NPD May 2009

obonicus said:
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?

Seriously, this idea that the xbox never had to turn a profit seems like revisionism. Of course MS wanted to turn a profit! Sure, they certainly realized they would have to take heavy losses to get anywhere in the industry, but that's not the same as them never intending to make a profit. MS really isn't in the business of spending billions of dollars with no hope of ever seeing a return.
Click to expand...

Actually no, MS stated multiple times during the leadup to launch of the Xbox that they did not expect to make a profit from the Xbox effort until the 2nd and most likely 3rd generation of consoles. So they are actually slightly ahead of the goals they set when they decided to enter the console arena.

Unfortunately I can no longer find transcripts from their conference calls prior to the launch of Xbox where they made those statements to their investors.

Regards,
SB
 
RancidLunchmeat said:
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.
Click to expand...

Actually MS DOES care about their hardware as well as the software. While they may view the hardware as a means to sell their software (games and Live services), the hardware is most definitely important.

It isn't ONLY about preventing others from being the dominant media gateway.

Whatever their motivation is they are quite interested in that. As controlling the hardware means you control the licensing of any software.

While prior to the launch of their console efforts they would have been happy to provide the software and server structure to Nintendo or Sony, now that they are in the console arena, the are FAR more interested in controlling their own hardware.

As it allows them to maximize their profits if it succeeds.

Regards,
SB
 
Silent_Buddha said:
Actually no, MS stated multiple times during the leadup to launch of the Xbox that they did not expect to make a profit from the Xbox effort until the 2nd and most likely 3rd generation of consoles. So they are actually slightly ahead of the goals they set when they decided to enter the console arena.
Click to expand...
Huh since the xbox360 MS e+D have lost Billions (with a B not M)
 
zed said:
Huh since the xbox360 MS e+D have lost Billions (with a B not M)
Click to expand...

Yes but X360 is now operating in the black. IE - the overall Xbox investment still hasn't been profitable. But X360 is operating at a profit now.

The entire venture though hasn't had a positive monetary return on initial and continuing investment however.

I should have been more clear.

Either way, MS wasn't expecting the console to even operate in the black until 2nd gen (now) or 3rd gen. And they really weren't putting much into hoping it would operate at a profit in the 2nd gen though they admitted to the possibility that it had an outside chance to do that.

Regards,
SB
 
Silent_Buddha said:
Yes but X360 is now operating in the black. IE - the overall Xbox investment still hasn't been profitable. But X360 is operating at a profit now.

The entire venture though hasn't had a positive monetary return on initial and continuing investment however.

I should have been more clear.

Either way, MS wasn't expecting the console to even operate in the black until 2nd gen (now) or 3rd gen. And they really weren't putting much into hoping it would operate at a profit in the 2nd gen though they admitted to the possibility that it had an outside chance to do that.

Regards,
SB
Click to expand...

Are you sure about this? I took there statements in the past to mean that they didnt expect to turn a profit/break even on thier entire xbox buisness until 2nd/3rd gen, not that the would be in the red on a monthly/yearly basis the whole time...
 
Silent_Buddha said:
Actually MS DOES care about their hardware as well as the software. While they may view the hardware as a means to sell their software (games and Live services), the hardware is most definitely important.

It isn't ONLY about preventing others from being the dominant media gateway.

Whatever their motivation is they are quite interested in that. As controlling the hardware means you control the licensing of any software.
Click to expand...


No, you're wrong.

MS doesn't want to fall into the same trap that Sony fell into with the PS1 and PS2 and become a 'video game company'.

Sony didn't WANT to get into the video game business, they were forced there when Nintendo refused their advances and then they had such remarkable success they changed their business model.

Which would be great, if it weren't for the fact that this generation and the PS3 has proven that they would have been better off leveraging their success and putting pressure on Nintendo.

Sony could have had everything they wanted BEFORE the PS1 AFTER the PS2 if they would have stayed the course. Instead, they changed.

Just because MS might be successful (Ie: profitable) with the 360 doesn't mean that's where they EVER wanted to go or that they will continue down that path.

Sony had a PERFECT opportunity to bail out of the console market after the PS2 and just license software and hardware to Nintendo. They didn't do it because the Playstation brand was such a cash cow.

I think MS will bail out the INSTANT they have the opportunity. To sell their OS, their software, NATAL, etc.. to Sony or Nintendo and let them deal with the hardware issues while they get a commission based upon units sold with their software, just as they do with PC's.
 
RancidLunchmeat said:
I think MS will bail out the INSTANT they have the opportunity. To sell their OS, their software, NATAL, etc.. to Sony or Nintendo and let them deal with the hardware issues while they get a commission based upon units sold with their software, just as they do with PC's.
Click to expand...

It's your opinion, and you're welcome to it, but I think MS sees the 360 as their trojan horse into the living room and various other potential revenue streams. It's not really a game console at all, it's a general-purpose appliance with big software potential. MS would love for the 360 (or a derivative) to become the de facto standard cable TV settop box, among other things. The device could be used to drive revenues from so many of MS's IPs - Silverlight and VC-1 immediately spring to mind.
 
RancidLunchmeat said:
No, you're wrong.
Click to expand...

No, you're wrong. See how opinions work? It's much better to state your opinion. Put forth your reasons. State your arguments. Than to just try to shout someone down.

As to the rest, yes everyone is entitled to their opinion.

But considering MS stands to make far more money if they control the hardware, licensing fees, infrastructure, etc.

It'll be a cold day in hell before MS willingly drops console hardware.

Unless, as someone postulated earlier, console hardware becomes a standardized commoditized electronic gadget.

Regards,
SB
 
Silent_Buddha said:
No, you're wrong. See how opinions work? It's much better to state your opinion. Put forth your reasons. State your arguments. Than to just try to shout someone down.

As to the rest, yes everyone is entitled to their opinion.

But considering MS stands to make far more money if they control the hardware, licensing fees, infrastructure, etc.

It'll be a cold day in hell before MS willingly drops console hardware.

Unless, as someone postulated earlier, console hardware becomes a standardized commoditized electronic gadget.

Regards,
SB
Click to expand...

I agree.

MS at this point has learned more than they wanted to at the onset of the xbox project. But now that they are in the position they are in, there is no point in dropping out of a business they are making money in currently and where their competition on both ends, is pinned.

I project MS to grow profits in this gen AND next gen. They are positioned well and with the knowledge they've gained, they should continue to do well.

This isn't to say MS won't spin off the xbox brand as a separate company though...
 
RancidLunchmeat said:
No, you're wrong.

MS doesn't want to fall into the same trap that Sony fell into with the PS1 and PS2 and become a 'video game company'.

Sony didn't WANT to get into the video game business, they were forced there when Nintendo refused their advances and then they had such remarkable success they changed their business model.

Which would be great, if it weren't for the fact that this generation and the PS3 has proven that they would have been better off leveraging their success and putting pressure on Nintendo.

Sony could have had everything they wanted BEFORE the PS1 AFTER the PS2 if they would have stayed the course. Instead, they changed.

Just because MS might be successful (Ie: profitable) with the 360 doesn't mean that's where they EVER wanted to go or that they will continue down that path.

Sony had a PERFECT opportunity to bail out of the console market after the PS2 and just license software and hardware to Nintendo. They didn't do it because the Playstation brand was such a cash cow.

I think MS will bail out the INSTANT they have the opportunity. To sell their OS, their software, NATAL, etc.. to Sony or Nintendo and let them deal with the hardware issues while they get a commission based upon units sold with their software, just as they do with PC's.
Click to expand...

What are you talking about?

Sony initially got into bed with Nintendo by providing audio chips to the SNES and then to provide SNES with a CD ROM add-on. Nintendo cancelled the add-on because the intial contract gave Sony too much control of the actual licenses of the games that used the add-on.

Nintendo decided to use philips and Sony decided to go off on its own, which obviously makes sense since Sony is an electronics company. I don't see how you surmise that Sony was forced to get into the game business. Good thing Sony didn't produce audio chips or optical formats for NASA or Sony may have been stuck trying to launch its own space program if NASA decided to go with someone else.

It wasn't entering the video game market that was a bad move. The bad move was thinking that the Playstation brand could carry 2X the retail price of any mainstream console ever launched and despite adding a bunch of new untested tech into the machine, still maintain an aggressive price reduction schedule. They were wrong on both accounts. However, Sony hasn't damaged the "Playstation" brand enough that Sony can't release a more successful console next gen with a sound and rational strategy.

Furthermore, no one in their right mind that can't read the future would forgo the manufacturing of a successful product that generates billions of dollars in revenue and profits to sell licenses so that others can manufacture that product so they can see a fraction of those billions in revenue and profits.
 
Last edited by a moderator:
The bad move was thinking that the Playstation brand could carry 2X the retail price of any mainstream console ever launched and despite adding a bunch of new untested tech into the machine, still maintain an aggressive price reduction schedule. They were wrong on both accounts.
Click to expand...
Hubris has destroyed many a business.

MS's goal is to retain control of the tools and APIs used to create games. When the Playstation became "PC gaming for casuals," they had to counterattack with the Xbox. And since then, they've developed the Xbox into an online platform for controlling platform that previously they couldn't monetize. The biggest disruptor to MS recently has been Google (why do you think MS hasn't tried to get any kind of Xbox-Google deal?). Facebook money, Twitter money, etc don't translate into Microsoft money, not when your Internet is Google-powered and platform-agnostic. But when your Internet is accessed through a closed, Microsoft-built, Microsoft-programmed, Microsoft-controlled, Microsoft-connected system, things change!
 
fearsomepirate said:
Hubris has destroyed many a business.

MS's goal is to retain control of the tools and APIs used to create games. When the Playstation became "PC gaming for casuals," they had to counterattack with the Xbox. And since then, they've developed the Xbox into an online platform for controlling platform that previously they couldn't monetize. The biggest disruptor to MS recently has been Google (why do you think MS hasn't tried to get any kind of Xbox-Google deal?). Facebook money, Twitter money, etc don't translate into Microsoft money, not when your Internet is Google-powered and platform-agnostic. But when your Internet is accessed through a closed, Microsoft-built, Microsoft-programmed, Microsoft-controlled, Microsoft-connected system, things change!
Click to expand...

Exactly.

These latest sales figures help cement a direction we've seen developing for some time now. MS is now gaining ground rapidly in the masses homes and with Natal, they plan to capture more.

In the not to distant future, I see "Natal search" instead of "google search" being the biggest monetary gain for MS.

Something along the lines of "find me this [shows item to Natal] on sale" and Natal brings up a listing of local and online options to the consumer.

Or speaking the item in question and selecting the closest match from a list.

Or suggestive advertising aimed at the specific user at specific locations and times.


THAT will be the big money maker for MS.

If these NPD numbers continue as they are and we see the expected bump from Natal of course. ;)
 
TheChefO said:
Something along the lines of "find me this [shows item to Natal] on sale" and Natal brings up a listing of local and online options to the consumer.
Click to expand...
If you have it to show Natal, why do you want to buy it? :p Will also make searching for large furniture items interesting. And as this function only needs image recognition without a 3D camera, Google are in as good a position to offer the service as anyone. Although MS have some incredible image recognition tech.
 
I can't find the news for some reason but I just want to say that Bionic commando pretty much bombed and sold 27K in US. I didn't have high expectations for the game but this is really low. I'm not sure they were right to release a multi player demo (I didn't download it for instance as I'm more a solo player).
 
Four fitness bundles in the Wii top 10.

Sacred2 is up on the 360 list. I didn't think a top down RPG would do that well on a console. Really must be a PC audience crossover.
 
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