Business Approach Comparison Sony PS4 and Microsoft Xbox

And just because some of the coming console owners doesn't want to pay for online play doesn't make them non paying customers

Well that is the other thing. Both systems have their own video and audio services so that is another differentiator for the casual or very casual gamer.
 
If they're not paying, then you don't care about them. If the people who buy a PS4 because it's services are free are also the sort of people who are going to pay next-to-nothing on content and services, then MS won't miss anything. Going with AlphaWolf's Starbucks analogy, Starbucks is missing out on potentially millions of customers by not charging $1 a coffee, but in terms of profit they are far better served selling a higher priced product to a smaller number of people. It's the same (MS hopes) with services on a fee-chargeable network service. The sorts of people who won't pay for MS's internet service and the sorts of customers MS doesn't want, and catering for them would reduce total profitability as the customers who are willing to pay get away without paying anything.

Certainly the service is what MS is selling so yeah they aren't in the business of selling a box except as a means to get their services in the living room so they can leverage other Azure products and services, I kind of assume most anything on their network is Azure based one way or the other, so maybe ecosystem is a better term. So from that perspective maybe MS only cares about selling to a smaller but more "Lively" crowd. Maybe XB1 will be upscaled a bit to keep the riff-raff away :D
 
You are. Netflix will drop the quality of the stream if there is a performance issue and cache data as the stream plays, then return to a higher quality stream as the cache grows large enough. There is almost no time spent waiting for the stream to cache under normal usage; it isn't even an option in the UI. The numbers aren't distorted, people really do use both consoles more for entertainment apps than playing games.

So Netflix PS3 doesn't require gigabytes of hard disk storage space?
 
I think MS already forecasted that this next console generation will sell less than the last, but it is planning to make more money per console/user from XBLG and services then it did with 360.

I'm pretty sure this is the whole marketing premise of X1.

Whereas Sony pretty much has no chance to make more profits (less loss) than last gen regardless of sales.
 
I think MS already forecasted that this next console generation will sell less than the last, but it is planning to make more money per console/user from XBLG and services then it did with 360.

I'm pretty sure this is the whole marketing premise of X1.

Whereas Sony pretty much has no chance to make more profits (less loss) than last gen regardless of sales.

Actually the opposite. They are looking for 100m plus XB1 consoles sold iirc.

I'm personally not that optimistic about those numbers.
 
Whereas Sony pretty much has no chance to make more profits (less loss) than last gen regardless of sales.

Not true.
First Sony is not selling PS4 at loss unlike PS3 (till 2010) which means every PS4 is profitable.
Second the overall investment for PS4 is smaller than for PS3 and PS4 is easier to manufacture so they don't face the same dangers of PS3.
Thirdly PS4 is fairly priced and Sony even increased the forecast for PS4 sales which bodes well for Sony.
Last but not least Sony is more profitable than in the past already.
 
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Whereas Sony pretty much has no chance to make more profits (less loss) than last gen regardless of sales.
Don't you mean the opposite? This gen, Sony's gaming division profits were wiped out by the hardware costs. They are pretty much guaranteed to be more profitable next gen.
 
Microsoft has shifted to the subscriptions/service business while Sony is still playing primarily in the declining and less profitable traditional console and software business.
 
So Netflix PS3 doesn't require gigabytes of hard disk storage space?
Nope, it require a few megabytes or less for the app itself, and zero storage for the streaming. It's instant 1080p streaming with no wait, and no huge buffer, as long as you have at least 8-10Mb or so of bandwidth. If you have less, it uses a lower resolution, I think all the way down to 2Mb or less. It works across multiple devices, including rokus and others with zero storage capability.

The time between you deciding to watch a show, and that show starting to play is generally less than 5 seconds. Sometimes it's as long as 10 seconds (and that feels like an eternity nowadays - how spoiled we are..), most of the time it's about a second or two.
 
The Starbucks comparison doesn't quite work, they had to diversify and appeal to cheaper coffee buyers since the recession. That means offering DIY coffee in grocery-stores and supermarkets along with other SB-related products, that also means buying other lucrative businesses to stay ahead of the curve.

They've have had to deal with McDonald's and Dunkin Donuts trying to muscle in on coffee drinkers. But MS isn't quite like Starbucks since the latter is still showing growth in the face of competition, while they're actually losing PC sales to a rising market of tablets and smartphones they didn't help create.

They're trying to use that surplus of cash to adapt in the face of competition with questionable chances of success, even with enough marketing power behind them. Xbox and XBL is the only exception to that, and is a brand built on being competitive to an existing brand. But XBL is still the first unified online gaming service on consoles, so that is something in itself.

Really really long story short, Microsoft will have to stop the "we were here first" mentality if they want to survive and adapt. Even if that means adjusting their standards and expectations that other products/services have already defied, not just warping the surface of what they offer to seem like a still viable market alternative.
 
Actually the opposite. They are looking for 100m plus XB1 consoles sold iirc.

I'm personally not that optimistic about those numbers.

That number is likely the lifetime number which they are counting until the last console is shipped to a distributor, which the end point of them no longer selling the system, not it being the popular. My guess is a 10- year horizon, which 10 million consoles a year isn't that bad. Also keep in mind that despite the 360 being 8 years old, it's never been cheaper than $199, a price point the original Xbox reached 6 months after launch in May 2002.
 
Nope, it require a few megabytes or less for the app itself, and zero storage for the streaming. It's instant 1080p streaming with no wait, and no huge buffer, as long as you have at least 8-10Mb or so of bandwidth. If you have less, it uses a lower resolution, I think all the way down to 2Mb or less. It works across multiple devices, including rokus and others with zero storage capability.

The time between you deciding to watch a show, and that show starting to play is generally less than 5 seconds. Sometimes it's as long as 10 seconds (and that feels like an eternity nowadays - how spoiled we are..), most of the time it's about a second or two.

As far as I'm aware on the PS3 version of Netflix it is possible to watch hi-qualty content on a slow connection. The PS3 Netflix app uses the hard drive as cache if needed. Some users will opt to stream at their bandwidth and accept the quality level.
 
I doubt very much you speak for the casual gamer. Some won't want to spend money on a subscription, others will think nothing of it. Just like some won't spend $5 for a coffee and others think nothing of it.

As a business starbucks doesn't really give a crap about the people who won't spend more than $1 on a cup of coffee yet that has managed to work out pretty well for them. It's the same here, offering services aren't free, many people expect to pay for them. Some people won't but the people who aren't going to make money for your business aren't really worth having as a customer.

Great post. This is the thing. MS made $60 x 8 = $480 from Xbox Live renewals from most Gold members.

When you start working out the numbers you realize that Sony had to sell 5 PS3's without PSN+, for every Xbox 360 Gold subscriber to get the same revenue. 5:1 ! No wonder Sony lost their shirts and MS made money this generation.

MS doesn't care about non-Gold people. They have to pretend they do for PR reasons, but that's the truth of it.
 
As far as I'm aware on the PS3 version of Netflix it is possible to watch hi-qualty content on a slow connection. The PS3 Netflix app uses the hard drive as cache if needed. Some users will opt to stream at their bandwidth and accept the quality level.
If it does have that option, then it is different from every other Netflix player out there. I'm skeptical, but since I don't have a PS3 I can't say for sure you're wrong.

Even if you're right, I suspect the usage of that feature is so close to zero it doesn't matter. Xbox video has the option to download or stream instantly, and the usage of download is practically zero.
 
As far as I'm aware on the PS3 version of Netflix it is possible to watch hi-qualty content on a slow connection. The PS3 Netflix app uses the hard drive as cache if needed. Some users will opt to stream at their bandwidth and accept the quality level.

If that's a feature it is not one exposed to users as I have never seen such an option.
 
What exclusive Division content?

That is pretty funny considering how much it was being hyped almost as a PS4 game...

I tell you what, if it wasn't for the DRM backlash and 499, and OK maybe being less powerful too, I get the strong feeling MS would be about to relegate Sony/Ninty to bit player status. The level of software support they've strongarmed is pretty crazy. Headlined by both COD and BF now being basically Xbox branded, and both EA and Activision seeming to be in their corner (leaving Ubi as the one more Sony oriented that I can tell)

But anyways I cant believe there was no date announced. The ONE juicy morsel I was sure was going to come out of this. Ugh.

Also, the fact they're bundling Fifa 14 ought to imo definitely end yield problems rumors. The last thing you want to do if you have little stock is make major moves to stimulate demand.

On the negative side it does suggest XBO preorders were moving a bit slowly in Europe.

There was some suggestion there might be a USA counterpart, being EA, I'd have LOVED to see BF4 bundled, as that would have essentially saved me $65, and probably would have meant I wouldn't have purchased any other launch game.
 
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