1up.com - 4 page article on advice for Xbox Next
- Thread starter FatherJohn
- Start date
That MS can "blow" a couple billion on the Xbox and still:Tuttle said:
1) Call the market extremely important
2) Continue investing heavily in it
3) Make money hand-over-fist companywide
sure is a sign of invincibility.
Johnny Awesome said:
Didn't they burn 2 billion before they Console actually hit the street and then another 2 billion?
I can't think of any other company that can buy a market share in that fashion but Microsoft and i'm paying for it when i buy Windows XP
Moneywise Microsoft didn't exactly have any kind of succes, but if we consider buying their way into the console world they did a good job.
Better games and a better console might have made it easier and cheaper.
-tkf- said:I can't think of any other company that can buy a market share in that fashion but Microsoft and i'm paying for it when i buy Windows XP
Moneywise Microsoft didn't exactly have any kind of succes, but if we consider buying their way into the console world they did a good job.
I guess you could rationalize their xbox's marketplace disaster in that way. Kind of like the Special Olympics - no matter how retarded the effort, everyone's a winner.
Nick Laslett
Regular
Microsoft seem to have succeeded in spinning everyone into thinking the Xbox has been a success.
They have failed to meet their original business plan, hit sales targets etc. The installed user based is lower than planned, the software sales are lower, the take-up and retention of LIVE subscibers is lower. The losses are much higher than forcast. The bulk of the original management team has left and yet the perception in the media and financial institions is that they have succeeded.
Don't even mention the DevCo aquisitions!
Compared to the Playstation One, Saturn or N64 the Xbox has underachieved. In it's first eighteen months it only just eclipsed the sales performance of the Dreamcast. If you look at the price versus sales curve over time you will see the Xbox has dropped like a lead balloon, leading to huge losses. These price reductions have not been matched by reduction in production costs.
For the consumer the Xbox is a fanatastic machine, great price, great tehnology, great games, fantastic on-line offering. You can't fault MS on this side of things. The price they have paid is questionable. This is not a sustainable endeavor, even for Microsoft. Shareholders want to see growth or dividends, not mounting losses.
It will be interesting to see if the gamble pays off over the full 10 years. They are 4 years into their business plan. They've got an awful lot of money to earn if they want to break even.
They have failed to meet their original business plan, hit sales targets etc. The installed user based is lower than planned, the software sales are lower, the take-up and retention of LIVE subscibers is lower. The losses are much higher than forcast. The bulk of the original management team has left and yet the perception in the media and financial institions is that they have succeeded.
Don't even mention the DevCo aquisitions!
Compared to the Playstation One, Saturn or N64 the Xbox has underachieved. In it's first eighteen months it only just eclipsed the sales performance of the Dreamcast. If you look at the price versus sales curve over time you will see the Xbox has dropped like a lead balloon, leading to huge losses. These price reductions have not been matched by reduction in production costs.
For the consumer the Xbox is a fanatastic machine, great price, great tehnology, great games, fantastic on-line offering. You can't fault MS on this side of things. The price they have paid is questionable. This is not a sustainable endeavor, even for Microsoft. Shareholders want to see growth or dividends, not mounting losses.
It will be interesting to see if the gamble pays off over the full 10 years. They are 4 years into their business plan. They've got an awful lot of money to earn if they want to break even.
Microsoft get to where they are from selling craps like Windows, that shows MS marketing muscles. Xbox is actually a pretty decent system, so I am not suprised they can spin Xbox into a success story, even though they pretty much fail to meet their goals, no one can deny they've managed to establish the Xbox brand name among most gamers.
Tuttle said:
Ouch... Easy tiger... :?
Johnny Awesome
Veteran
Xbox loses are only around $2.5 billion according to the loss figures from the Home Entertainment division in their financial reports. Any additional losses are merely conjecture.
In any case, my point is simply that MS has come up short, but still managed to gain entry into the marketplace which was nearly an impossible task. I doubt any other company in the world could have done it. When Sony entered the market it was a different market than it was when MS entereted it. This made for added challenges.
I realize that some people are really bent out of shape that MS is now a player in the industry, but anyone who looks at the situation objectively will realize that MS is a smart corporation that learns from their mistakes. Xbox 2 will have a more appealing design, better games, better branding, and a lower cost curve. This virtually guarantees that they will gain marketshare again.
No one will care about the $2.5 billion in losses over the first 4 years when MS has 40% of the market in 2010 and is raking in around $1.5 billion annually from then on. That's the plan. They might fail, but I personally don't think so.
In any case, my point is simply that MS has come up short, but still managed to gain entry into the marketplace which was nearly an impossible task. I doubt any other company in the world could have done it. When Sony entered the market it was a different market than it was when MS entereted it. This made for added challenges.
I realize that some people are really bent out of shape that MS is now a player in the industry, but anyone who looks at the situation objectively will realize that MS is a smart corporation that learns from their mistakes. Xbox 2 will have a more appealing design, better games, better branding, and a lower cost curve. This virtually guarantees that they will gain marketshare again.
No one will care about the $2.5 billion in losses over the first 4 years when MS has 40% of the market in 2010 and is raking in around $1.5 billion annually from then on. That's the plan. They might fail, but I personally don't think so.
True, no mainstream gamer cares, or even knows how much MS has lost with xbox, has it been a financial success...
Xbox has gained quite good mindshare, better than I expected. People do know that xbox is one option when purchasing a console.
But I am worried how much further MS can carry on in the minds of console buyers, as the console to buy over the competitors.
During xbox's lifetime, there really has been only one big hit game that one associates as the best of that genre.
Halo.
Halo 2 will likely be the other.
At least I can not come up with other examples.
Gotham Racing, Rallisport Challenge, Sega GT, DOA, KOTOR, Amped, Top Spin... these are quality games, but both genres have as good (in mainstream gamers view) or much better games for rival consoles.
Splinter Cell, MS should've secured the series as an exclusive.
Panzer Dragoon Orta, Crimson Skies... great games but not exactly commercially significant successes.
Fable, Sudeki, PC ports/simultaneous releases, hyped products that failed to deliver miserably.
xbox Live! ... if only there were more top exclusive games to play on it, other than the same games that are available on competitor's console free of net charge.
True, the xbox gets many of the top titles that are multiplatform, and often in better form than in competitor's consoles. But that's not enough because the difference is not that big.
.
.
.
what I'm trying to bring forth here, is that I fear the mainstream gamers that bought xbox this gen, might be a little disappointed when one looks at the amount of games there really is worth buying an xbox for.
... or maybe not... possibly not... as the mainstream gamer does not buy as much games as the "hardcore" gamer, so he's happy with the selection.
Nor is he maybe that much quality conscious when it comes to games, to him a 30fps game may be silky smooth
Xbox has gained quite good mindshare, better than I expected. People do know that xbox is one option when purchasing a console.
But I am worried how much further MS can carry on in the minds of console buyers, as the console to buy over the competitors.
During xbox's lifetime, there really has been only one big hit game that one associates as the best of that genre.
Halo.
Halo 2 will likely be the other.
At least I can not come up with other examples.
Gotham Racing, Rallisport Challenge, Sega GT, DOA, KOTOR, Amped, Top Spin... these are quality games, but both genres have as good (in mainstream gamers view) or much better games for rival consoles.
Splinter Cell, MS should've secured the series as an exclusive.
Panzer Dragoon Orta, Crimson Skies... great games but not exactly commercially significant successes.
Fable, Sudeki, PC ports/simultaneous releases, hyped products that failed to deliver miserably.
xbox Live! ... if only there were more top exclusive games to play on it, other than the same games that are available on competitor's console free of net charge.
True, the xbox gets many of the top titles that are multiplatform, and often in better form than in competitor's consoles. But that's not enough because the difference is not that big.
.
.
.
what I'm trying to bring forth here, is that I fear the mainstream gamers that bought xbox this gen, might be a little disappointed when one looks at the amount of games there really is worth buying an xbox for.
... or maybe not... possibly not... as the mainstream gamer does not buy as much games as the "hardcore" gamer, so he's happy with the selection.
Nor is he maybe that much quality conscious when it comes to games, to him a 30fps game may be silky smooth
Xbox is not a financial success by any means. It is a failure if you look at it that way, but then again Microsoft never intended to profit from it for a long time. In Microsoft's eyes it is a success, it gained entry and a good chunk of the market, games on it sell well, and it gives MS and the Xbox name brand awareness for the next generation. Does anyone really think it's going to make money when MS's stance is to just throw as much money at a problem to fix it? NO!
But let's see here, Microsoft hasn't really eaten into Sony's share of the market. Maybe by a couple percentage points, if anything it has taken away from Nintendo's share. Nintendo might be making a profit but that will not last if it fails to change into a company that is forward thinking and adaptable to the changes in the industry. I can see Microsoft replacing Nintendo next generation. Nintendo's success cannot last forever the way they're doing business, it is time for them to stand up and be a company that makes a console that gamers everywhere want to play. Microsoft has shown us that it is willing to take major risks in grabbing marketshare and since Sony doesn't have too much to worry about right now that means Nintendo is the one in the position to really lose.
But let's see here, Microsoft hasn't really eaten into Sony's share of the market. Maybe by a couple percentage points, if anything it has taken away from Nintendo's share. Nintendo might be making a profit but that will not last if it fails to change into a company that is forward thinking and adaptable to the changes in the industry. I can see Microsoft replacing Nintendo next generation. Nintendo's success cannot last forever the way they're doing business, it is time for them to stand up and be a company that makes a console that gamers everywhere want to play. Microsoft has shown us that it is willing to take major risks in grabbing marketshare and since Sony doesn't have too much to worry about right now that means Nintendo is the one in the position to really lose.
If MS launches shortly before Sony and Nintendo, that could put them to disadvantage too.
People know there's new systems coming from Nintendo and Sony, they may wait and see what they have to offer before opting for MS's next console. Even if they ultimately would choose MS over either, it would make for a slow launch and bad publicity.
...That happened for Sega and DC.
People know there's new systems coming from Nintendo and Sony, they may wait and see what they have to offer before opting for MS's next console. Even if they ultimately would choose MS over either, it would make for a slow launch and bad publicity.
...That happened for Sega and DC.
no its not , i waited on lines for my dreamcast here in the states when it came out . The first x mass the units were very hard to find also.
If sega had kept at it the dreamcast would have been in the number 2 spot. Hell it had a 1 million console head start on the gamecube and xbox , even if it could only sell another 5 or 6 million units in the 4 years that followed it would have matched the user bases of the xbox and cube.
But anyway . Launching a year earlier would give ms an advantage . It wont be huge but . If they launch a year before the ps3 or even if they get an extra holiday , the xenon launching in sept and the ps3 launching the folowing april or what not. IT would be a huge deal.
jvd said:
Don't make me take out the euro trash !!!
Sure there were people who waited in line for DC, but there were more who waited for PS2 instead of DC.
But even with that in mind its still a failure. Because MS only planned to lose $1.5 billion on XBox and have already lost around twice that amount!.. and the losses haven't ended yet either.
MS may have gotten a share of the market with XBox. But they've down that in a way that is unsustainable. They've lost enough money to have actually given every XBox away for nothing. Which is obviously not even close to a viable business, in fact its completely the opposite to a viable business. So what happens when they need to make it viable? They have to change a lot of the things that made XBox attractive to its new core fanbase. They're the only company who will have to do that. We all know Sony can keep doing what makes them so successful. We all know that Nintendo can keep doing what attracts there core fanbase (making great Nintendo games). But MS are going to have to make big changes next generation because of there need to make the XBox business more viable. Which is why IMO its going to be far harder for MS in the next generation then its been in this generation. Unless they are prepared to stay with the same strategy or losing billions next gen... which I doubt.
On Nintendo, I genuinly think there task is much easier then MS's next gen. All it takes for them to do much better next gen is to keep doing what they're doing but add more aggressive marketing and also be more agressive in supporting third parties. But wether Nintendo will make those changes is another matter.. they seem less willing then MS.
That strategy has advantages and disadvantages, wether it ends up as one or the other depends on the circunstances. Personally I think for MS it may be more of a disadvantage, because their fanbase is built on being the biggest and most powerful. Or course they could lose their fanbase and gain a new one.. but maybe not.
Teasy said:
Heh how so. Is it not sony that pushed that they were more powerfull than the dreamcast ?
It seems to me that both companys just play on thier strengths .
I don't think less than a year diffrence in launch time is going to give sony a huge advantage. Then again it can give ms an advantage too at the same time. Sony may have the more powrfull hardware but ms could have the cheaper hardware.
Esp if the chips are on 90nm for the gpu and 65nm for the cpu. Then the gpu can drop to 65nm too thus saving money where as if the ps3 launches on 65nm and they use the advance process to out class the xenon's power it will end up costing more than the xenon hardware.
What "worries" me (doesn't really worry me, i don't really care) is that all the people (see: graphic whores) who bought Xbox for being the "most powerful" console will now shift towards PS3, which will likely be the most powerful this time around if it comes out 1 year after the others.
And there were many graphic whores out there who bought the Xbox based on the fact that it was the most powerful console this time around.
So Sony will have their faithful fanbase, plus many of MS's fans who only cares about how many pixels can you cram on one screen at once while holding a plat on your nose and touching your big toe with your left hand.
Unless MS gets the big games, they're lost. But they probably will get some cool games, they have lots of time apparently. MS will do everything they can do make sure that by the time PS3 comes out, the Xbox2 has a big enough userbase. It will take them a LOT of money to get there though.
And there were many graphic whores out there who bought the Xbox based on the fact that it was the most powerful console this time around.
So Sony will have their faithful fanbase, plus many of MS's fans who only cares about how many pixels can you cram on one screen at once while holding a plat on your nose and touching your big toe with your left hand.
Unless MS gets the big games, they're lost. But they probably will get some cool games, they have lots of time apparently. MS will do everything they can do make sure that by the time PS3 comes out, the Xbox2 has a big enough userbase. It will take them a LOT of money to get there though.