A Hypothetical Question to Xbox 360 owners about the Next Generation

[Zassk]

cbarcus, your first mistake is in assuming that there is such thing as brand loyalty. The Wii and PS3 have proven that brand loyalty is tenuous or nonexistent. You reveal your own prejudice by aiming your questions specifically toward existing X360 owners. Everyone who owns a console (and some who don't) is a potential customer of the next console iteration.

For me, I find the question academic. Natal is not coming with a new console, it's coming with a revision of the 360. The PS4 isn't even on the horizon yet, as Sony finally has a chance to recoup some of its record losses from this generation with the slim. Bottom line is that neither company is coming out with a new iteration in the near future. A Wii HD is most likely to come first, IMO.

 

[Dr. Nick]

cbarcus, your first mistake is in assuming that there is such thing as brand loyalty. The Wii and PS3 have proven that brand loyalty is tenuous or nonexistent. You reveal your own prejudice by aiming your questions specifically toward existing X360 owners. Everyone who owns a console (and some who don't) is a potential customer of the next console iteration.

For me, I find the question academic. Natal is not coming with a new console, it's coming with a revision of the 360. The PS4 isn't even on the horizon yet, as Sony finally has a chance to recoup some of its record losses from this generation with the slim. Bottom line is that neither company is coming out with a new iteration in the near future. A Wii HD is most likely to come first, IMO.

Agreed. Nintendo is probably the only one who is even close to being in the postion to launch a console in the 2010-11 range. If they do I expect it to be like the DSi where there will supposedly be exclusive games for it but for the most part it's just a revision of the DS.

 

[Shifty Geezer]

cbarcus, your first mistake is in assuming that there is such thing as brand loyalty. The Wii and PS3 have proven that brand loyalty is tenuous or nonexistent.

That's not true, otherwise companies woudn't invest billions in building up strong brands! Strong branding isn't an impenetrable fortress, and you can't expect a brand at the number one spot to remain there if the competition are moving forwards and you're not offering what the market wants. But brand contributes a great deal, such that a strong brand can, on later iterations, bolster a less effective product at a higher price to still control market share.

In your example, PS3 cost way too much for most shoppers and wasn't offering a fabulous new interface like Wii. But if this generation had Wii with conventional controls and PS3 launching much cheaper, chances are Sony would have the greater market share by now due to having the dominant brand entering the generation.

 

[Dr. Nick]

That's not true, otherwise companies woudn't invest billions in building up strong brands! Strong branding isn't an impenetrable fortress, and you can't expect a brand at the number one spot to remain there if the competition are moving forwards and you're not offering what the market wants. But brand contributes a great deal, such that a strong brand can, on later iterations, bolster a less effective product at a higher price to still control market share.

In your example, PS3 cost way too much for most shoppers and wasn't offering a fabulous new interface like Wii. But if this generation had Wii with conventional controls and PS3 launching much cheaper, chances are Sony would have the greater market share by now due to having the dominant brand entering the generation.

So far Sony has the most successful system to launch at a price of 500 or more dollars. I would say that in part proves how strong branding can be.

 

[Shifty Geezer]

Good point. How many other gaming consoles could sell ten - fifteen plus million at $500ish dollars? If Sony were new to the business this gen and launched PS3 as is without any previous reputation, how many would be buying it instead of XBox 2, sequel to their beloved XB, or Nintendo's GameCube sequel?

 

[Laa-Yosh]

Shifty, there are at least a hundred million PS2 owners and most of them had a PS1 too - yet less then a quarter of them has purchased the next iteration of the brand yet, and a lot of them have defected to Nintendo or Microsoft. They're not loyal, they're just looking for a console that's good value.

PS2 was good value compared to the rest on the market, PS3 is not. That's why PS2 became successful and PS3 not (not yet, anyway).

Brand loyalty is maybe for 10-20% of the market, absolutely not enough to build business plans upon. Yeah, 10 million PS3s were sold at an extreme price - but even that is far from enough to maintain a platform. Sony has probably lost so much money on that first 10 million that it'll never come back, they probably would've fared better without those sales...

 

[AzBat]

What about the brand loyality from original Xbox to Xbox 360? Hasn't the 360 surpassed the original? What about brand loyality from GameCube to Wii? or Gameboy to DS? I think brand loyality has a bigger than 10-20% following.

Tommy McClain

 

[Silent_Buddha]

I'm with Shifty on this. If PS3 wasn't a "Playstation" I'd be surprised if it would have sold even 5% of what it has sold up to today due almost entirely to cost of entry compared to the competition.

This isn't say it was a bad console. But without the strong brand not many consumers would have taken the chance on a 500-600 USD console.

Regards,
SB

 

[Pugger]

The PS3 may have sold better at $500 than anyother console brand would manage is probably true. However it sold nowhere near the numbers Sony required or thought. I can guarantee one thing you will never see another Sony console launch at that comparable price ever again.

 

[assen]

From the point of view of Ballmer - huge relaunch, attempt to penetrate new markets, new SKU, probably new packaging, "corporate identity" etc. - the Xbox 360 + Natal bundle might just as well sound as a new console, even though it's the exact same hardware packed in a box with a Natal unit.

Remember how Nintendo made from Gamecube, an additional ARM CPU and a motion controller a whole new console? The Xbox is getting another CPU in the form of the "brains" of the Natal unit; if they make it slimmer, the only thing missing from the full analogy with Wii would be the overclock - which, starting from its current 3.2 GHz, is outright impossible.

And Nintendo's competent marketing, of course

 

[dobwal]

Disclaimer: There is a lot of controversy over the timing of the next console launch with some industry analysts believing that it won't happen until 2013. Microsoft has not confirmed that they are going to integrate Natal capability into a new console next year, but such a possibility has been raised because the accessory has to include a CPU and memory to process the sensor data and generate the necessary controller information for the console.

Here's a hypothetical question for Xbox 360 owners:

Next year (Spring/Summer 2010) your console finally dies, and it is no longer under warranty. At this point it is clear that Microsoft is offering both a new console and the Natal accessory that Fall. The accessory will sell for $100, but the new console is twice as powerful as the old one, has Natal integrated within it, and will sell for $300. Halo 4: Reach will have some optimization for the new console, and will also be released at about the same time. Sony has announced their new console, and claim it will be over 10x as powerful as the current PS3, but it will not launch for another year (Fall 2011) and they haven't announced a price. Popular opinion is that the PS4 will be expensive, at least $400, maybe even $500.

Now you can only pick one option, but assuming that both consoles have compelling content, do you:

a) buy a $150 360 Arcade replacement,

b) wait for the Xbox Natal later that year, or

c) wait until Fall 2011 to buy the PS4?

Under the circumstances of a super360, I stick with a $150 Arcade replacement.

However, I highly doubt that MS would invest in beefing up the 360 to 2x the power to have it serves as an intermediate solution until the Xbox3 or 720 arrives. It would be a costly endeavor and one that highly prone to failure as history has shown us. If that 2X refers to practical performance rather than theoretical than it would more likely be a next gen console.

In that case I would purchase the new console.

I know a lot of people assume that next gen is several years away. I, for one, still think there is a high probability that a new console will launch in 2011. Manufacturers have shipped a total of ~110 million consoles out so far and that number will likely increase to ~125-130 million consoles by the end of 2009. Thats a little less than the total userbase of last gen (~132 million) when the xbox 360 was officially announced in May 06. By the time 360 arrived the overall userbase for last gen was in the ~140-145 million range.

Even if you dropped the annual volumes by 40% then a console officially launched during holiday 2011 launch, would still arrive to a userbase of over 185 million consoles or 30% more than was available when the 360 launched. Thats a huge increase considering we are in the middle of the deepest recession since the great Depression.

To put into perspective, the PS1 and PS2 shipped in 16-18 million range in the years when the PS2 and PS3 were shipped. So even if annual volumes don't drop swiftly within the next two years, we will have a userbase that was far bigger than last gen when the 360 dropped. Furthermore, the launch of a new console especially for Nintendo will probably be predicated on maintaining or growing current revenue and profit. Markets aren't inifinite and saturation is inevitable. Shareholders won't accept declining revenue and profits with the excuse of trying to milk the current gen for every drop.

 

[dobwal]

Shifty, there are at least a hundred million PS2 owners and most of them had a PS1 too - yet less then a quarter of them has purchased the next iteration of the brand yet, and a lot of them have defected to Nintendo or Microsoft. They're not loyal, they're just looking for a console that's good value.

PS2 was good value compared to the rest on the market, PS3 is not. That's why PS2 became successful and PS3 not (not yet, anyway).

Brand loyalty is maybe for 10-20% of the market, absolutely not enough to build business plans upon. Yeah, 10 million PS3s were sold at an extreme price - but even that is far from enough to maintain a platform. Sony has probably lost so much money on that first 10 million that it'll never come back, they probably would've fared better without those sales...

Loyalty doesn't have to be absolute or blind. And the level of brand loyalty is based on how well your current product stacks up in comparsion to past products of the same brand purchased by the loyal consumer. Loyalty is based on trust and a Sony branded PS3 was given a lot more rope by the market to hang itself than a Samsung/Panasonic PlayTerminal, or worse a console from a manufacturer no one has ever heard of, would of been allowed.

 

[Silenti]

From a purely anectodtal standpoint, the gamers I know and associate with (granting they are not the "casual" people for the most part) have a loyalty to software developers and not the to the hardware manufacturers. They mostly don't see it that way until you point it out to them.
Some of it rubs off from first party development (especially Nintendo), but any trust they have is in the games and not the hardware companies themselves. Those who bought a DS did so because of its title offerings. Same goes for the 360. It's almost brand loyalty to hardware by osmosis.
If Polyphony Digital was not a first party Sony developer, if they were to buy themselves out ala Bungie and go multi-platform, how many would desert the Playstation Brand for a cheaper console that offered the next iteration of Gran Turismo? The same goes for any major franchise.
I used to trust and follow certain games/devs - not the consoles. Heck, every generation it seemed I owned a console from a different company. (The Xbox to the 360 being the only repeat so far.) My loyalty to MS is virtually non-existant. My suspect loyalty not getting a boost thanks to the sheer number of 360's I have gone through. (Never RROD, always optical drive failure.) My reasons for having the Xbox and the 360 had to do with the games to a certain extent, and strangely enough, the controller played a huge part in my decisions. That is something of an historical hiccup in a way, the controller part.

I trust(ed) Bioware, Blizzard, Bungie to make games I like (for the most part.) I used to trust Sega and Capcom, LONG ago, and wouldn't touch their games with a 10' pole now. Overall, my view is probably colored by being a 360 owner, and the way 1st party devs are spread amongst the current 3. Nintendo being heavy first-party, Sony being a bit more in the middle, and MS being heavy in 3rd party, with some limited exclusives from those 3rd party's.

Maybe a brand loyalty discussion needs a different thread. Since this one was supposed to address hypothetical near future offerings I consider highly unlikely.

 

[RudeCurve]

Here's a hypothetical question for Xbox 360 owners:

Next year (Spring/Summer 2010) your console finally dies, and it is no longer under warranty.

Now you can only pick one option, but assuming that both consoles have compelling content, do you:

a) buy a $150 360 Arcade replacement,

b) wait for the Xbox Natal later that year, or

c) wait until Fall 2011 to buy the PS4?

I'd choose A, then swap my HDD from my Pro onto the Arcade. I wouldn't get either one of the new consoles. I'd rather wait while I enjoy my 360 games.

 

[Laa-Yosh]

What about the brand loyality from original Xbox to Xbox 360? Hasn't the 360 surpassed the original? What about brand loyality from GameCube to Wii? or Gameboy to DS? I think brand loyality has a bigger than 10-20% following.

Again, it's not about brand loyalty but about value. Both the Wii and the 360 are much better value then their predecessors. It just makes more sense to buy them.

 

[LunchBox]

What about trying to see if you can try and DIY fix it? Or trade it in and get a used X360.

 

[LeeC22]

As a console collector/game developer, I have the unfortunate problem of not being able to resist new tech, but this generation taught me a lesson that will be hard to forget.

I paid £475 for my 360 at launch, they weren't easy to find and I paid over the odds. I paid £400 for my PS3, you could buy them anywhere. My launch 360 is sat under my desk as an XNA dev machine and I have an Elite sat in front of my TV. My launch PS3 is starting to act up, but here's my situation...

If my PS3 dies, then it will just end up as another Sony console that has "left the building". I no longer have a PS1 or PS2 and have no qualms about not having a PS3. Historically, every Sony console I have ever owned required repairing or replacing at least once, more so in the case of my PS2. If my Elite dies (after the extended warranty has run out that is), it will get replaced, even if I have to sell my PS3 to replace it. If you switched the branding on the boxes, the situation would remain the same. I would get rid of the Microsoft MS3(?) to replace the PS360. At £475, the innards of the box with 360 on it, has proven to be better value for money than the £400 innards of the box with PS3 on it. That, and that alone is the single most important factor.

I couldn't care less about the name on the box, any more than I care what name is on the front of my HiFi amp (Onkyo, and I had never heard of them until I bought this amp, yet it didn't stop me buying it over a "brand" I know), or my TV, or anything for that matter. As a developer, I support the games and the developers who make them. I don't care what they run on, as long as they run. I choose the platform by suitability alone. Fighting games I get on the PS3, driving games I get on the 360, sport games I get on the 360, shooters... well I don't get them at all. I have Sega consoles, I have Nintendo consoles, Sony, Microsoft, Commodore computers etc... The name is irrelevant, the content is important, that is all I consider.

It's blind brand loyalty that causes all the arguments between the console owners. You will not see a greater amount of disrespect and ignorance anywhere outside a fanboy argument. There's no logic involved, there's no objectivity involved, it's simply "My console is better than yours because it says XXXXX on the box". Along with that you get, "game X is better than game Y because it's only on console XXXXX".

If I have any loyalty at all, it is to honesty. So if I look at those 2 consoles and think "which of those has given me what they said they would?". I think, do I see every game in TrueHD @ 120fps out of my twin HDMI ports on my PS3? Do I see a console worth "working longer to pay for"? The answer is no, but the answer isn't no because it says Sony on the box, it is no because they are simply the facts about that particular console. So come the next round of consoles I won't have a loyalty to Microsoft, because quite honestly, they don't care about me, they just want my money... but I will have an inherent distrust of Sony because of my experiences this generation.

I sometimes wish MSX had taken off and that we had a single console where the enjoyment is purely software driven. I tire of the incessant bickering between console owners, it just gets old really, really fast.

 

[grandmaster]

Here's a hypothetical question for Xbox 360 owners:

Next year (Spring/Summer 2010) your console finally dies, and it is no longer under warranty. At this point it is clear that Microsoft is offering both a new console and the Natal accessory that Fall. The accessory will sell for $100, but the new console is twice as powerful as the old one, has Natal integrated within it, and will sell for $300. Halo 4: Reach will have some optimization for the new console, and will also be released at about the same time. Sony has announced their new console, and claim it will be over 10x as powerful as the current PS3, but it will not launch for another year (Fall 2011) and they haven't announced a price. Popular opinion is that the PS4 will be expensive, at least $400, maybe even $500.

Isn't this basically a rephrasing of a discussion we've already had twice before in response to your suppositions that we're going to get new consoles next year? The bottom line is that new hardware in 2010 is going to lose money for Microsoft and Sony so they won't do it. Maybe you've seen the most recent NPD sales figures which show that the games industry is in a pretty fragile state. You won't grow the market by putting out premium priced consoles. It's all about lowering prices and adding value.

Now what is clear to see is that the platform holders are obviously looking to move on into new styles of gameplay. But it's not about pumping out more polygons, it's about expanding the game experience in new directions: both platform holders are clearly targeting motion controls and head/body-tracking, while Sony has its eye on the ball with 3D.

Maybe before we get another repetition of this thread you could give us one decent reason why - at this point - we need new gaming hardware? If Carmack can do RAGE on 360 and PS3, why does he a PS4 with 10x the power? Consoles are mainstream products - the only people who need a 10x PS3 will be the ones ready to invest $400 in a new GPU.

The whole argument is a complete non-starter.

 

[AzBat]

Again, it's not about brand loyalty but about value. Both the Wii and the 360 are much better value then their predecessors. It just makes more sense to buy them.

That might be true for some of the sales, but not all of it. I don't think the 360 would be near as big if it weren't for most of the original owners coming back for Halo 3 & Live.

Tommy McClain

 

[Laa-Yosh]

Well, in my opinion the loyalists are the minority
X360 is just so much better than its predecessor - but if it would be worse, or just on par with it, then we wouldn't see sales like this. Even a lot of the previous Xbox users would have abandoned the platform.

Same is especially true for the Wii, even if Nintendo franchise fans are probably the most loyal customers out there.