Xbox 360: Focus shifts from Japan to Europe?

[dobwal]

The market leader always want to extend the generation because the last few years is were all the money is being made. If the PS3 continues to do poorly sony will be first out the door with the PS4 to try and start over and win the next gen. The way things are going right now MS will want to keep the 360 around as long as possible to collect end of generation money. MS had no reason to keep the xbox 1 alive. It was a money pit with no end in site they were getting their tales kicked by sony. You think sony would be any different? You think they will just sit there with a failing system and eat cash for no reason? Market share and profit is going to determine the life span of a system.

The biggest reason MS did not make the hard drive standard was so one day they could get the 360 to 129 or less and still make a profit like sony is right now with the PS2.

Another positive aspect is that you can use to the profit generated by the older hardware to subidize and reduce to hit of the initial cost of the new hardware.

Imagine how bad Sony's numbera would look with no PS2. Imagine how MS's numbers would look if the xbox had been as viable as the PS2.

 

[mrcorbo]

As far as I know (is it different than i know?) they haven't even gotten to the point where they sell at a profit, let alone the point where they cover losses from initial year(s).

It actually matters very little if you sell the units themselves at a loss if your business is making money overall. Xbox 360 should soon (if they are not already) be making money when you factor in royalties on software sales, services, accessories, etc. The problem with the Xbox 1 was that they only had one profitable quarter in the entire lifetime of the system. Given the choice between pouring more resources into trying to wring some profit out of this or instead using those resources to try to get the jump on Sony in the next gen, it made the most sense to do the latter. In contrast, the 360 is likely to be generating money when next gen launches instead of draining it. Not much reason to kill a product if it is making you money. I would expect MS is aware of Sony's profitable PS1 and PS2 businesses after the launch of their successors.

 

[avaya]

Europe is interesting. Sony is doing as much as possible so far to ablate away their brand power on the continent.

However on the mainland it is significantly more expensive but reports seem indicate it’s either outselling or matching 360. Across the Latin-European markets it is even toe to toe with the all-conquering Wii.

Microsoft has a good chance to achieve >50% in the UK vs. the PS3, Sony have dropped the ball big time.

Mainland just seems to be waiting for price drop and GT.

If SCEE has indeed decided to "give up" on this year without any price cut then they will lose marketshare against 360 in the UK that they won’t get back. The Chav army is at a crossroads on the selection of the next console of choice.

 

[Cheezdoodles]

though not having the FIFA demo out in Europe must be a bit of a blow at least (but now at least they seem to have the PES demo out).

Fifa 2008 demo has been out for a week i europe, what are you talking about?

Why will buyers choose XB360 over PS3? Just price?

Norway PS3 vs X360 pricing:

PS3 Launch: $1000+
Now: $900

X360 Premium launch: $650
Now: $400

UK: PS3 = $860
X360 prem= $505

Price is a very deciding factor shifty. If price wasn't a deciding factor, PS3 would have whiped the floor with the X360 based on brand name alone in terms of sales.

Hell, the PS3 isn't out selling the X360 in norway. This is a country that sold 40x as many PS2's as Xboxes. Its also the country with the highest income per capita. (may be 2nd highest now, whatever). If price matters here, price matters everywhere.

The major titles themselves aren't enough and I think diversity counts for everything...

Are you taking marketing classes? It sure sounds like that. (I lol@Marketing ). Anyways, diversity is a direct result from having the biggest userbase. Simply because niche markets aren't able to sustain big enough sales.

I disagree completely with your statement though, Major titles sell the console, the rest of the sales are there as an effect of that, for most people anyway (aka people that aren't very very into some obscure niche genre).

Further, i would like to point out to all of you that the GENRE FPS is not "hardcore" as some of you call it. Based on sales, the FPS genre outsells any other genre out there (maybe not racing) its ridiculous to keep saying that based on some old stereotype from computers.

 

[mrcorbo]

How are they aiming to win Europe? Are the planning some diverse software and investing in developers, or are they just hoping to sell XB360's current console and line-up with marketing? If the latter, I can't see they'll get very far. MS need to be more aggressive in their software policy, getting EU devs to create EU games. They don't appear to be doing much in that respect though. XNA could be a big movement if they enable EU indies to produce titles across the glut of tastes and interests you get in the EU.

I'd imagine the recently minted MGS Europe are hard at work addressing the points you mentioned. This is their raison d'être, no?

 

[Cheezdoodles]

- say i get my xbox360 next year, I wouldn't be very surprised to see by 2009 preparations for a next gen xbox and slowly abandoning of xbox360 like they did with the xbox. Meanwhile my ps2 is still constantly getting releases 7 years after launch.

The PS2 is getting releases because it has the biggest userbase and Sony still earns money on it.

If the Xbox outsold PS2 last gen, the Xbox would still be getting releases. Its as simple as that, it has nothing to do with what company you choose.

The reason xbox got abandoned was because they lost a crapload of money, and kept loosing it, and the only way to compete vs a PS3 was an early launch. Its rather easy math tbh, whatever keeps earning money will get supported. If the PS3 keeps loosing money, Sony will release a PS4 early and abandon the PS3 and vice versa. Get it?

 

[borowki]

From what I understand, the price difference is quite high. Isn't ps3 double the price?

In Poland the PS3 costs 2400 PLN with Resisance and MotorStorm, while the XB 360 costs 1400 PLN with Kameo and an extra controller. The Core system costs 1100 PLN. The Wii is 1200 PLN, the last time I check. Should be in line with pricing in the Euro-zone.

If it were a small amount, I'd agree, but saving upwards of $300 isn't chump change to most, and yes that will lead to mass sales if/when they get their marketing effort in order.

One thing to remember is that consumer credit is much better developed in Europe now compared to the last generation. Paying an extra $300 hurts, but paying $30 a month instead of $15 a month hurts less...at the time when you make the purchase decision anyway

Another thing is that Americans are more exposed to advertisement than other people. In another word, promotion campaign can work better than you expect. Americans might take for granted that Microsoft will try to sell them something, whereas smaller countries in Europe, especially Eastern Europe, do not expect it. You basically earn points just by trying. And Microsoft is trying very hard here. Besides your regular PR stuff, the company is staging special events with many hot girls. Hot girls...hmmm....Anyhow, the effort is definitely appreciated.

 

[borowki]

Hell, the PS3 isn't out selling the X360 in norway. This is a country that sold 40x as many PS2's as Xboxes. Its also the country with the highest income per capita. (may be 2nd highest now, whatever). If price matters here, price matters everywhere.

Just because they earn a lot doesn't mean they will want to spend a lot. Norwegians are a nation of cheapskates if you ask me.

 

[Cheezdoodles]

Just because they earn a lot doesn't mean they will want to spend a lot. Norwegians are a nation of cheapskates if you ask me.

yet. none of us complained when we rushed out and bought ps2's at $1000 during launch. (It was sold out for a loooooooooong time here)

 

[iXaarii]

first: so many brilliant points!!! I love you guys! I feel very good with myself for constantly reading this website
Where on other forums I'd get fanboy stuff here I read great reasonings and a fascinating debate! Hat's off in respect!

Further, i would like to point out to all of you that the GENRE FPS is not "hardcore" as some of you call it. Based on sales, the FPS genre outsells any other genre out there (maybe not racing) its ridiculous to keep saying that based on some old stereotype from computers.

) brilliant! i never quite looked at it that way. Lucky me enjoying such a popular genre. I get to be immersed 1st person more often

The biggest reason MS did not make the hard drive standard was so one day they could get the 360 to 129 or less and still make a profit like sony is right now with the PS2.

I had assumed it's more of a marketing type product which nobody buys but is simply kept afloat so at press conferences they can say "we have price below...". I'm assuming by that end of the lifecycle they might be able even to have cheap storage of that size.

You guys expressed the possibility of ps3 going out before x360 to be replaced with newer ps4 hardware... do you really think it's probable? I mean I do think it's a huge loss for Sony the fact that hardware released one year after 360 doesn't have any obvious performance pluses. I had expected as per their graphs at least an obvious 2x performance over 360 but it seems that it's only the bluray storage that actually diferentiates them. Many times I searched on beyond 3d at hints at what you guys as graphics pros think of the much advertised advantages of the cell processor but it seemed to me that they weren't really there... people in discussions said if i understood right that trully better lighting similar to raytracing is not as within reach in this generation as advertised, and in a discussion about deferred rendering i understood it's not really practical on this hardware either... so ps3 seems just as tied to the GPU as xbox360 and PCs in terms of what's being done ... so my point is, given all this, combined with sony's investments in actual game creation and it's abilities for manufacturing, do you see any probable scenario in which Sony would actually abandon PS3 before MS abandon xbox360? I'm asking because it never occured to me that things might be THAT bad for Sony and you've provided me with a very intrigueing and fascinating view of a possible future. I myself had put my bets something on the lines of: sony surpasses xbox360 by 2009, but by then buzz is already out for a new consoles with more powerful hardware maybe for 2010, sony continues with ps3 large install base for the masses while MS takes the lead even more for the hardcore gamers willing to pay more by again providing them with bleeding edge technology while sony becomes somethign for the masses.
But the idea that you brought out... ps4 before that because of losses in ps3... fascinating. How would you see that play out?

 

[TrungGap]

ps4 before that because of losses in ps3... fascinating. How would you see that play out?

PS3 has nothing to be ashame of. Cost to consumer, it's very comparative. Cost to Sony, not really as bad as people make it out to be, as the cost will continue to go down. The problem with game console isn't necessary power, but buzz.

Is the Wii double the power of the GC? No, but it's doing amazing sales. Why, because Nintendo managed to do a spin on an existing technology and make it hip.

PS4 might not be a radically changed machine. But a new spin. Did you read about the new process in making Blu-ray disc using existing DVD production line? However, at this point it's uncertain, if a firmware update is required or a new drive is required for the existing blu-ray players. But I'm getting side-tracked.

The Cell and the RSX are pretty powerful. The bluray has a lot of potential. Now only if the memory were a little better on the PS3...then it can really shine.

 

[iXaarii]

The Cell and the RSX are pretty powerful. The bluray has a lot of potential. Now only if the memory were a little better on the PS3...then it can really shine.

I've been wondering about bluray a lot: sure it has a lot of storage, but does it provide fast enough (somewhat) random access for it to have enough bandwidth to improove the experience signifiantly, say by constantly streaming data to make worlds without boundaries by loading as you move through the virtual world. Is that a possibility? Then again if it is I'm wondering if something like that is impossible without say 2gb of memory...

 

[Cheezdoodles]

You guys expressed the possibility of ps3 going out before x360 to be replaced with newer ps4 hardware...

But the idea that you brought out... ps4 before that because of losses in ps3... fascinating. How would you see that play out?

Its simple finance.

Whatever keeps making you money (note: enough money, aka discounted on internal rates), you keep supporting.

The console that doesn't make (or even keeps loosing money) will be the first to go. The console that makes the most money will be the last to go. There is a reason for why Game Boys are still produced, and that reason is that nintendo keeps earning money on it.

 

[22psi]

MS should have done this from the get go.

 

[quest55720]

I had assumed it's more of a marketing type product which nobody buys but is simply kept afloat so at press conferences they can say "we have price below...". I'm assuming by that end of the lifecycle they might be able even to have cheap storage of that size.

One of the 2 reasons the first xbox lost so much money was the inclusion of a hard drive. There will be a point were the harddrive will be the most expenisve piece of hardware in a 360 pro/elite. While larger hard drives drop in price there is a minimum price for a hard drive no matter the size that does not really move that much. Even worse the 360 hard drives are a MS only product and not really mass produced keepin the price up. The other issue making the first xbox such a money loser was MS did not own the IPs of the chips inside. While produciton of those chips got cheaper the savings were not passed on to MS. This time around they own the IPs of the chips and they will get the savings over time. The core should allow MS to hit the magical price marks a year or more a head of sony.

The new core rumored arcade sku core should be launching for xmass. It will be interesting to see how well it sells.

 

[Fafalada]

Few of those franchises will remain exclusive to PS3; that's your point, right?

Considering that from 3rd party franchises on that list, there are no permament exclusives and only 2 timed ones to PS2 to begin with, there wasn't exactly more then "few" that could remain, was there?

 

[Shifty Geezer]

Norway PS3 vs X360 pricing:

PS3 Launch: $1000+
Now: $900

X360 Premium launch: $650
Now: $400

UK: PS3 = $860
X360 prem= $505

Price is a very deciding factor shifty.

Of course it is, but is it enough on it's own to win the territory? How much more is XB360 outselling PS3 in Norway with that huge price discrepency? How much more is it outselling the PS3 in the UK? What about the rest of Europe where XB360 is much cheaper? I don't think anyone knows at this point because sales figures per region are hard to come by. However, though XB360 is outselling PS3, it's not doing it 3:1 or 5:1. The sales at the moment of both machines are low because prices are high. When the prices drop, then sales will pick up, and then which platform will people pick from? Will they buy a $300 XB360 in Norway, or a $500 PS3? What about France with a $300 XB360 or a $400 PS3? Or the UK? A lot depends on pricing and we don't know what's going to happen there, but I don't think just selling your product cheaper than your rivals is all it takes to sell more. Then again, you're the marketing expert...you tell me. If I want to sell more MP3 players than Apple, all I need is a cheaper device, right?

Anyways, diversity is a direct result from having the biggest userbase. Simply because niche markets aren't able to sustain big enough sales.

That's not entirely true, at least early on. You can have a large 3rd party developer support that all make generic titles because they want to play it safe, all producing racers and shooters. How many 3rd parties go all artsy on us? The other way to guarantee diversity is to spend heavily on developing your own titles.

 

[Laa-Yosh]

Considering that from 3rd party franchises on that list, there are no permament exclusives and only 2 timed ones to PS2 to begin with, there wasn't exactly more then "few" that could remain, was there?

Replace 'remain' with 'be', OK?

 

[Fafalada]

Replace 'remain' with 'be', OK?

But that's kinda the point.
According to that chart, not a single permament 3rd party exclusive made the top 23, not to mention that 16 titles in the top 23 are full multiplatform releases - even though we are talking about the platform which had by far the largest amount of 3rd party exclusive content.

 

[Graham]

*ramble alert*

I think the two major roadblocks for any console are word of mouth and cost of entry. Apply this to Europe, Japan or NA.. I doubt it's all that different.

The 360, for me, is nearing a tipping point where I'm happy to recommend it to friends who may only game every so often, or don't have a huge amount of disposable income. This will be especially true when the arcade 360 arrives. The price is right and the software is piling up. The PS2 is still very compelling for these reasons, but it's certainly no longer new and shiny.

The success of the wii comes down to these two points. It's first impression is so good that you can't help tell others, the entry price is low enough - and you don't have to buy an accessory/game either. Now if Nintendo can sustain this?, well thats a question for a higher power.

The irony though is the Wii is very unsuccessful here in New Zealand. Thanks to a complete lack of decent advertising. It was certainly popular with those who own them, but the initial launch never reached critical mass.
And finally Sony. Perhaps this makes me biased, but I just don't see the PS3 turning itself around anytime soon. At $1200 price of entry, with a R16 (18+ pegi) sticker on the box, things aren't exactly roses and kittens. Advertising is picking up, so one would hope for the best - but it doesn't even compare to the media blitz that has been halo3. With a $450 core 360 (soon to be arcade), leading into christmas, you can clearly see long term strategy in microsofts path (although with a GTA4 sized hole).
Meanwhile the Wii merrily potters along, with bugger all new software (some launch titles still have yet to be released), and a $500 tag. And the PS3 also sits there, radiating it's powerful aura yet seemingly oblivious to the outside world, content with the occasional burst of unfocused energy.

:smile2: