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Analysts see Project Natal adding Billions to MS's revenue

I actually thought Natal stood a pretty good shot, until they announced the whole "cutting into the 360's processing to lower the price point".
Not because the actual loss of processing is that big a deal, but because that's indicative of a larger problem, where a completely awesome prototype and/or idea slowly gets chipped away by the issues of reality.

Put another way, Microsoft should have pulled a Miyamoto on this one if they wanted it to be completely awesome, and worked it through development until it really was perfect, regardless of how long it took. Small compromises like this seem to indicate that they're trying to get it out the door as fast as possible, which may be good for sales, but might not be good for the actual tech.


Natal still has a chance to surprise me, but I've gone from "this is going to be awesome!" to "...this could be good"
If I were a betting man, I'd say we get "souped up EyeToy" Natal this year, and Natal Motion + in 2012-13, or else launched with the next Xbox.
 
The_Technomancer said:
I actually thought Natal stood a pretty good shot, until they announced the whole "cutting into the 360's processing to lower the price point".
Not because the actual loss of processing is that big a deal, but because that's indicative of a larger problem, where a completely awesome prototype and/or idea slowly gets chipped away by the issues of reality.
You're describing most complex projects prior to market release...especially where it concerns high-technology products and platforms. Perhaps, it's because we don't usually learn about these sorts of decisions until there's some postmortem write-up or book covering a project's inception to its final form that this is different for someone on a personal hype level. I understand that changes the view of things, but unless you had a tangible way to tell what you've traded in such a decision by seeing what could've been and what it ended up being, I'm not sure why this possibility really matters. Compromise is the name of the game for everyone...it's just about making the right ones.
 
soco said:
is it really any different than the wii before it's launch?

Yup. The Wii was new. It DID change gaming.

Natal is now Eyetoy ++. What was originally promised with Natal cannot be done at marketable price at this point of tech. I pointed that out months ago.

The PS3 will survive just by the fact it has BR. Personally, I think the wand (and wii mote) is a more realized tech at a marketable price than Natal.

Paco said:
Those projections seem a bit too optimistic, but not impossible.

More interesting is GAF's reaction and skepticism. There's going to be so many burn victims in the coming years.

Burn victims being Natal early adopters? ;) Put me down for thinking Natal will crash and burn unless MS takes initial huge, huge loss leading. So, my prediction is poor market footprint or, best case scenario, black hole for MS gaming division profits.
 
For a forum that puts so much credence into what somebody like Micheal Pachter has to say, I find it bemusing that you should all collectvely poo-poo analysis from Goldman Sachs, who, as far as I'm aware, were the only financial institution to come out of the recession relatively unscathed. In fact, they warned of recession in 2007 http://www.telegraph.co.uk/finance/markets/2819582/Goldman-warns-of-a-substantial-US-recession.html

Thread is just full of armchair economists, marketers and (surprise surprise) fanboys whose loins quiver at the mere thought of Natal crashing and burning.

I'm looking forward to it. I hope its implemented well into existing genres and otherwise.
 
ConcealedBlaze said:
I don't know what annoys me more... people who are predicting that Natal will be huge or people who are predicting it will tank...

You people have no idea what will and won't work. Remember GAF's reaction to the DS announcement?

Sit back. Shut up. And let's just watch what happens when it launches.

Errr...so why don't follow your own advice? Seriously, why the hell do people come into threads telling people they shouldn't be discussing stuff?

As for the DS threds, they're super funny but there are quite a few people in them with significant insight, certainly loads more than what you saw from "real" gaming journalists and analysts, so they actually prove that it's worth having a discussion.

Crunched said:
I wonder if the people bashing Natal are the same people who thought the DS would be a flop. Then later made discredited the Wii before its release. It's like we've learned nothing from the past six years.

They're not really the same people though, and the situations is pretty different. And of course the people who thought the DS would be a flop had pretty good reasons that were interesting to discuss at the time.

Anyway, these posts basically suggest that since there were occasions when the majority opinion was wrong, all discussion should stop, which is in itself more retarded than anything any anti-DS person ever wrote in any of the threads.
 
Xanafalgue said:
For a forum that puts so much credence into what somebody like Micheal Pachter has to say, I find it bemusing that you should all collectvely poo-poo analysis from Goldman Sachs, who, as far as I'm aware, were the only financial institution to come out of the recession relatively unscathed. In fact, they warned of recession in 2007 http://www.telegraph.co.uk/finance/markets/2819582/Goldman-warns-of-a-substantial-US-recession.html

Thread is just full of armchair economists, marketers and (surprise surprise) fanboys whose loins quiver at the mere thought of Natal crashing and burning.

I'm looking forward to it. I hope its implemented well into existing genres and otherwise.


Financial analysts have proven themselves clueless this gen many many times over.
 
Nightstick11 said:
In order to make a different interface blow up, one of the first elements you need is a brand-name that a lot of gamers trust. Nintendo is obviously one of them. Sony may be a one. Given that Japan shuns Microsoft and Europe seems rather apathetic, you can scratch Microsoft off the list of "brand-names a lot of gamers trust" right off the bat.

40 million 360 owners isn't exactly something to sneeze at.

The second element you need is strong first-party studios that are capable of producing smash-hits with wide appeal. Super Mario World, Mario 64, Nintendogs, that sort of thing. Microsoft obviously lacks this.

MS has Halo, Forza, and Fable, all of which are pretty successful I'd say.

Lionhead and Rare are already on board; Rare is supposedly working on a fitness game, and Molyneux has promised some Natal functionality in Fable 3 this year.

But wait, what about third parties? Third-party studios are also capable of producing smash-hits with wide appeal. But they aren't getting on it.

Yeah, except for Activision Blizzard, Bethesda Softworks, Capcom, Disney Interactive, Electronic Arts, Konami, MTV Games, Namco Bandai, Sega, Square Enix, THQ, and Ubisoft.

PhatPhucGabe said:
Moneyhats?

...Goldman Sachs?
 
MightyHedgehog said:
You're describing most complex projects prior to market release...especially where it concerns high-technology products and platforms. Perhaps, it's because we don't usually learn about these sorts of decisions until there's some postmortem write-up or book covering a project's inception to its final form that this is different for someone on a personal hype level. I understand that changes the view of things, but unless you had a tangible way to tell what you've traded in such a decision by seeing what could've been and what it ended up being, I'm not sure why this possibility really matters. Compromise is the name of the game for everyone...it's just about making the right ones.


Right, no, I get that, it happens to every product. Hell, it happened to the Wii Remote. And that turned out....good, but not great.
My point is that almost invariably forcing a complex product to fit a release date or price point results in an inferior device. If Microsoft had decided to release Natal in 2012 after an insane amount of development, engineering, production, etc, so that the advance chip or its effects could be produced at $85 dollars, instead of cutting the chip and moving the power to the 360 so they could release it now, I'd still be on the hype-train.

Note: I'm talking as a gamer here, not as a market person. In terms of sales, releasing Natal this year is the right thing to do; Microsoft desperately needs a piece of the Nintendo mindshare. But as a gamer, I just don't like where this seems to be going. So do I think Microsoft is wrong to release it this year? No. Do I wish they weren't, so I could get my uber-awesome Minority Report experience? Yes.

But your right, I don't have anything concrete. Just an ominous intuition.
 
I love my 360's but I cannot, for the life of me, see myself interested in Natal at all. I might get it if it's sub-$100 just to satisfy my curiosity, but I fully expect it to work worse than the Wiimote and be far more frustrating.
 
P90 said:
Yup. The Wii was new. It DID change gaming.

Natal is now Eyetoy ++. What was originally promised with Natal cannot be done at marketable price at this point of tech. I pointed that out months ago.

really? what is it that's promised that they can't deliver at a marketable price point? it seems like they're doing just that... again, it's not any different than the Wii. it wasn't new. it'd been done in the previous generation and years before. i played quake 2 with motion controls and a VR helmet in 97.
 
Xanafalgue said:
For a forum that puts so much credence into what somebody like Micheal Pachter has to say, I find it bemusing that you should all collectvely poo-poo analysis from Goldman Sachs, who, as far as I'm aware, were the only financial institution to come out of the recession relatively unscathed. In fact, they warned of recession in 2007 http://www.telegraph.co.uk/finance/markets/2819582/Goldman-warns-of-a-substantial-US-recession.html

Lololol, Goldman Sachs are Eli Lilly and Monsanto level at least. Coming out of the recession "relatively unscathed" has nothing to do with their knowledge and expertise. Sorry but this was one of the funniest posts I've ever read on this forum :-DDDD

Thread is just full of armchair economists, marketers and (surprise surprise) fanboys whose loins quiver at the mere thought of Natal crashing and burning.

if you actually go back and read the DS and Wii threads, you'll see that some of these armchair economists etc had more clue than basically anyone "in the business".

soco said:
really? what is it that's promised that they can't deliver at a marketable price point? it seems like they're doing just that... again, it's not any different than the Wii. it wasn't new. it'd been done in the previous generation and years before. i played quake 2 with motion controls and a VR helmet in 97.

It has nothing to do with the technology, which was indeed pretty simple in the Wii. There were lightguns for the previous (PS2) gen consoles that worked the same way as the Wiimote pointer - but Nintendo's success wasn't based on the technology.
 
Forget what natal will be capable of, at the very least of it's potential ability it will be able to attract a decent amount of "casual" users based on it's price point and marketing approach.

I'm pretty sure we've already heard of Microsoft branding it as the "next xbox", or seperate from the xbox. That approach alone would get rid of the "released mid-cycle sent to die stigma" because to non-gamers and Casual Wii enthusiasts (the main target) it will have no attachment to a pre-existing brand and be seen as something new and something that is not confusing.

The best thing Microsoft can do is release Natal packed in with the xbox360 hardware and name it something other than Xbox360 at an approachable price, say $250 (just like Wii originally), all the while of course having stand-alone natals for current 360 owners. From previous rumors it seems like this could very well happen.
 
Monty Mole said:
Sounds likes these analysts have really upset you at some point.

It's analysts that look at the industry from the outside and think they know what they are talking about. There are VERY few analysts that know how the games industry works and even fewer that get a majority of their assumptions correct. Being an analyst must be nice: say what you want with no accountability.
 
Johnny Utah said:
If Nintendo was doing this people would say it was the next big thing.

Yes... and NO. Nowadays they might, but why don't you try reading some threads from when the Wii was first shown. I was one of the few who almost instantly grasped the idea and the possibilities, but overall opinion wasn't pretty.

I would say the same thing with Natal - the future is not set in stone. Though, I was much more certain of the Wii's success.
 
Prine said:
You should know never to take GAF pantomime reactions as an indication of consumer behavior. Especially when its same people making the same noise in every natal thread.
I'm not . . . the article said 'videogame enthusiasts' . . . that would be GAF.
 
ConcealedBlaze said:
I don't know what annoys me more... people who are predicting that Natal will be huge or people who are predicting it will tank...

You people have no idea what will and won't work. Remember GAF's reaction to the DS announcement?

Sit back. Shut up. And let's just watch what happens when it launches.

Speak for yourself. :D

Xanafalgue said:
For a forum that puts so much credence into what somebody like Micheal Pachter has to say, I find it bemusing that you should all collectvely poo-poo analysis from Goldman Sachs, who, as far as I'm aware, were the only financial institution to come out of the recession relatively unscathed. In fact, they warned of recession in 2007 http://www.telegraph.co.uk/finance/markets/2819582/Goldman-warns-of-a-substantial-US-recession.html

So what? GS has had so many laughably bad calls in the general tech sector during this downturn that they have lost credibility. And none of that has to do with the fact that they don't know what they are talking about with regard to the games industry. If you were ever on the receiving end of a call asking to participate in discovery interviews about the industry, as I have for a decade, you would understand how little they actually know about drivers in the industry. While I don't agree with everything Pachter has to say, he understands the business better than most analysts.

Oh, best part of the quoted section in the OP: ""Internally, Microsoft views NatalÂ’s introduction as significantly extending the lifecycle of Xbox 360 to 10 years (until 2015), which is double the average for consoles," Wow, MS even has to "steal" Sony's timetables (console 10 year life cycle). Yet another "Great MS Innovation"(TM)

Thread is just full of armchair economists, marketers and (surprise surprise) fanboys whose loins quiver at the mere thought of Natal crashing and burning.

Not just fanboys, but people who have a clue, junior.

I'm looking forward to it. I hope its implemented well into existing genres and otherwise.

So you are looking forward to it and don't like that others are critical of it. Understood.
 
I'm not going to predict the success of Natal only to say that I'll be buying one and the selling point was not software, but dashboard navigation. Software is just icing on the cake.

That being said, GAF has a terrible history of prediction... way worse than any analyst. Wii and PS3 come immediately to mind.
 
jedimike said:
I'm not going to predict the success of Natal only to say that I'll be buying one and the selling point was not software, but dashboard navigation. Software is just icing on the cake.

That being said, GAF has a terrible history of prediction... way worse than any analyst. Wii and PS3 come immediately to mind.

My impression is that the majority opinion on GAF was exactly the same as what analysts were predicting, but there were actually minority opinions in every thread that turned out to be much closer to what actually happened. One of the funniest threads is actually titled something like "Has the DS already won" iirc. If you only consider the majority opinion, you're more right though.
 
I wonder what the PS3's attach rate with the Dual Shock 3 is, compared to the non-rumbling SIXAXIS.

That attach rate sure went up when the new tech was packed in with every console, didn't it...
 
Johnny Utah said:
If Nintendo was doing this people would say it was the next big thing.

EXACTLY.

That's what pisses me off.

I have the same hopes for ARC/GEM/WHATEVER. If the software that accompanies these devices is spot on, there's no reason they can't succeed.

I mean, look at the Wii, it barely has a handful of software that even REMOTELY explaoits the Wii remote properly, and it still has kicked total ass.

Outside of Wii Sports/Resort, Trauma Centre, Smooth Moves and Metroid Prime, there isn't much that really utilises the Wii remote properly.

But those listed examples NAIL it.
 
Why For? said:
EXACTLY.

That's what pisses me off.

I have the same hopes for ARC/GEM/WHATEVER. If the software that accompanies these devices is spot on, there's no reason they can't succeed.

I mean, look at the Wii, it barely has a handful of software that even REMOTELY explaoits the Wii remote properly, and it still has kicked total ass.

Outside of Wii Sports/Resort, Trauma Centre, Smooth Moves and Metroid Prime, there isn't much that really utilises the Wii remote properly.

But those listed examples NAIL it.

People didn't say it would be the next big thing and it was FROM Nintendo. For both the DS and then the Wii people said they would bomb. It wasn't until AFTER Nintendo showed that they are right and everyone else was wrong. Microsoft and Sony said that Nintendo didn't matter and they'd be a niche product or a fad. Now they are playing catch up by releasing something for two platforms that have been out far too long. Product relaunches do not succeed that often.
 
Ulairi said:
People didn't say it would be the next big thing and it was FROM Nintendo. For both the DS and then the Wii people said they would bomb. It wasn't until AFTER Nintendo showed that they are right and everyone else was wrong. Microsoft and Sony said that Nintendo didn't matter and they'd be a niche product or a fad. Now they are playing catch up by releasing something for two platforms that have been out far too long. Product relaunches do not succeed that often.

Fair enough, but there's a first time for everything.

Again, the key to these will be software. If Microsoft combines 2 very important factors:

1) Great software (at least ONE killer app a la Wii Sports)

2) Flexes it's marketing muscle

I don't see why Natal couldn't achieve a 30-40% attach rate (including bundling in future consoles) which is still more than reasonable.
 
If Nintendo was doing this people would say it was the next big thing.

Now now..don't be bitter. Hate to break it to you, but MS is no Nintendo. Truth is, they ran their mouth off at the beginning of this generation with illusions of grandeur and ended up getting their asses handed to them by Ninty. Now they are eating abundant amounts of crow and playing desperate catch up. Problem is, Wii is a social phenomenon that isn't going to be dethroned by a blatant imitation. MS (and Sony) should stick to making powerful hardware with all the bells and whistles and leave the innovation to the master.
 
Why For? said:
Fair enough, but there's a first time for everything.

Again, the key to these will be software. If Microsoft combines 2 very important factors:

1) Great software (at least ONE killer app a la Wii Sports)

2) Flexes it's marketing muscle

I don't see why Natal couldn't achieve a 30-40% attach rate (including bundling in future consoles) which is still more than reasonable.

Thing is, 1) is much more difficult than just developing the technology :-) It seems simple but it really isn't. The technology looks very cool, but that's not really unexpected from Microsoft, and it's essentially much simpler to do for them (as a company) than coming up with software that changes the game like Wii Sports did. Which is why I think that success with Natal will be slower and dependent on third parties and probably smaller developers (seeing how the large ones have already demonstrated that they don't really get this new casual stuff yet). So imo the real advantage of MS is actually (as always) in their good developer relations (which is the reason third parties seem to be more enthusiastic about Natal than about the Wiimote or the Sony thing).
 
Why For? said:
Fair enough, but there's a first time for everything.

Again, the key to these will be software. If Microsoft combines 2 very important factors:

1) Great software (at least ONE killer app a la Wii Sports)

2) Flexes it's marketing muscle

I don't see why Natal couldn't achieve a 30-40% attach rate (including bundling in future consoles) which is still more than reasonable.

30-40% is still too small a number for every developer to use Natal features as part of their game experience. If you were a developer that could make a game that has the potential of 100% adoption of an install base vs. 40%, what would you do? That's not to say that games won't be made for it, not at all. Just the notion that Natal will extend the life of the XBox 360 by 5 years due directly to it's influence is, well, wishful thinking.

Dead Man Typing said:
I wonder what the PS3's attach rate with the Dual Shock 3 is, compared to the non-rumbling SIXAXIS.

That attach rate sure went up when the new tech was packed in with every console, didn't it...

So what? The fact is that every single game released could be played with six axis or dual shock controllers. No splintering of their market.

Why For? said:
EXACTLY.

That's what pisses me off.

I have the same hopes for ARC/GEM/WHATEVER. If the software that accompanies these devices is spot on, there's no reason they can't succeed.

I mean, look at the Wii, it barely has a handful of software that even REMOTELY explaoits the Wii remote properly, and it still has kicked total ass.

Outside of Wii Sports/Resort, Trauma Centre, Smooth Moves and Metroid Prime, there isn't much that really utilises the Wii remote properly.

But those listed examples NAIL it.

And every single developer is assured that EVERY SINGLE WII has motion controls available to it. It is not an optional thing, it is in every box. By comparison, look at how many games on the Wii do not require a nunchuck to play, including the biggest Wii game of the holiday. Many other games offer the ability to use it or not. Why? Because many people will purchase an extra Wii controller, but not additional nunchucks. Same thing with the Wii Motion Plus. This holiday Nintendo started shipping WSR with 2 bundled in the box instead of one.

It is not a question of "nailing it", it is about getting the biggest return for your development dollar by targeting the broadest install base.
 
The_Technomancer said:
I actually thought Natal stood a pretty good shot, until they announced the whole "cutting into the 360's processing to lower the price point".
Not because the actual loss of processing is that big a deal, but because that's indicative of a larger problem, where a completely awesome prototype and/or idea slowly gets chipped away by the issues of reality.

Put another way, Microsoft should have pulled a Miyamoto on this one if they wanted it to be completely awesome, and worked it through development until it really was perfect, regardless of how long it took. Small compromises like this seem to indicate that they're trying to get it out the door as fast as possible, which may be good for sales, but might not be good for the actual tech.


Natal still has a chance to surprise me, but I've gone from "this is going to be awesome!" to "...this could be good"
If I were a betting man, I'd say we get "souped up EyeToy" Natal this year, and Natal Motion + in 2012-13, or else launched with the next Xbox.

Sad but probably true.

I guess we'll find out how it all panned out when we finally see some software with the most current prototype. Hopefully the thing ends up decently capable despite some of the bad news rumours we've heard.
 
-WindYoshi- said:
The best thing Microsoft can do is release Natal packed in with the xbox360 hardware and name it something other than Xbox360 at an approachable price, say $250 (just like Wii originally), all the while of course having stand-alone natals for current 360 owners. From previous rumors it seems like this could very well happen.

There's two problems with dropping 360 branding.
First, it means you either abandon billions of dollars sunk into establishing the XBox name, or you continue selling XBoxes alongside Natals. If you do continue selling, this kneecaps Natal pretty hard in initial install base since you're now flogging it purely on its own merits as a late, high-priced Wii competitor. Priority #1 is always to get units into households so you can move software, and Natal would need to launch far better than any previous gen's winner to even compete with how many people are going to buy a 360/Natal bundle for Halo Reach.

Second, it really, really screws over publishers, and 360's main strength is its appeal to Western publishers. If you somehow pull the wool over the eyes of the blue ocean that Natal isn't a 360, it's just "backward-compatible", then every new 360 game carries the taint of old and busted to the Natal crowd. Third-parties have a hard enough time building enthusiast business on the Wii; Nintendo's only able to do it with core franchises that have been embedded in pop culture for decades, and Microsoft has nothing similar to even line its own pockets with.

I do think, mind you, that the best choice is to pack Natal in with every system after launch, and follow it up with advertising support; the cost-cutting measures suggest that this is going to be done, because MS certainly doesn't have any compunction about releasing $80-$100 peripherals. They're simply at a position where a clean launch as a separate product would involve scrapping what advantages they currently have and diving out of the profitable point in their cycle to chase a paradigm that's recently been losing ground to what they specialize in. Natal, if it's a success, is going to be a Dual Shock-style success, keeping an established platform from being the odd man out in features.
 
TAS said:
If Nintendo was doing this people would say it was the next big thing.

Now now..don't be bitter. Hate to break it to you, but MS is no Nintendo. Truth is, they ran their mouth off at the beginning of this generation with illusions of grandeur and ended up getting their asses handed to them by Ninty. Now they are eating abundant amounts of crow and playing desperate catch up. Problem is, Wii is a social phenomenon that isn't going to be dethroned by a blatant imitation. MS (and Sony) should stick to making powerful hardware with all the bells and whistles and leave the innovation to the master.

Aren't they each innovative to their own strengths, though? Nintendo, as a toy company, has an excellent handle on peripherals and mass-market software; Sony, an electronics manufacturer, constantly pushes limits with custom and unusual hardware; and MS, a software developer, does amazing things with improving ease of development and smart application of commodity hardware. Each of these can lead to a mass-market breakthrough in its own way.

That said, it runs the other way too. Nintendo habitually stumbles when it attempts to play the hardware game, and the PS3's biggest weakness is a poor commodity graphics chip. This is why MS's attempt to build a hit toy, especially when it's described as "what Tom Cruise uses on his computer at work in that movie", seems somewhat dubious.
 
Many game board enthusiasts STILL consider the Wii a failure and rarely miss an opportunity to take a shot at it. This despite how much it sells still, how many people are enjoying it and how much Scrooge McWata and friends make from it.

So what's my point?

Project Natal will probably never be considered a success to anyone resistant to it now. Minds have been made up. Flags have been planted. Lines drawn.

Me? I'm a 360-only owner (due more to economics) that is curious to see what will be done with Project Natal. I dig that the Wii has expanded the market and made gaming interesting to people I never thought would be. Its not for me, but I like what its done because I recognize the industry must grow and evolve.

Project Natal will likely grow and evolve the industry as well. You don't have to like it to recognize that. And you also don't have to see it as a threat when we already have too many 'core' games to play that are selling big numbers.
 
This from an Xbox 360 and Wii owner:

Natal on Day One for me. I hope Natal outperforms the Wii from a motion standpoint so I can dump the Wii and buy Wii type software/games for use on my 360 by my kids while I continue buying my type of 360 games.

Also with the 360 similarly priced to the Wii, I think with the hype and if the Natal delivers in perfomance and software (a big if I know), it will provide direct competion with the Wii for new potenial console buyers. I know it's anedotal, but my parents would have gotten a Natal instead of a Wii for this past Christmas if the Natal (and decent Natal software) was around.
 
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