If Microsoft fails this time around nobody will dare to enter the console market...

[Cheezdoodles]

Since we had a few threads lately that all go something like this:

Can [Insert big company name here] start making video game consoles?

I figured would just share my thoughts once, instead of copy\pasting it into the other threads:

If Microsoft "fails" with the Xbox 360, I'm confident that nobody will dare join the console marked for a very long time. MS have gotten almost everything "right" this time, comparable gfx to the PS3, lower price, 1 year head start, a lot more developer support, if they fail this time around, nobody with half a brain is going to enter the console marked for a decade.

If Microsoft and its Windows-Money-Train doesn't manage to give Sony a K.O. after 2 tries, nobody can. At least not in the near future.

(i am curious however, if MS will bother with a third console if the X360 crashes and burns..)

Any thoughts on this?

 

[Fu3lFr3nzy]

(i am curious however, if MS will bother with a third console if the X360 crashes and burns..)

Bill Gates has stated before(I forgot where I read it), that if X360 fails, they'll give it one more shot with the next console.

You do have a point though. If a massive company like Microsoft couldnt topple down nintendo and/or sony, I dont see how Toshiba or Apple(or whoever else tries) can.

/imo

 

[Arwin]

Nah, it's just a matter of being clever about it. You just can't tell what is the next big thing. Case in point - neither Microsoft or Sony were in the console business 10 pre-PS2 days. Or what about Apple with their iPod? It just takes a really good new idea. Say that in a year's time, someone out of nowhere comes with an affordable, working 3D console that you just put on your head, and has motion sensing built in, as well as a motion controller or whatever, and it just works, has a few great games, and third parties get on-board quick because there's a nice development toolkit that makes it easy to port their existing 3D worlds and since there is no real competition, everything in real 3D looks better than anything else anyway.

You just can't predict these things. A bank here in Holland suddenly came up with (or imported?) the idea of making mobile phones that are also digital wallets you can pay with. Who knows it's a hot new thing and also happens to be great at games? Or next year the new iPod is a great gaming device that you can also hook onto your TV, LCD, VGA, whatever.

 

[Bouncing Zabaglione Bros.]

I'm sure a few years back people were saying the same about Sega and Nintendo - and then along game Sony and Microsoft.

The bigger the market becomes, and the more money to be made, the more likely people will want to get a slice of the pie. That's exactly what MS and Sony did when they started eyeing up the console market a few years back.

 

[scooby_dooby]

Don't be crazy, MS doesn't fail! They just spend varying amounts of money!

 

[Skrying]

I do not see failure at all from the Xbox 360 this time around. Frankly they've already set themselves up to easily surpass their previous sales mark and it'll certainly be hardware profitable by the end of the life time, if they make a profit overall that's another question, but it'll be a MUCH MUCH MUCH more pretty picture for MS after this generation.

As for another company, it will not happen unless one of them three fall out. Fraknly the market is a bit strained supporting three systems (two, and plus one "other" if you ask me... that doesn't make the Wii any less great btw).

 

[London Geezer]

Problem 1: Define "failure". Market share? Profits?

You can't just say "if they fail blah blah blah"... Fail in what? Not enough units sold, or not enough money made out of the project? Within what time period? Where? US or Japan?

I think it's safe to say that unless something monstrously wrong happens, MS are having a very good run at least in the US.

Without defining the objectives MS has (and you wouldn't know them), you can't possibly know whether they fail those objectives or not. These discussions about "failures" always crack me up...

 

[Pozer]

If EA merged with IBM/Lenovo (or any decent company with hardware experience, AMD also) I think they could have an impressive launch lineup. Plus Lenovo could supply the art asset sweatshops out of China. Design and Code the games out of EA western branches and use the cheap labor for the time consuming development tasks (art, sound, motion capture). While one team sleeps the other half would be hard at work.

IBM/Lenovo could develop the Custom silicon, OS and dev kits. By 2012 GPUs may be unnecessary as things may go back to 'software style rendering' on a Cell like CPU.

 

[Carl B]

IBM/Lenovo could develop the Custom silicon, OS and dev kits. By 2012 GPUs may be unnecessary as things may go back to 'software style rendering' on a Cell like CPU.

IBM and Lenovo are not the same company; you're essentially saying "what if EA merged with Dell."

And what indeed...!

@Skyring: What in your book constitutes failure? If a company has 5% marketshare, but is still profitable, in many corners that can still be considered success...

For example, what would the market look like today if Apple folded it's cards a couple of years ago when people said it should? Then they became profitable again... with a 5% share... and then they came up with the iPod.

No company is ever finished until it's finished.

 

[Skrying]

@Skyring: What in your book constitutes failure? If a company has 5% marketshare, but is still profitable, in many corners that can still be considered success...

For example, what would the market look like today if Apple folded it's cards a couple of years ago when people said it should? Then they became profitable again... with a 5% share... and then they came up with the iPod.

No company is ever finished until it's finished.

My metric for failure is not the same for every company, nor is it strictly based on either market share or profit.

For example: In the case of Microsoft I would consider success to be a decent (10%~15%) gain in market share with greatly reduced losses (I'd consider losing under $200 million). For success I would consider market gain to be of much greater concern to Microsoft, while profit/reduction in loss is a concern its not as much, Microsoft is very focused on long term goals in expanding Windows and their company into the living room, the Xbox is their best way forward.

In the case of say Nintendo though I would judge it very differently. Decent profit gain is a must and market gain must also be around 10%. Nintendo is a mixture of both market share and profit, though a slight lean towards profit. If I was Nintendo I would be concerned with making a large profit (I believe they are, look at the price of the Wii for example) and then second is market share.

Sony for example would be simply staying where they are at, though I would say they are prepared to loss up to 10% of their market and still be "successful" for this new generation.

Frankly the out look for "failure" is so greatly different for each company that judging the entry of another company can not be based on one current company failing/succeeding. If any random company came into the market right now then they'd either have to be well established in another large market and have the need to gain place in the gaming market with a clear focus on the semi-distant (15+ years?). I actually see no company needing that right now unless some major changes occur.

 

[RancidLunchmeat]

The only companies I can see right now with a 'need' to enter the console space are those companies that want to compete with MS and Sony for content distribution.

In the US, that means Time Warner, AT&T and Comcast. They would all have motives to compete with the physical distribution methods of Blu-Ray, as well as MS's plan of digital distribution (which they are in direct competition with already as of a month ago).

A few years back, AT&T would have been in the best position to enter the market space, but I think they've sold off all of their hardware manufacturing/development capabilities to focus solely on the service aspect. Competing in this market would mean changing their business plan back to what it was 20 years ago, and I don't see that happening.

Is there any significant hardware manufacturer (other than apple) that isn't currently already involved in the console battle through some means?

 

[INKster]

Bill Gates has stated before(I forgot where I read it), that if X360 fails, they'll give it one more shot with the next console.

You do have a point though. If a massive company like Microsoft couldnt topple down nintendo and/or sony, I dont see how Toshiba or Apple(or whoever else tries) can.

/imo

http://www.beyond3d.com/forum/archive/index.php/t-25903.html

 

[RobertR1]

If MS gets "killed" this time around, it certainly will not be for a lack of effort. The console is good, Live is great, the games are great and the whole experience is great over all.

Also, any gain in marketshare is a win for them. With only 96million in losses in the last quarter and a very high software/excessary/Live attachment rate, I'd say they're well on their way to doing good.

Ofcourse, Sony will do good also. They have to horrible mess up and at the end of the I think they'll pull it together enough to keep a good marketshare.

Can't comment on Nintendo since I have not followed them at all.

 

[dantruon]

to be honest i dont want MS to fail but at the same time i dont want it succeed either.

 

[Rangers]

Since we had a few threads lately that all go something like this:



I figured would just share my thoughts once, instead of copy\pasting it into the other threads:

If Microsoft "fails" with the Xbox 360, I'm confident that nobody will dare join the console marked for a very long time. MS have gotten almost everything "right" this time, comparable gfx to the PS3, lower price, 1 year head start, a lot more developer support, if they fail this time around, nobody with half a brain is going to enter the console marked for a decade.

If Microsoft and its Windows-Money-Train doesn't manage to give Sony a K.O. after 2 tries, nobody can. At least not in the near future.

(i am curious however, if MS will bother with a third console if the X360 crashes and burns..)

Any thoughts on this?

I think they're reaching the point with 360 where it almost cant fail. Early tracking of November sales indicates it's going to be at 5m USA sales and 8+m worldwide by the end of December. Probably 10 million shipped, and the first console to 10m has won every previous generation says microsoft. That's 8-10m 360 owners, but the thing is Xbox fans have proven to be such voracious hardcore gamebuyers over the years that their game purchasing rate is even greater than a "normal" 10m consoles suggests. Say, more like 15m install base would buy games for a "normal" console. So that pretty much guarantees the majority of third party support is locked down for the foreseeable future, which just snowballs.

Add another huge advantage, they're well down the console cost reduction curve, and well ahead of competition there, which means drastic price drops are just another means at there disposal whenever needed to stimulate sales, it becomes a almost cant lose situation.

Finally, the lack of PS3 to date proving greatly technologically superior.

Oh, I dont think they can "win" worldwide sales when almost 1/3 of the market (Japan) shuns them. But they dont need to. Then again, Wii and PS3 may slug each other out well enough in Japan that 360 does indeed take the worldwide crown.

Wii is a console that can make up a gap fast, they could have 4-6m shipped by March, but I remain unconvinced that the Wii will maintain demand in the spring doldrums, let alone in 2-3 years. Besides, the Wii seems a bit orthogonal to 360, and doesn't appear to be hurting it's sales.

Then you have to add on top of all this rosy market picture the simple fact that even if 360 did worse than Xbox, it would likely be profitable rather than a huge moneyloser. That alone changes every definition of succes for microsoft, as Xbox was a defensive play in the beginning.

If you look at the fact that microsoft has lost maybe 4 billion over 6 years now, and look at the brand they've built, and about to be profitable soon, it becomes a rather nice investment.

Also, Bill Gates already said in a interview about 360, before 360 was even doing as well as it is now, that there would be a third console. The question was "what will you do if 360 fails" and his response was "we'll play again".

 

[EndR]

MS will not "fail" this time.. They are already doing better than what they did with Xbox.
So if MS continues this trend, they will increase their market share and make the next battle (Xbox3, PS4) even more closer (if MS dosen´t pull a "win" this time around)..

And sure, MS has spent alot of money into the Xbox-project, aprox 4-5 billion dollars.. but you can see it from another angle. MS "wanted" to buy Nintendo for 15+ billion. That would have made more of a dent on Microsoft.. so they came out cheaper by doing it by themselves...

Also, 2007 looks like a killer year for 360.. maybe we can see who is the candidate for victory during the year..

 

[CEO]

Since we had a few threads lately that all go something like this:



I figured would just share my thoughts once, instead of copy\pasting it into the other threads:

If Microsoft "fails" with the Xbox 360, I'm confident that nobody will dare join the console marked for a very long time. MS have gotten almost everything "right" this time, comparable (i meant ahead) gfx to the PS3, lower price, 1 year head start, a lot more developer support, if they fail this time around, nobody with half a brain is going to enter the console marked for a decade.

If Microsoft and its Windows-Money-Train doesn't manage to give Sony a K.O. after 2 tries, nobody can. At least not in the near future.

(i am curious however, if MS will bother with a third console if the X360 crashes and burns..)

Any thoughts on this?

You say almost? Is there anything i am missing?

 

[Gollum]

Add another huge advantage, they're well down the console cost reduction curve, and well ahead of competition there, which means drastic price drops are just another means at there disposal whenever needed to stimulate sales, it becomes a almost cant lose situation.

Wasn't there a report recently, that MS is already making a profit from each console sold? I'm pretty sure I saw some stats and graphs about that a little while back...

 

[assen]

Also, Bill Gates already said in a interview about 360, before 360 was even doing as well as it is now, that there would be a third console. The question was "what will you
do if 360 fails" and his response was "we'll play again".

[size=+2]Finish the fight![/size]

[size=-2]Sorry, couldn't resist [/size]

 

[-tkf-]

(i am curious however, if MS will bother with a third console if the X360 crashes and burns..)

Any thoughts on this?

With near unlimited funds (compared to Sony and Nintendo) they can not be beaten. The only way Microsoft can be beaten is if someone starts competing against them on the Software front.. and wins.