Slashdot Mirror

I cite this article. Read it, it's amusing and informative. (Oh and check out the rest of the site - Gord rules.)

yeah acts of gord is the chronicle of a owner of a video game store that rents video games, and it seems that people who are on welfare decide they have to rent games, keep them out for 3 months, and then never pay up.

Prehaps its time to bring back that old favourite Acts of Gord who really is a small game shop owner

Rus

If you want to open a video game rental store, then Acts of Gord is required reading.

"Who is this Gord? Well, let me tell you about Gord."

Sony doesn't lose money on the ps2, and never did, according to good ol' Gord (article here)

Reminds me of this story

<plagarized text snipped>

Nice ripoff there. Next time try not claiming you wrote something many people here have read, and give proper credit where it's due.

The full content of the article, however, is right on track, and coming from a much more authoritative source. I encourage everyone to click and read the real article; you may want to read the rest of the site when you're done, too, if you haven't. Quite funny.

Sounds like a newer BOFH. Also check out Gord a video game store owner.

House of Gord, Book of Chronicles, Chapter 17

Let's all turn there, shall we? Good.

Well, check out Gord's page on the subject. It's just a little bit more factual than something you heard somewhere. Also check this out. Finally, note that it would probably be illegal for sony, sega, or nintendo to sell consoles below cost.

Microsoft, like every other game console producer, takes a hit on the console.

Geez...you don't still believe that myth, do you?

Chapter of Proclamations

Actually, this is a myth.

No, Sony does not and never has sold at a loss. Please stop perpetuating this myth.

Info here.

To sum it up, most people (at this point) believe that Sony still makes at least $50 per console sold, Nintendo is just about breaking even, and Microsoft is still losing at least $70 per console sold. (this is taking into account drops in production prices, drops in sale prices, etc).

I previous poster once provided this link to a similar response to yours. I will do the same.

Read here to correct yourself.

Try reading some real-life examples of customer relations strategems here.

It's not flaimbait, it's a rant. MOD CHIPS GOOD. THEFT BAD.

It's not the mod chip that's the problem, per se, but what it allows. I would love it if you could have mod chips for all your consoles. You can mod everything everywehere. You should be able to use cheat codes and adjust memory to change your scores or get unlimited ammo or powerups.

Do whatever you want with your hardware, BUT DON'T STEAL SOFTWARE WITH YOUR MOD CHIP. Running another OS, or home-built games, or making your own dev-kit, I'm fine with all that. Knock yourself out. But if I lost a thousands of sales because of piracy, I would make you pay back every penny.

Check out Acts Of Gord where in one of his stories some punk kid comes into his game shop and offers to sell some games. He pulls out a bunch of games burned from his own CD-R. Gord just started breaking the CD's and yelling at the guy.

The sad truth is that most mod chips will not be used for making dev kits. They won't be made for imported/exported games (although there are many LEGAL mod chips that do that). Most mod chips are there to allow theft. Games take years to develop, are expensive, and often struggle to make a profit. Anyone stealing games they like ought to be clubbed until they understand what they are doing.

1. Install mod chip
2. Steal (copy) cool games
3. Keep stealing copying games
4. Notice that there are fewer cool games to steal.
5. Complain that no one will make cool games that you can steal.
6. Steal the mediocre games...
7. Complain because there are no more good games.

frob.

The bottom line is that the known facts are thus: the PS1 was profitable at its $299 US introductory price; there was never a loss on sales of the N64; it is arguable over whether the PS2 was ever sold at a significant loss; the Sega Saturn was the first actively marketed console to be sold at a loss, the Sega Dreamcast followed suit.

I find it doubtful that NES and SuperNES were ever sold at a loss. I'm willing to change my mind if you can find a good basis for the claim that they were.

Violence is bad m'kay?

Fear the Gord. Love the Gord.

I'm reposting it as a link since I totally agree with you (I was going to post it if no one else did).

Gord rules! (and keeps me from getting into retail)

I just wish it was being updated...

The Dreamcast, the PS2, the XBox and the GameCube all also lost money per sale at their initial releases.

This is not true. Sony and nintendo both let the public believe that they were getting more then they paid for, but Sony broke even on the PS2 initially, and Nintendo has admitted that they've never sold a machine they haven't made a profit on.

At this point, after the price drop, Sony is making almost $100 per unit. Nintendo claims to be able to produce the gamecube for ~$100.

Also, the market conditions have never been better for video games. In fact, Sony has sold 30 million PS2s in less then 2 years, and expects to sell another 8 million by christmas (19 million for the whole of 2002). The only console doing poorly right now is the Xbox, which has sold just over 3 million and is expected to sell just 2-3 million additional machines by christmas (5 million for the whole of 2002).

Gord has the straight scoop on the "sold at a loss" myth. According to Gord, the Xbox was the first console to sell at a loss. See Acts of Gord for details. This is a funnny site.

You can read some amusing stories on Acts of Gord on how Gord would install these region-free-only mod chips in to Playstations (and specifically state what the chip would and would not do) and then have an angry customer come back wondering why his PSX wouldn't play CD-R'd games.

Maybe I should post again, this time with a link.

- ahem -

The Book of Persecution:

In which Gord is arrested.

Acts of Gord

They did, at least, according to some story or another on Acts of Gord, a website written by a former video game store owner. I have had no chance to independently verify his information, but I trust him. Supposedly, there was a chip which would ONLY allow imports; not backups. Such a mod also definitely existed for the Sega Saturn, since defeating the region encoding required a separate device; defeating copy protection was much harder.

For the PS2, as it turned out, defeating the region encoding is FAR more difficult than defeating the copy protection. Only recently have there been any chips at all that allow the correct playing of import games (Origa, Messiah). My PS2 chip will only play a BACKUP of and IMPORT. How messed up is that? And it absolutely would not play my imported copy of Psyvariar CE, original or CDR. I had to sell it to someone else.

You would be surprised at how many of us there are that only want to play imports, and aren't interested in stealing. In my opinion, the fact that there are ANY of us far outweighs any illegitimate usage of these devices.

It's been pointed out before, but I'd just like to make the point that selling consoles at below cost is not a time-honored tradition of the console industry, nor does the most successful console maker (Sony) do any such thing. In fact, at this point in time, Sony makes a tidy profit of the sales of Playstation 2 consoles. Given the advances in manufacturing since it's release, it is estimated that they make in the range of $100 profit per console sold, even with the recent price drop.

I'll give you that Microsoft is selling the XBox below cost (estimated at around a $150 loss per console, although I'm not sure how that has changed since the price drop and since their manufacturing improvements). But seriously, what do you expect? This is the Microsoft way: if you want to get into a market, do whatever it takes, even if it means dumping billions down the drain. All that matters to MS is taking control of the console market, and they'll work on making a profit later (they've got plenty of profit from their other endeavours to keep the XBox afloat).

Anyways, my point is this: don't assume that just because Microsoft (and now, Nintendo as well, to a smaller degree) are stupid enough to fall into the same trap that Sega did with the Dreamcast, that this is how the console industry has always worked, or how the console industry will work in the future. Even now, Sony is still dominating the market, and they make a profit per console on top of that. Somehow, I think that MS is going to have trouble topping that, given that they have to sell around 15 games to a customer to make a profit (console = -$150, each game = roughly +$10 in licensing). Seriously, nobody wants 15 copies of Halo, and that's about the only worthwhile game the XBox has.

Microsoft has discontinued its UltimateTV hardware, leaving only the DirectTV/UltimateTV option. It's not doing fine, just ask one of the 400 people cut from the team (leaving ~100). ZDNet has a nice story about this entitled Why UltimateTV was an ultimate failure. Now, this doesn't necessarily mean that ReplayTV/SonicBlue or Tivo are kicking their asses; none of the PVR vendors is too healthy. It's a tough market and they're all struggling. Still, Microsoft is in a compromised position because they are at the same time trying to fight software piracy and be buddies with the DRM crowd, and to make a device which really screws with the entertainment industry's business model.

The Xbox is a different matter. The best argument I've seen any Microsoft zealot put forth so far is that this is 1.0, and the fact that they sold anything at all is a victory. Riiight. True, Microsoft has monopoly profits and can use them to fund failing projects indefinitely until competitors (who actually have to make money off their products) run out of money. Did somebody say Netscape? But Sony *is* making money on the PS2, and Microsoft is losing money on the Xbox. Even so, Microsoft reduced their sales projections for the Xbox, and are now estimating that they will ship 3.5 to 4 million units by the end of June 2002. Meanwhile, first week the PS2 was available, 980,000 units were sold. The first four days the PS2 game Final Fantasy X was on sale, 1.9 million units were sold. By the end of January 2002, over 4 million copies of Final Fantasy X had been sold worldwide. That means that in the same amount of time (~7 months), one PS2 game outsold the Xbox console. Apparently Gord knows what he's talking about when he said (a year ago!) that "This console race was over before it started." Microsoft needs to pull an maneuver like the IIS/IE one they used to kill Netscape: just give away the Xbox with the purchase of Halo. Eventually Sony will run out of money and give up. Riiiight.

As for PocketPC vs. Palm, that's a matter of speculation and only time will tell if Palm will get it together or if they will continue sitting on their asses while MS gets around to producing a useful PDA for less than $400 (remember that the Palm 105 costs $99 so they aren't really direct competitors - Palm makes the cheap simple ones, PocketPC licensees make the high-end fancy ones).

Time to trot out Chapter Two in the Book of Proclamations written by The Gord. This is the insight of someone actually in the industry. You may wish to check out some of his other writings about the XBOX to see the accuracy of other predictions he has made. Quite interesting, and great fun to read.

In short, while it may "make sense" to use consoles as a loss leader, this isn't how things are usually done in the industry. When the Gord wrote the article above, both Nintendo and Sony were already making profits on their consoles. This was last year sometime. Today, Microsoft still isn't making a profit.

Time to trot out Chapter Two in the Book of Proclamations written by The Gord. This is the insight of someone actually in the industry. You may wish to check out some of his other writings about the XBOX to see the accuracy of other predictions he has made. Quite interesting, and great fun to read.

In short, while it may "make sense" to use consoles as a loss leader, this isn't how things are usually done in the industry. When the Gord wrote the article above, both Nintendo and Sony were already making profits on their consoles. This was last year sometime. Today, Microsoft still isn't making a profit.

Time to trot out Chapter Two in the Book of Proclamations written by The Gord. This is the insight of someone actually in the industry. You may wish to check out some of his other writings about the XBOX to see the accuracy of other predictions he has made. Quite interesting, and great fun to read.

In short, while it may "make sense" to use consoles as a loss leader, this isn't how things are usually done in the industry. When the Gord wrote the article above, both Nintendo and Sony were already making profits on their consoles. This was last year sometime. Today, Microsoft still isn't making a profit.

Nah, Sony hit the break-even point for their hardware investment months ago. They're no longer taking a loss for console sales. Microsoft on the other hand...

Dont take my word for it...seek the advice of the master:
Gord speaks

Posting a link to a book for sale once is suggesting it. Posting a link to a book for sale habitually is advertising. Posting a link to a book for sale multiple times in a single thread is SPAMMING.

Bringing up arguments like, "The fact is, 'capitalism' doesn't work when you give people artificial monopolies." against a suggestion of purely voluntary donations to reward and support development of free software is TROLLING.

As for identifying the natural monopoly of road-building, for which confiscation of land is essential and a free-market solution is virtually impossible, with the anything-goes naturally free market of software... If that's not trolling, it's so mind-numbingly stupid that I'm afraid to discuss it due to the threat of intellectual
osmosis.

When you're so obviously free to give your own money to support any software development you choose, advocating government confiscation of others' money to support your preferred projects is as wicked as stealing it with your own hands. Believing that it will turn out to your benefit instead of diverting your money to support the goals of others is foolish. These are, of course, the characteristic traits of a socialist: mean-spirited idiocy under a facade of high ideals.

What I want to know is do you think this is enough to save the cube? Where are they going now?

I have always thought it is gonna succeed anyway, but I have read enough of other peoples opinions to at least admit the possibility that it will fail. But the new games that people have been waiting for are now being hyped and are coming real soon. I think this will help it a lot.

The average person may only buy one system per generation, but us "average users" that grew up with Nintendo are getting a lot older now, and have perfectly good jobs. PS2's are good, I won't take anything away from that, but $150 to have a second systems doesn't seem that unreasonable. For me, these are the exact announcements I have been waiting for to go out and buy a Gamecube. Also the price drop has provided further incentive for parents to choose the Cube for their kids.

Comments? PK

If that's not a dead giveaway that this is a pro-Microsoft post, I don't know what is. See, this troll is smart, though, because he doesn't say "but I'm impartial!" till the end.

. . . when it's functionality stretches . . .

That should read if it's functionality stretches. Microsoft is already losing money on this baby; do you really think they're going to dump more hardware into it just so they can lose more money? Also, any product that tries to compete with the already established market leaders on features will lose. Didn't you get that memo? One last thing is that I think I'll trust a truly unbiased source with years of experience in the industry before I trust what is obviously an end user in this market.

Well, that's a new one on me, because Peter Main, Nintendo's Vice President of Marketing and Sales, admitted last year that "We expect to incur a small loss on the GameCube hardware initially, and you're right that it hasn't been our habit in the past but we expect it to turn okay early next year." The year isn't even half over and the GameCube is already slashing its price by one fourth, which I would estimate is the profit margin. So it seems that Mr. Harrison, a Nintendo "marketing executive" (his position is not stated) is claiming that Nintendo learned over the course of the last few months how to make their manufacturing process roughly 20-25% more efficient than they expected they would be at this time, putting their improved efficiency since November at about 35-40%. That's quite a claim, especially for someone that also claims that Nintendo had been planning a price cut all along and that they were apparently just lying when they said that they had no plans to do so roughly a week ago.

Also, Acts of Gord has a pretty good explanation of why the PS2 is actually profiting from its sales. The math works out, but what really sells it is the simple explanation that Sony is a hardware company, rather than a video game company that's buying off-the-shelf or proprietary parts from third party vendors. Hardware costs much, much less when you make it yourself.

Gord's 10 XBOX hurdles were good food for thought, as was his analysis of what XBOX has going for it.

The Gord also prophesied the demise of the Xbox.

Side note: the author of the MMCEO mentioned that Sony & Nintendo could start a software war. I think it's already begun. Sony has employed the same "Greatest Hits" tactic with PS2 games that we last saw on PS1. Gran Turismo 3, Twisted Metal Black, ATV offroad Fury, and Dark Cloud are now $20 (USD). I can't wait for GTA3 to go on sale! The author also noted a 6 or 7 year turnover in game consoles. The PSX's 5 year endurance was unheard of at the time. I think a 2 or 3 year turnover is more accurate.

And here it is linked because some people are in such a hurry to post and score some karma.

Verily, it is truly as the Gord hath prophesied. Indeed, in this particular writing, the Gord reached pretty much the same conclusion as this fellow, only quite a bit earlier. Neat to see he is being proved right.

Verily, it is truly as the Gord hath prophesied. Indeed, in this particular writing, the Gord reached pretty much the same conclusion as this fellow, only quite a bit earlier. Neat to see he is being proved right.

To the original poster, and I block quoteth from my originally referenced article:

Anyway, Microsoft is losing money per console sold, not including what they are spending advertising and support. Reports have it fall between $50 to $105 lost per console. MS has only said that they are losing money, and won't comment on how much.

And as to your saying that it's "just some post from a guy who owns a rental store", well, that's more than we can say for you, isn't it? Tell you what, when you run a successful video game rental store for a number of YEARS, I might just believe something you have to say.

I just *love* how the link supporting your argument is to an msn.com site. Let's try something different, shall we? How about an independant analysis?

Oh, I don't know, maybe someone who knows what the Hell they're talking about, unlike you.

And yet, Microsoft has had a phenomenal attach rate, much higher than the PS2 had even months after its launch. Let's do the math. Assume at $200, the XBox is losing $150 (the commonly quoted (but unconfirmed) numbers were losing $100 at $300, but six months after the launch, we can assume that production costs have started to go down so that this price drop won't be losing a full $200). If the XBox has an attach rate of 4 games at purchase (assume $50 each, Microsoft would make say $15 on 3rd party titles, $40 on 1st party, also assume 2 of these are Microsoft titles), plus three controllers at $50 a piece (say, $30 back to Microsoft) because halo's great fun with four players, another $30 for the DVD kit (say, $15 back to MS), and $20 ($10 to MS) for advanced connectors (S-Video or component video and digital audio). That's $15 * 2 + $40 * 2 + $30 * 3 + $15 + $10 = $225, or a $75 profit on the sale of the XBox and attached games and peripherals.

My numbers may be off, but the point here is to show that, even though the XBox console itself is sold at a loss, a profit can still be made. And a profit very likely is being made, because it's already been shown that the XBox is attaching very well (and the recent price drops in Europe et al have actually increased the attach rate of new XBoxes -- do a google search).

And just as a preemptive strike against those who would invoke the Gord on me, I'm linking there already. He's a PS2 fanboy, and a funny author, but his maths don't add up.

Except Sony didn't sell Playstations at a loss. Atari tried to sue them for dumping, because the announced introductory price was so outrageously low compared to the competition. But Sony was able produce them for cheaper, and the exchange rate helped them too. Read the story here.

Like, selling an addon for $30 that comes with the PS2 for free?

It's been said before, but I'll say it again: the XBox is going to fail, for a number of good reasons, not the least of which are that the PS2 is three times as useful as an XBox (it plays PSOne games, PS2 games and DVDs out of the box).

Sure, the XBox may have better hardware. But is that really going to make a difference to the majority of people who will be running it on a shitty TV with shitty sound? In case you are thinking that there is a large market for high end consoles and the XBox will prevail, let me remind you of the NeoGeo . . .

This is incorrect. In fact, only two consolse have ever been sold at a loss. Sega's Dreamcast (they lost their shirts), and Microsoft's Xbox. Sony's PS2 is very cheap to make and actually turns a small profit.

Selling below cost is a busines stratagy that should have died with the dot-com'ers.

Thou has forsaken the Word of Gord. Repent ye!

And thanks to the person who first mentioned Act of Gord, absolutely the funniest thing I've read in a long time. (I really like stories about stupid people.)

Plus, his site is a classic.

Plus, his site is a classic.

Plus, his site is a classic.