I like it how after 2 years a lot of people are calling the X-Box a failure. MS is new in this market and is facing competition with years of experience and good hardware. Unlike Sega was when Sony entered the market.

Who even thinks that the X-Box was expected to overtake Sony in this generation? It was probably just a learning experience and a chance to build relationships with others in the industry.

The only way it will happen is if Sony makes some huge mistakes. And it will have to be major, the launched the PS2 with really no "must have" type games for the first six months or so (until GT3) and look how the PS2 turned out.

MS is banking on putting out a "do it all" machine that they think will appeal to more people (which I don't necessarily agree with).

Rumors have it that sony will counter this by putting out their own all in one machine (thus eliminating that MS "advantage") and possible also putting out a gaming only machine so as to not alienate those of us that don't want to pay extra for a bunch of features will never use/already own in stand alone format.

MS is also banking on Online gaming being a huge selling point. However, thats just not the case right now and maybe never in the console world. Xbox live is a great set up, yet the latest numbers I saw put it at 350,000. That's a fraction of worldwide X-box owners (probably in the 6-7 million range by now. And even smaller if you consider the total number of gamers which we could best estimate by PS2 sales, as most gamers have one, which last I saw were around 50 million.

So lets say the Xbox live membership doubles by the end of this generation (which is being optimistic) and all of the subscribers love it and decide to buy the X-box 2 just because of it (as this is how MS plans to gain market share through online gaming). That would be 700,000 X-box 2 sales generated by X-box live. Hardly gaining market share on the Sony juggernaut.

So as I see it, unless Sony makes a huge mistake, they've won the console battle for good. Nintendo was in the same situation in the 16 bit era. They fought off sega and ran away with the battle and were in the drivers seat. Then they botched their partnership with Sony (creating a fierce competitor in the process) and then further screwed themselved by going with cartridges with the N64. Sony would have to make some screw ups of this magnitude for MS or Nintendo to gain ANY ground on them in the future.

So in my opinion, if MS wants to stick around, they need to find a way to start making money next generation. This strategy of losing to gain marketshare will fail IMO. Sure they can afford to do it for years and years, but the fact is unless Sony screws up they'll simply continue to lose money year after year (and generation after generation) while gaining little if any marketshare on Sony. Investors will eventually tire of this fruitless strategy. IMO MS needs to accept there distant second place role, and find a way to capitalize on it and turn a profit, while being ready to pounce if Sony screws up.

Nintendo is in a tough spot too, but they at least have a loyal fanbase to fall back on that will buy their hardware just to play there games. They're committed to launching first next generation, but I really don't think that will help. Diehard fans like me will buy their offering and wait and see on the PS3, but most gamers will simply wait for the PS3.

Whether they stick around in the hardware business will be determined by whether they continue to stick to corporate pride and are happy with the profits they make in their current form (unlike Sega, they are not losing money and are making sizable profits) or decide to try to maximize profits by going third party (or joining with Sony or MS) and sticking with the Gameboy.

I think they've done a lot of good for the market regardless. Online console gaming is now a reality. They eliminated the memory card (thank god). They've been pretty damn consumer friendly (ie: people whined about the original controller and they delivered them a choice).

But the best thing is that they've given Sony competition, which in the end should mean better things for the consumer, as both companies will strive to make thier product(s) better.

I agree they've done a lot of good. I'd hate to see them fail and reduce competition. I hope they cast aside the lose money to gain marketshare strategy if it's not working by the middle of next generation, and find a way to turn a profit and the "second choice" system.

i don't think MS is banking on Sony making a mistake. that's too passive. constantly make a better product, offer more features, price-compete, etc. and, most importantly, offer fantastic games!

i think MS is thinking more broadly than you say about the xbox. for example, online service is a venture into that potential industry. and although, i am not a big fan of online gaming, as a business, i cannot ignore it and would invest my energies into it.

here's a partial list of potential goals for MS w/ future generations of the Xbox:

- console gaming (console, 1st party software, licensing = vertical market)
- tivo-like services
- online services including gaming, downloadable music, movies, etc (mix MSN broadband, adapter, and other services = vertical market)
- jukebox-like machine (obviating cds?) w/ .wma music - further down the line, even movies in mpg-4 format.
- email station/web browsing station - hook up digital camera and email photos to friends and family

and b/c i'm no genius, that's all i can think of

The problem is that sony has shown a willingness to counter any thing MS offers. That's why they have to make a mistake.

I never said MS was just waiting for them to make a mistake. They clearly arent. They're losing tons of money trying to find some angle to make gamers want their offering over Sony's. I'm just saying Sony has too huge of a lead and will counter any "extra" MS puts out (i.e. it's already rumored that the PS3 will have Tivo, and HD which would allow for the jukebox thing etc.). I'm simply saying that for them to stick around long term in the industry (i.e. past the next couple generations) Sony will either have to make a mistake that allows them to gain marketshare, or they will have to find a way to make a profit from a distant second place.

They aren't going to outwit Sony by throwing in a bunch of features, and they aren't going to put together a game library that's more appealing to the mass public of casual gamers. They simply can't offer enough money to developers to get big time games like GTA as an exclusive. Rockstar can make more by selling them to the 50 million plus playstation base (plus money from sony to keep it exclusive) than they could by selling it to the much, much smaller X-box base combined with what MS can through at them to get it exclusive. The same is true for pretty much all mainstream games.

instead of giving money to developers to get GTA, i think MS should really try to (if they can) create a phenomenon like GTA on their own. who knew that GTA would become such a huge hit?! (i still haven't played it much :shame: )

i am very excited about Fable (at the same time, worried b/c of the hype) but that's probably not a mass market game. nor is Halo2, imo, which really caters to the FPS fanbase.

yes, i think Sony can pull off the FutureBox also.
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my argument isn't trying trying to boost the xbox in any way. more that, just b/c MS lost money in the past 2 years, doesn't mean that the Xbox is a failure. they should continue their path and i think it will be fruitful.

I understood your argument.

I'm not saying the X-box is a failure either,and I don't want MS to fail.

I hope they change their path because I don't think it is a fruitful one. They need to find a way to start making money, rather than trying to gain market share regardless of the cost IMO.

As for making a GTA clone, the problem is MS's first party offerings have been mediocre at best (Fever, Inside Drive) to attrocious (Tao Fang). Maybe they could get Rare to make one, but that type of game isn't really their forte.

This is why they can't compete with Sony and Nintendo IMO in terms of game offerings. They can't secure the big time third party exclusives with mass market appeal like sony, and they don't have the First Party teams capable of churning out hit games like Nintendo.

Let's all remember that Microsoft is evil. They've got like dark sages that and help them make some of thier financial decisions. If the Xbox wasn't going to eventually generate profit, the dark sages would have informed Lord Gates by now.

I think many people forget just who Sony is up against. Sure Sony won this round and will have a good standing on the next generation but MS started out a year after Sony this time around. M$ has done exactly what they planned. Nintendo is obviously falling behind and with Sony going after the cashcow that is GBA Nintendo has to begin focusing even more on that side of the business. The next console battle will likely be just Sony and M$ with Nintendo creating some good games for their system but getting roughly the same 3rd party support.

M$ has put more companies out of business than most of us could imagine and I find it hard to believe that they haven't thought this out years ahead of time. They know what Sony will do before Sony does and they will make some moves. Those people on here who think M$ should just accept that for now and forever, unless Sony makes a mistake, that M$ will never be more than number 2 in console gaming should really go read some history books.

M$ will not settle for number 2 and they will eventually overtake Sony. It's just a matter of time and money, of which M$ has much more. This is why I didn't want to buy an Xbox at first, I know what the outcome will be and I hate to hand over the living room the way everyone has done with the computer room.

s}{ammer, the reasons you state for not buying an Xbox are the exact things Sony did to kill Sega and Nintendo.

Again, I think alot of Microsoft's success ( or failure if you will) is going to depend on "returning customers". Microsoft has thrown a ton of money at the XBox and at the public but only has managed to win about 12-13% of the market share. Now the big question is how will MS retain those customers while pulling in new ones? And will current XBox owners, seeing a lack of quality games on the current console, feel enough frustration to abandon the next console in favor of a Sony or Nintendo machine?

Unfortunately for them, MS is learning that you can't brow beat people into buying a game console with billion dollar adverstising. So the marketing campaigns aren't the answer. Microsoft will have to come up with some BIG ( and I just don't mean a hit I mean a MONSTER hit) titles that will entice people into buying the next console. Halo alone is not enough. At this point, after looking at some of the mediocre titles on the XBox, I dont' think that Microsoft has the creative "know-how" to put together a massive hit the size of GTA or even the size of The Getaway. Unless they can raid the development studios and secure some A list talent, the next XBox may only be able to deliver more of the same as the current console.

It worked for Sony. The problem is, they did it first.

But I will agree that the way to thier success is to secure A list titles. I think thier approach should be a little of Sony and a little of Nintendo. They'll need to put out mass appeal games as to not be stampeded by Sony, but I think what could put them over the top is securing the "hardcore" gamer base. Halo is the kind of game that has, and will, do this. However, Halo covers one very specific genre. If they can put out games the quality of Halo across other genres, they may be able to gain the upper hand.

I have to say that this is a really interesting (and rational) discussion of the Xbox and what Microsoft needs to do in order to gain a bigger market share.

The one comment I have to make is that no one is addressing the Japanese Factor, if you will, of the console market.

I think there is very little Microsoft can do to attract more Japanese gamers to buy an Xbox, especially over a Sony console or a Nintendo one. Without large numbers of Japanese gamers, the major Japanese videogame companies will never put serious effort into making games for the Xbox, or any future incarnations of it.

Personally, on the one hand, while I don't own an X-Box yet, although I plan to eventually, I don't see it ever being able to surpass Sony. On the other hand, I don't have an irrational hatred of Microsoft and would prefer it if they would stick around in the console business, just to keep competition going.

Games are indeed the key, and they main reason I don't think MS will get into even a close second place EVER, unless sony makes a mistake.

They can throw all the money into advertising they want, add all the features that may or may not entice people to buy their consoles that they want, but if they don't have a game line up that is better than Sony's (not just as good, but better) they'll never over take them or even significantly close the gap.

In the current situation they simply can't get the big exclusive games. Develoopers are either going to port their big games to all systems, or sign and exclusivity deal with Sony to get extra money and have the huge user base to sell to.

MS is going to have to buy some bigger developers (Rare just doesn't put out enough games) or miraculously get some compenent first party teams that can put out something other than mediocre to crappy games, if they hope to close the gap any. Bungie and Halo weren't enough this time, and they weren't next time either.

IMO they are better off changing strategies. Go for a different, smaller market and find a way to make money off them. The best market for the X-box is PC gamers/tech heads. PC gaming has been dwindling (or at least not growing like console gaming) for years. MS has foolishly been trying to distance themselves from the PC image as much as possible. They should capitize on the PC image. There's lots of PC gamers out their that would likely love to have more games to play. Put out an optional keyboard and mouse, churn out more FPSs and some RTS games sim games etc, while still putting out mass market console gaming genre's like sports, platforming, fighting games, etc. Market the hell out of the HD, surround sound, jukebox etc. to get the tech geeks that care as much about having the latest gadgets as they do about enjoying games, movies, music etc. to buy it.

Basically nail down this market and learn how to make a profit off of it, while constantly looking for ways to move up on Sony, especially if they make a mistake.

Nintendo is profitable simply because they have a dedicated market and they focus on that. This way they make money, while at the same time cautiously trying to gain new fans with games like RE, ED, etc.

MS can do the same thing by focusing on the PC gamer and tech head niche, while coming up with creative (but not money losing) ways to sell some consoles to the playstation owning casual gaming crowd.

actually Sega killed themselves in the console market long before Sony appeared.

Remember sega cd, 32x and saturn all were really failures with support that was lackluster at best. so anyone who was a fan of Sega consoles had already been burned by the time the Dreamcast showed up.

Sega had a large marketshare when they had the Genesis and they pissed it away.

Nintendos biggest mistake was staying away from cd's for so long. It allowed Sony to offer developers a cheap alternative to the cartridge which was far to expensive and limiting.

Both really killed themselves. At least in Nntendo's favor they moved to an optical format this time(I do think they made a mistake by not using a dvdrom and having dvd playback)

MS is doing one huge thing different than Sony did. they are planning to lose billions to try and win the console war. Sony has always planned on making money and in fact the Playstation division is a huge percentage of their profits. Sony can not afford to lose billions to compete with MS.

MS has been building up their game division in the last few years. When they first entered gaming in the late 1990's on the PC they did it in a big way with numerous top sellers. And they have bought a bunch of developers in the last few years.

They have also had online experience with MSN Gamezone and hosting other developer's games.

Developing games is one thing. Developing GOOD games is a whole different animal. One thing I've stated from the outset is that MS did a very poor job doing it's homework regarding the console market. The PC and console gamer are very different from each other. They may have banked on the PC game division's ability ( or rather inability) to easily step into the console game world rather than going out and securing some A-list titles. The prevailing mantra was "It doesn't matter what you play on it. It's an XBox!!". Well it does matter. And they are finding that out the hard way.

MS has tried to bring in a number of ideas from the PC world into the console realm. But what works with one does not necessarily work for the other. One of the things that has dogged the XBox is the perception that it's a "console for PC gamers". How much of that is perception and how much is reality I'm not really sure. But from an observational stand point when I look at the XBox library, I'm seeing alot of PC ports. This is another thing that MS needs to break away from.

frankly, western developers don't really understand what appeals to the japanese market (maybe, that's a good thing... ) mix that w/ the basic passive racism on both sides, and you get a tough market to penetrate.

still, i think you still have to try. i could tell microsoft how to do it, but i'm not on their payroll

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i still want to make a distinction of what is happening, imho. microsoft and sony are starting to change what the console game market used to be. to be sure, the core is still gaming, but they both envision a much broader function. so, i see the next 2 generations as more a level playing field than just a pure console market would be. yes, if it was just about console gaming, i think sony will probably dominate. but the rules are changing, no?

let me use a similar situation. back in the old days of usenet and readnews, i thought, no way is the WWW going to work. too slow, graphic hogs, bandwidth not capable, blah blah blah... um, i was wrong about that. the core is still information, but now, it is a much broader tool. so imagine that change starting to happen, and sony, which had the best newsreader ever created, makes a web browser and MS also makes one... i wouldn't have been able to predict which would be better at that time.

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i do see one advantage that worked the last time for sony... backwards compatibility.

I've seen good posts here on both sides of the issue. MS does have a lot to do but the KEY is they have the money to do it, unlike Sega. In all honesty I'm not so sure it is about the games like us gamers like to think. My honest opinion is that the PS2 is NOT #1 because of the games but because of hype to the customer that was bought hook line and sinker. I don't regret my PS2 purchase but it is my honest opinion that the system sold on hype. The PS2 was the COOL console to get. Way before the PS2 was released I heard tons of gamers talking about how the PS2 was the console to get and it would have this and that. The console was basically FLAT for 6 months or more. What Sony did right was market their system and build off of the momentum of the Playstation. This is what MS must do if they want to ever be #1. True, games are a big part of the "cool" factor but marketing is a big part of it as well. MS might have spent a TON of money marketing the Xbox but I don't think they done that well of a job. There are certainly other factors. There is no doubt that they need to either drop the Japanese market or spend even more money to break into it. Right now they are dead in Japan with such fickle gamers (my opinion).

All of your opinions on MS needing to bring AAA titles to win over fan base is right on the money.

Personally, I think Halo is an amazing game. I've seen the trailer for Halo 2, and that looks great as well. But herein lies the problem. Do I as a consumer spend the $179 on an Xbox to play Halo & Halo 2?, or do I settle for Timesplitters 2 and 007 on my current console, PS2? While there are a couple of other titles that intrigue me for the Xbox, they still aren't enough to convince me to buy their console.

I have to imagine this is where most non-Xbox owners stand. Until there are numerous top notch titles that appeal to most gamers and are console exclusive (GTA series, GT series for PS2 for example), they're going to have a hell of a time winning market share.

And while all of the new features for Xbox and Playstation being announced for this generation and the next are really cool, that is what I've got a computer/tivo/console for already.

MS wins by doing 3 things every time it enters a market:
1) Offering the most for your money
2) Buying up competition
3) Complete and uder advertising takeover in every avenue possible

If MS wasn't so frickin loaded there is no way they could compete.

I love how there are so many "Xbox" supporters because it's the best hardware and offers so much. What people fail to realize is that if MS ever were number one and the competition was reduced significantly, then you would be paying through the nose for the stuff. Once MS is on top it's VERY hard to switch gears to something else because they embed THEIR technology into things, making it impossible for competitors to offer the same features and fairly take on MS.

Right now every buddy is competing. The world is good. If the gamers of the world allow MS to become #1 we are all screwed. I urge everyone to play on multipul systems. You may say you don't have the money, but trust me, you are keeping your costs down, WAY down.

I guess I will finally interject, I do not have any epiphanies to share on the state of xbox-nation or MS's suffering money lose, but I have to say like other xbox owners I would like more of 'library' to choose from, but that will take a while. I had a NES when that first came out (I'm 25), then I stopped playing and about year ago I saw GTA3, and bought a PS2. I still think it is a great game, then got Vice City and some others, but just became tired of it and sold the entire system with games. Few months later I bought an Xbox. Great, powerful machine whose capabilities dwarf that little PS2 box. But xbox needs SOMETHING to get the mass appeal---which they desperately seek (and maybe not for the best)---will True Crime do that? Or Mafia? ?Ninja Gaiden...Doom 3? There are some titles on the way, but we have seen in the past sometimes the better, more advanced machines do not always win, but with MS and their budget, I don't see them going anywhere.

As a casual gamer, I wanted something had 'more power', and when I played games like Madden, Payne, Dead to Rights from the PS2 to xbox, it was just unbelievable how more enhanced and better they played (those god forsaken load times on Payne on the PS2)...People will eventually buy when the games are there and the "exclusivity" of titles as well, but it will take TIME.

At this point in time I really hope that MS doesn't take the #1 spot over because that will be very good for us. I mean just think if the Xbox was like the PS2 and you had to buy the ethernet adapter and the hardrive extra.

I have literally abandoned the PS2 because after GTA, GT3 and DMC there's really nothing else good to play anymore IMHO. And with Xbox LIVE there's nothing out there that can compare to it by far.

I'm very thankful that MS may be losing money on this console. (I have a feeling that MS is BS'n about those loss figures even though they can afford it) That just lets us get alot more for our money.

I'm not worried about Xbox because with MS's track record, they're here to stay.

My only worry now is that cable companies have deemed it necessary to put caps on bandwidth usage to try and get the online gamer to pay outrageous fees for their bandwidth usage. I'm sure some of you guys have recieved letters or Emails telling you this. Thank God that MS is only charging $50 per year for LIVE.

What I think Wowzy and Jeff should be saying is that if MS takes over then it will be like replacing one dictator with another. You guys are painting a lopsided picture here. If it wasn't for MS then we would still be paying $299 + $100 for modem/ethernet, + $150 for HD for a PS2 that was up to date! Everything that you guys claim MS will do is what Sony was already doing and got derailed by MS! Competition brings about cheaper prices and it doesn't matter if it is MS at the top or Sony. If MS becomes #1 then the prices will still be low as long as Sony is breathing down their neck. Please don't paint Sony to be a hero and MS to be the devil. All companies want to make as much as possible and Sony was doing plenty of that before MS came along and got the console war heated up.