Not at all. At the same time MS IS giving up next gen market share right now which means actually this gen market share. How much market share is MS willing to lose with everything said and done 4 or 5 years from now ? 20 or 30 or 40 percent ? MS isn't getting more WW market share as far as anybody can see.
All purpose sales and sales rumors/anecdotes thread next gen+
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Not at all. At the same time MS IS giving up next gen market share right now which means actually this gen market share. How much market share is MS willing to lose with everything said and done 4 or 5 years from now ? 20 or 30 or 40 percent ? MS isn't getting more WW market share as far as anybody can see.
It's not so much about market share as it is profits. What's the point in securing 80% market share if it costs you $20 billion to do that? There's not a company out there that wouldn't pick 30% market share and $1 billion a year profits over 70% market share and be somewhere around zero net gain. The interest in high market share is the potential to monetise that and generate profits, but that's not the end game. If MS can switch XB1 interest to mainstream consumers and sell 25 million to high-sellers buying content on MS platforms (MS movies, MS music, MS games, yada yada), XB1 will have been a good venture for them.
The problem with discussing the console market is those engaged in the conversation typically discuss it regards the 'console war' perspective where there's only one winner. Whatever PR that businesses may present, it's all about making money, nothing else. 'Best selling console' is only a PR point.
The problem with discussing the console market is those engaged in the conversation typically discuss it regards the 'console war' perspective where there's only one winner. Whatever PR that businesses may present, it's all about making money, nothing else. 'Best selling console' is only a PR point.
Well. It's not that simple. Yes £20 billion is an extreme example. But there are many, many companies who would rather break even or make a loss in exchange of 70% market share. The amount of loss they'd be prepared to swallow is known only to them of course.
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Who? I presume you mean private companies without stockholders.
Only if they could leverage that marketshare someway, but locking 20 billion of assets/resources and breaking even to just say we got a 70% market share? Why not just put it in a savings account and get x % interest on it.
Which MS could do, since I do not understand how they will take advantage of that marketshare to make a profit across other divisions. Putting in 20 billion into a business to break even is a bad idea. If you think not, I got some great business plans I can dust of, I'll guarantee you'll go break even
In contrast to Sony whom actually got most of their resources targeted towards the consumer space already. They own movies and music and create tons of consumer electronics not just consoles, there are clearer/more synergies for Sony.
Yup kinda like Apple. I think the issue then becomes one of a sort of ecosystem tipping point. Leverage was/is the strength of the XB1 vision such as it is and funneling interest via all of it's consumer products is the point of just about all of the consumer facing tech big wigs. Selling fewer products to the RIGHT consumers can be the most important thing for a company and if you have people or the right people in your ecosystem then it becomes relatively self sustaining.
Were that tipping point is is the question. Losing 20% marketshare would be just fine but 30% may be problematic ( Ether based numbers of course ).
Of course while I think MS cares about which type of consumer they are getting and leveraging and all that I just have to wonder about the marketing of "The ONE !!". The price/performance ratio, the "DRM", the ONE marketing, the paywalls and all of that is invasive and not inviting. Leverage is great and all but you still need a base and you still need some movement in the market to help things along.
It's sure isn't all black/white as to what MS should do. The metrics for the ecosystem and sales are pretty much instantaneous at this point so MS has the data, let's see what they do with it.
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Right and if Google owned Xbox then maybe they could take user/use metrics from the use of the device, what you watch, how long you watch, when you watch you, where yours eyes are looking on screen (how engaged you are) and combine it with the thousand other bits of info Google know about us and monetize it some clever way.
Doesn't MS already do this?
Most likely, but I think DSoup means that Google knows so much more about you that this adds small pieces to a more complete picture about you.
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I don't think to the extent that Google does. Google's entire business is predicated on selling targeted advertisements. They do this by trying to track as much as they can of what you do online (and offline with platforms like Android) mostly by offering great free software and services, which they datamine the hell out of.
Judging by SEC filings, Google are pretty good at it
To what extent this business is important to Microsoft I don't know. But maybe that's where they want to be in five years.
Only with a view to making money from it. Even if not directly via a console market share selling them games - it could be merchandising or advertising or whatever - but they only want people interested in their product if it makes them money. It'd take a peculiar company to place pride before profitability. I can't imagine any exists outside of individual led, curiously run smaller enterprises who lack true business savvy.
Of course in the long run things would need to change. But I think many here would be very, very surprised at how many businesses would kill their grandmothers to have 70% of the market at a smaller or zero profit rather the immediate profit you'd make in the same industry at 30% share.
There's a lot more money to be made in the future when you sit on 70% of the market than on 30% and it is a lot more difficult to more than double your market share, than finding ways to monetise from a dominant position in the market.
Heck, I have worked in at least one such business. And it definitely was not a small one at that.
That's the objective though. The intention is to make money, not to get marketshare, as it were. I suppose there are businesses poorly run who chase after market share without a decent plan to monetise that, and end up throwing money away securing market share that doesn't yield actual money - not every CEO or manager is actually good at their job... I doubt MS is that way inclined though. They want profits. If they can't make more money from more users than from less, they'll choose less. This is one of the things I think happened at MS - I think they looked at the non-gamer consumer and saw them more willing to pay than gamers pay for games, and XB1's design was more about a larger set of revenue streams. 30 million users yielding $500 each a year on services and content is a lot more interesting than 70 million users giving $100 each a year on game royalties.
Why are all these internet startup's worth billions when they make bugger all profits (and often can only show loses) then?
Both are important
I dont know about that, I for one predicted the failure of vita before it launched on these forums, unless they added cellular functionality. Mobile/tablets are direct competitors to handhelds but not consoles.
I was googling for a table with console shipment numbers to see what were the shipment numbers per year. I did find this though
ok its 3months vs 5 months but the basis premise is valid.
MS going look the xbone is 60% better than the 360 at the same point of time, whilst sounds good it doesnt mention the 360 was hard to come by for the first few months
The xbone is tracking worse than the original xbox in the US.
Remember it was originally not going to launch to more countries. Its didnt totally due to one thing, kinect and all the language issues etc
Because some people believe they'll make money with that market presence.
I'm not saying market share isn't important, but it's not more important than profits and it's not a target in itself. MS won't lose money securing market share if they won't get it back. They may try to invest money in securing market share to later turn it into money, but their plan is not, "we're going to spend some billions creating a console with the intention to get 70% of the market share, everthing else be damned." It'll be more like, "It's going to cost 5 billion to release and maintain a new console. We expect to make $200 profit off each buyer on average over five years. There's a potential market of 150 million users (more if they aren't just looking at console gamers). If we can secure 50%, that's 75 million users, that's 10 billion profit, or 2 billion a year for our shareholders. If we can get a higher market share, great. If we're down around 30%, that's only 4 billion profit. If we can find ways to increase the profit off each user, great. If we can secure a larger portion of the finite market, great." With whatever numbers they predictions and estimates provide.
They're not. It's only because most common investors are fucking idiots. Given a long enough market presence none of those major start-ups are worth anything. Just look at Yahoo or how much MySpace was valued at and where they're at now. The same can be said for Facebook and nearly all of their acquisitions, baring their VR pickup Oculus Rift. While they are worth something, they're still not worth nearly the price Facebook paid for them.
Mid-term profitability is where it's at for real companies that aren't looking to dazzle investors with bullshit dreams.
I just looked, yahoo is still valued at 36billion dollars. But Im in agreement with your general sentiment. I was just pointing out that profits are not the sole factor.
If it was then you could argue its better owning joeys kabab shop (which turns a small profit) than say AMD (which returns a loss)
If it was then you could argue its better owning joeys kabab shop (which turns a small profit) than say AMD (which returns a loss)
Short term (and short to mid term) profit is most definitely not the main factor in the way a business is run. If that were the case, MS would never, ever have entered the console market. Nor would some industries exist at all - industries which are intrinsically and unavoidably low-profit.
Obviously the original intent with Xbox was strategic, but strategy that made sense in the late 90s doesn't apply anymore. Owning the TV is a stupid goal when everyone watches TV glancing up occasionally from their iPad or Android phone.
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