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Stupid, Stupid xBox

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Re: Stupid, Stupid xBox

#151

Post by muyuu »

EwanToo wrote: post #147
InclinedPlane wrote: post #104

I see a couple comments here, including the highest voted top level comment, questioning how the xbox can be "crushing" their competition given that a straightforward reading of console sales indicates things aren't so cut and dried. However, the xbox is crushing its competition, in several ways, and let me explain why a naive reading of unit sales is misleading. Many consoles sell at a loss, especially initially, or…

The idea that Nintendo always sells at a profit is a long standing one, but with Wii U it's known to be false. Nintendo themselves have confirmed it: "With Wii U, we have taken a rather resolute stance in pricing it below its manufacturing cost, so we are not planning to perform a markdown." 1 - http://www.nintendo.co.jp/ir/en/library/events/130131/04.htm...

If that's the case, either MS and Sony take MASSIVE loss or hardware is going to be incredibly disappointing this generation.

The Wii U has 2006 PC level hardware at best. If you need to take a loss to sell it at these prices this is going to be really bad (unless the controller is taking the lion's share of the cost).

Re: Stupid, Stupid xBox

#152

Post by shiftpgdn »

adventured wrote: post #140
jpxxx wrote: post #128

The console industry used to sell high-end wedding cakes. Now they sell wedding cakes, some sheet cakes, and occasionally a pre-boxed slice if there are leftovers. These are your only options for snacking in the living room. You order a wedding cake, go pick it up in a few days, and hope it tastes good. They are about to find out what happens when piping hot cookies are hand-delivered in 30 seconds or less to the liv…

None of that is going to happen. Apple is horrific at the gaming business, and that isn't going to change any time soon. Why? Because it's not a priority, and isn't going to be any time soon. The substantial infrastructure pieces that Microsoft, Sony and Nintendo have built up in gaming - Apple has none of that, and it isn't going to magically appear. Apple would have to make gaming a top priority, and they will neve…

Why not? To quote The Lorax "business is business and business must grow." Apple can't ride the iphone wave forever and will need to find new paths to replace the dying/dead ipod revenue stream.

Re: Stupid, Stupid xBox

#153

Post by muyuu »

redblacktree wrote: post #31
clobber wrote: post #21

Earlier quoted context omitted.

Nobody seems to remember just how much money Microsoft and Sony have lost on their consoles. - Through 2005, the Xbox gaming division had lost over $4 billion [1] - Microsoft took a charge of $1 billion dollars on its June 2007 income statement to account for the cost of replacing bricked Xbox 360s [1] - Xbox 360 and PS3 losses total $8 billion [2] Luckily for Microsoft, they've had the cash to burn to strong-arm the…

Isn't this how the console market works? You lose money on console units, but make it back in licensing? Or are you saying that, taking licensing into account, the Xbox still lost money for Microsoft? 2005 and 2007 were a long time ago. Do you know of more recent numbers?

It's the way it works now, definitely. In almost any other market this would be considered dumping and anticompetitive practices, it sets an incredibly high barrier of entry to any potential newcomer.

Re: Stupid, Stupid xBox

#154

Post by ericd »

greggman wrote: post #143
InclinedPlane wrote: post #104

I see a couple comments here, including the highest voted top level comment, questioning how the xbox can be "crushing" their competition given that a straightforward reading of console sales indicates things aren't so cut and dried. However, the xbox is crushing its competition, in several ways, and let me explain why a naive reading of unit sales is misleading. Many consoles sell at a loss, especially initially, or…

Not that I disagree but just so I can back myself up when I go repeat this to friends and colleagues where's the data to substantiate these claims? In particular that 360 has made more money for 3rd party devs than Wii. It doesn't really matter if Microsoft makes more money per gamer than Nintendo if Nintendo is still more popular. As a ludacris example I'd consider consider a company that sold a million $1 items mor…

According to wikipedia (http://en.wikipedia.org/wiki/List_of_best-selling_video_game...), there have been 618.24 million XBox 360 games sold, and 863.53 million Wii games sold as of December 31st 2012. Nintendo is bigger on the 1st party games, though, so who knows whether it's made more for 3rd party devs or not.

Re: Stupid, Stupid xBox

#155

Post by EwanToo »

muyuu wrote: post #151
EwanToo wrote: post #147

Earlier quoted context omitted.

The idea that Nintendo always sells at a profit is a long standing one, but with Wii U it's known to be false. Nintendo themselves have confirmed it: "With Wii U, we have taken a rather resolute stance in pricing it below its manufacturing cost, so we are not planning to perform a markdown." 1 - http://www.nintendo.co.jp/ir/en/library/events/130131/04.htm...

If that's the case, either MS and Sony take MASSIVE loss or hardware is going to be incredibly disappointing this generation. The Wii U has 2006 PC level hardware at best. If you need to take a loss to sell it at these prices this is going to be really bad (unless the controller is taking the lion's share of the cost).

The Wii U controller does seem to be the bulk of the cost, but Sony were willing to take a massive hit on the PS3 cost at first to make Blu-Ray the standard disc format, so we'll just have to wait and see how much the next generation costs

Re: Stupid, Stupid xBox

#156

Post by VLM »

ern wrote: post #137

To add to OP's usability gripes, as a new Xbox owner (bought it over Christmas) with a grand total of 4 bundled games and a Kinect: Kinect menu interaction needs to be improved. Kinect Adventures has it right for its age group, showing a full mirror image of the user on its menus, but Kinect Sports is a mess of deeply nested menus, which my 4 year old, who has been able to navigate an iPad since age 2, can't get righ…

Ern I believe we purchased the same xbox package deal for christmas. My pet peeve WRT kinect is the agony I feel when I have to wave like a lunatic 25 times for 2-3 minutes to navigate a simple menu of songs when there's a perfectly good hand controller that could have done what I want in seconds.

One undiscussed economic effect is free trial/demo games and their impact on the market. Before I tried the demos with the kids, I'm planning on getting kinectimals and not getting minecraft... after the demos its intensely the other way around.

Re: Stupid, Stupid xBox

#157

Post by geon »

recoiledsnake wrote: post #97

Apple isn't making much money at all with the 30% cut of app sales. Their margins are huge on the iDevices. Since XBox is sold near cost, the move to 99c games and apps will just increase the costs needed to approve games while providing little profit or benefit to MS. Increasing the cost of hardware is another option but that's not easy either. Staying at the niche of high end games and including lots of media conte…

> the move to 99c games and apps

Steam has plenty of games in the 5, 10 and 20 $ price range.

Re: Stupid, Stupid xBox

#158

Post by Arjuna »

InclinedPlane wrote: post #104

I see a couple comments here, including the highest voted top level comment, questioning how the xbox can be "crushing" their competition given that a straightforward reading of console sales indicates things aren't so cut and dried. However, the xbox is crushing its competition, in several ways, and let me explain why a naive reading of unit sales is misleading. Many consoles sell at a loss, especially initially, or…

Thank you for this insightful commentary.

I wanted to add that there is a general vibe in this overall thread (not your comment - the vibe that you have responded to) that Microsoft essentially muscled their way into the console industry and achieved market dominance, largely because of their financial abilities.

Certainly, their financial abilities allowed them to shoulder the losses on hardware, but as you have pointed out, it is a common practice to implement a loss leader [1] strategy on hardware to achieve market share for other services (e.g., subscription gaming services, games, etc.)

Back to my point regarding financially muscling their way into the console market and why I do not believe that this is an entirely correct assessment.

For example:

1. Microsoft included a NIC in the XBOX at launch. It was baked-in; this was not an add-on. Sony had to step up and compete by offering the PlayStation Network Adapter, initially as an add-on. Also, Microsoft launched XBOX Live approximately 4 years ahead of PlayStation Network... 4 years!

Before that time, Sony essentially relied on game developers and publishers to support networked gameplay via a server infrastructure that was not controlled or offered as a subscription service by Sony. That service did not occur until Sony offered PlayStation Network.

2. Microsoft included a hard disk (a console industry first) in the XBOX, for storing downloadable content.

These are two examples of why it is not entirely correct to say that Microsoft achieved success solely by financial ability alone.

It was Microsoft that had the vision to launch with a unified, subscription-based gaming service with XBOX Live and a hard disk for storing additional content. They ultimately delivered a superlative networked gaming experience out of the gate, particularly with the quintessential launch title, Halo: Combat Evolved.

[1] https://en.wikipedia.org/wiki/Loss_leader

Re: Stupid, Stupid xBox

#159

Post by [deleted] »

InclinedPlane wrote: post #104

I see a couple comments here, including the highest voted top level comment, questioning how the xbox can be "crushing" their competition given that a straightforward reading of console sales indicates things aren't so cut and dried. However, the xbox is crushing its competition, in several ways, and let me explain why a naive reading of unit sales is misleading. Many consoles sell at a loss, especially initially, or…

[deleted]

Re: Stupid, Stupid xBox

#160

Post by teamonkey »

ericd wrote: post #154
greggman wrote: post #143

Earlier quoted context omitted.

Not that I disagree but just so I can back myself up when I go repeat this to friends and colleagues where's the data to substantiate these claims? In particular that 360 has made more money for 3rd party devs than Wii. It doesn't really matter if Microsoft makes more money per gamer than Nintendo if Nintendo is still more popular. As a ludacris example I'd consider consider a company that sold a million $1 items mor…

According to wikipedia ( http://en.wikipedia.org/wiki/List_of_best-selling_video_game... ), there have been 618.24 million XBox 360 games sold, and 863.53 million Wii games sold as of December 31st 2012. Nintendo is bigger on the 1st party games, though, so who knows whether it's made more for 3rd party devs or not.

All you need to do is look where the big money is invested. Of all the major publishers bar Nintendo, the majority is pumped towards the 360/PS3.
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