like Ive said for years, the ~5 year cycle has finished, its been obvious for a while. The reason is because we're in phase of diminished returns now. Ive said the same thing with PC's/CPU's even though I get a faster CPU (according to benchmarks) I hardly can tell the difference. 16 colors and 256 color = huge difference up 24bit color (smaller difference perhaps, but still easily noticeable) etc same dead with resolutions, sound whatever. Thus 5 years is not enuf for a console cycle. Im picking the next cycle will be even longer than the current one. i.e. we wont see the next gen until after 2020
Major Nelson tweet 960,000 360's sold over Black Friday
- Thread starter tcrews
- Start date
No need to apologize, the nintendo profits were enormous and I think surprised Nintendo almost as much as everyone else. If it weren't for the wii, I don't think the move or kinect would exist today. I think the xbox division would be absolutely ecstatic with a 6 billion dollar profit year. Our most profitable year so far was less than 2 billion, and our total _revenue_ was 8 billion. Nintendo's accomplishment was incredible, and companies will be trying to emulate it in future (hopefully without the sudden dropoffI stand corrected.Apologies, never meant to downplay any accomplishments, I just always thought Ninty made impossible profits due to the console and software sales in relation to how much they cost to make. Then again as aselto pointed out, the 360 may be coming close to Wii-level profits since it's selling at a high price considering the hardware's age.
) The only thing I took issue with was the claim that a 1 billion dollar quarter was impossible. If we thought that we'd probably drop out of the console game.
So there is like zero chance anyone is going to stand up and tell us how profitable the Xbox 360 is individually??
Anyhow the Nintendo results are DS plus Wii so I figured that the Xbox 360 profits had to be at least approaching if not exceeding the figures for the Wii back in the day especially if you considered the Xbox 360 vs Wii on a console vs console basis without all the extraneous stuff they include in EDD nowadays.
Xbox Live is just the gift which keeps on giving. In Nintendo terms it is probably the equivalent of releasing a Mario Kart Wii, that's the full lifetime sales and not one particular calendar year at that. The ducks really are all in a row here considering the amortized hardware and infrastructure costs compared to the high average sale price for hardware and Xbox Live. So whilst it may not be as profitable as the Wii it'd have to be pretty darn close at this point.
DuckThor Evil
Legend
"Those wanting the entertainment experience and arent' too fussed" are a large group and "the considering various options" is a phase of competition. I certainly don't expect a nose dive or perhaps even major effect, but it certainly isn't going to be like PS2 vs 360/PS3 type of situation where almost zero % of people would consider them as alternatives.
Wii was completely in another realm imo. WiiU sees Nintendo coming back to the same room with the others, despite each having unique features.
edit: Also one group that rarely get's a mention are the "up and comers" The fresh blood that is getting their first console or first "major" system and don't have as hard opinions yet. Every year each of us get a little older and thus more people enter the realm of gamers
Lot of those younger people can find the the touch screen tablet controller very appealing. I feel like the WiiU has all the strengths that Nintendo always has had and at least for a period it won't have the major drawback that the Wii had. Should help to make it competitive
I'd never spent over $200 in a store to play any game... except the duck simulator 4000.
More seriously. Your price speculation is somewhat premature at this point. We don't know what price the WiiU will be and we don't know what price 360 will be next fall. I'd say the price of WiiU will be somewhere in the range of $299-$399, which is the same range as Kinect equipped 360 today. MS has been very conservative with their pricing outside of special deals. At some point there will be a cut, but it's a bit early to consider them being very far in pricing and I personally don't see a large pricing gap existing between the consoles. WiiU also will be the brand new thing next holiday season and will garner some attention on that alone. Software showing performance gaps between the consoles is not something that automatically means they won't compete, also few comments that we've heard points out that most likely the WiiU-versions could see some improvements, that and the fact it's the shiny new thing should please certain portion of the "core" gamers as well. Nintendo certainly is well established as a family friendly entertainment system, which is where MS is putting the 360 with Kinect.
of course there will be plenty of people also who'll never consider one or the other. Shifty and I were talking about whether these consoles even fight for the same dollar at all, you seem to be saying something along the lines that "they are in competition, but WiiU won't be competitive enough" and bring pricing as the reason. My point was that far larger portion of people are willing to consider WiiU next holiday instead of 360, than for example PS2 vs PS3 in 2007. I think the market can sustain three consoles though, so there does not need to be big losers.
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Silent_Buddha
Legend
So there is like zero chance anyone is going to stand up and tell us how profitable the Xbox 360 is individually??
It's unlikely anyone other than a select few accountants and certain MS corporate heads (including the head of EDD) actually know.
Just like Sony, MS purposely groups profitable product lines with unprofitable ones to make it harder for stockholders and investors to know how badly any product line is doing.
Considering how product developement (especially at MS) is a very very long term investment where they are prepared to weather multiple years of bad performance in order to eventually have another bread and butter profit generator, it's not a bad thing. Especially when you consider how reactionary and short sighted many stockholders and investors are.
The corporation can then use PR to selectively point out which product lines are doing particularly well without putting undue focus on which product lines aren't doing so well, and when pointing out the bads ones, no need to show exactly how bad. Although sometimes it's unavoidable, as with Kin when it was abruptly cancelled.
Regards,
SB
Yeah I understand how logical it all sounds but that doesn't benefit me when I simply wanna know!
At this point one can be pretty comfortable that the whole enterprise has been worthwhile simply on the basis that they have solid ongoing profit, stable business and they'd be able to recoup all their costs if they so chose to sell the division. The only open questions are how worthwhile it has been and what the best course of action is going forwards?
The problem with analysis of what they'd do is that they have quite a few good options and you can't predict how lucky they will be with the odd Kinect title they've funded over the past few years. They could have a really good couple of Kinect games and really rake in the dough or they could have a dry patch and be forced to cut the price, the difference luck makes could be on the order of billions of dollars in profit. I guess you have to have good stones in this industry, eh?
Silent_Buddha
Legend
When it comes to software it's just like stocks. You KNOW you're going to have underperforming titles. It doesn't matter how good you are (unless you're Blizzard) if you're a publisher, you're going to end up with a stinker in your portfolio. The best way to protect against that is diversification. Not only by having a lot of titles in production at any given time, but also targeting multiple genres.
Publishers like Microprose failed because they basically only targetted strategy and simulation titles. They were very good at it so it made sense. Unfortunately when those genre's became mostly niche and fell out of favor, the company followed suit.
If MS was "only" targetting Kinect titles with limited genres' and appeal then they certainly open themselves up to that. But as can been seen, MS isn't only encouraging casual title developement for Kinect but they're also encouraging devs to do hybrid developement as well to try to find ways to incorporate it into core titles.
The initial wave of Kinect promotion obviously targetted casuals as that represented the largest potential return on investment. An entire market segment that was virtually untapped by X360. As well, those people would be less critical of any perceived flaws in the system.
Moving foward I expect to see more hybrid control games as well as slow integration into more core genres and games as developers find ways of incorporating it without disrupting the games unnecessarily just to including a checkbox.
But as you noted, it's hard to judge just "how" worthwhile an endeavor has been without Microsoft telling you. But that's the whole point. Most corporations don't want you to know exactly how well things are doing unless it's something they can brag about.
So in press releases or investor meetings they can pick and choose what to highlight while allowing badly performing or just underperforming products to hide in fiancial reports in generally well performing divisions.
Regards,
SB
Publishers like Microprose failed because they basically only targetted strategy and simulation titles. They were very good at it so it made sense. Unfortunately when those genre's became mostly niche and fell out of favor, the company followed suit.
If MS was "only" targetting Kinect titles with limited genres' and appeal then they certainly open themselves up to that. But as can been seen, MS isn't only encouraging casual title developement for Kinect but they're also encouraging devs to do hybrid developement as well to try to find ways to incorporate it into core titles.
The initial wave of Kinect promotion obviously targetted casuals as that represented the largest potential return on investment. An entire market segment that was virtually untapped by X360. As well, those people would be less critical of any perceived flaws in the system.
Moving foward I expect to see more hybrid control games as well as slow integration into more core genres and games as developers find ways of incorporating it without disrupting the games unnecessarily just to including a checkbox.
But as you noted, it's hard to judge just "how" worthwhile an endeavor has been without Microsoft telling you. But that's the whole point. Most corporations don't want you to know exactly how well things are doing unless it's something they can brag about.
So in press releases or investor meetings they can pick and choose what to highlight while allowing badly performing or just underperforming products to hide in fiancial reports in generally well performing divisions.
Regards,
SB
Silent_Buddha said:
Bullshit. They do it so the competition has to do guess work.
Not to obscure the picture for investors, if they really cared they could get that information easily- by voting
Silent_Buddha
Legend
You can think whatever you wish but it's to hide underperforming or badly performing product lines that they wish to continue pushing.
Investors are far FAR more important to a company than their competitors. And modern day traders tend to buy and sell with little to no thought for long term investment goals of a company. Hence this phenomenon is a fairly recent thing for many publicly traded companies.
A badly performing product line can easily see stock tumble which impacts a company far more than what their competitors think they are doing. Especially if there is competition that is doing far better.
Vague reports of Windows Phones doing poorly already make investors nervous for example. Knowing exact numbers would only make their fears concrete.
Competitors are far more interested in what is going on in research and development than they are in how well a product line is doing. Product performance they can already get a fairly decent handle on through various market reports. Knowing what a company is researching and developing and how much they are invested in it is much more valuable knowledge.
Regards,
SB
Investors are far FAR more important to a company than their competitors. And modern day traders tend to buy and sell with little to no thought for long term investment goals of a company. Hence this phenomenon is a fairly recent thing for many publicly traded companies.
A badly performing product line can easily see stock tumble which impacts a company far more than what their competitors think they are doing. Especially if there is competition that is doing far better.
Vague reports of Windows Phones doing poorly already make investors nervous for example. Knowing exact numbers would only make their fears concrete.
Competitors are far more interested in what is going on in research and development than they are in how well a product line is doing. Product performance they can already get a fairly decent handle on through various market reports. Knowing what a company is researching and developing and how much they are invested in it is much more valuable knowledge.
Regards,
SB
Silent_Buddha said:
1. Investors own the company, thus if the majority cared about product line specifics they would obtain it. It's that simple. Voting majority.... you know? They choose.
2. Competition is interested in other companies cost base, but I agree that r&d plans are more interesting.
3. A trader is by the very name a trader, an few investors are actually traders. A trader usually works at a financial institution and his job is to execute the trades necessary (for example for market making purposes, and w.r.t. The buy/ short orders that the brokers close.). His job is to take open, small market positions and take directional bets. For example if you place an order to buy gold @ 1600 usd, he may wait a minute because he believe gold will go down and purchase it for a lower price, earning the spread! Of course a modern day trader is short term it's basically due to his job description and no trader have ever been a long term investor
contrary to your belief most investors do have a long term vision. Stock prices will however jump up or down in any given day because for relatively liquid markets the price reflects all known public information available. New day, new information. Indications of windows 7 phones doing badly will simply result in analysts lowering some cash flow dcf or multiple model..
If you believe this bs that's it's to hide information for shareholders, and this is because people are more short term blah blah: 30 years ago you had less information available on publicly listed companies than you have today.
4. healthy companies shouldn't really care if their stock falls or jumps in the short term. The average stock in the s&p 500 index will statistically either go up or down with 35% on average in any given year. Most of that is driven by market sentiment (investors risk appetite) which accounts for 60% of the variations on average. This is why heavy option structures for CEOs get hammered in theoretical finance when they are related to stock price, which you cannot control unless ur in a very long term perspective.
5. Windows phones doing poorly is not really making anybody nervous. At least it shouldn't.
In short, the only reason you do not disclose product line specifics is w.r.t. The competition. At least that is what I'm told by the people running the companies(CEO and CFO), that the FI I work for, invest in. And frankly, as an investor, (not my money, but my job is to analyze and give recommendations to invest in companies.(my companys money)) I could care less about product line specifics for a company the size of Microsoft with plenty of diversification. Nice to have, but not need to have. However if I ask nicely I can even obtain that information if we talk non public or non public debt side investments.(inside information and all)
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