Changes at Microsoft: Good for XBox?

[Carl B]

If you haven't yet heard, Microsoft will be reorganizing into three seperate divisions, of which Robbie Bach will be one of the new presidents.

Here's an article you can read if it's new to you.

article

Anyway I see this as generally a positive for XBox. With Bach in charge of the new Entertainment division, it's not hard to envision XBox's access to resources improving.

 

[Dave Baumann]

Actually, it'll be good for PC games since he'll be taking on the "Games for Windows" brand, I'd imagine. MS have realised that something like 60% of Windows software sold are games and they haven't really concentrated on promoting that part of the software market at all - I've heard that they may begin to address the channel with Games for Windows in a similar fashion to XBOX.

 

[Carl B]

Well that's the word for the whole Vista push - and I think it's far more than just rumor; they even have their little seals for game boxes all ready to go. Still, as far as access to resources, I think XBox is bettter off with Bach in charge rather than not.

 

[Nightz]

Yeah that way Xbox losses will be swallowed by the rest of the division. Shareholders will have less to complain about.

 

[AlNom]

Wasn't there talk of a rating system for computers to determine the level of "gaming" capability? It was supposed to replace the long list of hardware requirements or at least make it easier to say how well the computer would perform with a particular game.

 

[Lysander]

sounds good, direct and hierarchical, as they are preparing for a battle

 

[Shifty Geezer]

Gaming on PC should be a lot less profitable for MS than XB though. Okay, ignoring the stupid losses of XB1! But seriously, they make money on every title sold on XB whereas they get squat from PC games. No fee for games, licensing DirectX, or anything. Apart from the OS sales PC gaming gives MS nothing (othr then their own titles of course). Unless they make a push to get games being created for Vista only, forcing gamers to upgrade their OS, pursuing gaming on PC seems not so smart from a making money perspective.

 

[Carl B]

Well I think in fact making games tailored to Vista is exactly what MS hopes will happen; and their certification program - knowing them - probably won't be free for developers, increasing their PC game margins.

Anyway who knows, everything Vista in my opinion is subject to change.

But there were a number of articles in recent weeks discussing Microsoft's push to 'revive' PC gaming, and they more or less ran along the mentioned lines.

 

[Acert93]

Gaming on PC should be a lot less profitable for MS than XB though. Okay, ignoring the stupid losses of XB1! But seriously, they make money on every title sold on XB whereas they get squat from PC games. No fee for games, licensing DirectX, or anything. Apart from the OS sales PC gaming gives MS nothing (othr then their own titles of course). Unless they make a push to get games being created for Vista only, forcing gamers to upgrade their OS, pursuing gaming on PC seems not so smart from a making money perspective.

Bingo!

Gaming is the #2 activity on the PC and as Dave noted makes up like 60% of software sales. Windows makes a lot of money for MS, and even more indirectly by its market penetration.

Sometimes you have to spend some (or a lot!) of money to make money. Killing PC gaming is bad in many ways.

 

[Shifty Geezer]

But unless the games provide a reason to upgrade such as no backward compatiibility with older version of Windows, gaming itself won't promote an OS upgrade at all as far as I can see.

 

[Acert93]

But unless the games provide a reason to upgrade such as no backward compatiibility with older version of Windows, gaming itself won't promote an OS upgrade at all as far as I can see.

There is always a transition--one of the PC strengths (also a weakness). But my understanding is DX10 is Vista only, and it requires certain features. So in 2007 we may see our first "DX10 only" game with no SM3.0/2.0 fallback. It is a process.

I see DX10/Xenos as a concerted effort to move to a "Windows" platform even friendlier than what is current available. Anyhow I am rambling/mumbling now

 

[Shifty Geezer]

Okay, that'd explain it then. Might cause a furore though. If devs can't easily add enhancements to DX10 while still supporting DX9, I can't imagine them writing for Vista until people upgrade, and people won't be upgrading for the games if devs aren't writing for Vista.

 

[Acert93]

Okay, that'd explain it then. Might cause a furore though. If devs can't easily add enhancements to DX10 while still supporting DX9, I can't imagine them writing for Vista until people upgrade, and people won't be upgrading for the games if devs aren't writing for Vista.

Catch 22.

Of course Vista will play DX9 games and have other perks, and I am sure there will be those transition games that have DX10 modes and DX9 modes.

The real kicker will be Xbox 360 ports. Devs are not going to want to have to downsize their game for underpowered and underfeatured DX9 hardware. So far it is looking like Xenos (and RSX) are faster than anything on the PC right now.

So with these engines designed with Xenos/DX10 features and performance in mind you now have next gen games coming to the PC. The games, partly, will be coming from 360 devs.

So that breaks up the catch 22 a bit. The games will come only if because there will be new hardware that NEEDS Vista to really excell and because it is a logical outreach of the 360. And of course people will buy Vista for other reasons like.... DRM

Ps- DX9 came out in Fall 2002. First real DX9 games were FarCry and HL2 in Spring and Fall of 2004--and even then they had a LOT of DX7 fall back. So it takes time.

The difference being with Vista/DX10 is that I think it is being setup as a new "platform". At some point thee wont be the fall back because it is a cleaner platform. Part of this is from the consoles. Just as the consoles push the market forward to accept a minimum performance/feature standard, toward the end of their lives they hold them back.

With the Vista/360 1-2 punch I think MS is making an overt move toward DX10. It makes sense with their goals of cross platforming. This is a nice way to strip some of the legacy from DX and to "catch up and pass" the consoles.

Now that I think about it, UE3 is the first game engine I can think of that requires DX9 and wont work on DX8.1 or older hardware--and PC UE3 games wont arrive until 2006. That is a 3.5 year gap from API to the first game requiring it.

I think it is certain we will see "DX10 hardware required" games before 2010 on Vista! Although SM2.0/3.0 hardware seems pretty capable in features to a degree and performance is not bad either... but you have to make some kind of cutoff at some point. I am sure console devs are not wanting to design engines with DX9 class performance cards in mind, so those types will be a pain to port.

 

[c0_re]

Yeah that way Xbox losses will be swallowed by the rest of the division. Shareholders will have less to complain about.

LOL!! ha ah too funny but so true

 

[Johnny Awesome]

The reason they can do this now is that the Xbox division is almost profitable and will be by 2007. They don't need the big division to absorb losses anymore.

 

[SubD]

The xbox division isn't almost profitable. It had a one time blip of a quarter.

And they say they are targeting profitablity by 2007. That is pretty wishful thinking.

 

[expletive]

The xbox division isn't almost profitable. It had a one time blip of a quarter.

And they say they are targeting profitablity by 2007. That is pretty wishful thinking.

Since the new generation is break-even in terms of hardware, i cant see how they wont be profitable by 2007.

EDIT:early on hardware will be at a loss but MS expects to be break even in a year.


MS releasing the 360 controller for PCs, imo, really says alot about their strategy.

My guess is that theyll continue to make it easier to cross develop games for 360/vista via XNA.

This way, whoever runs vista and has the new controller can be counted as an 'installed unit' for MS in terms of 'XNA developed' titles.

IT oculd be very appealing for developers to know that they could open up their game to millions of PC gamers for maybe 15% more work.

Obviously a very broad stroke guess but i think theyre headed in that general direction.

J

 

[London Geezer]

Is the X360 not being sold at a loss at the beginning? How much does it cost to manufacture?

I can see MS making lots of money from the extortionate prices they charge for the accessories.

 

[expletive]

Is the X360 not being sold at a loss at the beginning? How much does it cost to manufacture?

I can see MS making lots of money from the extortionate prices they charge for the accessories.

Early on yes, but they expect to be at a break even point in a year. That gives them almost 5 quarters to be profitable. That seems entirely reasonable to me.

J

 

[Carl B]

I was thinking about the 360 hardware lately, and I have to imagine assuming they're selling at a loss, it can't be that much of a loss. The components are all cheap - to be honest - and the chips can't be coming to $200+ in manufacturing. Even though the premium package knocks some off in terms of what they would be making individually on the included accessories, it's still clearly a gain in terms of what it costs to include those items.

So I could see Microsoft pushing to profitability fairly quickly this gen, if they can keep the momentum up six months post-launch.

The fact that they're promising a price cut every year seems also to indicate that either those cuts will be modest, or there's already a 'bonus to MS' buffer built-in to the launch price.