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MS doubles loss in Xbox division
REUTERS[ TUESDAY, MAY 13, 2003 08:29:52 AM ] LOS ANGELES: Microsoft Corp. lost nearly twice as much on its Xbox, games and consumer hardware businesses in the most recent quarter than it had a year earlier, according to a regulatory filing on Monday. Redmond, Washington-based Microsoft said that its Home and Entertainment division lost $190 million before taxes, write-offs and other charges in its fiscal third quarter ended March 31, compared with a loss of $97 million a year earlier. The division's quarterly revenue fell to $493 million from $943 million a year earlier. |
People bash Nintendo for not going online, but look at how much money you have to lose to support an online network right now. It may pay off in the future, but who else but Microsoft can lose 200 million on something without batting an eye.
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I wouldn't pin it all on Live. They're still selling each box at a steep discount and I imagine that's what accounts for the bulk of their loss.
Granted, XBox Live is a very expensive investment, but Nintendo doesn't have to do Live, they can do something like Sony where they just make adapters available and let the developers handle the online component for their games. Done that way, it's actually profitable. They've sold 500,000 adapters at $40 and their cost on those can't be much more than $10. And how many copies of Socom did they sell? Compare that to how many would have sold if there was no online gameplay. |
Uh... Nintendo did make adapters available. They just didn't make any games themselves. (currently, only PSO uses it). And if Nintendo itself isn't going to support their own peripheral, what makes you think the 3rd parties are going to invest in the next ROB the Robot?
Sony probably distributes some kind of developers package to help their developers integrate online gaming. Also, I have to believe the profit margin on a PS2 game is a lot more than a GCN game, as far as copies sold and whether it'll be worth it for a company to setup online servers. |
MS keeps saying they are in it for the long haul, but they can't be happy about this. That's a no brainer, any time a business loses $$$ it's not a good thing.
The XBox was already selling at a loss to begin with even at $300. I still don't think they took into account how much the loss of GTA would affect them. I know you can't pin it on that one bad decision, but not having the biggest game on your maching doesn't help. |
A lot of it is definitely live. The rumors were $1-2 billion to set it up and market it, and they're only charging $50 a pop which is great for gamers but no where near what they'd have to charge to make a profit this generation. This is exactly why Nintendo is staying out for now (though they could at least allow peer to peer connections). They don't have the money to take those kind of losses.
However, this means nothing for MS. They just want to gain market share this generation, pretty much regardless of the loss. |
Originally posted by Josh Hinkle They just want to gain market share this generation, pretty much regardless of the loss. Nintendo might not lose a lot of money but they are losing a lot of the market share with the Gamecube this generation. Microsoft just needs the market share for now, they can get profits later. It's like amazon.com. They didn't make profits until a few years after they started up. Now they are the only "Big" online store. Everyone else has gone under. |
Where exactly is MS going to make money? In 2005 the new systems are going to be introduced and the money losing cycle starts all over again. The money is supposed to come from selling games. But looking at the sales charts, MS is not selling very many. MS thought the price cut to $199 would boost game sales, but that didn't happen...
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Originally posted by evenflowddt Exactly. Nintendo might not lose a lot of money but they are losing a lot of the market share with the Gamecube this generation. Microsoft just needs the market share for now, they can get profits later. It's like amazon.com. They didn't make profits until a few years after they started up. Now they are the only "Big" online store. Everyone else has gone under. You have a point there. But the question remains; How much of the market share do they to garner to make an impact? I'm not sure but I read somewhere, may have been on CNN.com, that Microsoft only has something like 12-13% of the market share this generation. How much more can they gain? Another 5-7%? Will 5-7% make be enough to make a difference? And with two big franchise games being announced as PS2 exclusives ( GTA and Metal Gear) for their next upcoming incarnations, will Microsoft have the games on the XBox that will get them the expanded user base they need? That also raises the question; Is Microsoft too far behind to be a major player for the next generation and how many "return customers will they have? That might be one thing alot of people aren't taking into account. How many people out there may abandon the next XBox generation, feeling frustrated by the inability to play big name game titles, for a Nintendo or Sony machine? Interesting questions... |
Its not Nintendo they need to get market share from its Sony. the Xbox has got a foothold on the industry, but to make profits you have to have the user base of the PS2. Xbox will be a big money loser its entire life, but what Microsoft hopes is to get PS2 gamers to jump ship to their console next generation and steal away Sony's user base.
It will be well worth losing a billion dollars this generation if they can make multiple billions the next one. The big question is can they. They really need to build up a solid group of developers and get some big time exclusives to position themselves for success. The way things look now though Sony may end up wiping out all competition next time out. If the PS3 continues to be successful and they take away Nintendo's handheld market they may end up being the only game in town. Of course we are years away from knowing what will happen. |
Is anyone surprised?
The sad thing is they continue to "advance" by throwing money out the window. What a world. |
MS will not make money this generation and I do not see a way for them to do it next time either. The hardcore gamer might own an Xbox but the casual gamer is where the money is.
Nintendo makes money because they sell a bunch of their own titles and they cut corners on the hardware side by limiting features to make the hardware more profitable for them also. |
Amazon.com is not a good analogy. They weren't the only online store losing money...EVERYBODY was. They just lost less of it than everybody else.
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Originally posted by Groucho Amazon.com is not a good analogy. They weren't the only online store losing money...EVERYBODY was. They just lost less of it than everybody else. Anyway. The return customer question is a good one. I have both an X-Box and a GC. I would DEFINITELY sit out (as it stands now) on the next XB. Maybe go for Sony. But Nintendo comes first. I can't live w/o their first party games. |
isn't it a little early to decide which systems to buy next time around?I bought a PS2 and haven't used it more than 3 or 4 times since I got the Xbox. GTA3/VC are great games but who says it will be the best in genre next time around? That True Crimes game looks like a GTA killer to me. If it's done well there might be a bunch of people buying xboxs for that game or halo 2/doom 3. There is way too much time between now and next gen to decide that you will skip one and buy the other.
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Originally posted by s}{ammer isn't it a little early to decide which systems to buy next time around?I bought a PS2 and haven't used it more than 3 or 4 times since I got the Xbox. GTA3/VC are great games but who says it will be the best in genre next time around? That True Crimes game looks like a GTA killer to me. If it's done well there might be a bunch of people buying xboxs for that game or halo 2/doom 3. There is way too much time between now and next gen to decide that you will skip one and buy the other. |
They are loosing money on the systems. Its been like that from the start. If the loss is bigger, more people may be picking up a x-box. I know a lot of people who have bought one to accompany there PS2. to play on live and get some of the other x-box games. It would be intresting to see how many x-box's sold then and then now
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Originally posted by Josh Hinkle A lot of it is definitely live. The rumors were $1-2 billion to set it up and market it... Anyway, what is accounting for the additional loss is actually increased sales of their console. The Xbox is statistically a gamer's second or third console of choice, depending on who you ask, and so they don't make as much on the software as say Sony would, because the ratio of games bought per console is lower for the Xbox than for the PS2. It would be interesting to see this statistic. But generally, if someone buys an Xbox they are only buying the exclusives, like Halo, and at one point, Splinter Cell. For PS2, the games are either exclusive or in most instances have an exclusivity period, so gamers would buy for the PS2. Therefore, they would have purchased more titles for their PS2 than their Xbox. MS needs a) more exclusive titles, which they are working on; and b) a re-engineered, more cost efficient console, which they are also working on. Expect their losses to plateau once these two happen. Jeremy Jeremy |
Losing money for MS is nothing new. I think they are still losing money on MSN which includes Hotmail after all these years. Windows, Office and their Server apps pay all the bills and make the cash.
The management thinks that X-Box and entertainment is the future and is willing to lose money on them for years. The management at MS is as good as you can get and knows that on some things you need to lose money for years before making a profit. Jack Welch said that GE lost money on plastices for 10-20 years before it finally became a money maker. |
Microsoft XBox: A game of pitfall? Commentary: The game's not over, but the score's lousy By Mike Tarsala, CBS.MarketWatch.com Last Update: 12:08 AM ET May 14, 2003 LOS ANGELES (CBS.MW) -- Is Microsoft's Xbox business a game of Pac-Man or Pitfall? A year-and-a-half and about $1 billion have passed since Microsoft introduced the Xbox video game system in North America. But despite continually falling hardware component prices, Microsoft still can't eat the competition. Unlike Sony, its main gaming rival, the Redmond, Wash.-based software titan is still losing money on every game system it sells. And it seems to be getting worse. Microsoft lost $190 million from its Xbox games and hardware operation in its most recently reported quarter. That's more than twice the loss in the same period a year earlier. Sales were cut nearly in half to $493 million. "Losing money on every transaction and making it up later on the games is a good story line, but it only works for so long," says Jonathan Eunice, software market analyst with Illuminata Inc. "They have to show that Xbox eventually returns value to Microsoft." Even if Microsoft (MSFT: news) couldn't find a better investment than Xbox, the company could more than double its annual dividend with all the money it's plowed into online gaming so far. At least some of the Xbox losses are attributable to game piracy, which is a larger problem in Europe than the company is willing to acknowledge, says Richard Doherty, analyst with Envisioneering Inc. He says it's very easy for kids to buy one Xbox game and make five clones of it, using a personal computer. This week, Xbox was dealt yet another big blow. Electronics giant Sony (SNE: news) and No.1 games publisher Electronic Arts (ERTS: news) announced plans at the annual E3 trade show in Los Angeles to jointly take aim at Microsoft's online gaming operation. EA will make a number of new games exclusively for Sony, and the companies announced an online sports gaming partnership. Analysts say the reason Sony and EA teamed up partly due to Microsoft's onerous partnership terms, and the fact that Microsoft competes with EA and its other gaming partners by publishing its own game titles and running its own online gaming platform. "There's an ongoing shift in momentum for Xbox," Eunice says. Software developers are questioning whether they can make a lot of money from it. The insularity of the Microsoft gaming business makes the gaming companies want to go with another alternative." David Hefford, group product manager for Xbox, said in an interview this week that he's very confident about Microsoft's market approach. Unlike Sony, he says Microsoft provides game publishers with server farms, managed security services, billing services -- everything they need. He says that Sony has it "all wrong." Perhaps. But it is not clear that Microsoft has it all right. Some large institutional investors have disliked the Xbox business from the start, says David Pearl, managing director and portfolio manager at Steinberg Priest & Sloane Capital Management in New York, a firm that manages $1.5 billion in mutual, pension and private client accounts. Pearl, who owns both Microsoft and EA stock in his company's portfolio, does give Microsoft the benefit of the doubt, though. He says he thinks Xbox is a smart bet, whether or not Microsoft dominates, or if the company would be more profitable right now without it. "The personal computer is a maturing market. If you are Microsoft, you have to find new growth areas," Pearl says. "Where else do you put your money?" Only a handful of companies have the resources to lead the technology several years down the road, when home entertainment, personal computing and Internet technologies intersect, says John Taylor, analyst with Arcadia Investment Corp. in Portland Ore. He says Xbox should be a long-term winner -- even though his firm owns shares of both Sony and EA. "To be a major convergence player, you have to pay to position the company ahead of time," Taylor says. "Rightly so, Microsoft views the piece of real estate between the TV and the floor as a critical thing to control in the next five to 10 years. And there are cost that will be incurred in order to get there." Taylor says there seems to be more hand wringing about Sony's profit and loss in the gaming business than Microsoft's. While Xbox is a not critical to Microsoft business, he says that PlayStation generates about 60 percent of Sony's operating profit -- even though it generates less than 15 percent of sales. Microsoft seems to have turned a corner with Xbox recently, Doherty argues. Last year, the company lost about $200 on each $199 Xbox it sold. Due in part to cheaper hard drive and other components and an increase in the number of Xbox suppliers, the company is close to breaking even on each game system sold, he says. He adds that the company overtook Nintendo last year to become a solid threat in the game console market, behind Sony. Microsoft had said early this year that it would have between 9 million and 11 million Xboxes in homes worldwide by the end of June, the company's fiscal year-end. Hefford said this week that the company will fall "comfortably" in that range. New and potentially profitable Xbox game titles are in the works. At the E3 show, Microsoft announced Halo 2, the sequel to the best-selling Xbox game ever, as well as a sequel to the ever-popular Doom series. The company is expected to come out with about 100 new releases between now and the holiday season, compared with 65 games over the same span of time last year. Microsoft now has about 300 games on the market, vs. 400 written exclusively for the Playstation 2. A year ago, a dearth of new titles was as stumbling block for Xbox sales. Many of the best games came out on Playstation before they were available on Xbox. Going head-to-head vs. the EA/Sony venture, Microsoft also announced plans this week to start a new head-to-head online sports league in August, called XSN Sports. Much like a fantasy sports team, participants can log on to a Web site to check league scores and statistics. Microsoft has a history of starting as an insignificant player in product niches such as Internet browsers and database software, only to become a market force after refining its product three or four times. At this point, the bet on the company's stock is that Xbox will eventually follow that pattern. |
Originally posted by al_bundy The management thinks that X-Box and entertainment is the future and is willing to lose money on them for years. The management at MS is as good as you can get and knows that on some things you need to lose money for years before making a profit. Jack Welch said that GE lost money on plastices for 10-20 years before it finally became a money maker. also, imo, nintendo may very well go the way of sega. |
Microsoft seems to have turned a corner with Xbox recently, Doherty argues. Last year, the company lost about $200 on each $199 Xbox it sold. Due in part to cheaper hard drive and other components and an increase in the number of Xbox suppliers, the company is close to breaking even on each game system sold, he says. |
IDK, the rumors were they were originally losing $200 on each console at launch when it was selling for $299.
A $100 drop in costs over the period (which would account for the $200 loss at the current $199 tag) seems reasonable to me. Plus they say "last year" meaning 2002, costs have like dropped further since then, and they probably are losing less than $200 in the present. |
Originally posted by al_bundy Losing money for MS is nothing new. I think they are still losing money on MSN which includes Hotmail after all these years. Windows, Office and their Server apps pay all the bills and make the cash. Yes MS hopes the Xbox will become "The Entertainment System", but what all these articles are pointing out is how exactly is this going to happen when the losses continue to mount every year for the Xbox? How is the Xbox going to become "The Entertainment System" when it hasn't even made a dent into the PS2 juggernaught? |
Originally posted by CreatureX ...How is the Xbox going to become "The Entertainment System" when it hasn't even made a dent into the PS2 juggernaught? imo, it has already made a "dent". at least in the mindset of people that MS is a viable player in the home entertainment industry (and not just in computers). |
Originally posted by s}{ammer MS isn't in Xbox to be the number 1 gaming machine, they want to be your number 1 entertainment system. Xbox isn't going anywhere even if it take xbox 3 or 4 to get where they are going. 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. |
Originally posted by CreatureX Yes MS hopes the Xbox will become "The Entertainment System", but what all these articles are pointing out is how exactly is this going to happen when the losses continue to mount every year for the Xbox? How is the Xbox going to become "The Entertainment System" when it hasn't even made a dent into the PS2 juggernaught? 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.
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Originally posted by Josh Hinkle 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. would like to comment on your whole post but it's too long... sorry... 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. -- 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.
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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.
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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. |
Originally posted by Captain Harlock Unfortunately for them, MS is learning that you can't brow beat people into buying a game console with billion dollar adverstising. 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. |
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