Business Approach Comparison Sony PS4 and Microsoft Xbox

[BoardBonobo]

and they still wetn out and bought a devices company that will continue to make devices , they will still be launching surface 2 , xbox one and dozens of other hardware products. Thy are also looking at buying Blackberry

ValueAct has the least power on the board I wouldn't actually worry about them changing anything. Balmer is out but that's about it and it was in motion from last year.

Their usual tactic of buying their way into a market just seems so stale now. For once I'd like to see them actually get into a market on the basis of having the best product at the best price. It's a shame that Nokia will become the next victim of MS's Borg like intent to drive products into a bland mediocrity like they did with the OS market on the PC.

 

[Rangers]

I like Microsoft OS...

And I think Xbox is the best video game product, all things considered, as well (that's imo of course)

ValueAct has the least power on the board I wouldn't actually worry about them changing anything. Balmer is out but that's about it and it was in motion from last year.

Yes, it's ludicrous. Do you realize MS new all you can eat music thing-y is called XBOX music?? They literally dont have any other brand with a positive connotation. Xbox is absolutely key for them.

The odds of MS dropping Xbox are like, infinitesimal (besides that it's profitable, unlike many of their initiatives). But some people keep hope alive..

 

[XpiderMX]

I like Microsoft OS...

And I think Xbox is the best video game product, all things considered, as well (that's imo of course)



Yes, it's ludicrous. Do you realize MS new all you can eat music thing-y is called XBOX music?? They literally dont have any other brand with a positive connotation. Xbox is absolutely key for them.

The odds of MS dropping Xbox are like, infinitesimal (besides that it's profitable, unlike many of their initiatives). But some people keep hope alive..

What about Office? or Windows?

 

[RobertR1]

What about Office? or Windows?

Windows 7 goodwill got burnt up by windows 8.

Office is awesome but it's seen more as a necessity than a trendy brand.

Xbox is the only mass consumer brand they have. Let's hope they don't vista it.

 

[blakjedi]

Their usual tactic of buying their way into a market just seems so stale now. For once I'd like to see them actually get into a market on the basis of having the best product at the best price. It's a shame that Nokia will become the next victim of MS's Borg like intent to drive products into a bland mediocrity like they did with the OS market on the PC.

You know that Google bought android.... and they bought Motorola...

 

[blakjedi]

Windows 7 goodwill got burnt up by windows 8.

Office is awesome but it's seen more as a necessity than a trendy brand.

Xbox is the only mass consumer brand they have. Let's hope they don't vista it.

and yet there are more win8 boxes than all of Macs combined and they have a larger share than Vista has... XP share will be converted to either win 7 or win 8. A sale is a sale to MS so who cares? Sony isnt stopping selling PS3's even after PS4 drops...

 

[dobwal]

You know that Google bought android.... and they bought Motorola...

Might as well lump in iOS as well, since its based on OS X which is derived from NeXTStep which Apple purchased.

Buying into markets isn't just a practice limited to MS, its a practice employed by most big corporations.

 

[Bigduo209]

I do like what Sony is proposing with PS4's remote play for Vita and Vita TV.

The actual main console becomes a network hub for gameplay on smaller dedicated companion-like devices, and can possibly use other mobile devices as a secondary display for output-only spectating purposes.

I don't just mean interacting in minor ways from smartphone like the gaming or console-related companion apps are trying to do, but expanding on what the Wii-U is doing and making it better. It'd be cool to have multiple Vitas and Vita TVs being connected to one console, creating dedicated screens and controls for everyone. It sounds like a cool way of re-igniting the appeal of local multiplayer for gaming.

I know the PS4 and Wii-U can do this, but I'm talking about doing it on a larger scale with a bigger number of devices all tied to it. Of course this would mean making a PS5 and Vita 2 (or whatever they're called).

While I don't how Sony will implement touchscreen-only functions on previous titles for PSV-TV, I can see it working well for future games. Especially for Indie titles releasing on the PS4 where accounting for the DS4 will work in the devices' favor, just tweak that existing dynamic for the Vita TV to make it work.

 

[blakjedi]

Even with vita connections, smartglass is on every mobile platform. Time will tell whether the Xbox team will be able to exploit that connection across multiple ecosystems rather than the relatively limited Ps vita audience.

 

[baten]

I like Microsoft OS...

And I think Xbox is the best video game product, all things considered, as well (that's imo of course)



Yes, it's ludicrous. Do you realize MS new all you can eat music thing-y is called XBOX music?? They literally dont have any other brand with a positive connotation. Xbox is absolutely key for them.

The odds of MS dropping Xbox are like, infinitesimal (besides that it's profitable, unlike many of their initiatives). But some people keep hope alive..

Apparently Xbox is still in red. They lost about 3 bilions with the first one and they just barely become profitable on the second, dont have a link but this is what I remember.

If XBone doesnt perform well I think there is a chance investors will want to can the whole project - if they can make some money selling the brand.

 

[AlphaWolf]

Apparently Xbox is still in red. They lost about 3 bilions with the first one and they just barely become profitable on the second, dont have a link but this is what I remember.

If XBone doesnt perform well I think there is a chance investors will want to can the whole project - if they can make some money selling the brand.

There are no public numbers for the xbox business alone so you'd be guessing.

 

[Rangers]

Apparently Xbox is still in red. They lost about 3 bilions with the first one and they just barely become profitable on the second, dont have a link but this is what I remember.

If XBone doesnt perform well I think there is a chance investors will want to can the whole project - if they can make some money selling the brand.

We dont really know those figures.

It's hard to keep up but off the top of my head I think they might be break even already.

Besides it'd be more about the current state and current generation. And MS guy did say the tail of 360 has been incredibly profitable the other day.

Now with One they supposedly dont even want to take that initial hardware loss that is the bugaboo of consoles (which is one reason for 499 and they've said One is break even or mild profit). So things appear to just be getting more profitable generation vs generation.

Besides MS has much bigger money losers I dont see anybody clamoring about...such as bing.

If we are going by profitability presumably PS3 was less profitable so it's always funny to me how Sony is somehow supposed to be completely immune from any "shareholder pressures".

In addition to all that they're transitioning to a devices and services company. So devices are part of their future. Hmm, how many successful devices do they have...

I dont see how any reasonable person could think selling Xbox would be good for MS. It's just so much wishful thinking.

 

[baten]

We dont really know those figures.

It's hard to keep up but off the top of my head I think they might be break even already.

Besides it'd be more about the current state and current generation. And MS guy did say the tail of 360 has been incredibly profitable the other day.

Now with One they supposedly dont even want to take that initial hardware loss that is the bugaboo of consoles (which is one reason for 499 and they've said One is break even or mild profit). So things appear to just be getting more profitable generation vs generation.

Besides MS has much bigger money losers I dont see anybody clamoring about...such as bing.

If we are going by profitability presumably PS3 was less profitable so it's always funny to me how Sony is somehow supposed to be completely immune from any "shareholder pressures".

In addition to all that they're transitioning to a devices and services company. So devices are part of their future. Hmm, how many successful devices do they have...

I dont see how any reasonable person could think selling Xbox would be good for MS. It's just so much wishful thinking.

For XBox - I dont think it really matters if it stays on MS side or is done by some other company, the brand as it is will not disappear.
But I can see how some investors in MS might percieve the console market as having no future since there are all these devices that can play games and all these smart TV, so it might make a lot of sense to them to sell and cash the profit.

 

[Rangers]

For XBox - I dont think it really matters if it stays on MS side or is done by some other company, the brand as it is will not disappear.

Two companies cant own one brand.

Also just noticed a thread on GAF, PS4 price in Argentina was announced, it's equivalent to $1200 US dollars. This in a country with much less average income than USA too (average $11k annual per capita GDP versus $50k USA). So if you scale it by per capita GDP, it's equivalent to costing like $6000 in USA.

Basically just goes to show a lot of those 32 countries Sony managed will likely have very trivial sales.

 

[Strange]

Two companies cant own one brand.

Also just noticed a thread on GAF, PS4 price in Argentina was announced, it's equivalent to $1200 US dollars. This in a country with much less average income than USA too (average $11k annual per capita GDP versus $50k USA). So if you scale it by per capita GDP, it's equivalent to costing like $6000 in USA.

Basically just goes to show a lot of those 32 countries Sony managed will likely have very trivial sales.

Don't use Argentina as an example. The currency exchange rate there is totally fu*ked up right now.

 

[Rangers]

Console prices are always extravagantly high in South America. Nothing new. They may not all be as bad as Argentina.

In Brazil they can get around it a little by manufacturing them in Brazil and avoiding some terrible import duties, and both Sony and MS did. But it's still well higher than USA.

 

[Strange]

Console prices are always extravagantly high in South America. Nothing new. They may not all be as bad as Argentina.

In Brazil they can get around it a little by manufacturing them in Brazil and avoiding some terrible import duties, and both Sony and MS did. But it's still well higher than USA.

No, what I mean is that back in April the official exchange rate to USD is around 1:6. The black market (aka. the real exchange rate) was more like 1:8 and falling fast (a month before I arrived there it was ~1:7 I think). I don't know how bad it is right now but I believe it's worse than in April. Therefore the prices in Argentina shouldn't be representative of anything but a fu*ked up economy.

6500 pesos. The official exchange rate is 5.38 right now and the "informal" is 8.13 and fluctuating wildly. The informal one broke 1:10 back in May.

Just found some more info.
http://dolarblue.net/historico/

So according to your exchange rate you're using you have official 1200 USD, informal 800 USD, and really high point 650 USD. Sony understands that they would have to be above 399 + other costs to cover themselves even when the currency is whacked so 6500 pesos isn't as wacky as you think.

 

[Rangers]

No, what I mean is that back in April the official exchange rate to USD is around 1:6. The black market (aka. the real exchange rate) was more like 1:8 and falling fast (a month before I arrived there it was ~1:7 I think). I don't know how bad it is right now but I believe it's worse than in April. Therefore the prices in Argentina shouldn't be representative of anything but a fu*ked up economy.

6500 pesos. The official exchange rate is 5.38 right now and the "informal" is 8.13 and fluctuating wildly. The informal one broke 1:10 back in May.

Just found some more info.
http://dolarblue.net/historico/

So according to your exchange rate you're using you have official 1200 USD, informal 800 USD, and really high point 650 USD. Sony understands that they would have to be above 399 + other costs to cover themselves even when the currency is whacked so 6500 pesos isn't as wacky as you think.

No, it's not "the exchange rate I'm using" it's "the exchange rate". There's only one.

The GAF poster lives in Argentina, I would think he would know about all these informal exchange rates you're claiming, and he said it's 1200.

Even if it is less like 800 (it may be more, like 1600) it's really not going to matter in the scheme of things, very few units will be sold.

Which people with a basic grasp on console markets already knew.

Even if it's 650, how well would PS4 sell if it cost $650 in America? Now couple that with our average income is 5 times higher.

 

[Brad Grenz]

Strange's point is if the economy is volatile you have to price a product in a manner than protects you from spikes that could cause severe losses. Remember when Nintendo posted their first losses ever? They were getting hit by an unfavorable exchange rate where they couldn't very well go out and raise the price of their hardware in the West. And that was simply the Yen to Dollar and Euro which you'd expect to be much more stable.

Also, you can't simply compare the price of luxury goods like that. Maybe the PS4 costs twice as much, but the cost of housing and food is dramatically less.

 

[liolio]

I think that MSFT is doing something right with XB1 and it is not the communication...

They are actually taking mostly all their risky bets at the beginning of the generation:
1) Change in business practices: they are to launch in the grey or to make small profits
2) Kinect is standard, it is another overhead as far as costs are concerned (on top of point 1)

If it succeeds or do well enough they will make money real fast, if Kinect works with casuals it will be standard, devs can target it, etc.

If it is a disaster overall, well they can back pedal on kinect and their pricing policies. If they do looking at the company financial data and how they put the system together I believe that they would be in a real good position against Sony.

I think all the talk about all those "bad" decisions from MSFT is a tad short sighted, the race have not started yet. Let wait for sale, financial reports from both companies and so on.

Even if XB1 were to have a tough start, I would wait for 2/3 years to count it out and vouch every decisions MSFT made wrt system as "wrong".