And last but not least... MS financials

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.

 

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

 

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.