J. Allard Interview

[Shifty Geezer]

You've stumped me, Geezer. You're right. I'm missing something. Anybody got an idea where MS really plans to make money Live? Microtransactions and the like won't fly. There has to be a bigger picture, and I'm missing it.

Sony and MS are gunning for exactly the same market. You know how MS got into the console industry? They saw consoles as being a possible point for the future of convergence - something which the 'industry' has expected for many years. Eventually everything will be downloaded/streamed. MS want a slice of the pie as they guess it'll be hugely profitable. Imagine taking a cut of EVERYTHING sold on the internet for example. MS approached Sony to put an MS OS into PS2. Sony declined. MS approached Nintendo who also declined. Their only chance of siezing the console space in case the matures into the convergence space was to throw together a console and get it out quick. Hence the extraordinarily costly hardware and massive loses from XB.

It's all in this belief that they'll be loads of downloaded content, and the gateway provider will be able to take a cut per sale. Every TV programme, music track, game, Ring Tone, screen saver...all paying a little bit to the content gateway provider.

If Sony had accepted MS's proposition there'd be no competition. MS would be providing an OS for PS3, and both would be reaping the benefits of PlayStation Live!. That didn't happen and now both are fighting for that market.

Whether the market happens or not is uncertain, but these guys believe it will and are willing to throw stupid amounts of money around now hoping for massive returns later on, for a long, long time.

(Disclaimer : The historic reasons MS entered the Console market are based on lots of reading including executives at MS, but there's no specific articles I can link to. So I might be way off. But AFAIK that's the reasons behind why MS entered a hardware industry.)

 

[blakjedi]

You've stumped me, Geezer. You're right. I'm missing something. Anybody got an idea where MS really plans to make money Live? Microtransactions and the like won't fly. There has to be a bigger picture, and I'm missing it.

Sony and MS are gunning for exactly the same market. You know how MS got into the console industry? They saw consoles as being a possible point for the future of convergence - something which the 'industry' has expected for many years. Eventually everything will be downloaded/streamed. MS want a slice of the pie as they guess it'll be hugely profitable. Imagine taking a cut of EVERYTHING sold on the internet for example. MS approached Sony to put an MS OS into PS2. Sony declined. MS approached Nintendo who also declined. Their only chance of siezing the console space in case the matures into the convergence space was to throw together a console and get it out quick. Hence the extraordinarily costly hardware and massive loses from XB.

It's all in this belief that they'll be loads of downloaded content, and the gateway provider will be able to take a cut per sale. Every TV programme, music track, game, Ring Tone, screen saver...all paying a little bit to the content gateway provider.

If Sony had accepted MS's proposition there'd be no competition. MS would be providing an OS for PS3, and both would be reaping the benefits of PlayStation Live!. That didn't happen and now both are fighting for that market.

Whether the market happens or not is uncertain, but these guys believe it will and are willing to throw stupid amounts of money around now hoping for massive returns later on, for a long, long time.

(Disclaimer : The historic reasons MS entered the Console market are based on lots of reading including executives at MS, but there's no specific articles I can link to. So I might be way off. But AFAIK that's the reasons behind why MS entered a hardware industry.)

Good analysis.

 

[RancidLunchmeat]

A good analysis, sure.. but it still fails to provide the final piece of the puzzle for MS which is what had me stumped this morning when Geezer asked me the question.

Sony has content it owns and can provide for a fee over a connection to anybody with a PS3, or a PS3 + New Content Download Thing.

What exactly is MS going to sell? Even if they get the X360 into as many homes as have cable boxes, so? People are still going to buy their content from their cable providers, not MS. And the cable providers will already have deals in place with the content owners, MS won't.

Sure, maybe when MS was trying to get into every household with WebTV (that worked well, nice to see them trying again..) it made sense. But that market has come and gone already.

And with Sony competing in the same space as MS, Sony has a huge advantage because they do own the media content already that MS would have to license from them in order to sell, because it's clear Sony isn't going to license the OS or distribution system from MS.

Or do you think these two will make a deal in the future and that's what MS is still hoping for despite going into head to head competition with them? Beat them up a little bit and then say "We don't really need to fight.."

 

[Shifty Geezer]

Um..I'm not sure what content are directly bringing, except game content. Seeing as their OS is a major host to much downloaded material, I guess at some point when they've dominated that 'convergence gateway' they'll then say to Napster, iTunes et al 'we want 1 cent for every transaction'. No idea how they want to work it. :? Perhaps they didn't even think that far enough ahead? They win the console war and find they've no material to sell!