteen months old, with 4.7 games per unit sold.

ROTFL. That is hilarious. Of course that number is going to be higher. For the past 2-3 months the only XBox you could get was the bundle that comes with two games. They get a jump start right there, not to mention Halo is still probably bought with every system sold. So they are at 3 games per unit sold right at the first purchase. Ha. That is too funny.

joltaddict

You always state this like a fact when the truth is theyre most likely losing money on the Cube. There is nothing to even show that theyre breaking even let alone making money. If they were Im sure they would be broadcasting that not releasing aggregate numbers that include the GBA.

Homer Simpson

I'm going to finally give my XBox a chance and move it to my main tv, I've only got 2 games for it and haven't played either of them (my son plays the N64 and Dreamcast over the XBox). Nothing on the XBox has intrigued me enough yet, I won it at a MS lecture. I'm getting a PS2 for Xmas (for Kingdom Hearts) to complete the sweep, so far the Cube is still my favorite. It's been a nice string of titles from Mario to StarFox to Metroid to Zelda. Kingdom Hearts will fill the gap for me until March...

My son will be excited to take possession of the PS1 after Christmas...

I'm with others, I don't care who sells more, I just want good games, now they can be for any system and I win.

ScandalUMD

With the software sales their first party titles, I very much doubt Gamecube is losing money.

joltaddict

Oh! Well then I stand corrected!

darkside

There is no way to know. The GBA is flying off the shelves again this Christmas so we won't hear any bad financial news from Nintendo after the holiday. Considering how much money they have made the last year I doubt the Cube is losing them very much money if any. By the same token I doubt its making any big profits either. If it were we would know about it for sure. With first party games like Metroid Prime doing well I'm sure the Cube is probably holding its own though. I doubt its eating to much into the GBA profits.

joltaddict

Why? There is nothing to support that. Thats always stated here but that goes against the whole business model of console gaming since the PSX. Theyre loss-leaders and they money comes back over time through software. But somehow Nintendos making money. How? Where? Why does everybody keep repeating this? As powerful and well designed as the cube combined with the least amount of third party fees out of the bunch and considering the timeframe thats passed... how?

jeffdsmith

If Nintendo did not advertise they would be making money for sure, as the system currently costs them less to make then what they sell it for. That is a fact that Nintendo has stated.

However, with advertising dollars in effect it would be a close call to say it's going one way or the other. The GC is clearing plenty of software so there is money being made, but how much I do not know.

Also worth mentioning is people always assume that if the GC is losing money, then it's eating the GBA's profits. This also may or not be true. People are forgetting that the GC is resposible for some GBA and accessories sales as well because of the link between the two. How many people have bought a GBA after getting Animal Crossing? The E-Reader? The cards for animal crossing? etc. Also how many people have gone and looked at games and been influenced by that link up? For example I can easily see someone justifying buying a crappy game such as Crash because they think,"Well I can link it with my GC/GBA, that will be cool".

You are never going to get a clear picture at one units profits because they are interconnected at this point. And as time moves on it will only become more so.

joltaddict

Youre forgetting R&D. The Cube is an engineering marvel. Compare the weight and size to the Box. Anybody whos built a PC or a PCHT knows how impressive that little box is. Heat dispersion alone.

But anway Im not saying the loss leader business model is unprofitable. You lose a little early to reap the benefits later. But for people to constantly say the cube is making money is disingenuious at best.

darkside

The point is we don't know. For anyone to say its losing money is disingenuious. They don't split it up between the two so its pointless to debate whether or not its making or losing money.

I have to look at Nintendo as a whole. They are making lots of money as a video game and hardware maker. Thats really all we know until Nintendo gives better data about just the GameCube profit wise.

Nintendo did release a statement saying the Cube would be profitable within its first year. Since I can't find any information to contradict that statement I will have to assume its true.

jeffdsmith

Jolt, you are right. I completly forgot about that one.

You are also right about the engineering, it is fantastic. Have you ever looked at the bottom of the cube? You could knock off another 1/2 - 3/4 " if those expansion slots wern't there taking up space.

*On a side note: I used the handle today to carry the unit from upstairs to downstairs in my parents house. This is the 5th or 6th time I've used it. I find it quite useful.

joltaddict

I believe they stated the fixed manufacturing costs would be covered within a year. A little different. No small feat but far from a profit on the cube as a whole. *





*drunk as hell right now give a little latitude

darkside

Now there is a great suggestion. Going off to try this right now.

ScandalUMD

Nintendo's biggest sellers are first party titles. Smash Bros has sold over 3 million, and Mario is past the 2 million mark. Meanwhile Metroid has been flying off the shelves stateside and Zelda sold 400,000 copies in less than a week in Japan. These strong sales should be more than sufficient to balance out hardware losses.

While these companies keep their manufacturing costs pretty secret, the conventional wisdom has been that Nintendo had a good deal going to begin with, and the cost-efficient design of the system supports that. Further, Nintendo was apparently able to cut the cost of manufacturing the system recently.

It's true that companies typically lose money on hardware, but Microsoft is apparently losing a lot more than Sony or Nintendo are (or could afford to). Most people estimated that MS was losing $150 on each console a year ago at launch. They cut the price by $100 about six months later, and added two third-party games to the package recently. Further, Microsoft's attempts to trim their costs have been undermined by disputes with their hardware partner Nvidia.

As such, Microsoft is losing at least as much on each console sold as they were at launch, and probably more.

ScandalUMD

I certainly didn't mean to suggest Nintendo's hardware alone was profitable. Even if they're breaking even or making a little bit now, it's probably not enough to cover their early losses and R&D.

However, Nintendo was never losing anywhere near as much on hardware as Microsoft was and still is. A lot of that R&D went into making a machine that was powerful and could be manufactured cheaply. While I'm not an engineer and my grasp of this stuff is limited, every analysis I've read of the Gamecube hardware has agreed that it's a cost-effective machine.

Further, Nintendo has a lot of tremendously successful first-party games. Their software is almost certainly covering their hardware losses and netting them a profit.

Microsoft's Halo is their big hit. But people forget that Microsoft had to buy Bungie to get Halo. Bungie knew they had a hit on their hands; the buzz surrounding that game was tremendous. That's why Microsoft wanted it in the first place. I don't know if the details of that deal were ever disclosed, but Bungie couldn't have come cheap.

jeffdsmith

From my electrical engineering studies I would say that Nintendo had to put more money into the R+D of the GC then MS in the xbox. Not the other way around.

However, the GC is very cost effective.

joltaddict

How does losing less equal not losing anything? If the software sales were already breaking the total cost of the console it would be news, big news. Nintendo would be broadcasting that in all the financial rags. Mainly because its not even supposed to yet. Its a loss leader. Its a long term investment. If the Cube was doing so well as to exceed all of even the most optimistic forecasts do you really think Nintendo would be keeping it a secret? You said "Gamecube is operating on a model that makes money". Thats completely unsupportable by the facts.

al_bundy

I don't know if MS is really losing as much money as people say they are. For $200 you can buy a PC without an OS at walmart that is about as powerful as the x-box. And that's retail price. MS gets their components a lot cheaper than what you pay at retail.

Groucho

I find it interesting that the article never once mentions what geographic region they are talking about. The reader is meant to assume worldwide, but it's just U.S. sales.

As an owner of both consoles, I don't care who sells more as long as they both continue to be supported with great software.

MikeA

I find 'stories' like this hilarious considering I don't know anyone who owns an XBox. I know 2 people this christmas who got Gamecubes. Everyone else I know either has a gamecube or a PS2. I always say the best way to judge market penetration of a product is to just look around you. See what people around you own and its always a pretty good indicator. If you aren't a tool and hang around a diverse group of people that is.

spainlinx0

So we're tools, but none of your friends are "diverse" enough to actually have purchased an Xbox?

Let me recount what my friends have. We all own all three systems. Hmmm, doesn't really tell me anything about the console war other than we have a bigger selection of great games to play than you and your friends do.

darkside

Agreed. All three are competing and releasing great games and thats the biggest news of all. It looks like all three will continue to do so for years to come. Its a great time to be a gamer. In the past if you didn't own the top console you had a dark cloud over you. You never knew if the console you bought on launch day would even be supported two years down the road. Thats not the case this time around.

All three of these will be going strong till at least 2005.

ScandalUMD

That's just not true. Nobody has a model that keeps them in the red for over a year except Microsoft.

While Nintendo doesn't disclose or their manufacturing costs or separate their Gamecube and Gameboy business for your benefit, they made record profits last year in spite of the expense of launching hardware, and have been aggressively cutting manufacturing costs while releasing first-party, multimillion-selling software.

There were years when Pokemon covered for weakness in the N64, but there is no software like that around now, and, at $69, the GBA hardware is probably something of a "loss leader" itself. The GBA is very strong, but it's not a big enough moneymaker to boost Nintendo to record profits if the Gamecube is in the red.