MS Xbox is gaining momentum...unstoppable...

[marconelly!]

Namco's Ace Combat 4 is probably the best arcade airplane game made this gen. They also made Klonoa 2, and Tekken 4 is getting averaged reviews at ~ 80%.


"MS has made as many good moves as Sony"

The only really good acquisition move MS has made is getting Bungie on board. And even that hardly compares to simply making GTA franchise exclusive to PS2.

 

[Johnny Awesome]

You're right about Namco. They are underperforming lately.

Once again, MS costs have been exagerated and their revenues are understated.

They've sold 20 millon games and have 30% 1st party penetration. This means that they have sold 6 million first party title = $30 * 6 = $180 million. The 14 million other titles have generated another $7 * 14 = $98 million. Extra controllers have generated around 5 million * $20 = $100 million at least.

This brings the revenue to around $378 million + $290 * 3 million + $190 * 2 million = $1.63 billion, which is a billion shy of the costs you cited. In other words, they aren't as far away as you think, especially when you realize that there's no way the Xbox cost more than $250 to manufacture at this point.

I imagine that MS will lose another $1 billion this year on the Xbox through June, get their 9 million users, break even in 2004 with 18 million users, and make $1-2 billion in 2005 with 27-32 million userbase, making the whole thing a wash. Not a bad way to enter the market the first time out.

 

[Teasy]

Extra controllers have generated around 5 million * $20 = $100 million at least.

Is that a real number or a guess?

This brings the revenue to around $378 million + $290 * 3 million + $190 * 2 million = $1.63 billion

Could you be more clear, what is all that money made from exactly?

 

[Laa-Yosh]

This brings the revenue to around $378 million + $290 * 3 million + $190 * 2 million = $1.63 billion

Could you be more clear, what is all that money made from exactly?

Hm, maybe software revenue + hardware revenue, you know, from the 3 + 2 million Xboxes they've sold?

 

[Johnny Awesome]

Sure, no problem.

Software, pre-drop Xbox units, post-drop Xbox units.

 

[Laa-Yosh]

Sure, no problem.

Software, pre-drop Xbox units, post-drop Xbox units.

Aren't 9 dollars of retailer profit a bit too low for those boxes?

 

[Vince]

Wow, are you people just absolute pestimesets or incapable us using some commoin sence??

Last time I checked e-commerce didn't really occur from the living room.

It's only a matter of time, why else do you think MS is there? because they care about Console Gamers?

This of course is contingent on a few factors. One, that they all decide to get along together.

Sony's already been rearanging itself since their Sony Meeting in Summer 2001 where they disguessed the new corperate strategy under Ando:

"Using graphs and diagrams to drive home his point, Ando insisted that Sony, the world's premier gizmo maker, was better positioned to triumph in this broadband world than any of its rivals. He went on to argue that nobody--not Samsung (SSNLF ), not Microsoft (MSFT )--had a sharper vision of how consumers would navigate superfast networks in which a single fat wire, or a sliver of radio frequency, would handle multiple layers of voice, data, and video. Already, he noted, Sony's violet-gray Vaio laptops were hits with the digerati, who liked to edit their own photos and music files and exchange them over the Web. Once broadband networks were ubiquitous, all of Sony's cameras and audio devices would meld into a seamless distribution network for Sony's movies, music, and games, supported by the company's own online shopping and financial services. "Ando's message was clear and aggressive," says Hiro Uchida, Sony's general manager for strategic ventures. "Sony faces big challenges, but Ando showed us that we're getting activated."

You know, if you guys actually did some research and used some intelligence, they're would be no fighting here....

I won't even talk of Conrgressional oversight when talking about an alliance of rivals of Microsoft who are supporting Open Source projects like Linux and OGSA.

How is it not working? MS's projections for December are 9 million. They are not, repeat NOT, expecting to take over the market in one fell swoop. This round is to establish that it isn't a joke. Next round is to scare the $hit out of sony, the third round will decide the winner or at least will provide something to keep these forums alive.

1) 9Million verse 50Million, Thats why it's not working.

Xbox3/PS4 is where the finally war in the valley of armageddon will occur

2) The war will be descided by then. This is it, who ever takes control of the living room (either MS or Sony/IBM) will get the developer and cunsumer support of their OS/Network form and we'll only see a repeat of the PS2/XBox massacure for the next generational loser.

This is assuming that they indeed wish to enter the digital entertainment market. The post-napster world has changed the way the industry has, and will, look at things. They weren't ready before now and I'd be willing to bet they arent' going to move into the digital realm until they are "certain" they can solve the essential problem of copying.

Do some research, then get back to me. I'm sick of repeating stuff and having people blow BS in my face that "kills", "mames", or otherwise "destroys" the form of system that I talk about - Yet, if you were informed would have no revelence whatsoever.

This is assuming, as Grall pointed out, that people will by peripherals. At least if MS takes over it will all be in one huge ass box beside the tv if in the home at all.[/peripherals]

I think Marconelly covered this, but I will again because it irritates me. Do you have any idea what I'm talking about? Peripherals? These aren't Computer assesories that they're trying to sell like MS:

Do you own a TV? a CD Player? Shelf Audio System? Cell Phone? DVD Player? PS2? PDA? Computer? Telephone? Or any other the thousands of other products Sony offers?

Well, then the idea is that if your going to buy any of them, you might aswell buy ones made by Sony that work together with your other Sony products effortlesly. It's [product] differentiation and convergence at the same time.

Well, if I buy the Sony Shelf Audio System, I can get music off PS3/ Sony's GRID and play them on it... cool. Or, If I buy a Sony PDA, I can control all my Sony Products.. cool. If I buy a Sony HDTV..... See it yet?

Microsofts going to put it all in one box uh? They going to start selling ready mades housing units now too???

So yeah Vince's post is food for thought but in the end acid-reflux causing heartburn is a b!tch.

Only get burned if you don't know what your talking about.

I think you're assuming everyone's a techno-geek. Provided you as Joe Consumer (or Jane for that matter) even understand the concept of this Cell/OS thing you're trumpeting and the (percieved) benefits it might offer

Ohh, I totally understand, I usually harp on people for thinking close minded that all are as well educated in this as we are.

I can't say yes or no to this as I don't have it and don't work for Sony, but I do know that I can already merge amany things in my house together if I really wanted to. But, with Windows and seperate products with seperate standards from diffrent companies, it's a total hassle like you said.

But, if everythings running the same OS, using the same hardware architecture, by the same standards, and probobly from the sam comapny.... It should (unless Sony royally fucks up) be so easy to use and add to that a frickin baby could do it.

Thats the beauty, it's all the same, based on one architecture, one OS, one standard/protocol.... I mean, common


PS. I think it's a totally cool idea and m just talking about it in the abstract, whether or not they can pull it off is another thing, but the argument is valid and the pieces fit - they just need to do it.

 

[Vince]

Sony also pissed off a lot of developers with the PS2. Development costs and times are FAR higher than they could have been, and it's kinda put Sony at a disadvantage. One of the reasons the PSX was so popular was how easy it was to get a game on it. The PS2 was the opposite

To add to Crazyace.. here's a hypothetical... how much more/less would a developer make if they could do away with a traditional publisher and sell it on ther 'Net. Hypothetically speaking.

Just thinking outloud, but what if - I dunno, say XBox/LIVE! - had a service where you could go there, browse threw games and descriptions and videos and select one which you'd download, decompress, and play from your HD or prefferably some form of Recordable Media (CD-R, a DVD format, ect)

Obviously, you'd need some form of DRM, ect, but hypothetically, would developers be pen to this? I'm just curious...

Faf, Archie, Ace??

 

[nonamer]

To add to Crazyace.. here's a hypothetical... how much more/less would a developer make if they could do away with a traditional publisher and sell it on ther 'Net. Hypothetically speaking.

Dismally! Since that gives no piracy protection and is the equivalent of give the software away!

 

[bryanb]

You're right about Namco. They are underperforming lately.

Once again, MS costs have been exagerated and their revenues are understated.

They've sold 20 millon games and have 30% 1st party penetration. This means that they have sold 6 million first party title = $30 * 6 = $180 million. The 14 million other titles have generated another $7 * 14 = $98 million. Extra controllers have generated around 5 million * $20 = $100 million at least.

This brings the revenue to around $378 million + $290 * 3 million + $190 * 2 million = $1.63 billion, which is a billion shy of the costs you cited. In other words, they aren't as far away as you think, especially when you realize that there's no way the Xbox cost more than $250 to manufacture at this point.

I imagine that MS will lose another $1 billion this year on the Xbox through June, get their 9 million users, break even in 2004 with 18 million users, and make $1-2 billion in 2005 with 27-32 million userbase, making the whole thing a wash. Not a bad way to enter the market the first time out.

Johnny what kind of strang math are you practicing?

MS didn't sell 20 million games. As of July NPD data had their numbers pegged in the US to 10 to 11 million. You can even find the NPD numbers here in a separate thread. If they said they sold 20 million then they are lying.

Since when does MS get 20 bucks for every extra controller they sell? Not hardly likely.

I also forgot to add Microsoft's own labor costs. I'd imagine they probably have a couple hundred people total on this project (dev, sales, marketing). So let's say another 80 to 100 million.

And of course their XBox Live costs. Lets peg those conservatively so far at 300 million.

3.1 Billion total Xbox expenses
0 XBox profit

Intel and Nvidia are sucking up around 80 bucks per XBox. Microsoft will never have a profitable XBox in the 200 dollar price range.

I wonder how many titles Microsoft would need to sell per Xbox to see a profit. 20? Ha, so laughable impossible.

 

[Brimstone]

You're right about Namco. They are underperforming lately.

Once again, MS costs have been exagerated and their revenues are understated.

They've sold 20 millon games and have 30% 1st party penetration. This means that they have sold 6 million first party title = $30 * 6 = $180 million. The 14 million other titles have generated another $7 * 14 = $98 million. Extra controllers have generated around 5 million * $20 = $100 million at least.

This brings the revenue to around $378 million + $290 * 3 million + $190 * 2 million = $1.63 billion, which is a billion shy of the costs you cited. In other words, they aren't as far away as you think, especially when you realize that there's no way the Xbox cost more than $250 to manufacture at this point.

I imagine that MS will lose another $1 billion this year on the Xbox through June, get their 9 million users, break even in 2004 with 18 million users, and make $1-2 billion in 2005 with 27-32 million userbase, making the whole thing a wash. Not a bad way to enter the market the first time out.

I have no idea about the total profit and loss sheet of Microsoft when it comes to the X-Box, but I don't think it really matters in the long run. The X-Box is about establishing a beachead in the console market and they've accomplished that. X-Box live will probably loose a lot of money also, but in the long run it will help them establish brand recognition when it comes to online gaming.

The way AOL has a huge lead over MSN is something M$ seems to have learned from. Sony is going to have to excute well to combat M$ in the console arena.

 

[Mark Cicero]

I don't understand why everyone is so focused on saying that if Xbox doesn't make a profit then MS has lost everything. Xbox is such a minor subsidiary at this point that it is barely mentioned at all in the year end financial reports. (And just for Vince's "prove it"-ness, there's a summary of it in part I, item I, products; and a brief mention in part I, item 7 revenue. Aside from that I can't find any more).

What if Xbox isn't supposed to make money but just try to break even? It makes a lot more sense for that senario to be in place with a 9 million projection for the end of the year than it is for there to be some sort of profit at the end of the tunnel. Once MS entered the market the rules changed, the winner win not be the one with the largest profit margin but the one who keeps consumer consciousness for two succeeding systems which brings me back to my Xbox3/PS4 will decide the war idea. As for 9 million not being close to 50 million, well, what part of "this round is to prove that its not a joke, next round is where the action will be, and the aforementioned third round ending it all" is not being understood?

Do you own a TV? a CD Player? Shelf Audio System? Cell Phone? DVD Player? PS2? PDA? Computer? Telephone? Or any other the thousands of other products Sony offers?
Well, then the idea is that if your going to buy any of them, you might aswell buy ones made by Sony that work together with your other Sony products effortlesly. It's [product] differentiation and convergence at the same time.
Well, if I buy the Sony Shelf Audio System, I can get music off PS3/ Sony's GRID and play them on it... cool. Or, If I buy a Sony PDA, I can control all my Sony Products.. cool. If I buy a Sony HDTV..... See it yet?

Just for the record, none of the electronics in my house come from sony since they generally seem to be overpriced dodads that are easily found in a much nicer, and cheaper, form outside of that pretentious religious-experience-in-electronics-temple called the sony store.

And for the record, my comment about MS putting everything into a huge ass box was originally intended to be a funny sarcastic point that would leave everyone in hysterics. Apparently I'm not as funny at 11:30 at night as I thought I was.

 

[Gollum]

This always has to end in a pissing contests? Anyway, both sides have made some valid points, no need to repeat them.

It amazes me though, how some people always think they can predict the future. Like Vince, man calm down a bit about all those great Sony products you keep raging about, I am not following this forum closely but you really do sound like you get paid for this. Like it or not, a large majority of people just buys products without considering how their devices can work together flawlessly with their game console and that isn't going to change within the next few years. You are taking a niche group of people (enthusiasts and in your case apparently Sony fans while at it) and concluding from there to how you think the rest of the population will make their purchasing decisions in the next several years? Not bloody likely, it doesn't work that way! And even so, assuming people care about their cellphone integrating with their DVD-Player, you completely fail to mention that there are dozens of other great manufacturers of electronic goods out there that often make even better products than Sony and offer tham at a better price too! Surprise, they can offer most of what Sony offer too, sans a game console maybe but so what? For Sony's living-room dominance you preach about to happen, they'd first need to butcher their competition in all those other markets to carry more weight (or co-operate on common standards, which given their past doesn't seem very likely), otherwise its not gonna make a whole lot of a difference in this "war"...

 

[marconelly!]

but the one who keeps consumer consciousness for two succeeding systems

Maybe you should expand that to 'three' because PS2 has sure done a great job in keeping and expanding consumer consciousness from PS1

Just for the record, none of the electronics in my house come from sony since they generally seem to be overpriced dodads that are easily found in a much nicer, and cheaper, form outside of that pretentious religious-experience-in-electronics-temple called the sony store.

I have no idea how you got such weird impression about their stores, but know that you are, at the very least, depriving yourself of some of the best display technologies available today.

I hope you realize that it's just as silly as people depriving themselves of Microsoft products because they have personal issues with the company's politics.

For Sony's living-room dominance you preach about to happen, they'd first need to butcher their competition in all those other markets to carry more weight

It is my impression they have already done that. Their home electronic devices are by far most sold (from the stats I saw in some magazine once)

 

[zurich]

I thought Panasonic/Mashitsiaiurusiua was #1.

Besides, Sony doesnt have any offerings for the very very large $199 crowd that Zenith/RCA soaks up. Much like how the TNT2 Vanta was NVIDIAs cashcow for the past many years, low end = market penetration.

zurich

 

[Johnny Awesome]

Bryanb:

Xbox is running at a 4.3:1 software ratio (probably higher now) and MS has sold roughly 5 million Xbox units. That's around 20 million games (I underestimated it actually). Even if you're right and MS has lost 1.3 billion or something, it's inconsequential. It's a long term investment in the entertainment market that will eventually pay off in spades.

General thoughts:

Sony's HDTVs don't offer as good value as other brands for instance, but they are pretty nice televisions. Their DVD players are a mixed bag, but sell fairly well. They aren't dominating the market or anything. Bluetooth is catching on pretty fast though. Sony better hurry up unless they want to confuse the market.

Besides, do you honestly think the US government is going to allow a foreign company to control the creation, sales, and delivery of all electronic entertainment? Dream on.

The problem I have with some Sony advocates (not all, mind you) is that it's a constantly moving target. When the DC had better games, it was wait for Sony games with kick ass graphics. When the PS2 finally arrived it was lacklustre visually and many Sony fans started saying "it's all about the gameplay".

Now that the Xbox has arrived with a 4-ports/hard drive/ethernet which add significant features and gameplay improvements (see Blinx, Project Ego, Xbox Live, audio ripping, no memory cards) that consumers will eventually warm up to and developers are embracing, the Xbox software library is catching up to the PS2. Now it's no longer about the games. Now it's about the amazing "cell and PS3".

It's all smoke and mirrors, but if you look at the situation objectively Microsoft has 5 million set top boxes out there with network capabilities and mass store and Sony has around 150,000. If Sony fans really think that everything is about digital home entertainment centers this generation (which it isn't, it's about games) then Sony may as well pack it in right now.

I have a love of Xbox and welcome MS as competition to Sony (but I'm not a huge MS fan), but I'm not blind to the problems Xbox faces: No Japanese RPG franchises of worth, poor sales in Japan, apprehensive European market, newbie status, no backwards PSX compatibility, 30 million units behind Sony, only around 1/2 the number of titles this year in the US as the PS2.

But I'm also not blind to their strengths: MS money and persistence, huge western developer support, great hardware, ability to absorb losses unnoticed by shareholders, great marketing advantage through PCs, .NET proliferation, good partnerships with companies like RCA, Vivendi Universal, NVidia, Intel, AMD, solid online strategy, more flexible hardware (hard drive, 4-ports, ethernet).

This is going to be a good fight. Sony will win Round 1, but Round 2 will be VERY interesting, despite the fact that many people seem to think that Sony/IMB/AOL/Toshiba/Cell are going to steamroll the world without MS/Phillips/Vivendi Universal/RCA/Verizon/NVidia/Intel/AMD/ and others doing anything about it.

Think about how hard it is to explain the Xbox hardware advantages to consumers who are used to the same thing over and over, let alone "crazy concepts" like cell. Sony has some hurdles of their own up ahead.

 

[Glonk]

Re: high dev costs not just for PS2....

Hi Glonk,

I think you'll find that the high dev costs are for any projects on next gen consoles, not just PS2.... This is more to do with the high expectations in terms of audio and graphics more than anything else..
High end 3D art packages have historically cost as much as devkits...

Many developers have stated that they've needed to employ several programmers whose sole job was optimizing the code for the VUs on the PS2, otherwise performance wouldn't be as good as it should be. Because it's also so much more difficult, it adds to the length of time it takes to makes games, which also increases costs...

It's not cheap on any platform, but PS2 is the most expensive. It's the most restricted hardware wise, and easiest to bottleneck.

 

[bryanb]

Bryanb:

Xbox is running at a 4.3:1 software ratio (probably higher now) and MS has sold roughly 5 million Xbox units.

I'm just not interested in a 4.3:1 number. Where did it come from? Its a magical mystery number fabricated by Microsoft.

I can show you NPD numbers on this site that detail the top 500 selling games from July of this year. You can total the numbers up for yourself. Its shows the Xbox having shipped around 7 to 8 million games and NPD admits to only polling 80% of total sales.

So where did the other 10 million games that the Xbox shipped come from? Not from the EU. More magical mystery numbers.

Are you familiar with NPD? They report facts on the console industry. Unless you can show me FACTS about which games made up the 20 million figure for the XBox, then I have no choice but to believe it as pure MS marketing speal.

 

[StefanS]

General thoughts:

Sony's HDTVs don't offer as good value as other brands for instance, but they are pretty nice televisions. Their DVD players are a mixed bag, but sell fairly well. They aren't dominating the market or anything. Bluetooth is catching on pretty fast though. Sony better hurry up unless they want to confuse the market.

As far as I know Sony is supporting bluetooth, especially since they teamed up with Erricson, developer of bluetooth, to create the brand SonyErricson for the mobile market. I have always liked Erricson, so to me their new mobiles seem to be very good.

But some of their other accessories aren't. E.g.: Their cybershot, which is not a very good product. Average resolution, no good optics and only few lumen.

Now that the Xbox has arrived with a 4-ports/hard drive/ethernet which add significant features and gameplay improvements (see Blinx, Project Ego, Xbox Live, audio ripping, no memory cards) that consumers will eventually warm up to and developers are embracing, the Xbox software library is catching up to the PS2. Now it's no longer about the games. Now it's about the amazing "cell and PS3".

Frankly, only very few Xbox games use the 4 gamepadports. For people who want to play with 3 fellows the GCN is obvisously the better choice. BTW I would not count that as an improvement since this feature has been arround since the N64.

But audioripping and the use of the harddisk is adding to the gameplay. Especially if you're not satified with the sound track of a game.As far the hard disk it has been only integrated into the gameplay by one game (Blinx) so far, so we'll see how this will develope.

But the harddisk has also some downsides: Piracy. You can already get copies of several Xbox titles fairly easy on the Net and play them with a modchip. That's why MS had to alter their design of the Xbox and this has caused some additional costs I guess.

 

[aneep]

Bryanb:

Xbox is running at a 4.3:1 software ratio (probably higher now) and MS has sold roughly 5 million Xbox units.

I'm just not interested in a 4.3:1 number. Where did it come from? Its a magical mystery number fabricated by Microsoft.

I can show you NPD numbers on this site that detail the top 500 selling games from July of this year. You can total the numbers up for yourself. Its shows the Xbox having shipped around 7 to 8 million games and NPD admits to only polling 80% of total sales.

So where did the other 10 million games that the Xbox shipped come from? Not from the EU. More magical mystery numbers.

Are you familiar with NPD? They report facts on the console industry. Unless you can show me FACTS about which games made up the 20 million figure for the XBox, then I have no choice but to believe it as pure MS marketing speal.

CSFB August report pegged Xbox software to hw ratio at 4.58:1 and CSFB based its report on NPD Funworld data

the difference between xbox and ps2 ratio is almost the same as the difference between GC and Xbox ratio

-aneep-