I'm not certain that they loose money with each console sold. Anyway, with more consoles sold, you have a much higher probability to sell more games and to have more susbcribers to your online services.
Console Failures and Successes *spawn*
- Thread starter Shortbread
- Start date
I'm not certain that they loose money with each console sold. Anyway, with more consoles sold, you have a much higher probability to sell more games and to have more susbcribers to your online services.
From that graph, MS makes more than half of Sony's taking with half as many consoles.
True but the gap is increasing each year.
If that's inclusive of PC sales, looks a little to low. I'm almost sure MS includes digital content data that's inclusive of XB360 software sales as well. Plus with backwards capability, the XBO attach-rate with older games are bound to be much higher.
Silent_Buddha
Legend
Except it isn't. It's not performing as well as hoped prior to the start of the generation, but from a hardware standpoint it is performing roughly on par with X360. IE - it's not a failure in the sense that PS3 was a failure in not being able to match the previous generation of devices from that company.
Additionally, from a profit perspective the Xbox division is now performing significantly better than it did during the X360 era. There are many reasons for this from higher ASPs for accessories (Elite controllers and customized controllers increase the ASP quite significantly meaning higher margins), increased significance of digital versus physical (Sony also benefits from this shift in the market), etc.
While the first point (hardware sales) is certainly important, the second point is by far the most important factor. Going by that, while XBO is not meeting expectations for overall hardware sales set prior to the start of the generation, it is still overall a success for the company.
Basically...
- Anything that helps attain profitability is important.
- Hardware install base.
- Software attach rate.
- Accessories attach rate.
- Margins for Hardware, Software, Accessories.
- Dollars spent on services (monthly/yearly memberships, music rentals/purchases, movie rentals/purchases, app purchases, etc.)
- However, profitability is key.
- All of the above only matters in terms of how it drives profitability.
- "Winning" or "Losing" is all about whether profits have grown or shrunk.
Likewise, if we take a look at the PS3, it was a failure for Sony as profits shrunk compared to the prior generation despite it being a relative success in fanboy wars. Conversely, PS4 is a success for both Sony and fanboys.
To put things into perspective from a corporate POV.
There were many on the Microsoft Board of Directors that wanted to cut the Xbox division prior to the launch of the XBO. When it's first year performance was bad relative to expectations, it was a nigh certainty that the BOD was going to vote to axe the division.
However, Phil was able to turn things around enough that the division is now making more profit than the X360. Enough profit that most of the BOD has reconsidered and is now approving of increased spending and support on the division.
From a consumer perspective you can see this most prominently in the lack of exclusives over the past year. Those decisions to potentially close the Xbox division led to immediate cuts in spending which meant there wasn't as much money available to Phil for investing into exclusives. In theory, in the future we should see increased spending on exclusives again as the Xbox division isn't in imminent danger of being cut from Microsoft.
Regards,
SB
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This is my point... they could have done much better. Last gen, the ratio was basically 1:1 vs Sony. This gen it's 2:1.
It's a failure from this point of view.
If they were able to keep a 1:1 ratio this gen, then their profits would have been much higher.
They failed to attain their real goals. The fact that they stopped to publish global sales tells a lot...
And please, people need to stop with this fanboy story. We're just analysing facts...
Also, about the supposed profitability of the Xbox division : http://www.cgmagonline.com/2017/08/14/microsofts-xbox-never-profitable-according-report/
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djskribbles
Legend
Well, PS4 really took off. It would've been incredibly difficult for XB1 to reach PS4 sales, even if everything went right.
A realistic goal would've been to match or slightly improve on X360, so ~85M+. But, they will most likely only reach ~60M if they're lucky.
A realistic goal would've been to match or slightly improve on X360, so ~85M+. But, they will most likely only reach ~60M if they're lucky.
If the XB1 was as good as the 360, the fight would have been much tougher for Sony.
But you're not wrong since Playstation is a stronger brand than Xbox. Sony might need less effort than MS to be successful .
However, they did everything right with the PS4. Everything was perfect while MS made a lot of mistakes. Yet, the domination we've seen during the PS2 era is gone... i mean, even Nintendo paid its mistakes more severely than MS.
That post really should be a sticky post at this point on the B3D sales forum...And I was about to ask for receipts to @Silent_Buddha about those alleged Xbox profits...
Silent_Buddha
Legend
Some publicly available information from their latest financial report for 2017.
- Hardware revenue down. This is low margin.
- Xbox Software and Services revenue up. This is high margin.
- Margins grew due to Windows, Search advertising, and Gaming despite a decline in margins due to Phone and Surface.
Information for 2016.
Again, Gaming was a key driver in the segment.
- Hardware revenue down. This is low margin.
- Software revenue up. This is high margin.
Again, showing a shift to a higher margin (IE - more profitable) mix of products and services. Revenue is down for Xbox (the aggressive price cuts and specials on hardware), but profits are up (increased high margin software revenue and services).
Regards,
SB
Here it seems Sony have bigger revenue at least and profit too. Margin on PS4 and Xbox One hardware is probably close... Price of PS plus and Xbox Gold is the same, the Xbox division have more services ith Gamepass and EA Acess(take a dime probably) where Sony only have the PS Now...
It is because unit matters. Sony gaming divison earns more money than the Xbox division. More money is always better, if the Xbox One was more popular, the Xbox division will earns more money(revenue and profit)... It is a simple as that... After they are probably profitable and it is important too but Sony gaming division is profitable too.
This is Sony profit/loss since the beginning coming from Zhuge EX, PS3 era was a total failure but all the other consoles are good and PS4 very good. I think with a smoother new generation going with the PS5 they will maybe be a little profitable the year of PS5 launch. Because everytime they launch a new console it is a loss...
Gaming profits are carefully buried into the Titan Windows and search ads. As far as we know they could make $1 profits overall on gaming (hardware + software). All the adjectives you read are PR. They mean nothing.
Also as a whole, as you know, gaming revenue is down. I don't think this is the definition of corporation winning. More Xbox players and subscriptions but revenue down ?
I don't know how many times I need to repeat this, but it seems in every such conversation...
Success and failure are relative, measured against selected criteria.
A product isn't a success or a failure full-stop - it's a success or failure measured against a goal. People discussing such matters need to specify what they're measuring and why, and then they need to stop presenting a different set of goals to someone else to prove success/failure of the entire product! Importantly, a product, like life, can be a success in some areas and a failure in others. It can succeed in selling lots and fail in making as much profit as intended, or it can sell less than hoped but succeed at making more money per unit, or can fail to hit a large enough social media penetration but succeed in winning a few Industrial Design awards.
Anyone stating something is a success/failure without specifying at exactly what is starting a nonsense discussion, more nonsensical than 'what's the most powerful console?'
(To be fair on Shortbread, he did qualify as overall, relative to 360's performance last gen)
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Microsoft is not selling Xbox in a vaccum. From the first tweet of Aaron Greenbeg is happy of US december 2017 hardware sales and he compares sales of XB1 to PS4... Other point it is not as good as 360 market share too... If Sony sold half the console of Microsoft, they would do the same things like last generation
they wanted to hide US PS3 Number with a new metric Playsation family(PS3+PSP...)...After it is not a failure if they are profitable but not a success too, they lost market share and revenue and profit...
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I'd say the XB1 is licking it's wounds from the Don Mattrick era decisions.
The XB1 came out and it had an immediate identity crisis; it wasn't powerful enough to keep the hardcore and not unique enough to grip the casuals. The price point was another issue for both buyer pools.
Fast forward to today and with the X1S and X1X, dropping Kinect, redoing the dash to make it more gamer centric, I'd say they're coming out well on the other side.
They won't be a in position to make up ground this generation. That ship has sailed. What they can do is start transforming the mindshare in the market so the core gamers that flocked to the 360 either start slowly adopting the X1X or use that knowledge to get excited about Microsoft's next console.
For me, I've probably put more hours on the X1X in the short time it's been out than I did on the launch day XB1 I have.
The XB1 came out and it had an immediate identity crisis; it wasn't powerful enough to keep the hardcore and not unique enough to grip the casuals. The price point was another issue for both buyer pools.
Fast forward to today and with the X1S and X1X, dropping Kinect, redoing the dash to make it more gamer centric, I'd say they're coming out well on the other side.
They won't be a in position to make up ground this generation. That ship has sailed. What they can do is start transforming the mindshare in the market so the core gamers that flocked to the 360 either start slowly adopting the X1X or use that knowledge to get excited about Microsoft's next console.
For me, I've probably put more hours on the X1X in the short time it's been out than I did on the launch day XB1 I have.
Its crazy how they managed to recover from the PS3's awful launch. And its amazing how high operating profit is with the PS4, in an age when we expect consoles to lose from tablets, PCs and other gaming devices.This is Sony profit/loss since the beginning coming from Zhuge EX, PS3 era was a total failure but all the other consoles are good and PS4 very good. I think with a smoother new generation going with the PS5 they will maybe be a little profitable the year of PS5 launch. Because everytime they launch a new console it is a loss...
I guess the orange bar is the estimated operating profit which may or may not be met.
Edit: Regarding the XBO depends how we defy failure. I don't think it is a failure as a product in absolute terms. But it certainly had some negative effect on the image and brand of the XBOX. They still haven't fully recovered from the "damage". It is a product that has no real competitive advantage to stand out. It's greatest achievements are not that sought out by the consumer and some of them are not even gaming related. MS slashed the price significantly and bandles the console with games more often than Sony to keep the adoption healthy
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