Interesting. And begs the question – how can MS continue to sell at such a loss? Is the Xbox line ever going to be profitable? Isn’t this a drag on shareholders for no good reason?
Also, I think MS is being wildly optimistic over initial sales, especially with no franchise game ready to roll out with the system. Why spend the $300 to upgrade if you’re going to get nothing but super-duper versions of old games like Madden? Especially with Sony right around the corner? I dunno, this really seems like it could be a repeat of the Dreamcast debacle–unless MS really sells people on all the added nifty things that the 360 will be able to do.
It’s still all speculation and guessing though. No price has been announced. No one knows for sure how much it costs to make the box (probably not even Microsoft since they’ve apparently not started putting the final box together in production yet) and with five months to go til launch, a lot can change.
Oh, the sell-out thing is all hype too. Sony did the same thing with PS2 and PSP. Turns out the latter of those systems was in plentiful supply when they were saying (and continue to say) that it sold out.
I don’t doubt they’ll sell a lot of Xbox 360 units this fall, but I wouldn’t expect some kind of record breaking launch, especially in light of PSP’s “just ok” debut and a cheap PS2, Xbox and Gamecube on the shelf right next to 360, each with a lot of good software. If no 360 game looks any better than current gen stuff as we saw at E3, 360 will be a very hard sell.
According to their own numbers a while back (maybe last year), the XBox division was losing $2 million per day.
But that’s nothing to them.
They recognize that there is a lot of money in games, and so they’re building brands. It certainly won’t be in the current generation, and it’s possible it won’t even be in the next generation, but I think by the XBox… um… 720? they’ll be entrenched enough that the money can happily roll in.
Bear in mind of course that they make a bunch of money back on software, so the hardware is a loss-leader, and that their dedication to online has less to do with you truly owning your gameplay experience and more to do with charging users a monthly fee for the service, as well as getting a cut for things like patches… um, I mean “premium content”.
No matter what Frodo tells us, I think the XBox is in for an uphill battle against the PS3 in the coming generation. But I think the potential payoff is sweet enough, and the losses sustainable enough (it’s pretty easy to afford a few million dollars a day when your other big product is Windows), that even the grouchiest shareholders are probably happy to go along for the ride.
First, this is just the guess of a financial analyst. They don’t have the greatest track record when it comes to the games industry.
Having said that, it’s not at all uncommon. In fact, both Sony and Microsoft lost more than $100 a unit when their last systems first went on sale (Sony actually lost a lot more, if you count the entire fab plant they built for several billion dollars just to build the PS2’s graphics synthesis chip). The trick is, getting your costs down over the coming years.
Exactly. Sony was losing close to $200 a PS2 when it launched, accourding to the news reports at the time. Maybe even higher.
The big difference this time around is that MS “owns” the chip designs for the CPU and GPU. It simply bought chips from Intel and Nvidia for Xbox1, and that caused all sorts of pressures, because it would needed millions more chips, and the only place they could get them would be Intel and Nvidia. And the last thing those companies want to do is dedicate production of dated designs. The Xbox CPU is a 733MHz chip in the age when Intel is pushing 4GHz. Hell, Nvidia and Microsoft had to go to arbitration to settle a dispute. The idea by “owning” the chips is that MS can simply pay any major company that has a suitable chip foundry to manufacturer the chips for it, so it can shop around for a good deal.
I agree with some assessments here… I think the Xbox 360 is in danger of being a slight flop. They really needed to have funded a Bungie team to work on Halo 3 beginning a year ago.
On which run games. That other people make. That MS gets paid for, no matter how well they sell.
MS is trying to get market penetration, because the money is in everyone having to fork over a licensing fee to simply put out a product on your console. If they can do it by eating a short-term loss up front for a quicker/better/larger penetration into the market place long term, well, that’s the stuff business decisions which lead to profitability are made of.
You got to remember the 360’s “Marketplace” as well. I’m sure they get some pretty decent royalities off of all the games and premium content they sell over XBL. Add in the additional fees of “Xbox Live Gold”, licensing fees, and first-party software sales… they’re sitting pretty.
Halo 3 is scheduled to come out the day the PS3 launches, or something like that.
One thing I wonder about Xbox 360 is that if it creeps closer to being a PC and competing with PC manufacturers like Dell and Gateway, how can Microsoft sell it at a loss? Wouldn’t that be considered anti-competitive?
It doesn’t matter if the first cycle is at a loss, because it will be pure gravy after 6 months. PS3 won’t be launched then, add in Halo 3, to steal some thunder, and MS owns the chips. Kick Moore’s law into effect and you’re talking semi-exponential growth in profit. String this along for 5 years… daaaamn.
And dont forget to add in the sales for controllers and other “peripherals” like remote controls for DVD Movie playback kits, system link cables, RF and HDTV adapters, XBOX Live kits, cables etc. etc.
Any word on what cables these next gen consoles are coming with? Especially with all the touting of hidef all over the place if not mandated for each and every game am I still going to have to pay $30 for the adapter? If I recall, the current gen systems didn’t even ship with s-video adapters…
Any word on what cables these next gen consoles are coming with? Especially with all the touting of hidef all over the place if not mandated for each and every game am I still going to have to pay $30 for the adapter? If I recall, the current gen systems didn’t even ship with s-video adapters…
In a special insert in my latest PSM magazine (take that, Sony), there was a flyer for the X360. In it, they stated that it would have wireless controllers as a default, with USB ports on the front panel if you wanted to go wired. Wireless networking would be available as an add-on (unlike the PSP or the Revolution, which have it built in).
It plays DVDs right out of the box, but you can buy an IR remote if you want to have easy use of the control functions. One thing the remote had on it was a “live TV” button just like a DVR would have. This was confusing in light of the 20gb hard drive it was shipping with. The 80gb HD on my Tivo gets full fairly easily, so it’s hard to see why 20gb would be worthwhile. I don’t think they even sell 20gb HDs anymore.
EDIT: misunderstood your question. It appears to have both HiDef and VGA support out of the box.
You know, I said exactly the same thing when the PS2 rolled out. If you’ll recall, the PS2 had a terrible launch lineup, on top of a whole bunch of other difficulties. I predicted that it was going to flop.
And man, was I ever wrong. So I guess the lesson I’ve learned is not to try to predict these things. And for what it’s worth, I don’t think that the Xbox 360 has a terrible launch (or near-launch) lineup–certainly a lot better than what the PS2 had. And (like the PS2) it will be first to market.
I will say one thing about the hardware, though: I think HDTVs are going to help sell these systems over the next few years. I recently bought one, and I was amazed at how dated all the current console stuff looks on it. Suddenly those awesome Xbox graphics look as low-res and pixely as a PS1 game. The Xbox 360 games look good in general (some of those PGR3 videos are amazing), but for folks with HDTV, I think the graphical leap will be as large as it was going from PS1 to Xbox/PS2, because “all games at 720p and anti-aliased” is going to be a really key feature for the HD crowd.
It has a number of must-buy games, at least for me. PGR3 is a no-brainer, and Full Auto sounds awesome (a vehicular combat game by Sega? Where do I sign up?). I’m also really looking forward to Amped 3–I love that series (better than SSX!), though I know I’m in the minority on that count. Gears of War has potential (and co-op single-player over Live).
