And last but not least... MS financials

[Nightz]

Errmm... Tell me again how you got to that thought?
Microsoft are being purposedly inefficient in order to destroy the competition? How does that work again? Cause if anything, their inefficiencies will take them down.

They have so much money it allows them to enter a market they wouldnt naturally be in. That is they can afford to be grossly inefficient just to compete.

They have already lost 3 billion and this only their first console. No other firm in existance could afford to lose so much. It remains to be seen how much more they can afford to lose, like everyone else Microsoft is in this to make profit.

My logic is if the market remains as competitive as it is they wont get their money back. They will nee to kill the competitive element.

We'll have to wait and see what happens in the future.

 

[pahcman]

There is a strong possibility that fanboys will paint this dynamic as utterly ruinous for company A and orgasmically awesome for company B

exactly. to such fanboys, MS is doomed is they do, doomed if they not.

more random speak

will it matter for Xenon to launch before, same or after PS3?

speaking of console monopoly and inefficient competing, its funny since its far truer for others than MS Xbox Xenon.

Halo is MS leader, as with GT for Sony and Pokemon for Nintendo. Seem fair. Beyond that it boils to 3rd party dealins .. again.

Xbox still has some 2005 games to do well, Halo, GTA and possilibly KOTOR, Jade Empire and SC CT. May never hit 6++ mil per game, but how many other games in 2005 will sell 6mil, not even considering Xbox userbase?

The high costs of Xbox have more to do with the rushed hardware deal MS inked. Xenon will fix that.

 

[Nightz]

You might want to read up on how that whole "console business model" thingy works.

The problem isnt the business model its the market. Microsoft forced themselves into market with several natural barriers to entry. The nature of the market only allows there to be a few profitable players or an oligoply.

 

[Acert93]

You might want to read up on how that whole "console business model" thingy works.

The problem isnt the business model its the market. Microsoft forced themselves into market with several natural barriers to entry. The nature of the market only allows there to be a few profitable players or an oligoply.

The MS-hating is tired.

Sony forced themselves into the market. I remember them buy exclusives and buying out 3rd parties. 3DO tried to get into the market and failed. Panasonics parent companied tried and quit (M2, never released). The list is a pretty long one actually.

The video game console market is a nasty beast who is rough on newcomers... and even veterans. Ask Sega about that. The fact Xbox has sold nearly 20M consoles (read a news release last night that they are up to 19.9M) shows there are 20M people who want their product. They have gone punch for punch with an industry veteran with better 1st party games (Nintendo) because they are making games that certain segments of gamers wants (e.g. Halo or Mech Assault), offer good services (Xbox Live), have quality hardware, and have built good relationships with 3rd party software developers.

MS has done nothing different than any other company who tried to get in. Actually, MS has been less aggressive than Sony was with the PS in getting exclusives. The fact MS has a lot of money is irrelevant. MS, just like Sony and Panasonic, saw how green (and I mean $GREEN$) the video game pasture was and wanted a slice in the pie. This is why Sony got in on the market with the PS.

As for the nature of the market, yes, it can only carry so many companies. That did not stop Sony for entering the market did it? And guess what? If MS floats and Nintendo sinks (as much as I would hate to see that), it would be Nintendo's fault. Nintendo makes great software and some pretty nice HW, but they have been out of touch for the longest of times (note: I own every Nintendo console since the NES). They still treat 3rd parties like, well, 3rd class citizens. They still act like people need to come to them because they own the market. Their attitude towards 3rd parties has hurt them, and as a gamer I must admit some of their attitudes toward mature gamers (people who like indepth games with stories, refined and detailed controls, etc...) alienates me to an extent. They make some brilliant games mind you, but if they keep losing marketshare it is not because of "Big Bad MS Monopoly" it is because they did not give gamers what they wanted as a whole.

As much as I love Nintendo games, and I have a special appreciation for Nintendo, if the market can only sustain 3 players and they get nudged out it is not Sony's or MS's fault. It was Nintendo's for giving up their market leadership with the N64 (which related to their insistance on the very expensive ROMS and poor 3rd party relations) and the mixed messages they send gamers.

The same goes for Sony and MS. If they are the only 2 left in 5 years and start abusing their market position I would hope that someone else would push their way in to compete. I could care less if the market can only hold 2 consoles--it is not a defacto deal. If someone can offer (1) Gamers and (2) Developers something new, better, more affordable, or whatever, then so be it. If they platform veterans resist the changes that gamers and developers want, well tough luck on them.

 

[Ty]

It was Nintendo's for giving up their market leadership with the N64 (which related to their insistance on the very expensive ROMS and poor 3rd party relations) and the mixed messages they send gamers.

Where were you when someone here was trying to claim that Nintendo was innovative by having the N64 use carts?

 

[Proforma]

Only someone like Tuttle could turn this into a negative thread.

Congrats Tuttle you sure know how to troll.

 

[-tkf-]

The fact MS has a lot of money is irrelevant.

IMHO that is the single most important point.

The XBOX would never ever had been where it is now if it wasn't for the insane amount of money MS can throw after it. It doesn't stand on it's own legs, it stands on Windows XP and Office legs. If Sony had failed with the PS (like burnt up 3 billion dollars) i'm not even sure they had been around today.

However, just because MS has so much money it's pretty much hopeless to compare their "strategy" to past consoles. The funny thing is that we the consumers are gonna pay back that money back to Microsoft, either via Windows products or if we get "lucky" console games.

 

[Shifty Geezer]

Sony forced themselves into the market. I remember them buy exclusives and buying out 3rd parties. 3DO tried to get into the market and failed. Panasonics parent companied tried and quit (M2, never released). The list is a pretty long one actually.

Yes, they failed! They didn't have $3 billion to throw at it. Sony kinda got lucky but it didn't take them 3 years to turn a profit. They didn't try to 'steamroll' their way in taking billion dollar losses but still selling hardware regardless. If you want to compare MS to Sony, do you think would have continued with PS if they were losing the kinda money MS had?

MS is the only company I know to try and enter the games sector taking insane losses for years - everyone else would have backed out by now. If it weren't for their insanely profitable other business, XB would have died a long time ago like all those other console attempts.

Sony 'forced' their way in, spending money to get market share, but the resistance facing MS has been far, far greater, yet they still persist.

If MS floats and Nintendo sinks (as much as I would hate to see that), it would be Nintendo's fault. Nintendo makes great software and some pretty nice HW, but they have been out of touch for the longest of times (note: I own every Nintendo console since the NES).

Why do people say this? They've sold as many consoles as XB, making more money from software, yet people talk of Ninty as failures. Just because they no-longer dominate the US market doesn't mean they can't hold their own in the international scene. If they're out of touch with what people want, how come they get very good game to console ratios?

 

[Ty]

Why do people say this? They've sold as many consoles as XB, making more money from software, yet people talk of Ninty as failures. Just because they no-longer dominate the US market doesn't mean they can't hold their own in the international scene. If they're out of touch with what people want, how come they get very good game to console ratios?

It's because people here have wildly different definitions of 'success' or 'failure'. Your definition seems to be one of a financial perspective. For others it's relative to their previous marketshare. Until there is a decent discussion on these words, it's somewhat pointless to say company X failed or company Y succeeded.

 

[MightyHedgehog]

Why do people say this? They've sold as many consoles as XB, making more money from software, yet people talk of Ninty as failures. Just because they no-longer dominate the US market doesn't mean they can't hold their own in the international scene. If they're out of touch with what people want, how come they get very good game to console ratios?

The real problem with Nintendo is that their home consoles, and in particular the GC, are only really good for them...while 3rd party software largely sells like crap on them. This isn't quite the case for XBOX, where 3rd party games sell, on average, much better. So while the GC has kept pace with the XBOX in worldwide console sales, its ability to be profitable for the most important people, the 3rd parties, is largely why its considered a failure, by comparison. Note that the sales of 3rd party games I'm referring to is really about western publishers/developers, the primary driving force in the console market today.

 

[PC-Engine]

Why do people say this? They've sold as many consoles as XB, making more money from software, yet people talk of Ninty as failures. Just because they no-longer dominate the US market doesn't mean they can't hold their own in the international scene. If they're out of touch with what people want, how come they get very good game to console ratios?

The real problem with Nintendo is that their home consoles, and in particular the GC, are only really good for them...while 3rd party software largely sells like crap on them. This isn't quite the case for XBOX, where 3rd party games sell, on average, much better. So while the GC has kept pace with the XBOX in worldwide console sales, its ability to be profitable for the most important people, the 3rd parties, is largely why its considered a failure, by comparison. Note that the sales of 3rd party games I'm referring to is really about western publishers/developers, the primary driving force in the console market today.

Do you have numbers for cross platform titles to support that claim?

 

[DuckThor Evil]

Why do people say this? They've sold as many consoles as XB,

Actually no they haven't. And MS didn't just overtake them, they are cruising away.

 

[pahcman]

Yes, they failed! They didn't have $3 billion to throw at it. Sony kinda got lucky but it didn't take them 3 years to turn a profit. They didn't try to 'steamroll' their way in taking billion dollar losses but still selling hardware regardless. If you want to compare MS to Sony, do you think would have continued with PS if they were losing the kinda money MS had?

MS is the only company I know to try and enter the games sector taking insane losses for years - everyone else would have backed out by now. If it weren't for their insanely profitable other business, XB would have died a long time ago like all those other console attempts.

Sony 'forced' their way in, spending money to get market share, but the resistance facing MS has been far, far greater, yet they still persist.

What wrong with playing to one strenghts?
Have u not felt the benefits of added MS competition?

Before some paranoid guys start saying MS will monopolizzze the consoles !!! Let talk when we cross the bridge, now the only monopoly is u know who and i dont see much complains.

Why do people say this? They've sold as many consoles as XB, making more money from software, yet people talk of Ninty as failures. Just because they no-longer dominate the US market doesn't mean they can't hold their own in the international scene. If they're out of touch with what people want, how come they get very good game to console ratios?

Because outside Japan GC is losing more n more to Xbox. In Japan they are miles behind Sony. Nintendo have their dominate GB line to thanks. How u rate "good game to console ratios"? Even Nintendo own games have trouble selling on GC. Imo, MS and Nintendo popularity are going opposite poles.


And i agree with Proforma. Way to go tuttle.

 

[Tuttle]

Only someone like Tuttle could turn this into a negative thread.

Congrats Tuttle you sure know how to troll.

What a joke.

So tell us, from your reading of the MSFT earnings report, you did read it before running your mouth off, right? was the good news for MS?

It looks like Wallstreet missed the good news just like me, I'm sure they would like to know.

 

[pahcman]

For anyone who has actually bother to read them, these financial results are a disaster for MS.

Please elaborate.

How about you reply to aaaaa00 and tell us more?

 

[Nightz]

The fact MS has a lot of money is irrelevant.

IMHO that is the single most important point.

The XBOX would never ever had been where it is now if it wasn't for the insane amount of money MS can throw after it. It doesn't stand on it's own legs, it stands on Windows XP and Office legs. If Sony had failed with the PS (like burnt up 3 billion dollars) i'm not even sure they had been around today.

However, just because MS has so much money it's pretty much hopeless to compare their "strategy" to past consoles. The funny thing is that we the consumers are gonna pay back that money back to Microsoft, either via Windows products or if we get "lucky" console games.

Spot on, thats what ive been saying in the end Xbox consumers will pay the money back..

Acert, Sony were pretty efficient they never posted insane losses with their PS. Like its been said above Sony would have pulled out by now if they had lost so much money so early. Firms like Matsushita, Philips, Commordore, Nec, Bandai, SNK, Sega, Amstrad and Atari arent stupid.

 

[one]

The fact MS has a lot of money is irrelevant.

IMHO that is the single most important point.

The XBOX would never ever had been where it is now if it wasn't for the insane amount of money MS can throw after it. It doesn't stand on it's own legs, it stands on Windows XP and Office legs. If Sony had failed with the PS (like burnt up 3 billion dollars) i'm not even sure they had been around today.

However, just because MS has so much money it's pretty much hopeless to compare their "strategy" to past consoles. The funny thing is that we the consumers are gonna pay back that money back to Microsoft, either via Windows products or if we get "lucky" console games.

Spot on, thats what ive been saying in the end Xbox consumers will pay the money back..

Acert, Sony were pretty efficient they never posted insane losses with their PS. Like its been said above Sony would have pulled out by now if they had lost so much money so early. Firms like Matsushita, Philips, Commordore, Nec, Bandai, SNK, Sega, Amstrad and Atari arent stupid.

Basically, Microsoft bought the Xbox status in today for $5billion. That's the thing that can be done only by those with that amount of money in their pocket (or those trusted enough to be able to borrow the money). Is it a cheap buy or not, I don't know :?

 

[Acert93]

It was Nintendo's for giving up their market leadership with the N64 (which related to their insistance on the very expensive ROMS and poor 3rd party relations) and the mixed messages they send gamers.

Where were you when someone here was trying to claim that Nintendo was innovative by having the N64 use carts?

I saw and chose not to respond

I think people tend to forget the atmosphere of things at the time and look back with odd slants. e.g. CD-ROMs. Someone was saying they were a big risk and that Nintendo was being conservative by sticking to ROMS. Actually, it was a huge risk sticking with ROMS. CD's were a very hot item, were much cheaper to make games with, allowed a lot more content, could do nice FMV, play music, and so forth. So consumers were excited about them. But most of all developers were excited about them.

Nintendo took the route of condemning FMV (which was good and bad... Nintendo's use of ingame movie sequences has proven to be the right path in the end, not that FMV is bad if used correctly) and claiming ROMs let them do things that CDs never would. Effective streaming methods would have been an option. The only legit benefit I ever saw was load times which were pretty good on the N64. But these are pretty minor reasons. The real reason Nintendo went with ROMs was piracy.

Carts were not an innovation, and the gameplay benefits were a wash (and that is being kind). Yes, you got faster load times, but you also had games that were restricted by the small ROM size. That meant smaller games and less detail. Where it was a huge risk was the fact that ROMs were numerous times more expensive than CDs. So Nintendo made less money (or had to sell their games for more, which they did at times...) and Developers were upset at the drakonian style Nintendo ran themselves. Nintendo could no longer dictate to the market and force their will on developers, especially when it meant developers would make more money elsewhere.

ROMs were a very innovative way to offend developers, I will give them that

 

[Acert93]

However, just because MS has so much money it's pretty much hopeless to compare their "strategy" to past consoles. The funny thing is that we the consumers are gonna pay back that money back to Microsoft, either via Windows products or if we get "lucky" console games.

That over simplifies it.

The money MS is using is money they have already earned. e.g. When Nintendo releases a new console they are spending money they earned on the previous generations. Or in our current case, the handheld market is helping the console market. Is it "bad" that the handheld market is subsidizing the console market? Is it bad that the previous generations pay for all the R&D and cover the costs the first couple years?

MS having $40B+ in the bank is no different than Nintendo having $7B in the bank. IF MS does well this next gen of course the games revenue will be offsetting today's losses. But how is that any different from what Sony and Nintendo HOPE to do?

Think of it this way: The $7B Nintendo has saved up is the $7B MS is hoping to make over the next 5-10 years and is counting on THAT to offset their loses. Sony, MS, and Nintendo all do (or can) make a lot of money with Video games. Short term loses, even large ones, are a drop in the bucket considering the (a) potential long term earnings and (b) the growing importance of convergance and the living room.

The living room and general computer are very important to MS. The consoles are a long term investment by MS. The Xbox was an expensive R&D project and an expensive marketing tactic from a business stand point, but for many reasons it has been a success. They have a lot of happy customers, broke into a tough market, and have established an excellent online service. They lost a lot more than they wanted to, but that is irrelevant. There is no point complaining that MS can do stuff that other companies cannot do. I would love to have more money to start up my own business (lets say a boat business), but this does not mean I should complain about my rich neighbor when he can buy an entire fleet and take a few bad years. My goals would be to break even whereas his would be to be a commercial success. I am not going to hate my neighbor just because he has more resources and is able to do things I only dream of.

If we have that attitude we can find a reason to hate every company out there, MS and Sony included.

Ps- As for the operating system costs... I do not want to get into a big debate about that. But Mac OS X 10.3 Panther is $129, and Linspire (aka Lindows) is $59 retail. I know you can get Windows XP Home for under $75 oem and computer makers like DELL get a large break also, so Windows is not necessarily more expensive compared to the market. And it is kinda a moot point, if we do not like what they sell we can get something else. And a lot of people have. A lot of people are using Linux varieties these days and Firefox is catching on.

 

[-tkf-]

That over simplifies it.

Of course it does, but the sheer amount of money that Microsoft is making based on a monopoly can't be compared to either Sega, Sony, Nintendo or whatever other big company. The companies Microsoft is competing with doesn't print their own money. MS is pretty close to be doing just that.

Actually the XBOX is a classic example of MS "strategy", version 1.0 is never good. But MS is used to burn money up going from 1.0 to 3.11.

I would much rather see a MS diveded into a OS company and a Software firm. Hell even a hardware firm. And then a PC based game world against a console based.