NPD May 2009

[RancidLunchmeat]

<modEdit>

Certainly, because there are no console wars. Did they want to be where PS2 was last-gen and where the Wii is this-gen? Yes. Do you honestly believe that they set off to be #2?

Where the PS2 was last generation in terms of WHAT? What are you talking about? You ADMIT and actually have been CHAMPIONING the idea there is no such thing as 'console wars' so what are you talking about here? #2 in terms of what? HARDWARE SALES?

If you think MS entered into this business to sell HARDWARE, then you are completely wrong in your basic assumptions.

I agree on software, sure. But yes, they do care about selling xboxes, now that they're in the xbox business. They didn't burn billions on a whim! It's no coincidence that the 360 followed and maybe even perfected Sony's Playstation strategy.

No... No... They don't. They are only selling hardware because they couldn't sell their software because Sony and Nintendo weren't willing to pay royalties when they had the market all locked up themselves.

If you think that MS wouldn't drop out of the consoling gaming market tomorrow if they were able to license a software package to both Nintendo and Sony then you don't understand the entire business model of MS.

I guess we'd have to agree to disagree. It's doing better, and certainly doing better than Sony (who is doing poorly) but I have a hard time seeing an actual success there. Only if you do as TheChefO suggests and remove the Wii from the equation.

Who cares about 'doing better'? MS is either making a profit or damn close to it, selling the 360 HARDWARE and SOFTWARE and has firmly entrenched themselves as THE gamer's console.

When you used to see every single movie show gamers using Dualshock controllers, they are now seen using 360 controllers.

Profitability, name recognition, game library, community development, the 360 is on top of the world. What they have done in TWO generations (or 1.5 generations since they ended the Xbox quickly or launched the 360 "too soon), has been REMARKABLE.

Of course it's true that what Nintendo has done has been SUPERCALFRADALISTICOUSEXPEALIDOUIUS (yes, I spelled that wrong), but just because what Nintendo has done has been UNWORLDLY doesn't mean that what MS has done isn't 'well'.

Which is what you said.

MS has done far better than 'well.'

 

[obonicus]

Sorry, but this is a just a completely retarded stance.

If you believe that MS ever believed they would make a profit on the Xbox, or that their primary goal with the Xbox was to be a profitable enterprise then you seriously need to go do some reading and look up some historical facts.

I'll give you the fact that MS didn't intend to suffer the degree of losses that they did with the Xbox, but to say that MS ever entered into the console market with the idea that the Xbox would be profitable is chasing the end of a rainbow.

MS knew well and good they'd never PROFIT from the Xbox, the only question was how much they would LOSE compared to the inroads they would make.

In fact, I'd say that so far in this generation, the main selling point and the keystone of the success of the 360 is LIVE! and that was achieved from the foundation that was built by the original Xbox.

I don't really know how you argue with that, actually.

But hey.. I'm willing to read your rebuttal.

How about if I tell you to actually read what I'm saying? I admitted that they accepted losses on the Xbox. What Asher said, and I believe you agreed with is that Microsoft never intended to make a profit on the Xbox -- from his making a distinction between Xbox and Xbox(1) I can only assume that he means making a profit on consoles. And again, by the way the 360 learned from the PS2, it's clear that, along with wanting a way into the living room, they wanted a slice of Sony's pie. And whether or not they wanted to sell hardware or not is irrelevant. Once they're in the business, do you really think that they didn't enter the hardware business very seriously, and amped it even higher with the 360? The xbox business isn't just a hobby of Microsoft's.

 

[Asher]

Most know this? And yes, I'm looking at the original Xbox. What about it? You mean how they killed it abruptly when it became clear that they'd never make a profit on it?

No, that's not why the Xbox was killed. It was very clear that it would not turn a profit from the beginning.

The Xbox(1) was killed because MS saw the opportunity to preempt the PS3 before its release. Due to the licensing schemes and mistakes MS made, the Xbox was losing them a lot of money and there was no chance of it dominating the PS2. They needed the next gen to do it, so they rushed to it and killed the Xbox ASAP.

Again, this is coming down to MS caring more about keeping Sony and its hyped "Entertainment Computers" at bay than generating massive amount of profit and outselling "Cooking Mama" to elderly grandmothers.

Seriously, this idea that the xbox never had to turn a profit seems like revisionism.

It is absolutely not. Everyone has known this from the start. Read "Opening the Xbox".

So, wait. Why's MS making such a big push into the Wii's territory, then?

Low-hanging fruit. It's a goal, just a secondary goal.

 

[Asher]

Certainly, because there are no console wars. Did they want to be where PS2 was last-gen and where the Wii is this-gen? Yes. Do you honestly believe that they set off to be #2?

This strawman is getting to be a bit long in the tooth, don't you think?

No one is saying MS wanted to be #2. They wanted to beat Sony and control digital distribution of media to the living room. These are very different arguments.

Of course MS wants to be #1 in the markets they're in. But if you think Microsoft considered Nintendo a threat when they entered the market, you're very wrong. The Xbox exists to combat a threat MS perceived to their OS dominance. Sony was starting hyperbole before the PS3 was released raving about how it'd transform the living room with an Entertainment Computer. Them were fighting words, so MS came and fought.

Now Nintendo has done wonderful things expanding the gaming market and making money. But the console gaming market for MS is a means to an end to make sure MS is where "computers" are for consumers. That's their overriding concern.

And this is not revisionist. This has been known for many, many years. I've been talking about it and reading about it since 2000 at least.

 

[obonicus]

No, that's not why the Xbox was killed. It was very clear that it would not turn a profit from the beginning.

The Xbox(1) was killed because MS saw the opportunity to preempt the PS3 before its release. Due to the licensing schemes and mistakes MS made, the Xbox was losing them a lot of money and there was no chance of it dominating the PS2. They needed the next gen to do it, so they rushed to it and killed the Xbox ASAP.

That's exactly what I said.

Again, this is coming down to MS caring more about keeping Sony and its hyped "Entertainment Computers" at bay than generating massive amount of profit and outselling "Cooking Mama" to elderly grandmothers.


It is absolutely not. Everyone has known this from the start. Read "Opening the Xbox".


Low-hanging fruit. It's a goal, just a secondary goal.

So, just to see if I got this right: they wanted to spend billions to get marketshare from Sony with no intention of ever turning a profit? This whole endeavor to become the 'computer in the livingroom' was never meant to make any money? It was just something to block Sony from making money, but without any intention to take a share of that money for themselves?

 

[RancidLunchmeat]

How about if I tell you to actually read what I'm saying? I admitted that they accepted losses on the Xbox. What Asher said, and I believe you agreed with is that Microsoft never intended to make a profit on the Xbox -- from his making a distinction between Xbox and Xbox(1) I can only assume that he means making a profit on consoles. And again, by the way the 360 learned from the PS2, it's clear that, along with wanting a way into the living room, they wanted a slice of Sony's pie. And whether or not they wanted to sell hardware or not is irrelevant. Once they're in the business, do you really think that they didn't enter the hardware business very seriously, and amped it even higher with the 360? The xbox business isn't just a hobby of Microsoft's.

I read what you said previously. I read what you just said here. And I still have no idea how any of that leads anybody to the conclusion that MS isn't doing 'WELL' with the 360.

The only distinguishing factor that I can see is where you say MS wanted 'a slice of Sony's pie.'

MS NEVER wanted 'a slice of Sony's pie.' What MS wanted is to sell to Sony the software that would enable and control digital distribution and to PREVENT Sony from position themselves to take it all.

Sony NEVER HAD ANYTHING that MS wanted. Sony was only positioning themselves to be able to take it in the future.

This is a game of chess, not checkers. MS saw that if Sony was left unchecked, they'd be able to move into checkmate. (Which is what 'unchecked' actually means, fyi.) MS's purpose was to throw as many pawns, knights, bishops, etc.. into Sony's way that they couldn't accomplish checkmate.

And they have completely accomplished that goal. In fact, they have so exceeded their original intent that now people like you believe that MS's goal was to remove Sony completely from the playing field.

That's not the case. MS has many different business relationships with Sony. MS isn't in the 'gaming console' business to DESTROY Sony. They are only there to make Sony accept MS as the software provider.

That's it.

I'll say it again: MS would GLADLY get out of the console hardware manufacturing business the second that Sony agrees to pay MS royalties for the software to run the consoles.

MS understands their business is SOFTWARE and that the profit margin on SOFTWARE has virtually no ceiling while the profit margin on hardware has a very defined ceiling.

 

[obonicus]

This strawman is getting to be a bit long in the tooth, don't you think?

What strawman? We have people arguing that MS is a success, while ignoring the 500lb gorilla in the room that is Nintendo.

No one is saying MS wanted to be #2. They wanted to beat Sony and control digital distribution of media to the living room. These are very different arguments.

Of course MS wants to be #1 in the markets they're in. But if you think Microsoft considered Nintendo a threat when they entered the market, you're very wrong. The Xbox exists to combat a threat MS perceived to their OS dominance. Sony was starting hyperbole before the PS3 was released raving about how it'd transform the living room with an Entertainment Computer. Them were fighting words, so MS came and fought.

What they intended to do doesn't matter. It's what I've been saying, that simply meeting their goals doesn't mean they're a success. You have to actually succeed to be a success. Again, the 500lb gorilla.

That's why I keep harping on #2: because people are saying 'well, MS beat Sony, mission successful'.

Now Nintendo has done wonderful things expanding the gaming market and making money. But the console gaming market for MS is a means to an end to make sure MS is where "computers" are for consumers. That's their overriding concern.

And this is not revisionist. This has been known for many, many years. I've been talking about it and reading about it since 2000 at least.

But that hasn't happened! The box in the livingroom is Nintendo's. Maybe it's less capable, but that hardly matters when it's not yours.

 

[obonicus]

I read what you said previously. I read what you just said here. And I still have no idea how any of that leads anybody to the conclusion that MS isn't doing 'WELL' with the 360.

Alright. For certain values of 'well', MS is doing 'well'.

I'll say it again: MS would GLADLY get out of the console hardware manufacturing business the second that Sony agrees to pay MS royalties for the software to run the consoles.

I think this was their strategy at some point, but I think that now, with the investment in hardware MS made they're in it for the long haul. I think that MS isn't as hardware-shy as you make them out to be -- just look at the Zune, I don't see them trying to leverage that software onto other platforms.

 

[RancidLunchmeat]

So, just to see if I got this right: they wanted to spend billions to get marketshare from Sony with no intention of ever turning a profit? This whole endeavor to become the 'computer in the livingroom' was never meant to make any money? It was just something to block Sony from making money, but without any intention to take a share of that money for themselves?

You can't honestly be this dense, you must just be trolling at this point.

And as much as I hate to feed trolls, I'll explain it to you one last time.

MS never cared and still doesn't care about who wins the 'console wars' whether they are real or imaginary. All MS cares about is making sure that they have a stake in the FUTURE of entertainment which means controlling the access of digital distribution to the living room.

If you know your history, you'd know that MS approached Sony when they made the PS2 (just like Sony approached Nintendo before they made the PS1) and offered them software solutions for their hardware.

Sony balked just as Nintendo had balked earlier when Sony wanted to provide Nintendo with hardware solutions.

Hell. Do you think Sony even WANTS to be in the GAMING market? Answer that question.

Sony only got into the gaming market because Nintendo wouldn't play ball. MS only got into the gaming market because Sony wouldn't play ball.

Neither Sony NOR Microsoft really WANT to manufacture hardware for GAMING. They are BOTH in this 'game' because they want to control the living room.

Nintendo is the only one who has no designs on 'controlling' anything and are focused on GAMING which is why they are having the success that they are.

None of this is really very complicated if you've been following along.

 

[obonicus]

You can't honestly be this dense, you must just be trolling at this point.

And as much as I hate to feed trolls, I'll explain it to you one last time.

MS never cared and still doesn't care about who wins the 'console wars' whether they are real or imaginary. All MS cares about is making sure that they have a stake in the FUTURE of entertainment which means controlling the access of digital distribution to the living room.

If you know your history, you'd know that MS approached Sony when they made the PS2 (just like Sony approached Nintendo before they made the PS1) and offered them software solutions for their hardware.

Sony balked just as Nintendo had balked earlier when Sony wanted to provide Nintendo with hardware solutions.

Hell. Do you think Sony even WANTS to be in the GAMING market? Answer that question.

Sony only got into the gaming market because Nintendo wouldn't play ball. MS only got into the gaming market because Sony wouldn't play ball.

Neither Sony NOR Microsoft really WANT to manufacture hardware for GAMING. They are BOTH in this 'game' because they want to control the living room.

Nintendo is the only one who has no designs on 'controlling' anything and are focused on GAMING which is why they are having the success that they are.

None of this is really very complicated if you've been following along.

Your diatribe on the history of gaming notwithstanding, you realize you didn't answer my question, right? Did Microsoft intend to make money off consoles at some point or were they doing this just for kicks?

Spoiler

Of course they did. So let's drop the notion that actual profit is unimportant to these companies. Were they willing to take big losses to gain their foothold? Yes, of course, but they certainly intended to get their investment back at some point! Otherwise there'd be no point.

 

[RancidLunchmeat]

What strawman? We have people arguing that MS is a success, while ignoring the 500lb gorilla in the room that is Nintendo.

I'm just curious... How is it that you sleep at night?

Because somebody else is ALWAYS doing better that you.

Whatever it is that you do, whatever it is you think you are good at, somebody else... somewhere, is better at it than you.

Does that mean that you aren't doing WELL?

MS is a success for what it was THEY wanted to achieve.

What Nintendo wanted to achieve is COMPLETELY DIFFERENT from what MS wanted to achieve.

In fact, that's so completely obvious that Nintendo doesn't even attempt to compete with MS or Sony on these issues.

There is no 500LB gorilla in the room, because selling game consoles certainly was never MS's goal in getting into this business. And if it was Sony's intent, that's only because they got glassy eyed at the success of the PS2.

Honestly.

I just don't get how you don't see that MS doesn't care for one second how many consoles Nintendo sells. Because the product that Nintendo is selling is not only completely different than the console that MS is selling, it's not even REMOTELY connected.

If Nintendo were offering the Wii and had a feature included like Twitter or Facebook or something, then MS might worry.

But as it is, Nintendo is offering a PURE gaming experience for LOCALIZED players.

The bottom line is that Nintendo has essentially gone BACKWARDS from where MS (and Sony) want virtual interaction to go.

 

[obonicus]

MS is a success for what it was THEY wanted to achieve.

What Nintendo wanted to achieve is COMPLETELY DIFFERENT from what MS wanted to achieve.

Okay, so we're dealing with meaningless metrics. We're all winners here! Except for Nintendo, they're actually making money.

 

[RancidLunchmeat]

Your diatribe on the history of gaming notwithstanding,

Right. Let's put the facts aside for a second and deal with a strawman because those are more fun!

you realize you didn't answer my question, right? Did Microsoft intend to make money off consoles at some point or were they doing this just for kicks?

Of course they did. So let's drop the notion that actual profit is unimportant to these companies. Were they willing to take big losses to gain their foothold? Yes, of course, but they certainly intended to get their investment back at some point! Otherwise there'd be no point.

Okay. I've written message after message trying to explain this to you. Over the course of this thread, others have tried to jump in here to try to help explain it to you and you still don't seem to get it.

It's very simple and I'm sorry that you don't seem to understand the big picture.

What is especially confusing to me is that you've now acknowledged that MS's investment in the Xbox lead to the success of the 360.

If you understand that basic principle, the rest should really flow rather easily.

NOBODY CARES ABOUT NINTENDO AND THEIR SELLING VIDEO GAMES OR VIDEO GAME CONSOLES.

Selling video games and video game consoles isn't why MS or Sony are in the video game business.

The only reason that people even BELIEVE that Sony is in the video game business is because they've been in it for two generations and had so much success with the PS2.

You would think that any intelligent person could look at the PS3 and realize that Sony doesn't give A DAMN about selling VIDEO GAMES because they were more intent on selling the CELL and BLU-RAY.

Microsoft is in the SAME POSITION as Sony, only they don't have a HARDWARE stake that they are trying to push. Which is why the 360 is so much less expensive.

Christ. How hard is this to understand? Sony & MS are both in the console business for reasons OTHER THAN providing the 'best gaming experience'.

Sony wants to push its exclusive hardware, MS wants to push its exclusive software. And of course, Nintendo says 'HEY! We can make a profit by just selling fun games!'

But no matter how you try to SLICE THE PIE, there's no way you can say that MS is doing ANY WORSE than 'Well'.

In fact, it's pretty clear that MS has been doing AMAZINGLY well.

 

[obonicus]

Right. Let's put the facts aside for a second and deal with a strawman because those are more fun!

It's not a strawman when someone actually says it. In fact, you keep saying that profit doesn't matter because none of the players (besides Nintendo) in the videogame business are serious about it and wish they were doing something else.

Stripping out a few ad hominems.

NOBODY CARES ABOUT NINTENDO AND THEIR SELLING VIDEO GAMES OR VIDEO GAME CONSOLES.

Selling video games and video game consoles isn't why MS or Sony are in the video game business.

The only reason that people even BELIEVE that Sony is in the video game business is because they've been in it for two generations and had so much success with the PS2.

You would think that any intelligent person could look at the PS3 and realize that Sony doesn't give A DAMN about selling VIDEO GAMES because they were more intent on selling the CELL and BLU-RAY.

Microsoft is in the SAME POSITION as Sony, only they don't have a HARDWARE stake that they are trying to push. Which is why the 360 is so much less expensive.

Christ. How hard is this to understand? Sony & MS are both in the console business for reasons OTHER THAN providing the 'best gaming experience'.

Who mentioned the 'best gaming experience'. I'm talking about profit. You know, that thing neither Sony nor Microsoft are actually after when they engage in business? You're doing your very best to avoid talking about profit, rambling about things you don't really know about. But that's okay, I'm going to nod and agree with whatever you say. I'm done here.

Neither Sony nor Microsoft are in the games industry to actually turn a profit despite spending billions of dollars in R&D to enter this market. To which I say: mission accomplished, Sony. Mission accomplished.

But no matter how you try to SLICE THE PIE, there's no way you can say that MS is doing ANY WORSE than 'Well'.

I've acknowledged well.

In fact, it's pretty clear that MS has been doing AMAZINGLY well.

And we're back to the the beginning. Okay. You win. Microsoft is doing amazingly well, Nintendo is doing groin-grabbingly well, while Sony is merely 'okay'. I like your world, because in it as long as you set your own goals, you can never fail. We're all winners. But I'm done here.

 

[RancidLunchmeat]

I've acknowledged well.

I must have missed that, but that was the entire point of pretty much at least 2 pages of this thread.

Because you stated that the 360 wasn't doing well because it was 2nd to Nintendo in hardware sales.

As long as you've come around to recognizing that the 360 is doing well or doing well at what they intended to do, then we don't really have anything else to discuss.

 

[mrcorbo]

Not at all. That's what tests are, the idea is to have a set of standards to measure others against. But I think I'm going OT here.

I think what you are thinking of is "relative success" rather than "success". There's a difference between not doing "as well" and not doing "well".

 

[mrcorbo]

Neither Sony nor Microsoft are in the games industry to actually turn a profit despite spending billions of dollars in R&D to enter this market. To which I say: mission accomplished, Sony. Mission accomplished.

The goal in buisness isn't always profit per se. It's return on investment. That return can come in the form of profit, yes. It can also, though, come in the form of acquired assets or even increases in the value of existing assets. In the case of MS one asset they have aquired is a thriving digital distribution buisness that I am sure they feel will grow to the point that the revenue it generates will lead to significant profit at some point in the future.

 

[Teasy]

MS and Sony aren't in the video game business to sell consoles or video games? In fact they aren't actually in the video game business at all? I've heard it all now... Strange that Sony were in the video game business last gen when they dominated it, now that they're doing poorly they aren't in it all of a sudden. Its like the kid in the play ground who would claim he was just out for the excercise whenever he was losing

 

[ShadowRunner]

Yep that was a stupid argument. PS3 doesnt exist to push Blu Ray, there would still have been a PS3 without it. Blu Ray exists because there was a PS3 in development that could make it a success.

 

[Nesh]

So, just to see if I got this right: they wanted to spend billions to get marketshare from Sony with no intention of ever turning a profit? This whole endeavor to become the 'computer in the livingroom' was never meant to make any money? It was just something to block Sony from making money, but without any intention to take a share of that money for themselves?

Its simple. The main purpose of the XBOX brand had to do with non-monetary gains.

These non-monetary gains would serve as a safeguard of what MS had already being doing, help them expand on what they had being doing and prevent potential competitors into threatening their long term plans. In other words this still has to do with profits. But not necessarily with gaming related profits

What many of us find hard to understand to are business strategies that arent directly related to money.

For example businesses like Starbucks may continue to support non profitable chains in some areas simply to maintain the strength of their brand name and not let any potential competitor reduce the presence of their brand

These indirectly help the company's profits though