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[MightyHedgehog]

How did 5 billion dollars come into the picture for XBOX, so far, alone? Who's 'throwing away' that kind of money? It's called investment, regardless of how it seems now. Now MS has street cred and now it has a successful branding (XBOX/Live/Halo/PGR/etc.) to launch all forward products off of. Your characterization of XBOX is extremely slanted.

 

[SolidSnakex]

Who's 'throwing away' that kind of money?

It's not throwing away, it's what they have over the competition. Sony had an early launch to help them last gen, MS has a ton of money to help them this gen.

 

[jarrod]

It's called investment, regardless of how it seems now.

And I'm the one with the slanted viewpoint? So when exactly should this "investment" suddenly seem like one and make a return?

Really though, I just don't see XBox as some incredible 1st time achievement. Nintendo totally revived a dead market with NES/Famicom, and brought gaming to the forefront of popular culture. With GameBoy they carved out a unique new market brought gaming outside the household, pushing it's social component more than anything in the consumer market previously. With PlayStation, Sony completely changed the industry by courting 3rd parties, revamping distribution models, presented an cooperative hardware design initiative and pushed gaming even further with the mainstream. With XBox... Microsoft has "invested" billions with little return while following Sony's lead in terms of agenda and settled for scrapping against Nintendo for a very distant 2nd place. I dunno... I see a pretty clear distinction.

 

[Joe]

ms has already talked about their plans two generations from now which would be their 3rd system and they consistently say they are in it for the long haul. whatever money is spent now is an investment.

 

[jarrod]

ms has already talked about their plans two generations from now which would be their 3rd system and they consistently say they are in it for the long haul. whatever money is spent now is an investment.

Really? So what exactly do these plans entail exactly?

 

[Greekboy]

ms has already talked about their plans two generations from now which would be their 3rd system and they consistently say they are in it for the long haul. whatever money is spent now is an investment.

You guys are too quick to eat up PR crap.

 

[sohka88]

ms has already talked about their plans two generations from now which would be their 3rd system and they consistently say they are in it for the long haul. whatever money is spent now is an investment.

Yeah, what are they suppose to say? They were pretty commited to WebTV and other projects too, until they got dropped for losing too much money.

 

[MightyHedgehog]

I've never said that XBOX was an amazing 1st time achievement...I don't think anyone can in all seriousness. Still, the situations you just referenced had something in common: a softness in the market and an example of working at making something a success in considerably softer competition.

For the NES, its challenge was the state of the market at its release. It's competition was weak...no, extremely weak...which was to its advantage. For the PS1, Nintendo and Sega both could have presented a good challenge up front to stem any sort of momentum, but obviously that was not the case in the early going. That allowed Sony to have a relatively easier time of it.

With the XBOX, the weakness of its two competitors was (and is) not of the same level that would have helped facilitate the kind of nice opportunity that both the NES and PS1 could take advantage of in their debuts. In other words, MS didn't have the luck of their main competition fucking themselves up a bit to allow for an easier, more immediately successful entry into the market...and their goes the subsequent advantage of momentum that can be had from that. MS' success, thus far, with the XBOX can be, IMO, mostly traced to their quick read and reaction of the market, as well as the ususal amount of luck that is always involved somehow. Their massive piles of money couldn't save them if they didn't make the decisions they've up 'til now.

 

[human5892]

Their massive piles of money couldn't save them if they didn't make the decisions they've up 'til now.

Yeah, but a lot of those decisions were enabled only because of their massive piles of money. Paid time exclusives, selling the hardware at a HUGE initial loss to accomodate its features, advertising and marketing presence (I remember the Xbox was EVERYWHERE at launch time, compared to the GameCube, which many people hadn't even heard of), etc. That's exactly what some people mean when they say Microsoft has only done as well as they have because of their ability to eat the losses involved; without the incredibly rich divisions of the rest of Microsoft, many of the fundamental things that made the Xbox what it is couldn't have been possible.

Of course, I think it is commendable the way Microsoft approaching the whole thing, and they're really quite fortunate they've come out with as many sales as they have, but to say money didn't facilitate their current position is actually a bit ignorant.

 

[jarrod]

For Sony in particular it was a struggle with PS1 until about 1998, when it really started taking off and distancing from N64. Nintendo entered into a dead market in the 1980s, they literally were starting from scratch.

Sorry, the notion that Nintendo/Sony somehow "got lucky" and that lead to their market success is flimsy at best. Bottom line, they offered revolutionary products that ignited consumers and changed the industry... that's something Microsoft needs to do if they want to take first place, rather than just trying to do what the competition is, only with far more funding. There's no way XBox has had an easier time of things than NES or PS1 did when they started out, the truth is it's simply not a good enough product to demand the same level of success. Sales reflect that.

 

[Joe]

Really? So what exactly do these plans entail exactly?

http://www.eurogamer.net/article.php?article_id=55585

It wants to own the entire standard of gaming across every platform. This isn't about warring between incompatible standards, it's about creating a standard - a VHS-standard of ubiquity. Don't think 3DO, think DVD. This is, after all, one of the biggest companies in the entire world, and it wants your money.

Eurogamer: It's not going to happen in the next gen, though is it?

J Allard: I think it would be very hard to tap into the next gen, but you can start sneaking up on it. A great example was the Panasonic Q, right? I mean, Nintendo kind of tried to do that. They said 'look, consumers want choice - one of the choices that they're going to want is movie playback, well, our target, our sweet spot of our market, it's not important, so it's for this higher end thing. We'll partner with Panasonic and let them do the one that plays movies'. Then that failed for a number of different reasons. 3DO failed for a lot more reasons than the notion

 

[Greekboy]

Why are you pulling out even more PR spin to defend yourself with?

 

[Hotsuma]

I wonder how the numbers would be for the GC/Xbox if the other did not exist? Would the GC or Xbox total be a lot closer to the PS2's US number, or would things still be near the same as they are now?

 

[PhatSaqs]

I'm confused as to how that qualifies as "spin". What exactly is being spun here?

 

[AirBrian]

Yeah, but a lot of those decisions were enabled only because of their massive piles of money. Paid time exclusives, selling the hardware at a HUGE initial loss to accomodate its features, advertising and marketing presence (I remember the Xbox was EVERYWHERE at launch time, compared to the GameCube, which many people hadn't even heard of), etc. That's exactly what some people mean when they say Microsoft has only done as well as they have because of their ability to eat the losses involved; without the incredibly rich divisions of the rest of Microsoft, many of the fundamental things that made the Xbox what it is couldn't have been possible.

Of course, I think it is commendable the way Microsoft approaching the whole thing, and they're really quite fortunate they've come out with as many sales as they have, but to say money didn't facilitate their current position is actually a bit ignorant.

I think human hit it on the head. The deep pockets enabled them to pursue avenues that otherwise would not be available to someone without.

When you evaluate a product or company, you have to look at the total picture -- including profitability.

 

[MightyHedgehog]

Yeah, but a lot of those decisions were enabled only because of their massive piles of money. Paid time exclusives, selling the hardware at a HUGE initial loss to accomodate its features, advertising and marketing presence (I remember the Xbox was EVERYWHERE at launch time, compared to the GameCube, which many people hadn't even heard of), etc. That's exactly what some people mean when they say Microsoft has only done as well as they have because of their ability to eat the losses involved; without the incredibly rich divisions of the rest of Microsoft, many of the fundamental things that made the Xbox what it is couldn't have been possible.

Are you forgetting about Sony in it's initial debut? Sony gutted teams, headhunted staff, paid big for deals, and spent loads on marketing. They also lost a fair bit on their console for awhile, IIRC. As for Nintendo, they've got a supreme advantage over MS, in that their name is synonomous with games and look at the sales...it's not like they weren't competitive with MS with much less marketing. Nintendo could've spent more on marketing if they wanted to -- what's with that 5 billion in the bank?

Of course, I think it is commendable the way Microsoft approaching the whole thing, and they're really quite fortunate they've come out with as many sales as they have, but to say money didn't facilitate their current position is actually a bit ignorant.

I never said it wasn't a factor. I was attacking jarrod's overemphasis on MS' money as what seemed to be a sole reason for MS' success compared to Sony and Nintendo. People act as if Nintendo and Sony don't have buckets of cash spent into their investments. Their current success and lack of need for spending as much as a newcomer is based on early success and spending...something a newcomer doesn't have the advantage of, especially in what is the most hotly contested console race if you look at the fact that there are 3 real competitors on the field. Saturn wasn't shit in the US -- it took 2-3 years to sell 1 million consoles in NA, IIRC. N64 was PS1's only competition here and that came a year later.

 

[Greekboy]

I'm confused as to how that qualifies as "spin". What exactly is being spun here?

Do you honestly expect MS to say we will gladly lose millions this generation, the next and the one beyond that? They have to spin this goal of domination and losing money now to dominate later. They're making it sound easier than it really is so simpletons will eat it up.

 

[human5892]

Are you forgetting about Sony in it's initial debut? Sony gutted teams, headhunted staff, paid big for deals, and spent loads on marketing. They also lost a fair bit on their console for awhile, IIRC. As for Nintendo, they've got a supreme advantage over MS, in that their name is synonomous with games and look at the sales...it's not like they weren't competitive with MS with much less marketing. Nintendo could've spent more on marketing if they wanted to -- what's with that 5 billion in the bank?

But Sony received high sales to justify their spending and eventually recoup their investment, not to mention making all kinds of profit on top of it. If they had remained profitless, as Microsoft has with the Xbox, they almost certainly would've been forced to abandon the PS initiative. Microsoft, being a far richer corporation than Sony, has the luxury of not needing to proft and can continue sinking money into the project, even if it still returns loses almost three years after the fact, with no change in sight.

And Nintendo worries about their banked money because videogames are their only source of revenue. Again, unlike Microsoft, which has other branches of the company to keep it more than afloat.

I never said it wasn't a factor. I was attacking jarrod's overemphasis on MS' money as what seemed to be a sole reason for MS' success compared to Sony and Nintendo. People act as if Nintendo and Sony don't have buckets of cash spent into their investments. Their current success and lack of need for spending as much as a newcomer is based on early success and spending...something a newcomer doesn't have the advantage of, especially in what is the most hotly contested console race if you look at the fact that there are 3 real competitors on the field. Saturn wasn't shit in the US -- it took 2-3 years to sell 1 million consoles in NA, IIRC. N64 was PS1's only competition here and that came a year later.

Saturn actually sold quite well initially in the US. And the N64 provided enough competition to the PSOne that it actually outsold it in the US in 1998. But really, that's besides the point.

 

[jedimike]

Do you honestly expect MS to say we will gladly lose millions this generation, the next and the one beyond that? They have to spin this goal of domination and losing money now to dominate later. They're making it sound easier than it really is so simpletons will eat it up.

MS was under pressure by investors to spend money. They were just sitting on tens of billions of dollars. If it wasn't spent on Xbox it would be spent on something else. Until MS has net profits of under $10 Billion a year, Xbox isn't going anywhere.

 

[MightyHedgehog]

Sorry, the notion that Nintendo/Sony somehow "got lucky" and that lead to their market success is flimsy at best.

I'm not attributing their success soley to their fortunate timing of entry into the market. Obviously, that's not enough to sustain them. They had to work as well. My point was that their entries were much less weighed on by stronger competition that XBOX 1 faces in this gen. Thus, MS has to spend a lot more to compete.

Bottom line, they offered revolutionary products that ignited consumers and changed the industry... that's something Microsoft needs to do if they want to take first place, rather than just trying to do what the competition is, only with far more funding. There's no way XBox has had an easier time of things than NES or PS1 did when they started out, the truth is it's simply not a good enough product to demand the same level of success. Sales reflect that.

XBOX isn't MS PS2. It offers built in internet support, built in HDD, pretty much complete progressive scan support for every game, custom soundtracks for the HDD, no forced memory card purchases, a more fully-featured online plan, etc... XBOX has plenty of 'features' that neither of its competitors offer in a standalone system. As for NES being revolutionary, I beg to differ, but it was certainly innovative...just not in console design, but rather its software-producer-licensing structure. PS1 offered nothing that hadn't been done before in a console, but put a lot of things together in one package.

 

[human5892]

XBOX isn't MS PS2. It offers built in internet support, built in HDD, pretty much complete progressive scan support for every game, custom soundtracks for the HDD, no forced memory card purchases, a more fully-featured online plan, etc... XBOX has plenty of 'features' that neither of its competitors offer in a standalone system.

In its "attitude" and games, though, it's the spirit of PS2. It's going after the same demographic. The features you mentioned are cool, but they are not significant enough to greatly differentiate the Xbox from the PS2; if they were, the XBox would be selling a lot better than it is.

As for NES being revolutionary, I beg to differ, but it was certainly innovative...just not in console design, but rather its software-producer-licensing structure. PS1 offered nothing that hadn't been done before in a console, but put a lot of things together in one package.

The PS1 succeeded because it made gaming "cool". It took what Sega had done in the early 90's with the more adult segment of the market and took it to a new level. You're looking too much at the actual physical console and not enough at who that console appeals to. That's what drives the success.

 

[PhatSaqs]

Do you honestly expect MS to say we will gladly lose millions this generation, the next and the one beyond that? They have to spin this goal of domination and losing money now to dominate later. They're making it sound easier than it really is so simpletons will eat it up.

But that IS what they're doing right? Spending money in hopes of making more later/becoming #1 in the marketplace? Whether they succeed or not is another issue but I dont know how one can consider the idea of outlining an investment as spin.

 

[Greekboy]

But that IS what they're doing right? Spending money in hopes of making more later/becoming #1 in the marketplace? Whether they succeed or not is another issue but I dont know how one can consider the idea of outlining an investment as spin.

Because it is spin. It must be outlined in a positive manner for investors and such us. What happens if Xbox2 starts losing money like Xbox currently is? How long before the plug is pulled?

 

[GhaleonEB]

Because it is spin. It must be outlined in a positive manner for investors and such us. What happens if Xbox2 starts losing money like Xbox currently is? How long before the plug is pulled?

We're not talking about XBox 2, we're talking about XBox.

 

[PhatSaqs]

Because it is spin. It must be outlined in a positive manner for investors and such us. What happens if Xbox2 starts losing money like Xbox currently is? How long before the plug is pulled?

What is the reality that is being spun in regards to XB2? I just dont see how investment plans can be spun myself. Of course an investment is always going to be judged as either a failure or success but i've never seen one that outlined the negative side of things.

 

[cvxfreak]

I wonder when the GBA will catch up to PS2... it can't be long now...

 

[sonycowboy]

I wonder when the GBA will catch up to PS2... it can't be long now...

With the DS coming out, it never will.

 

[jarrod]

I wonder how the numbers would be for the GC/Xbox if the other did not exist? Would the GC or Xbox total be a lot closer to the PS2's US number, or would things still be near the same as they are now?

Even combined GC & XBox still haven't sold as well as N64 did. :/

I'm not attributing their success soley to their fortunate timing of entry into the market. Obviously, that's not enough to sustain them. They had to work as well. My point was that their entries were much less weighed on by stronger competition that XBOX 1 faces in this gen. Thus, MS has to spend a lot more to compete.

I dunno... I'd actually Nintendo and Sony did such a spectacular job they circumvented competition. Sony capitalized on Saturn's crap architecture and N64's expensive media by offering more attractive alternatives, but early on Saturn was thought by most to be the eventual victor until N64 showed up and took first place. Nintendo and Sega's brand names were much stonger than Sony for gaming, in fact both were synonomous with gaming in the early/mid 1990s. NES might not have had much in terms of direct console competition, but they also had a dead market that retail didn't want to touch. The fact that both Sony and Nintendo had first place plarforms their first time out doesn't make those obstacles any less signifcant... it's a testament to their ingenuity and hard work that they managed to overcome them. Microsoft... hasn't.

XBOX isn't MS PS2. It offers built in internet support, built in HDD, pretty much complete progressive scan support for every game, custom soundtracks for the HDD, no forced memory card purchases, a more fully-featured online plan, etc... XBOX has plenty of 'features' that neither of its competitors offer in a standalone system.

XBox is exactly Microsoft's PS2. Same target market, same distribution/royalty models, same advertising... only slightly better technology. If Microsoft wants to break out of selling less than 20 million units they have to change the game, rather than follow in Sony's footsteps.

As for NES being revolutionary, I beg to differ, but it was certainly innovative...just not in console design, but rather its software-producer-licensing structure. PS1 offered nothing that hadn't been done before in a console, but put a lot of things together in one package.

I'm not talking simply hardware, there's more to it than that. I'd agree that NES owes it's early success mainly to software like Mario, Metroid & Zelda but also Nintendo's iron fisted 3rd party policies and key advertising. Sony took advantage by inverting Nintendo's policies, and bringing 3rd parties in closer in all regards to the platform (tools/libraries, hardware design, advertising, etc). Both got to the top by being shrewd and capitalizing on mistakes others made... Microsoft really hasn't done anything similar so far. They've just spent money on a loss taking console design, loss taking network structure, 3rd party cooperation and tons of advertising/promotion. It's Microsoft's agenda and policies which really reek of sameness.

With the DS coming out, it never will.

Both PS1 and GBA will continue selling well after their successors hit market. GBA SP is still consistantly outselling all other platforms and it hasn't even had a price drop yet... both platforms should go well past 30 million in the US alone.

 

[GDJustin]

Hardware wise... but software sales are something to be desired. GameBoys are like the de facto present for boys. "Get 'em a GameBoy for his birthday"...

The software ratio for the GBA is so low b/c so many gamers own more than one, thanks to the SP.

 

[sonycowboy]

Both PS1 and GBA will continue selling well after their successors hit market. GBA SP is still consistantly outselling all other platforms and it hasn't even had a price drop yet... both platforms should go well past 30 million in the US alone.

I don't disagree that the GBA will continue to sell. It will sell better than the Xbox & GC, but once the DS comes out, it will fall behind the PS2, which will continue to be "current". Since the GBA has been out in the US, it and the PS2 have been about even.

However, the PS2 will also continue to have price drops and Nintendo (and every other GBA developer out there) will switch over to DS development from the GBA. I think the E3 showing was pretty darn clear as to what the future of the GBA is.

 

[jarrod]

I don't disagree that the GBA will continue to sell. It will sell better than the Xbox & GC, but once the DS comes out, it will fall behind the PS2, which will continue to be "current". Since the GBA has been out in the US, it and the PS2 have been about even.

However, the PS2 will also continue to have price drops and Nintendo (and every other GBA developer out there) will switch over to DS development from the GBA. I think the E3 showing was pretty darn clear as to what the future of the GBA is.

I don't expect DS to really take over GBA sales until production starts ramping up (likely spring 2005) and even then price drops will probably keep GBASP going strong. PS2 might also find itself in a tight situation once Xenon releases though and with Sony's focus now split on PSP (which is targeting the same exact market)... these platforms could take an unexpected hit on PS2 as well next year, we'll have to see.

Software wise, while a lot of 3rd parties are switching over from GBA to DS, Nintendo themselves seems pretty committed to keep GBA going. Games like Zelda: Magical Hood, DK: King of Swing, F-Zero Climax, Custom Robo Advance, Wario Ware 2, Pokemon Emerald and others all being unveiled after the DS blowout...GBA should at least have a strong 2005 in terms of software and franchise releases.

 

[cvxfreak]

Eurogamer: It's not going to happen in the next gen, though is it?

J Allard: I think it would be very hard to tap into the next gen, but you can start sneaking up on it. A great example was the Panasonic Q, right? I mean, Nintendo kind of tried to do that. They said 'look, consumers want choice - one of the choices that they're going to want is movie playback, well, our target, our sweet spot of our market, it's not important, so it's for this higher end thing. We'll partner with Panasonic and let them do the one that plays movies'. Then that failed for a number of different reasons. 3DO failed for a lot more reasons than the notion

What an airhead. I'd bet good money Panasonic Q sales rival those of Xbox in Japan.

 

[ghostface]

MS was under pressure by investors to spend money. They were just sitting on tens of billions of dollars. If it wasn't spent on Xbox it would be spent on something else. Until MS has net profits of under $10 Billion a year, Xbox isn't going anywhere.

http://finance.news.com.au/common/story_page/0,4057,10201403%255E14305,00.html

Microsoft, which has a near monopoly on the software that runs the world's desktop computers, generated $US10.4 billion in cash during its 2003 fiscal year alone. But its stock price has been little changed for almost three years, increasing pressure on the company to do something with its cash reserves that now total at least $US56 billion....The Redmond-based company plans to pay a one-time dividend of $US3 per share – at a cost of $US32 billion – and will double its annual dividend to 32c per share.

This is the "something else" you're talking about, not the Xbox.

I doubt the investors will be very happy if MS continue losing money the way they are now.

 

[DSN2K]

whole xbox project is is putting it simply Microsoft are bored and very rich and need something to spend their money on.

its also very slowly moving the Microsoft brand out from the bedroom's and offices and into are living rooms.

Xbox is the first step to a much bigger goal.

 

[disabledHeliocentric]

I'm almost starting to beleive a gaming system is as important as a fashion statement and status symbol, for its price point, and its power, as the games.
For a while xbox was beating the cube with, imo, a far inferior line up of games.
The times the Cube has done better seemed more due to pricing, oddly, since last christmas especially the cube had a weak line up.
Right now for 2004 the xbox is shaping up to have a better line up, imo, but I'm starting to beleive that's only one factor among many since all three systems already have far more quality titles than your average consumer will buy.
So I'm thinking Microsoft's billions have made the differance.