ANALYSIS: How Much is Too Much?

[hey69]

Microsoft says it will stick with its Xbox business come hell or high water. But with years of heavy losses behind it the time has arrived to turn a profit. Has it all been worth the effort and how can the company turn its hard won market share gains into actual profits?Digg this story here.

Earlier this week, an interview with Microsoft COO Kevin Turner affirmed that Microsoft is willing to stay the course with its videogame business, despite the fact that it hasn’t been profitable on an annual basis since the original Xbox launched in 2001.



http://www.next-gen.biz/index.php?option=com_content&task=view&id=3988&Itemid=2

 

[speng]

It's been discussed here many times, MS doesn't care about the profit as much. It wants to protect it's windows/pc business while keeping some presence in anything that may infringe on that.

If consoles start having web-browsers and internet applications take off (google-docs etc) they can say good-bye to their home based sales of Word and Windows OS.

If the average user has a PS3/Wii and can do browse the web, email, write up a decent word document or reasonable spreadsheet, what more do they need. MS needs a presence here so that when the shift comes they will still have these customers.

The shift will come as parents realize they don't need a PC for their child but a console will do that role also.

Speng.

 

[Qroach]

This HAS been discussed too many times. However one thing you got wrong speng is that MS does care if this turns a profit and they arlready plan to turn a profit on a specific time table. They clearly realize it's not going to turn a profit fo a while.

 

[Guden Oden]

There's a difference between 'turning profit (quarterly)' and 'turning profit (over lifetime of project)'.

MS may be close to doing the first regularly, they've actually done it at least once (when Halo2 launched) or maybe a couple more times I believe. The second may be very very far off, considering how many hundreds of millions they've blown on this grand experiment. They'd pretty much need sony to go out of business altogether to earn all that back within the next ten years...

 

[blakjedi]

print!

draft!

powerpoint!

spreadsheet!

these things still matter therefore the pc will go nowhere anytime soon.

 

[digitalwanderer]

$251 is too much.

 

[22psi]

It's a 20 year plan not a 5 year plan

 

[Phil]

print!

draft!

powerpoint!

spreadsheet!

these things still matter therefore the pc will go nowhere anytime soon.

How many people actually use that and have a genuine legal copy of Office at home? The most basic needs of the casual users are internet, email etc. If there's a unit in the house that can do these basic functions out of the box, how many will go and buy a PC or upgrade to the latest windows version? No one is saying that no one will buy PCs or that it will become extinct - far from it. The fact of the matter though is, even a slight decline in such purchases can hurt profits.

 

[cthellis42]

How many people actually use that and have a genuine legal copy of Office at home?

Very few. But their profits come from businesses, and what does owning an illegal copy of Office at home do for people? It trains them in using Office, so when they're in the work force what do they know how to use? Office. And what do business have to make SURE to have?

You got it!

Plus, lately I've seen a lot more people buying legit versions of Office. (They seem to consider it a "school expense" at this point.) And even though they're likely just getting the Student & Teacher edition, that's still more than they'd get if Office was being pirated. They're probably drawing more from the home consumer market now than ever before, too.

 

[RancidLunchmeat]

I'd say about 95% of the people I know have at least one legit copy of Office at their home.

It might not be Office XP, it might be 2000 or whatever former iteration of the product, but at some point they went out and spent the cash and got a copy.

In fact, I think the idea that you used the phrase 'genuine legal copy', demonstrates you believe your very small niche of pirates and thieves is somehow representative of the majority of the population.

It's not.

 

[avaya]

I'd say about 95% of the people I know have at least one legit copy of Office at their home.

It might not be Office XP, it might be 2000 or whatever former iteration of the product, but at some point they went out and spent the cash and got a copy.

In fact, I think the idea that you used the phrase 'genuine legal copy', demonstrates you believe your very small niche of pirates and thieves is somehow representative of the majority of the population.

It's not.

I know of no one who has a legit copy of office. No one, and the people I know are by and large all very very rich bastards. Pirated office disks get shared around like no body's business. People "lose" their original disks or buy new PC's and borrow a friends copy to install. This is normal behaviour for nearly everyone. Everyone scoffs at the price for the office suite of programs. Rip-off total.

I don't condone the piracy but the price Microsoft charge for the product invites it. I assume Microsoft loses an absolute bucket load of cash from pirated office. They should release a new windows update which checks for it. From personal experience it seems a much greater problem than OS piracy. If I had to guess (that, is, pulling numbers from my ass), I don't think it's a small minority that is engaged in office piracy, I would put figures at ~40%. Even if the majority consume the product legally, having nearly half your base using the illegal version is pretty serious.

 

[Shifty Geezer]

I know of no one who has a legit copy of office. No one, and the people I know are by and large all very very rich bastards. Pirated office disks get shared around like no body's business. People "lose" their original disks or buy new PC's and borrow a friends copy to install. This is normal behaviour for nearly everyone. Everyone scoffs at the price for the office suite of programs. Rip-off total.

Same with me. I know people who get the Office disc from work and install it at home. Given the cost of Office, and the fact everyone seems to use it, there must be a lot of piracy going on. $hundreds for Office does siirke me as utterly overpriced (there's a reason MS are amongst the most profitable companies in the world, even when struck with large amounts of piracy). Or maybe people buy those $70 dollar spam-email versions?!

Though having heard the latest from MS regards Vista, like all this insane DRMness I find it hard to be against software piracy when law-abiding citizens are being treated as criminals. If they're going to treat us as criminals, may as well act like them, no?

 

[Acert93]

I don't condone the piracy but the price Microsoft charge for the product invites it.

Or all the sleeze bags who rip it off cause the price for honest citizens to increase. As a registered owner of MS Office and absolutely no pirated software (even own a legit copy of Photoshop) I have two hints:

1. Office is a professional grade software suite. You pay a premium for the best.

2. There are alternatives with basic funcationality for cheap (e.g. Works); and even free suites (e.g. OpenOffice).

The only thing INVITING piracy is people's self indulged sense of worth where they believe they have a right to anything they want if they can get away with it, regardless of the work, rights, and ownership of another.

Same with me. I know people who get the Office disc from work and install it at home. Given the cost of Office, and the fact everyone seems to use it, there must be a lot of piracy going on. $hundreds for Office does siirke me as utterly overpriced

See above. Considering the amount of R&D that goes into Office, and the fact no one is making you buy a copy, you really don't have a place to complain. If that wasn't enough, if you price out other professional suites of applications (and past competitive history in the market) I think you would realize that for the actual product/features it is not as absurd sa you suggest.

If you want something cheaper get Works or another remedial suite -- that has all the core functionality. Or use Wordpad or Notepad, etc... And as of the last couple years there is absolutely no excuse per the existance of OpenOffice which offers competitive features and functionality for free.

Though having heard the latest from MS regards Vista, like all this insane DRMness I find it hard to be against software piracy when law-abiding citizens are being treated as criminals. If they're going to treat us as criminals, may as well act like them, no?

And yet invasive DRM doesn't prevent people from getting excited about BR or HD DVD.

I am not a fan of DRM, and especially hate what companies like Adobe do to honest owners (and yet seem to wink at thiefs), but as the above reasoning indicates, what do you do? High and morally mighty peeps, with a sense of entitlement, rip your software off to "prove a point" because they think it is too expensive and they have a right to own and use your product for free.

Ironically, and more relevant to this forum, I have not heard anyone (but me!) say they feel like a criminal for DRM... but that was in relation to HD media formats. I can say that to this point the only software maker who even gets close to how Sony/Toshiba's HD media is Adobe.

Funny how people look at it, based on product/company. I have always taken the consumer stance: If it is overpriced I won't buy it; if I don't like the usage agreement I won't buy it (the only reason I have Photoshop is due to work requirements). Hence the reason sitting out on HD Media: Portable media standards not locked to a optical format are the future and after investing in DVDs I see no need to invest in HD DVD/BR and then in "Platform free Media" in the future, especially when I see the expense of HD media platforms and the restrictions they place on honest consumers.

But the fact is people DO steal their product and to protect themselves they charge more and impliment methods that begin alienating consumers. HD media is definately at that point; thus far I cannot say the same for MS seeing as people are throwing around 40% rates for thefted software. And outside of installation I have had no issues with MS products in regards to ownership/registration.

We will see in Vista comes and what makes it out the door (see laxed ICT standards on HD media), but I could imagine the outcry if the shoe was on the other foot. The difference of course is that at least people are admitting a massive, consumer level, theft of software (whereas video media doesn't seem to be as routinely pirated at such rates at the consumer level).

 

[Dave Baumann]

Personally I think that article is focusing too much on the hardware and defense angles. It points that that MS is a software company, yet misses the fact that the XBox is another vehicle for pushing software (yes, games are software!).

Over recent years Microsoft has realised the value of games in both the PC realm (over 60% of Windows software sold are games) and the console space, so a lot of the losses in the home division will also be offset some by MS's Game Studios and publishing concerns.

 

[LunchBox]

If they want some quick profit it would be quite easy for them to stick ad banners on MS marketplace...

 

[SPM]

print!

draft!

powerpoint!

spreadsheet!

these things still matter therefore the pc will go nowhere anytime soon.

PS3 + Openoffice + USB printer will do all this. You can also use Google apps from any browser when the beta testing is completed.

OpenOffice is a professional office suite by the way. Free does not mean unprofessional. We use it instead of MS Office in my office, apart from one copy of MS Office which we keep for occasional use for legacy compatibility.

 

[scooby_dooby]

I think it seems very obvious that MS will start turning a profit by the end of this generation, there's really no doubt about it when you look at their hardware costs and projected install base.

 

[London Geezer]

I think it seems very obvious that MS will start turning a profit by the end of this generation, there's really no doubt about it when you look at their hardware costs and projected install base.

I'd be surprised if it didn't happen sooner.

 

[scooby_dooby]

I'd be surprised if it didn't happen sooner.

\

MS says 2008, but I hedged my bets a little

 

[avaya]

Or all the sleeze bags who rip it off cause the price for honest citizens to increase. As a registered owner of MS Office and absolutely no pirated software (even own a legit copy of Photoshop) I have two hints:

1. Office is a professional grade software suite. You pay a premium for the best.

2. There are alternatives with basic funcationality for cheap (e.g. Works); and even free suites (e.g. OpenOffice).

The only thing INVITING piracy is people's self indulged sense of worth where they believe they have a right to anything they want if they can get away with it, regardless of the work, rights, and ownership of another.



See above. Considering the amount of R&D that goes into Office, and the fact no one is making you buy a copy, you really don't have a place to complain. If that wasn't enough, if you price out other professional suites of applications (and past competitive history in the market) I think you would realize that for the actual product/features it is not as absurd sa you suggest.

If you want something cheaper get Works or another remedial suite -- that has all the core functionality. Or use Wordpad or Notepad, etc... And as of the last couple years there is absolutely no excuse per the existance of OpenOffice which offers competitive features and functionality for free.

Microsoft Office is over priced. Microsoft OS’s are over priced.

Monopoly pricing dictates that the product will not be priced at the minimum average cost. The premium you pay for is not just for the better product it is also because it’s the monopoly product.

For most people getting office is not a matter of choice per say, for work ,for education they require it. These same people are not too computer literate and would not be willing to choose a cheaper or even free alternative and learn that suite from the ground up. A total BS excuse or not, it is a huge issue. Then you get into the standards problem. Office is a monopoly and documents will in most cases be in office format and this presents a huge obstacle. Word, Excel and PowerPoint are the de facto standard. The reality of choice is a fallacy for the majority.

Again, I don’t condone the piracy but there are very clear reasons why Microsoft office gets pirated the crap out of. I find it pretty shocking to be honest. It’s like MP3 piracy, no one cares that they do it. The same people who pirate office will actually go out and buy a new copy of windows. I have no problems admitting at times I had pirated copies of office on my PC (borrowed a friends copy of Office 2000 to install after re-formatting HDD), the last office I purchased was 2003 Student edition which is the one I use today.

I don’t know how much Microsoft spends on R&D for office but honestly, if ever there is a product suite that suffers from diminishing returns then Office takes the biscuit. No matter how many tweaks Microsoft makes office is still going to be the same experience for the vast majority of users. The price tag for it from their perspective is unjustified. For the OS side of things, this is not such a problem because *visually* (which is what most people seem to care about, lowest common denominator and all that) each new OS is markedly different.

EDIT: I got negative rep or something for admitting my office piracy in the past, whatever. I have a clear conscience, I know I was a total schmuck at the time. I'm sure I'm not the only one on this site who has at one time or another had an illegal version of office on their PC just like I'm sure I'm not the only one on this site who has at one time or another had an illegal MP3 on their PC. Office piracy is huge. It's piracy on a whim and because it's Microsoft no one seems to bat an eyelid. This is both sad and disturbing.