I don't see nothing extraordinary here.
It's a new hardware sold with a loss, and marketing expenses are included in cost of revenue.
I don't really see what in Sony's strategy shows they "understood the market". They just used the same old strategy with the same old games. Their console isn't especially expensive but not especially cheap either, neither is it especially powerful nor underpowered. They did play it safe and got rewarded for that, but there's no strategic brilliance there. They just had to watch Nintendo and MS try different routes and struggle there.
By your definition industry has been dead since PS1 days. Sony has never made a profit during launch quarter of their home console. Also MS lsot way more during launches of original Xbox and X360.
But I highly question if they will do it again with their new guy in charge.
iirc it's not being sold at a loss, I think part of that loss comes from R&D for XB1
Not entirely true. Some aren't particularly evident, but others are quite visible. Pretty much everyone could tell the Saturn's crazy complicated architecture would be a dud. The PS3's ultra-ambitious nature and sky-high price was another visible mistake. Wii U's branding, price and marketing target was yet another.Mistakes are unpredictable, and the price they carry is an important metric of the health of an industry.
Sony made no mistakes with the PS2 and obliterated the competition. Nintendo made no mistakes with the DS2 and ran away with the money. The mistakes they made with the Wii didn't affect their 7th gen performance and they were extremely profitable.There was never a console generation where all sides didn't make big mistakes along the way.
Winning strategies might not be obvious, but some pitfalls are.Its not like there is some obvious winning strategy here that everyone seems to be missing.
It's a shame, IMO. Whatever people think of Xbox, it has done a lot in this industry and brought in some much-needed competition (this is coming from someone that doesn't own or find Xbox appealing at all). I'd like to see them make less stupid decisions and continue to release hardware, don't want to go back to the days of one super-power in gaming, which means less for the consumer in the end.
If that is what the market wanted and you catered to it then that in itself means you judged/understood the market correctly... Doesn't really matter if you just did what you did last time.I don't really see what in Sony's strategy shows they "understood the market". They just used the same old strategy with the same old games.
Is it always fanboyism though?This kind of fanboyism needs to be killed.
That's four times the loss Nintendo had with Wii U.
Well holy shit, I guess.
I don't really see what in Sony's strategy shows they "understood the market". They just used the same old strategy with the same old games. Their console isn't especially expensive but not especially cheap either, neither is it especially powerful nor underpowered. They did play it safe and got rewarded for that, but there's no strategic brilliance there. They just had to watch Nintendo and MS try different routes and struggle there.
and that's why it would be ridiculous for Nintendo to wade into the console power war. I could only see them losing and losing significantly. At least by focussing on their own strategy as they are now, they can muddle along relatively happily and be in control of their own destiny.
THat seems a lot but every consoler maker are loosing on the first and usually the second year. Considering the amount of money thrown at in marketing and the problem we know they are facing, it only seems logical to see such loss. Not surprised. But I don't get worried for MS. They've been loosing money on Xbox branch since the begining and they kept at it so I don't see why it would change
So they have this underpowered, underengineered, overpriced hardware and manage to lose about $100 for every X1 they sell? How is that even possible?
Ok, thanks. I must miss this quotation. For Xbox One, with weaker hardware inside, it is very strange MS didn't make profits per unit.
I guess KINECT V2 contributed the loss a lot...
Bundles are either old games for free, or new games where the cost of the game is added in. For example, the PS4 Destiny bundle is $450. Microsoft was offering Xbox One with Titanfall at $500, and there were limited discounts on top of that.So... a Brundle...?
and that's why it would be ridiculous for Nintendo to wade into the console power war. I could only see them losing and losing significantly. At least by focussing on their own strategy as they are now, they can muddle along relatively happily and be in control of their own destiny.
Not entirely true. Some aren't particularly evident, but others are quite visible. Pretty much everyone could tell the Saturn's crazy complicated architecture would be a dud. The PS3's ultra-ambitious nature and sky-high price was another visible mistake. Wii U's branding, price and marketing target was yet another.
Sony made no mistakes with the PS2 and obliterated the competition. Nintendo made no mistakes with the DS2 and ran away with the money. The mistakes they made with the Wii didn't affect their 7th gen performance and they were extremely profitable.
Winning strategies might not be obvious, but some pitfalls are.
Destiny is only $50? Or is this some sort of bribe?Bundles are either old games for free, or new games where the cost of the game is added in. For example, the PS4 Destiny bundle is $450. Microsoft was offering Xbox One with Titanfall at $500, and there were limited discounts on top of that.
Agreed.
Sony essentially created the most standard "sequel" for 360 and PS3 owners. All Microsoft had to do was make something like the 360 but more powerful.
Ok, thanks. I must miss this quotation. For Xbox One, with weaker hardware inside, it is very strange MS didn't make profits per unit.
I guess KINECT V2 contributed the loss a lot...
Xbox One lost $400m for Microsoft for FY2013/14
This is on a gross margin basis as well so the operating loss is probably much higher.
Sure. It's a cheap one, but at least it's something to keep the bundle from being pointless.Destiny is only $50? Or is this son sort of bribe?
I don't really see what in Sony's strategy shows they "understood the market". They just used the same old strategy with the same old games. Their console isn't especially expensive but not especially cheap either, neither is it especially powerful nor underpowered. They did play it safe and got rewarded for that, but there's no strategic brilliance there. They just had to watch Nintendo and MS try different routes and struggle there.
I dunno. Competition is great and all but even with one dominating platform (PS2) I still had a great time as a gamer. In fact, the PS2 gen was my favourite.
also, Service and Software wise they could just lean back, listen to Microsoft's offer and the General public's reaction and act accordingly.
the really clever idea was the timing of things.
* Show some lines and edges (meaning the console is "done") but release no Information about game licenses, used game policies, online requirements, whatsoever.
* Wait for Microsoft to announce their policies
* observe the public backlash, act accordingly, gloat a bit.
Before the MS conference, the PS4 might have been an empty Shell, both figuratively as well as literally. the OS pretty much was - and still is - unfinished.
Sony didn't do anything to shine really, they just were clever enough not to offend anyone (by means of policies or pricing)
Eight gig shouldn't have been surprising to anyone who know anything about tech. The GDDR5 was still a big surprise though as console makers have a rep for going for the lowest price they can get for parts. The biggest thing though is they didn't let crazy Ken design the console again, but focused on getting a more pc-like experience for devs.That's not true. Go back to the NeoGAF threads where people got laughed at for saying that Sony is implementing 8GB of RAM (GDDR5 was not even considered, because that would be too expensive/risky). So most thought it would be 4GB of something. Sony surprised everyone and took a huge risk. Not to mention their online strategies, used game policy, etc. since that was what the publishers wanted. You can be damn sure that EA and everyone else dropped online passes because they thought that MS and Sony will implement some sort of DRM into their consoles.
I reckon a chunk of that was spent on buying upcoming exclusive third party games.
how much in the negative is the entire XBox project?
I don't really see what in Sony's strategy shows they "understood the market". They just used the same old strategy with the same old games. Their console isn't especially expensive but not especially cheap either, neither is it especially powerful nor underpowered. They did play it safe and got rewarded for that, but there's no strategic brilliance there. They just had to watch Nintendo and MS try different routes and struggle there.
I reckon a chunk of that was spent on buying upcoming exclusive third party games.
Yeah. Since every game being announced at E3 is Xbone exclusive it'd explain where the $400 million went.
Next E3 will cost Microsoft even more.
Research and development expenses increased $600 million or 6%, due mainly to higher headcount-related expenses, largely related to the Xbox Platform.
I dunno. Competition is great and all but even with one dominating platform (PS2) I still had a great time as a gamer. In fact, the PS2 gen was my favourite.
This isn't taking software into account.
second-party and third-party video game royalties
Looks like it is because of this: