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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.
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
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 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!
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
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...
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?)
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.
Go forth and compete. Stop jerking off to porn and reading your little comic books, how about working 100 hours a week on what you think the market wants -- Microsoft won't prevent you from taking out a loan, running an ad campaign, and shipping a better product, so why aren't you doing it?
No, that's where you're wrong. If you were actually to compete with M$ on any of their many playing fields, you would inevitbly face some of the anti-competative business practices which the company has already been convicted of implementing. Extortion-like pricing, custom-crufted code and underground whisper campaigns are only a few of their dirty tricks.
I'm all for free enterprise and entrepeneurialism. In fact that's why I dislike M$, because they discourage these things. But if you don't have any checks and/or balances, two bad things occur:
1) Only that which profits will survive. This is an ok (though not great) way to run a business, but it's no way to run a society. The maxim that "everyone in pursuit of their self-interest generates the best common good" has been roundly disprooved in history. This is because all people are not created economically equal, and hence many people's self-interest trumps that of others for highly arbitrary reasons. Furthermore, there are a great many things that a society should have that should not be profit motivated. Roads are a good example. The interstate highway system makes no money, but without this vital infrastructure commerce would fail. Defence is another example. You don't want your army going out to the highest bidder. This is why citizens collectivize to mutually provide funds (aka taxes) so that these social institutions can be run in absence of profit motivation.
2) Without checks and regulations on a market, you're likely to have a highly unstable situation. Die-hard lesse faire advocates will tell you that things will eventually even out, and this is true, but it would take many generations for a stable global economy to emerge (if it ever did) from the chaos of an unregulated market.
Look, anti-trust law was instituted for a couple of good reasons. On the one hand, it prevents monopoly companies from abusing consumers (e.g. selling tainted meat or fixing the price of oil). It keep's them honest. Secondly, it forces them to innovate, since they cannot retain market dominance by controling the market. A monopoly market occurs when one player controls the entire game. Therefore it make a lot more sense to have a player who is (at least in principle) working in the best interest of citizens, aka the government, in control, and let this player make sure everyone plays fair. We have a teacher watching the kids play at recess, and the teacher steps in to tell bullies to play nice.
The truth is that right now M$ is more economically powerful than you, I, or perhaps even the entire aggrigated slashdot community. Ergo, should they decide to focus their wrath on me for whatever reason, I'd like someone to be there to keep them off me.
In the end, the fatal flaw of free market idealism is the incontrovertable fact that the most important elements of life bear only a tangential relationship to the profit motive.
Howard Dean for president