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[Dunlop]

i'm going to cry now. 7 years for xbox project. 8 B losses. 2 quarters in green both only with Halo.
This is not an investment. Unless they can be profitable with 360 at least -- it's ain't no investment, but money burn.

Gimme a break, the losses on XBOX outside of the RRod was expected, the wanted in the living room and to slow down the Sony Juggernaught. They came in the market up against the PS2 which was riding off the uber success of the original Playstation.

Guess what? because of the XBOX, MS made a name for themselves as a major player in the console war. They have managed to cater well to the hardcore player and while they are flopping trying to get sloppy seconds from the Wii's casual market, nobody would have predicted that Microsoft would be in the number 2 spot and Sony would be scrambling to play catch up.

 

[domokunrox]

6 BILLION in the red?! YIKES!

You can only hope that microsoft is in it for the long haul or perminatly. It would be kind of stagnant without a 3rd competitor, I think.

 

[GenericPseudonym]

I think the six billion dollar price tag on the Xbox isn't really of a major concern to MS as long as they are profitable until the start of the next generation. MS is willing to spend a lot of money (just look at Yahoo!) but they won't continue investing in a blackhole. Now that 2008 has been profitable, I don't think they'll be willing to pull the plug for a long time.

 

[domokunrox]

nobody would have predicted that Microsoft would be in the number 2 spot and Sony would be scrambling to play catch up.

Actually, everyone knew that Sony would have to play catch up. Microsoft released their next gen console a year before the competition did. Even Nintendo had to catch up (And their ahead now).

Everyone knows this, why did I have to tell you? You been living underground?

 

[Raistlin]

A 1GB flash drive in the Xbox 1080 would finally kill all that "buray in M$ next consolz!" talk.....if only they could get those prices down.

What does having a 1GB flash drive have to do with whether or not it will have BD? :lol

 

[Dunlop]

Actually, everyone knew that Sony would have to play catch up. Microsoft released their next gen console a year before the competition did. Even Nintendo had to catch up (And their ahead now).

Everyone knows this, why did I have to tell you? You been living underground?

You have aproblem with people who live in caves?

let me expand the statement:

nobody would have predicted that Microsoft would be in the number 2 spot and Sony would be scrambling to play catch up at this point in the console wars

The Wii was being laughed at by most and the PS2 was (is) fucking unstoppable, the PS3 is supposed to be where the Wii is at this point (marketshare, not number of units sold)

 

[Raistlin]

at this point in the console wars

I doubt many people thought the PS3 would surpass the 360 in one year. And I'm pretty sure once they saw the launch price, they knew it.

The Wii was being laughed at by most and the PS2 was (is) fucking unstoppable, the PS3 is supposed to be where the Wii is at this point (marketshare, not number of units sold)

Obviously the Wii was SEVERELY underestimated.

 

[Ash Sparrow]

Many people thought PS3 would surpass 360 at launch. :lol

 

[Zombie James]

Many people thought PS3 would surpass 360 at launch. :lol

edit: Nevermind, totally mis-read your post.

 

[mj1108]

Obviously the Wii was SEVERELY underestimated.

Look back on GAF threads when the name and controller were revealed....

There's enough crow to serve that would cure world hunger.

 

[Great Rumbler]

Look back on GAF threads when the name and controller were revealed....

There's enough crow to serve that would cure world hunger.

It was pretty much the same way with the DS as well. Nintendo as a whole was severely underestimated this generation.

 

[Man God]

It was pretty much the same way with the DS as well. Nintendo as a whole was severely underestimated this generation.

I'm amazed that people looked at what the DS was doing in 2005 and 2006 and still thought that the Wii was going to tank.

 

[PuppetMaster]

Seeing how unpredicable the video game market can be. I think Microsoft is starting to revaluate how much money they want to throw into this venture.

Nintendo going from a distant thrid place last gen to where they are today just shows how unpredicable the market is. Which console the mass market consumers flock to cannot be controled by guys in suits and their budgets. The gaming market is driven by innovation.

Even if MS was able to successfully use that 6 billion they've blown to actually capture a #1 position this generation, there is absolutly no guarentee they will not drop down to last place next gen. This concept terrifies those coroprate guys in suits who don't want to spend so deep unless they can get predicable outcomes from the market.

Gaming is a very high risk industry. I think this is only just recently starting to sink into the suits at Microsoft.

 

[Snah]

Strong Q3 numbers from the playstation division indicates that the tide is turning and the bleeding is gone.

I think of these negative figures more as an investment into the blu-ray media more than anything else. Luckily for Sony, that investment will pay off since PS3 won the format wars and will make them billions of dollars over the next decade, dwarfing any potential money to be had in videogames.

Pretty soon you'll see the PS3 division become profitable (my guess is by Q3 2008), which should make the Playstation division as a whole incredibly strong.

Overall, while Sony has received a lot of flack for including Blu-Ray in the PS3 and having to launch at 599, the decision was a short-term sacrifice for long-term gains across the company as a whole. A very good decision for Sony.

 

[Innotech]

Strong Q3 numbers from the playstation division indicates that the tide is turning and the bleeding is gone.

I think of these negative figures more as an investment into the blu-ray media more than anything else. Luckily for Sony, that investment will pay off since PS3 won the format wars and will make them billions of dollars over the next decade, dwarfing any potential money to be had in videogames.

Pretty soon you'll see the PS3 division become profitable (my guess is by Q3 2008), which should make the Playstation division as a whole incredibly strong.

Overall, while Sony has received a lot of flack for including Blu-Ray in the PS3 and having to launch at 599, the decision was a short-term sacrifice for long-term gains across the company as a whole. A very good decision for Sony.

I was wondering when you would show up

 

[Raistlin]

I was wondering when you would show up

:lol


He does have a point about the R&D though, and its actually further reaching than most people realize. The PS3 R&D saw the biggest losses ever for the Playstation division. However, its also the first time they are effectively R&Ding for multiple generations.

Assuming BD is a moderate success, it will be in the PS4. So will some variant of CELL.


So where does that leave MS for next generation? Not only will Sony have less up-front R&D next time around, they will likely have cost advantages as well. They will get CELL at cost, and since it will be mature, yields should be good. They will also get BD at cost.

Now move over to MS. They 'produce' nothing in terms of HW. They will have to pay for everything on margin, and to compete in terms of tech ... it won't come cheap. That doesn't even factor in the long-term arrangement Sony has with NVidia (including sharing technology for eDRAM - one can only assume they will get a decent price for NVidia tech when all is factored in). So not only will they potentially get the GPU for cheaper, but if things continue as they are heading now ... AMD/ATI may not even have the same level of technology.



When you consider all of these things, next generation is going to be quite interesting!

 

[HocusPocus]

Sony has lost more market / mind share this generation from the previous one than I've ever seen before in the console gaming industry. We will see what 2008 brings.

 

[Son of Godzilla]

Sony has lost more market / mind share this generation from the previous one than I've ever seen before in the console gaming industry. We will see what 2008 brings.

N64 to GC was worse. Far, far worse.

 

[MisterHero]

N64 to GC was worse. Far, far worse.

Not really. GC was a huge step up in 3rd-party support from the N64. :lol

N64 to GC was maybe -10 million in userbase (30+ to 20+ million), but if the PS3 doesn't pick up its userbase could be as much as HALVED from what PS2 had (+120 million). Hey 60 million is still a good number right?

 

[Scottlarock]

I doubt many people thought the PS3 would surpass the 360 in one year. .

OMG, GAF was predicting it to happen in 6 months, I hope your not serious..:lol :lol :lol

 

[Thunder Monkey]

N64 to GC was worse. Far, far worse.

34 million units down to 21 million units is a larger drop then 120 million units to 30-40 million units*?

*my estimate for PS3 LTD in 2011.

 

[Scottlarock]

N64 to GC was worse. Far, far worse.

no way, n64 did eh, GC did eh... PS2 did , so far ps3 did eh...

 

[Super_Chicken]

Not really. GC was a huge step up in 3rd-party support from the N64. :lol

N64 to GC was maybe -10 million in userbase (30+ to 20+ million), but if the PS3 doesn't pick up its userbase could be as much as HALVED from what PS2 had (+120 million). Hey 60 million is still a good number right?

What makes you think it won't? Didn't it outsell the 360 in 07?

http://www.n4g.com/industrynews/News-106357.aspx
http://www.gamespot.com/news/6185395.html?tag=latestnews;title;3

They're out of the rough sea's and just have to worry about catching/passing 360 total sales now. Which may be iffy for 08, but should be done by 09.

 

[Raistlin]

OMG, GAF was predicting it to happen in 6 months, I hope your not serious..:lol :lol :lol

So knowing the launch price, and the fact it wasn't coming out in Europe until summer ... people really thought it would catch up to the 360 with its year head-start, just by 6-months of sales in the US and Japan?

wtf?!?!?!? :lol

Oh gaf ...

 

[Raistlin]

Not really. GC was a huge step up in 3rd-party support from the N64. :lol

N64 to GC was maybe -10 million in userbase (30+ to 20+ million), but if the PS3 doesn't pick up its userbase could be as much as HALVED from what PS2 had (+120 million). Hey 60 million is still a good number right?

Yeah ... using last gen's marketshare is a little unfair to Sony.

 

[Scottlarock]

So knowing the launch price, and the fact it wasn't coming out in Europe until summer ... people really thought it would catch up to the 360 with its year head-start, just by 6-months of sales in the US and Japan?

wtf?!?!?!? :lol

Oh gaf ...

I WISH I wasn't joking....someone I'm sure will post a link....

 

[MisterHero]

Yeah ... using last gen's marketshare is a little unfair to Sony.

Well I was replying to the following assertion:

N64 to GC was worse. Far, far worse.

34 million units down to 21 million units is a larger drop then 120 million units to 30-40 million units*?

*my estimate for PS3 LTD in 2011.

Thunder Monkey's estimate may or may not have solid basis (likewise I'm estimating a generous 60 million ) but the % slowdown between N64/GC's and PS2/PS3's respective growths is undoubtedly more drastic on Sony's end.

 

[Thunder Monkey]

Thunder Monkey's estimate may or may not have solid basis (likewise I'm estimating a generous 60 million ) but the % slowdown between N64/GC's and PS2/PS3's respective growths is undoubtedly more drastic on Sony's end.

My estimate is based on a standard five year cycle with a 2nd year increase and subsequent drops the three years after. It's possible for Sony to hit the 40 million unit mark, but it'd definitely be unprecedented for them to do so.

 

[MWS Natural]

What does having a 1GB flash drive have to do with whether or not it will have BD? :lol

Sorry I meant 1TB was a typo.

So knowing the launch price, and the fact it wasn't coming out in Europe until summer ... people really thought it would catch up to the 360 with its year head-start, just by 6-months of sales in the US and Japan?

Not only GAF, but all throughout the interwebs many thought 360 would get "Dreamcasted" immediately after the PS3 launch.

 

[Son of Godzilla]

34 million units down to 21 million units is a larger drop then 120 million units to 30-40 million units*?

*my estimate for PS3 LTD in 2011.

I was talking mindshare, and US only. GC may as well have not been released.

 

[Super_Chicken]

Not only GAF, but all throughout the interwebs many thought 360 would get "Dreamcasted" immediately after the PS3 launch.

Hell if it was any other company than Microsoft, I'd have bet my life saving's on the same thing. These numbers prove it. Any other company that didn't have bottomless pockets would have pulled out insteady of dumping over 6 billion into something.

 

[Thunder Monkey]

I was talking mindshare, and US only. GC may as well have not been released.

The American market feels the same way about the PS3 this gen.

 

[Raistlin]

Well I was replying to the following assertion:

I think the implication was that the N64 didn't fair very well (hurt mindshare) ... and then the GC was even worse off.

Basically, it appeared to be a trend. Two successive bad gens for a company obviously hurts mindshare a bit.

 

[Raistlin]

Sorry I meant 1TB was a typo.

Oh ... so you were just joking?


If you think MS is going to actually attempt a DD only console next gen ...


:lol :lol :lol

Not only GAF, but all throughout the interwebs many thought 360 would get "Dreamcasted" immediately after the PS3 launch.

Oh god

 

[stotch]

Seeing how unpredicable the video game market can be. I think Microsoft is starting to revaluate how much money they want to throw into this venture.

Nintendo going from a distant thrid place last gen to where they are today just shows how unpredicable the market is. Which console the mass market consumers flock to cannot be controled by guys in suits and their budgets. The gaming market is driven by innovation.

Even if MS was able to successfully use that 6 billion they've blown to actually capture a #1 position this generation, there is absolutly no guarentee they will not drop down to last place next gen. This concept terrifies those coroprate guys in suits who don't want to spend so deep unless they can get predicable outcomes from the market.

Gaming is a very high risk industry. I think this is only just recently starting to sink into the suits at Microsoft.

I don't think Microsoft suits (Kudo) are going to be scared by the roaring success of the wii in comparison to the gc. Consoles don't lose market share as fast as the ps2 and wii gained it. Sega took 2 generations to get beat, the n64 was already not great with 3rd parties before the gamecube.

 

[tino]

haha... 10 is even possible.... But seriously, things made possible with PS3 - like BD royalties, will definetly bring them profits 10-15 years from now.... Of course, it will never be on the same sheet as their gaming unit...

Sony can extend their PS2 program to 15 years now if they want to. I am taking a vacation in China right now. PS2 frankly is still not very popular here, simple due to the lack of translated titles. However JRPG is still very popular here, Sony can crack it if they want to.

They can make a PS2 that tailor to China. Basically it should be able to play all region games (so people don't have to hack it); plays all kind of dvix/xivd video on crappy DVDR media; and make all new releases Chinese titles online only. And make the software cheap, like $5 cheap. Same strategy applies ti India.

 

[MisterHero]

I think the implication was that the N64 didn't fair very well (hurt mindshare) ... and then the GC was even worse off.

Basically, it appeared to be a trend. Two successive bad gens for a company obviously hurts mindshare a bit.

If you look at the 'drop' between NES-SNES-N64 Nintendo apparently had 'bad gens', but it was more due to increasing competition. N64 to GC wasn't a huge downturn as the argument might seem without its context. And as I pointed out before, the GC was a big improvement in terms of software support from 2nd/3rd-party companies.

Look at both the PSX and PS2. The leaders of their gens by huge margins but this gen put a stop to that. I don't think PS3 will tank but it's slowed down quite a bit (40-60 million is still a good number, right? ).

 

[MWS Natural]

Oh ... so you were just joking?


If you think MS is going to actually attempt a DD only console next gen ...


:lol :lol :lol

Not entirely far-fetched for that to happen in 5+ years. You know Microsoft would love to cut the middle man out and release the majority of their games through XBL. Regardless after what the Wii has done this gen it's going to interesting to see what the HD consoles develop next gen.

 

[Raistlin]

Not entirely far-fetched for that to happen in 5+ years. You know Microsoft would love to cut the middle man out and release the majority of their games through XBL. Regardless after what the Wii has done this gen it's going to interesting to see what the HD consoles develop next gen.

I think its pretty far-fetched to think they would do it in 5+ years.


For one, you're completely 'throwing out' anyone that doesn't have a broadband connection. There are plenty of people that own 360's that don't use Live at all ... or even have a broadband connection.

And then even for the people with a broadband connect, do you think that many will have one fast enough to want to be downloading 15+GB titles on a regular basis?

Cutting out the middle-man would be a bad idea in general. That would burn A LOT of bridges.

People still play CDs and DVDs on their console every once in a while. Not having access to that would be a bit weird. If BD takes off, it would really be a detraction for the console to not have it in there.

Lastly, I highly doubt a 1TB flash drive will be cost-competative to the alternatives

 

[vanguardian1]

For one, you're completely 'throwing out' anyone that doesn't have a broadband connection. There are plenty of people that own 360's that don't use Live at all ... or even have a broadband connection.

And then even for the people with a broadband connect, do you think that many will have one fast enough to want to be downloading 15+GB titles on a regular basis?

I just wanted to chime in on this. My numbers are a bit old, but last I checked about 1/3 of American households can't even get a "real" broadband. Every so often I go looking for options, but at the rate things are going I'd be suprised if I had broadband by 2020. (Satellite internet FTL, but not nearly as bad as dial-up!)

 

[hauton]

So why did the op lose his posting privleges?

 

[sakuragi]

Not entirely far-fetched for that to happen in 5+ years. You know Microsoft would love to cut the middle man out and release the majority of their games through XBL. Regardless after what the Wii has done this gen it's going to interesting to see what the HD consoles develop next gen.

In 5 years? Are you talking about Microsoft's next console or the one after that? I really doubt that Microsoft could hold on to the Xbox 360 for 5 years. It has already reached its peak in Japan and its starting to reach the summit in Europe as well. The Xbox 360 is now in its third year of its life cycle and I'd say Microsoft will have to make another console in within the next two years in order to compete with Sony and Nintendo. That is, if they want to stay in the market.

So if they were to release a console after 2 years, I don't think 1 terabite flash drives would be affordable by then, or whether a DD only console would be a viable means of distributing games without cutting off a huge segment of the market that still depends on physical formats.

 

[FightyF]

nobody would have predicted that Microsoft would be in the number 2 spot and Sony would be scrambling to play catch up at this point in the console wars

I did. I had a very public multipage debate with Amirox and whole slew of others about this.

 

[Snah]

In 5 years? Are you talking about Microsoft's next console or the one after that? I really doubt that Microsoft could hold on to the Xbox 360 for 5 years. It has already reached its peak in Japan and its starting to reach the summit in Europe as well. The Xbox 360 is now in its third year of its life cycle and I'd say Microsoft will have to make another console in within the next two years in order to compete with Sony and Nintendo. That is, if they want to stay in the market.
So if they were to release a console after 2 years, I don't think 1 terabite flash drives would be affordable by then, or whether a DD only console would be a viable means of distributing games without cutting off a huge segment of the market that still depends on physical formats.

The problem with this assumption is that releasing a new console within the next few years will help increase the adoption of the Xbox brand in Japan and Europe, which is incredibly unlikely.

Microsoft would really be shooting themselves in the foot by cutting the life of the Xbox 360 short. They've only just recently been able to turn a profit, and investing in a new console this early would cut into these gains. Further, they need to build consumer confidence in their products and establish a better library of games. Releasing a new console this early would damage both of these goals.

 

[sakuragi]

The problem with this assumption is that releasing a new console within the next few years will help increase the adoption of the Xbox brand in Japan and Europe, which is incredibly unlikely.

Microsoft would really be shooting themselves in the foot by cutting the life of the Xbox 360 short. They've only just recently been able to turn a profit, and investing in a new console this early would cut into these gains. Further, they need to build consumer confidence in their products and establish a better library of games. Releasing a new console this early would damage both of these goals.

Who said Microsoft would kill off the Xbox 360 completely like they did with the Xbox? Microsoft made a huge mistake with that move and pissed of a lot of late adopters of the console. And after the launch of the PS3 and the huge role the PS2 played in carrying the burden of the costly and freshly launch PS3 and the fact that the PS2 helped made Sony's game division make a profit even after they had included the pinnacle of disk drive technology and a $200 price drop within a year. If not for Sony prolonging the life of the PS2, they would have been in an impossible situation right now. Knowing this, I bet Microsoft are bitting their fingers right now. I don't think Microsoft will ever make this mistake again. Even though the Xbox 360 isnt successful in Japan and Europe, they could make money out of it in the US and keep the PS3 at bay until its successor establishes its self into the market.

But other than that, I agree with your points. However, Microsoft has no choice but to release a new console soon. Microsoft is in the same situation they were with the Xbox. They rushed the release the Xbox 360 because they had no choice. They rushed the Xbox 360 out of the market because of desperation and they had no other alternative if the wanted to beat Sony. They made a right decision business wise for them, but they screwed their Xbox fanbase in the process. You cant blame them though because every company priorities themselves over their consumers. I cant fathom what would happen if the PS3 were to launch at the same time as the Xbox 360 if Microsoft hadn't hit the panic button. They would have gotten killed by the PS3 in USA as well probebly and massacred in Europe and Japan.

Microsoft has no choice but to launch a new console early or get booted out of the gaming industry by the competition. Whether it will change the situation is entirely up to them and how they could "fix" their brand image in countries outside of America. And maybe pull a Wii :lol

 

[Atreides]

Who said Microsoft would kill off the Xbox 360 completely like they did with the Xbox? Microsoft made a huge mistake with that move and pissed of a lot of late adopters of the console. And after the launch of the PS3 and the huge role the PS2 played in carrying the burden of the costly and freshly launch PS3 and the fact that the PS2 helped made Sony's game division make a profit even after they had included the pinnacle a disk drive technology and a $200 price drop within a year. If not for Sony prolonging the life of the PS2, they would have been in an impossible situation right now. Knowing this, I bet Microsoft are bitting their fingers right now. I don't think Microsoft will ever make this mistake again. Even though the Xbox 360 isnt successful in Japan and Europe, they could make money out of it in the US and keep the PS3 at bay until its successor establishes its self into the market.

You are assuming that Microsoft have the choice to prolonge the life of the X360 after releasing their next console. That's probably not true. The console that won each generation had a prolonged life after its successor was launched, the consoles that didn't win never had a prolonged life. So most likely only the winner will have a prolonged life.

 

[sakuragi]

You are assuming that Microsoft have the choice to prolonge the life of the X360 after releasing their next console. That's probably not true. The console that won each generation had a prolonged life after its successor was launched, the consoles that didn't win never had a prolonged life. So most likely only the winner will have a prolonged life.

Even if you aren't the market leader, it was a mistake leaving the PS2 without any competition. They could have at least stole some of its hardware and software sales in the US. You know, at least do some damage to the competition even though you know you lost and not to damage your brand recognition and image by killing your product prematurely. Microsoft had nothing to loose if they kept the Xbox a live abit longer, at least until the dust of the launch of the Xbox 360 has settled. The damage done by killing the console far out weighs the negatives of keeping the loosing console alive ( they loose on every Xbox hardware sold).

Edit. Maybe Microsoft thought they could force the 20 million Xbox users to upgrade to the Xbox 360 by killing it :lol

 

[Atreides]

Even if you aren't the market leader, it was a mistake leaving the PS2 without any competition. They could have at least stole some of its hardware and software sales in the US. You know, at least do some damage to the competition even though you know you lost and not to damage your brand recognition and image by killing your product prematurely. Microsoft had nothing to loose if they kept the Xbox a live abit longer, at least until the dust of the launch of the Xbox 360 has settled. The damage done by killing the console far out weighs the negatives of keeping the loosing console alive ( they loose on every Xbox hardware sold).

Edit. Maybe Microsoft thought they could force the 20 million Xbox users to upgrade to the Xbox 360 by killing it :lol

The resources they could use to keep the old console alive (if keeping it alive only by itself and almost no third parties can be called "alive") are probably being used to make games for the new console, trying to make it more successful. Trying to do games for the old console can make the new one less successful. Even the market leader rarely releases new first party games for the new console more than one year after the launch of the new console, it is kept alive mainly by third party games. And this is even more difficult for Microsoft, that doesn't have the huge first party resources that Nintendo and Sony have.

 

[sakuragi]

The resources they could use to keep the old console alive (if keeping it alive only by itself and almost no third parties can be called "alive") are probably being used to make games for the new console, trying to make it more successful. Trying to do games for the old console can make the new one less successful. Even the market leader rarely releases new first party games for the new console more than one year after the launch of the new console, it is kept alive mainly by third party games. And this is even more difficult for Microsoft, that doesn't have the huge first party resources that Nintendo and Sony have.

The Xbox had quite a healthy dose of third party multiplatfrom games compared to the gamecube. Now if the Xbox were in the gamecube's shoes, then I might agree with you. Most of the western developers supported the Xbox with their games. Most of their games would sooner or later land on the console ( GTA), with a few exceptions here and there. the Xbox even had lots of exclusive PC ports too. But its major problem were the lack of Japanese support. Again, sure the Xbox paled in comparison to the PS2, but a completion is better than no competition at all. Microsoft could have earned money on live subscriptions and software sales in the US, and save the Xbox brand image in the process opposed to screwing over its consumers.

 

[Psychotext]

Microsoft had nothing to loose if they kept the Xbox a live abit longer, at least until the dust of the launch of the Xbox 360 has settled. The damage done by killing the console far out weighs the negatives of keeping the loosing console alive ( they loose on every Xbox hardware sold).

They had plenty to lose. Thanks to poor contracts with Nvidia and Intel they were losing money on the console right up until they killed it, which is why they ended up $5bn in the red. The 360 is a completely different story as they own all the tech and are quite capable of price reducing it (though obviously not as fast as Sony). You seem to be calling the war before it's even begun (the 360 has had one pathetic sized price drop)...