Xbox 360 costs MS 315million this quarter. 360 sales slow to 1/3 of last year's

Now that I think about it, during the 32bits years (in which we had MSRP pretty much like those we have now) we saw some big price cuts in almost no time.

Like, both the PSX and Saturn got price cuts less than a year after release, while the X360 still has the same launch price (even more if we consider how the elite affects the console average price) the Wii is sold way over the real price, and the PS3 is pretty much unlike to get a price cut, specially since the 20GB SKU is gone and the 60GB wont come down in price unless the X360 does comes down first.

About a universal platform like the 3DO, well is actually a good idea, the problem is that the money is in licensing. If they (as in the company and the asociated corporations that make the hardware) get to divide all the profits from the games sales, those have to be huge as to turn a decent profit on all the members involved in the project.

Either that or consoles that cost as much as a PC, which is pretty bad...

If thats true then its the last kick in the game industry altogether...

If MS, the king of making money out of thin air, cant make a profitable game company, then no one in the entire market will believe hes capable of doing that.

I'm no saying that no one as in really no one, but in the sense that you wont see a dime for a game company coming of investors and venture capital if the X360 fails.

 

Don't forget about the Super NES....it debuted at $199.99 in August 1991 and was already on its first price cut to 179.99 in early 1992. I know because I bought mine in Feb 1992 when the price cut hit.

 

You suggest that MS makes money out of thin air.

I would suggest you look at the basic corporate structure that all companies in the world live by:

"Making money is the goal" - Well, nintendo makes more money than MS in the video-game market. This doesn't make nintendo more talented magically -it just means that nintendo considers every step it takes so it doesn't not keep the budget below the red line.

Microsoft has tried, by force-feeding the XBOX to the market, largely thanks to pumping money from other pillars in the corporate structure, to make a frankenstein monster.

If it was any other company out there, it couldn't afford the artificial sustaining that both XBOX platforms are going through.

In other words, if Microsoft does kick the can, it doesn't mean that the market is bad - it just means that they have rushed to spend too much money without considering the corporate cost or perhaps even over-estimating their ability to create interest and revenue.

Just like the story of the hare and the turtle, nintendo will reach the finish line, even if Microsoft doesn't next round.

 

Nintendo has also earned the distinct privilege of being shit on as having lesser consoles. There's ps2 and xbox people, then there's nintendo people. Nintendo will never get the type of gamers that went for the xbox or ps2 over the gamecube, and the same for this generation.

I guess it shows that there's money to be made in putting out rehashed consoles and selling them for a profit instead of pumping out bleeding edge technology and hoping that there's enough early adaptors to support the decision.

 

Indeed, but I compared the nextgen to the 32bit gen since both have things in common, like very pricey consoles (the 3DO was $600, and the Saturn $400, same as PS3 and X360 today) and being an improoved version of the last gen (32bits improoved the 3D flatshaded poly games from the 16bits, and nextgen add more FXs and online capabilities to new games).

Dude dont you get a metaphor when you see it? jezz...

Windows is not a good OS at all, yet it dominates the market. MS is practically making money of nothing (since is not a good product) thanks to high retail prices and humongous license fees for corporate and government clients.

They are literally making billons with no real (as in having a product thats worth the money you pay for it) reasons beyond having the standart of the industry.

Try to explain that to hundreds of investors that dont understand a crap about games and all they see is a company that showered a games division with money and got nothing out of it.

Take for example the Gizmondo aftermath: I know some guys that have a portable prototype that kicks ass, yet they cant find investors since after those fuckers from the gizmondo ripped their investors for more than $400 million bucks, almost every investor thinks guys with a portable looking for funding are just a bunch of scammers.

And thats was just an small independent company, just think about the tidal wave that would be unleashed if MS decided to drop the X360 and leave the VG market.

Dunno, I believe the Wii owes its life to internet hype.

You can beat that kind of publicity, just believe what would happen to nintendo if the GC was a overhauled N64 (yet priced even more than in the 96 launch) and they released it in 2001 when the internets were barely at the dawn of the blog days, and just at the tipping point of the bubble.

They would be burned alive, thats for sure.

In most forums you cant say shit against the Wii, and thats a major point since just as someone may end up doing something if all their friends tell him is good to do so, theres a big fat chance that the average joe would get am overpriced, underpowered Wii since its praised by almost everybody, while the PS3 (and in a lesser way, the X360) get trashed everywhere.

The Wii may live up the hype, but only if nintendo quits this GC-like game release timeline and starts pumping some AAA games pronto...

 

Important shareholders are able to see the difference between the amount spent and the amount made - that's all they need to know.

When they also know that nintendo is making a profit, they just add one and one and it's obvious that Microsoft's approach is aggressive and too risky.

Overall, MS is a very large entity, and for large stock-holders the dividents and other bonuses should be enough to keep them happy - that doesn't mean they approve of the XBOX's position, nor that the market is in their view bad.

PS: if you really want someone who makes money ouf of thin air, try the Banks. Now that's a good bed-time story, involving voodoo and black magic, where capital multiplies itself thanks to a central nod that can guarantee money.

Microsoft is a saint and a hard-working corporate entity compared to what banks have been.

 

If Gizmondo proves anything, it's that there are still plenty of investors wanting to pump money into the game industry. If Microsoft pull out after Xbox 360, someone else will take their place; if anything, there woud be more investment capital pouring in, because a major player would have left and there'd be a gap in the market. There are simply far too many people with an awful lot of money who want to play games, and someone is going to make them and sell them. If companies like Microsoft can't do that at a profit (or more applicably in this case, cannot staunch their losses to an acceptable degree), someone else will find a way to do so and reap the financial rewards.

I love this doom and gloom stuff. Oh woe! The video game industry is about to collapse. I guess all those people spending >$30 billion a year worldwide on consoles and games are just going to pack it in and find a new hobby. As long as that kind of money is being spent, someone will always be there ready to take it.

 

Dude if we're going to talk about bad companies then what about arms dealers? they really get money out of nowhere really.

After all, they charge up to $4000 for a cheap weapon that costs $60 to make, and benefit from the ongoing civil wars and racial fights in africa to make profits, HUGE profits.

I didnt said MS was evil, but that their main souce of income is still the ol' windows, and that that product is still standing there becos is the industry standart. Not becos is the best or the most efficient, but becos you cant run most programs without it.

At least theres a diversification process in course, cuz some years ago you simply couldnt do shit without a windows OS.

About investors, you just cant rule out everyone who isnt teh Whiz in VGs dude, they are much more (and therefore represent more capital) than those who are "in the game" and therefore know exactly how this market works.

But on the other hand MS didnt needed any investors for the Xbox, and if they step out of the market, unless the newcomer is a young company they shouldnt need any investors at all.

I bet the next player to enter the industry will be Samsung.

Still? what theres a new console project and I didnt heard of it? cuz both the Gizmondo and the crapstatic Phantom were speculative bubbles and vaporware, yet I dont see anyone else coming to the game with a new console.

Plus both of those projects were 2 years ago at least, and today with the new Web 2.0 all that venture capital that went to other markets (like VGs) after the 2001 internet bubble burst is coming back to invest in the new internet companies.

Also I've to say both Phantom and Gizmondo were the only independent consoles (as in, coming from new companies and not from big old corporations) I've heard about in a long time, and with the big scandals behind those projects I wonder if anyone whos not an expert in this industry would invest in new hardware companies like those.

Unless you get half of the silicon valley to invest in that (like the new Vudu DVR) you wont get a dime from "normal" investors, since Web 2.0 looks a lot better right now.

And no, the market wont go "teh d34thssss" pal, but if it stops growing it would be a big kick in the balls nonetheless, and nobodys invests in stagnating business.

I believe that with nintendo keeping with the obsolete hardware/great profits strategy, if MS or even sony decides to quit the war then the newcomer to the market will bring another low powered console like the Wii, since being [nintendo] the only company thats really profitable right now theres a bigger chance that newcomers will see it as the way to go in this industry, which is not that good if you ask me.

 

I like how you jumped from me talking about the "video game industry" to "console manufacturers". Straw man argument seen and countered.

First of all, shut the fuck up with this "teh leet talk in quotations", it makes you sound like an idiot - and though we frequently disagree, I don't actually think you're stupid, so for your own sake knock it off. Second, any business which sees $30 billion a year, even if it isn't growing, is not stagnant, and is obviously attractive to investors. End of.

 

It's not all doom and gloom, but the industry does need to change if it wishes to continue making the kind of money it enjoyed in the past. Costs go up, prices stay the same. That is not a workable trend long term. I think it is a safe prediction to say that console generations will last longer so that manufacturers and publishers can recover investments in technology, but I wonder when that will be when both Microsoft and Sony are pushing the limit of console design in terms of power vs cost so fiercely.

It doesn't seem like the cycle can continue, especially when Nintendo sees the success it does without pushing the technology envelope.

 

Well duh! the console manufacturers ARE the industry pal! consoles are the backbone of the current game industry, they represent more than three times the number of users, way more than in PC and other system (ie: cellphones and PPCs).

Just imagine if consoles dissapeared and only PCs could run games, do you think most people will pay $1000 bucks for a gaming PC? most buyers complaint cuz they've to pay $400 for an X360! and $1k buys you just a midend PC, which is going to be obsolete in a year or less.

Just imagine if 3 fourths of the VG users disseapeared from the market, what would developers do eh? make more tetris clones for crackberries?

and BTW:

This industry is all about future profits and estimates, and if you tell an investor something that ends being completely different you lose credibility. Just look at MS that still cant get a profit on the Xbox, and not even near the sales numbers they said they would.

The only hope for consoles (which are more and more costly to make in every new generation) is that the market grows so the costs go down and therefore profits go up (or at least start to appear).

Exactly, but on the other hand, most gamers still complaint about the PS3 price, which is kinda funny since sony still losses like $200 or more for every unit sold.

Honestly I dont understand how people pays $100 bucks or more for designer clothes (which were made with cheapass fabric and asian slaves in some sweatshop) but they bitch all the time becos games are now $60.

I remember being a kid during the 16bit days and a "cheap" game was $60, since most of them were either $70 or $80, and others like Virtua Racing were at $120! if we adjust those prices to inflation games today should be starting at $90 and going for as much as $180 or more...

And lets not forget that back in the day the average game production budget was $200000 while today is beyond $10 millons in most cases, a whooping 5000% from 13 years ago.

Now this is an interesting point: what if highends consoles were replaced by others like the Wii? mind that the Wii cant even run HL2, not even Halo2 (and dont even ask for GoW or Crysis) and I doubt the wiimote can help with that since as we were discussing in the other thread that new form of control is becoming a gimmick.

So, if highend console hardware dissapears, highend games will dissapear too, since I doubt PC games sales can cover the huge developer budgets we have today...

 

I still like the fact that the Xbox 360 is barely selling 4,000 units a week in Japan (and it's normally a lot less) and that the Wii and PS3 have outsold it's total number of installed units here it in the last 3 months.

 

Console sales are not the where the money's made, though. It's in games, as you well know.

Why should I imagine something so daft? I've got no problem with talking in hypotheticals, but that's absurd.

Costs won't go down if there are just more people buying games, you'll just get higher profits. Anyway, the trick is to lower/maintain costs while remaining attractive, and to their credit, Nintendo are managing this currently. Speaking of which...

Numerical specs aside, both those games were available for Xbox, and the Wii is definitely more powerful than Xbox, so you're wrong.

 

Well duh! but how are you going to run a game if you dont have the hardware? and theres quite a difference in paying $400 for a console and $1000 for a PC, which BTW will get obsolete much faster than the console.

Licensing is the way to go, the PC system wouldnt be able to mantain the current industry, not a chance.

Yeah, as absurd as no money=cant make shit. Theres no signs that theres going to happen inmediatly, but the big 2 (MS and Sony) are already in the red since their consoles are bleeding money, and no company can keep that for too long, not without the stockholders against them.

Have you ever tried to make custom hardware? I did, and theres quite a difference between making a couple units, some hundreds and a millon. Costs go down if production goes up, and production goes up if sales go up, thats basic capitalism pal...

WTF? its been already said here and in other forums that even with the OC Gekko the Wii is NOT as powerful as the Xbox...

Some dev once gave a really good speech on the subject, saying that eventually programmers (pulling some tricks on the hardware) may get a little more power out of the Wii than what the Xbox had, but theres some things that the Xbox could do that the Wii will never be able to do.

 

what does Alchy having made custom hardware have to do with your point about production costs? It's a well established point that when production goes up, prices are driven lower.

But since you brought it up, what sort of custom hardware did you make ?

 

Consoles are custom hardware since theres no standart like in PCs, ergo getting a custom motherboard and chips for a console may be more expensive (initially) than using off-the-shelve parts.

But on the long run when production goes beyond the 10 million units costs on custom parts go down pretty fast.

We were trying to make a portable running Linux and using a SH7 as a CPU since it has a great power/comsuption ratio and was pretty cheap.

What wasnt cheap was getting a prototype made: I wasnt in charge of that but the guy who had the contacts to do so said it was going to cost us like $700 or more per unit, and we needed 10 or more to start coding since none of us were living in the same area (so we needed a unit for each member of the project).

Then most of us had to go back to college and some of the members were out of cash, so the whole thing got scrapped...

 

see my other reply regarding the Sh-7, in the "Modern 2D console" thread. Haven't your parents taught you that lying is bad? ;-)

 

Go see the reply....

 

i ve already replied

 

http://www.eweek.com/article2/0,1759,2125544,00.asp?kc=EWRSS03119TX1K0000594

The President of Microsoft's Entertainment and Devices Division says the xbox will be profitable within a year. They see money in it yet, and don't appear to feel like they need to make price cuts or change their strategy.