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Xbox Price Drops to $200
ProfBooty writes: "Just two days after rival Sony Corp. cut prices on the PlayStation 2, Microsoft has announced they are cutting Xbox pricing by 33% to $200. Nintendo still has no plans to cut pricing on the Gamecube. Now is definitely a good time to be a gamer with all 3 next-gen systems at $200. Too bad i just bought a Playstation 2 yesterday." I'd like to know if anyone has succeeded in porting a Free operating system to the Xbox.
The most definately lose on the price of the actual system, but all of that money is re-couped in game licensing. Or, in the case of M$FT, the chance for monopolizing your TV too :)
While all three box manufacturers are stuck at $199 USD (while Japan, the EU, and Canada sell them for less) - one wonders when the game price competition will start?
My son said that two kids at school are waiting to buy xBox games when the price drops below $40 USD, since they have to use their own allowance money.
By my calculations, MSFT has to sell 10 games at $50 USD to break even on the price subsidy of the xBox. Nintendo still has a profit on both box and games, and Sony is just at breakeven due to manufacturing efficiencies on the 2.5 yo PS2 with clear profit on the games.
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--- Will in Seattle - What are you doing to fight the War?
I'd like to know if anyone has succeeded in porting a Free operating system to the Xbox.
Someone has to break the encryption on the DVDs first or make a mod chip that lets you boot unencrypted CDs. Hasn't happened yet, but it's only a matter of time.
Then you have the problem of adding a keyboard and mouse to the Xbox. But that should be too hard.
But aside from the bragging rights, who cares.
// TODO: fix sig
Amidst all of the discussions about how much money MS will lose on this, y'all might want to remember this discussion and ponder whether or not they can afford it.
Donut
If you bought it at Toys 'R Us, you can get back $100 if you kept your receipt and bought it within 30 days.
I think it's a great move by Toys 'R Us to keep people happy.
As for Nintendo, they're going to drop their prices at E3, I guarantee it. They stated back in April that if Sony dropped their price, Nintendo would follow suit and drop their price as well. I'm predicting a price drop down to $150 or $125. But, if they really wanted to make a splash, Nintendo would release a combo package of the Gameboy Advance, Gamecube, and the link cable that goes between them for $200 (a feasable price).
It won't matter, though. Nintendo is going to 0wn this E3, and this whole year. With new games coming out for all these franchises...
Im soooooooo sick of people saying that GC is kiddy and crap.
And I'm so sick of people's post wich are so kiddy and crap...
Sorry, but your comment was sounding like YOU are 5 years old.
"My console is better then yours. No it's mine, NO IT'S MINE! bouhouuhouuu... SHUTUP! bouhouuhouuu"
Yes, I meant to flame. But if you want to be taken seriously, post objectives comments and try to talk intelligently. People don't give a dawm about what flame war you had with your friend at school. By the way, you said he was arrogant, but so you were. Sorry for being rude, I had to say it.
I'd rather be sailing...
Let's take a trip down memory lane and think about all of the other money-losing ventures that the pundits thought would be the death of Microsoft:
- Microsoft Bob. An absolutely horrible idea with an even
worse execution. M$ spent millions developing and promoting it, and didn't
sell more than a handful of copies.
- Internet Exploder. Originally intended to be sold at a profit,
the IE group has cost Microsoft tens of millions of dollars in development
and support costs. What they have created is a money pit crafted from
insecure, non-modular spaghetti code. Many observers (such as ESR)
expected IE to implode under its own weight around the release of version
4.0, but it never happened.
- UltimateTV. Microsoft's lame attempt to make a Tivo and sell
consumers a crappy version of the Tivo service at the same high monthly price
as Tivo somehow didn't pan out. Go figure.
- Mac support. As it stands, Microsoft has not recouped its
development costs on any release of Office for the Mac. This should not
come as much of a surprise, as they offer steep bulk/site discounts to
educational institutions on these products.
As you can see from the above examples, Microsoft's sole goal is to dominate the computer industry by creating products that lose vast sums of money, but "hook" the consumer into their services and upgrades. This is why we need more than Linux and OpenOffice to compete against them; we need government action. We're already beating them in the marketplace, but that doesn't matter when they have infinitely deep pockets from which to draw funding.And that, my friends, is why Sony and Nintendo have a formidable enemy in Microsoft. Neither company has the cash reserves to compete with Microsoft on such an unlevel playing field, and neither one seems likely to survive in the video game arena for long without help from Uncle Sam.
Hmmm... Microsoft vs. Sony
This is like rooting for The Empire to wipe out The Borg...
Sony isn't quite as blatantly evil as Microsoft, IMHO, but they are one of the major forces behind both the RIAA and the MPAA. When you buy a Playstation, you're contributing to a pool that eventually helps to lobby for laws like the DMCA and SCSSA
The next Slashdot story will be ready soon, but subscribers can beat the rush and slashdot the links early!
The question is, what will be MS's strategy for the Xbox2? They can't beat PS2 (and maybe not even gamecube). So they will go back and come up with the marketing strategy to win the console monopoly in the next round. They could give their Xbox2 away for a pittance, and hope to get such a large user base as to strangle PS3. But to really kill it, they also need developers to not develop games for the PS3. If they can accomplish both of those they have a shot.
The video game wars usually seem to have only two combatants, though.
The original warriors were the Atari 2600 and Intellivision. There were others, including Colecovision and other Atari systems, but these two ruled the roost.
In the 8 bit times, the NES and Sega master System ruled.
In the 16-bit world, you had Super Nintendo and Sega Genesis.
In the 32/64 bit arena, you had Nintendo 64 and Sony Playstation. The Sega Saturn floundered and died an early death.
Now, we have/had four competitors, the two dominant being Nintendo Game Cube and Sony PS2. The Dreamcast crashed and burned and it looks like the XBOX might be heading in the same direction.
Yes, the people enjoy choice, but it's only big enough for two main systems.
I am the evil aardvark!
Why all this talk about porting a specific version of linux to the X-Box? Why not just rewrite the BIOS so that it will think it is a regular PC and accept any OS, including your favorite distro of linux? The thing is pretty much a bargan bin PC with a 733mhz PIII and an nforce chipset with slightly better graphics.
Any sufficiently advanced influence is indistinguishable from control.
Somehow half my comment disappeared..
... ~$300 (after adding the DVD pack and the Advanced AV pack) you get a highly capable DVD player that outperforms many similarly priced standalone units (ask Sound & Vision magazine), a HDD based music jukebox (standalone units cost $500+), and a powerful gaming system complete with network play, Dolby Digital 5.1 & DTS, and component video.
After "For" insert the following:
Granted the game library is smaller than PS2, but many of the titles are absolutly amazing (Halo, Rallisport Challenge, Morrowind, Munch's Oddysey, Jet Set Radio Future, DOA3, Project Gotham...)
Okay continue statement...
There's no reason to think that they would be losing the same amount of money of each box now. Production costs will drop as they improve the process, parts get cheaper, etc..
It's common for clone makers when doing a school contract for a couple of years to price the machines at a loss up front. The first several months that they sell them will be at a loss. However, they know that the prices will quickly catch up by then, and they'll be making a nice profit.
People seem to assume that the Gamecube is an inferior piece of hardware, therefore it should be cheaper than the Xbox or PS2. I personally own a Cube and think the exact oppisite. Sure it doesn't play DVD's (but according to recent market survey's people are buying game system to play games, not watch their movies). It is also very important to not that Nintendo doesn't appear to be out to win the "console war". They are out to make a lot of money. This is something they have done successfully for years and years and years. Even in the time of the N64 they where raking in millions. Heck, last year was their most profitable year ever and they expect to only gain on that this year. Nintendo (and their shareholders) don't care if the Cube has the most sales worldwide (though I am sure they wouldn't mind). They want money...and they do that better than any console maker out there!
Unstable Apps: Our Android Apps Don't Suck
Mario, Zelda, Metroid, Pokemon...
The $200 price caught my attention for a second but it's back to the $50 games. Besides, how would I decide which of the 34 snowboarding games to buy?
What I'm listening to now on Pandora...
Keep in mind that while other component prices have decreased, memory has sharply increased in this time frame (and keep in mind that all the xbox's sold at launch were obviously produced before the launch, some even months before, so memory was even cheaper). So while I'm sure it's cheaper, it's probably not as cheap as you might think. Good thing for M$ that they didn't put an lcd in the thing, then they'd really be hosed.
So not only would you have people returning out of the box merchandise they would continue to walk into the store and purchase a brand new console at the discounted cost. Nothing better than having a dozen opened consoles that you'll have to take the hassle to send back to the manufacture.
Overall it is just good business practice, if you're shopping at a place that wont just give you the money within 30 days you ought to be shopping somewhere else.
Prices have been $50 since about 1990. The first 16megabit cartriges were expensive to make, or at least used as a justification for charging fifty bucks. Prices have stabilized, though. Sure DVDs are cheaper to make than carts, but development costs are much higher. A game that took eighteen months to make in 1990 would now take two years. I hope you bought a few computer games instead of pirating every single one just because you could. The music analogy is simple, support the artists you can afford to. Otherwise you're just a scummy pirate enjoying himself at the expense of others.
Keep in mind that M$ needs the retailers way more than they need M$. Retailers don't make a lot on the consoles themselves, and if M$ tries to eat into their already slim margins by foisting part of the price cut on to them, then they could balk and simply use the shelf space for PS2, which they know will sell. The absolute last thing that M$ needs now (since sales are under estimates and there is a perception that they are on their heels) is to have any of the major retailers drop the xbox. This would hugely undermine confidence in the platform, and in this market, perception is everything!
M$ will absorb the loss, because they must. They have more than enough in the warchest to fund the thing for as long as they want to. That's the "beauty" of M$, with such huge resources behind them, they have play in the sandbox until _they_ decide it's time to get out (anyone here old enough to remember the early days of cdrom and who championed the format for years until everyone else caught up?)
True, MS is losing tons of money on the box, but every console manufacturer since the dawn of time has been losing money on their console. The money is not in consoles, it never will be. Its in games
Hold on. MSFT loses more than $200 now on each box. NTDOY makes money on each GameCube. Sony was breaking even on the PS2 - at best they're losing $100 per box.
With games at $50, MSFT needs to sell 10 to break even with the old price. Now it needs to break 15 games per box. NTDOY makes money on each game, so each game is gravy. Sony was in gravy for any games - now they have to sell 5-10 games at most.
With these economic realities, the best thing for Open Source is people buying xBox to turn them into Linux or BSD devices - and buying either no games or just buying Halo (one copy will do).
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--- Will in Seattle - What are you doing to fight the War?
I don't know that Microsoft's costs would have changed all that much.
.18um fab line). They could (and possibly already have) decreased costs easily by switching to a .13um fab line, but that's only going to be a marginal decrease in costs given that it was a pretty cheap chip to produce in the first place. Further cost cutting measures are going to help less and less. To top it off, while the original chip was a run-of-the-mill Celeron die, which Intel was making in HUGE quantities, soon this chip will be a low-volume specialty part as Intel moves all it's Celerons first to a .13um fab process (they may or may not be able to use a standard .13um Celeron die for the X-Box, I dunno), and now they're moving to a completely different architecture (Celeron's will become semi-castrated P4s).
Both Intel and nVidia sold MS some fairly low-production-cost chips. In the case of nVidia, they don't even make these chips, so they've got to pay whatever TSMC or UMC charge, and given that these were relatively low cost chips to begin with, the cost that TSMC/UMC charges isn't going to decrease too much. Even if the price does decrease, nVidia may decide to keep the extra profits for themselves, and keep charging MS the same amount. MS is pretty much locked in to using nVidia chips for the lifetime of the X-Box, so nVidia isn't really forced to lower their prices.
As for Intel, they were producing a dirt-cheap chip (a low speed Celeron processors built on a
Same thing pretty much goes for the hard drive and DVD drive. These producets were all fairly low-cost models ot begin with, and cost cutting just isn't going to trim too much off the bottom line. What's more, in all of these cases MS is outsourcing production of each part to different OEMs, each of whom are going to look for a piece of the pie. I'd even hazard a guess that many of these OEMs took the contract with virtually no margins in the hope that this would turn into a very large volume deal, which it hasn't.
The one area that they can probably really cut costs down is memory. The memory that they're using is DDR400 memory, which used to be a pretty rare specialty part only for graphics cards, but now is becoming a LOT more commonplace and would probably have decreased in price significantly.
So, long story short, production costs probably have decreased somewhat since the initial release, but I doubt that they've dropped very significantly. My guess is that the drop in production cost is quite a bit less then this new drop in retail price.
Bottom line is, in the quantities they're buying, costs of manufacture should be substantially less than eight months ago.
I'm not a Microsoft fan either, but, let's face it, M$ is not going to "loose [sic] all of their software business to open source." And it is not "to [sic] late" either. Even in the server market where Linux excels, they have achieved, what, a whole 15% market penetration? What measly percentage has it achieved in the desktop market? How many tenths of one percent? And what of VA and all of these other Linux companies that were supposed to make money hand over fist? VA? Hah!
Face it, guys, the techies don't make the purchasing decisions, PHBs do. Windoze is marketed to PHBs and that's what's going to get purchased, period. I know it sucks, but open your eyes, guys!
ms does have a lot of money, but they use that
as a reason to do nothing most of the time until
the opportunity passes. Look at the history:
webtv -- they bought it and sat on it
go -- remember go, the pda in the early 90s?
remember windows with pen extensions??
somehow, pilot was able to make an entirely new
market from something that microsoft bought,
developed, then threw away because their research
showed that nobody wanted to leave windows 3.1
so, what I'm saying is that Microsoft's huge
cash reserve actually hurts their innovation
because they have no drive to make anything new
or better.
What's the difference between what M$$$ is doing and a non-US company that dumps their products at below cost? The legislators scream when non-US companies do this, but seem to offer nothing more than a wink and a handshake when a company like M$ does it. Granted, Sony and Nintendo are both non-US companies, but they provide competition, and with respect to M$$$, short of any real punitive action for its monopolistic practices, competition is the next best thing.
In the short run, consumers are getting a good deal when MS sells the Xbox for less than it costs to produce. In the long run, however, if it leads to the demise of competitive alternatives, everyone loses (except M$$$ of course).
I spent a year in Iraq looking for WMD and all I found was this lousy sig.
Gosh darn, thanks for your very informative and on-topic answer! Whatever would we do without your speculation!
The question was, who makes money and who does not. MS most definitely loses money, as they were losing money even under the priginal price. Sony likely makes money, the hardware has been out for a while, costs are recouped, manufacturing less expensive, plus they get all the groovy licensing revenue.
Next time, at least PRETEND to be factual, as opposed to panning a non sequitor.