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.

Comments

Cost Question

[Carbonite]

What are the current production costs for the PS2, Xbox and Gamecube?

Which companies will be making money ate the reduced prices and which will be losing on each sale?

Re:Cost Question

[deft]

at the initial retail price of $299, Microsoft has been losing anywhere between $76 and $105 on every Xbox sold.

thus, they are now loosing from $176 to $205 bucks each box!

Re:Cost Question

[nat5an]

It was in Wired when the XBOX was the cover story I believe. I believe his quote was "I don't want to be in the razor business if I can't get in on the blades." Or something.

The story is here http://www.wired.com/wired/archive/9.11/flex.html? pg=1. It also discusses how much Microsoft was initially losing on the boxes ($100 - $110 I believe).

Re:Cost Question

[ryanr]

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.

Re:Cost Question

[dtfarmer]

The X-Box is definitely losing money on each sale

Microsoft loses money on each Xbox sold.... therefore, they really aren't losing much money now, are they? (at least not in Japan or Europe)

Re:Cost Question

[NeMon'ess]

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.

Re:Cost Question

[binaryDigit]

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?)

Re:Cost Question

[Hoser McMoose]

I don't know that Microsoft's costs would have changed all that much.

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 .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).

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.

Now is definatly a good time ...

[dbretton]

Now is definatly a good time to be a ...

Spellchecker?

Re:Wonder who shot first?

[CynicTheHedgehog]

According to Penny Arcade, Sony accelerated their price drop plans leaving Microsoft with no choice but to follow suit. This is a real kick to the groin for Microsoft, whose consoles haven't been doing as well as they thought and cost more to produce. Sony's probably recouped their initial losses, but I doubt Microsoft has.

Yay Sony, I guess.

Xbox Linux

[Bob9113]

The Xbox Linux Project is currently working to port Linux to the Xbox. It appears that the primary hurdle is getting past the hardware based authorization system, which does not allow unapproved software to run.

Re:Xbox Linux

[Bob9113]

I pulled the trigger on the submit too quick - here's some more good info:
Quick overview of an ideal use for the machine.

Only $199 a pop and every unit I buy costs Microsoft money? Most excellant! How long till they begin firing volleys of lawyers at The Xbox Linux Project? Any bets on which 4 letter law starting with "DM" and ending with "CA" they'll invoke?

Re:Xbox Linux

[bob_jordan]

Surely the primary hurdle is getting microsoft to sell you an Xbox minus OS for less then $199.

Bob.

Re:What?

[Marx_Mrvelous]

I don't know if you realize this, but MS loses at least $200 per unit that they sell. So, porting say, Linux to it and use it as a desktop, you just cost MS $200. Bad troll!

40 billion in the bank

[Donut]

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

Nintendo and Toys'R'Us

[FortKnox]

Quick FYI - Toys 'r' us is giving the consumer back their $100 if they bought an XBox (or PS2) within 30 days of the price drop.

Also, when do you expect Nintendo to drop their prices? If the N-Cube was $100-$150, I'd pick one up in a heartbeat...

XBox Hacked (and Linux)

[nherc]

I submitted this info days ago... but there are at least 3 mod chip makers who have just released chips to open up the xbox. The mod chips allow unsigned code to run off of any media dvd-r,dvd-rw,cd-r,cd-rw.

More xbox mod chip info.

This will (very) soon lead to a xbox linux distro.

Re:Finally, a market not easily....

[Bonker]

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

Re:Finally, a market not easily....

[Black Aardvark House]

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.

Nintendo = no price drop land (good)

[GweeDo]

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!

It's the games, not the console

[Otter]

For me (an adult who fires up a game of Doom or Tomb Raider every so often but is hardly a 'gamer'), what kept me from buying a console for years wasn't the up-front cost but the prospect of dropping $50 a pop on games. When the Dreamcast fell to $50 last Christmas, I bought one and picked up some $5-10 games on E-Bay, probably from kids running out to buy an X-Box. Given my general no-longer-young suckiness (it took me three nights of trying to finish the last stage of the Jet Grind Radio tutorial, the rail to over the mailbox to rail to rail over the overpass to the top of the bus shelter sequence), that's plenty for me.

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?

Re:Losing money never hurt Bill

[IronTek]

I think you're wrong. First, to keep my cred, I don't like Microsoft and I'm a Linux user. However, I hate ignorant people that spout of incorrect assumptions without thought of what they're speaking of even more than I hate Microsoft.

Microsoft Bob: While it was a horrible failure as a product, it did teach Microsoft much about human computer interaction, what their customers want, and how to market products better. End the end, it was probably a pretty cheap "failure."

Internet Explorer: Probably saved Microsoft's ass. Had they not given it away, and made the user not have a choice whether or not to have it, they could have lost ground on the desktop as well as on the internet. They would not be the company they are today if it weren't for a free IE. Further, IE is not under danger of an implosion. It's not that horrible of a browser...while I prefer Mozilla, IE does feature stability in key areas that I wish Mozillla would (and it will...eventually)

Ultimate TV: This was a premature release and not well thought out, no doubt...but it will pave the way for their takeover of the home entertainment center when the XBox 2 (or whatever) combines the XBox with UltimateTV. The product itself may be a failure, but the next incarnation of the XBox would not have been/will not be possible without the work done on Ultimate TV

Mac Support: Not only have they made money on the Mac (what have you been smoking), but they're the largest seller of applications to Mac users! Further, at least up until the last version of Office for the Mac, programs like Excel and Word used the same core as the PC version, so the development costs consisted of wraping up the engines that drive the programs to work with the Mac.

Now shutup, go get a helmet, and hope that other companies out there can keep them in check.

Top five lamest arguments of the console war

[Toddarooski]

1. You shouldn't buy a GameCube because it's a kiddie console! (Only kids like fun games, apparently...)

2. Micro$oft is evil! Therefore you should support Nintendo! (Unless it's being said with irony, then it's clever.)

3. Don't buy an Xbox becuase it's just a stripped down PC! (Oh, no! It's got a CPU and a graphics chip! Run!)

4. MGS is a great game! (Okay, just my own personal opinion here -- 20 minutes of excellent gameplay surrounded by 18 hours of crappy dialogue is a good game? Give me Ico any day.)

5. I'm throwing my loyalty behind (Sony / Nintendo / Microsoft) because they care about me as a gamer.

PS2 Linux Kit dut to ship on 5/22/02

[DeadBugs]

The PS2 Linux Kit is coming out next week. For $199.00 you get:

Linux for PlayStation 2 version 1.0 software

Monitor Cable Adaptor

Internal 40GB Hard Disc Drive Network Adaptor

Ethernet 10/100 Base-T

USB Keyboard & USB Mouse

XBox security is tough

[Animats]

The XBox's firmware is in a 1MB mask-programmed ROM. It can't be changed without replacing it physically.

Physical replacement of the firmware chip is possible, but requires soldering 29 wires.

See a summary of XBox vulnerabilities here.

Join the Evil Empire here and make security even tighter.

It's worth understanding how the XBox locks out non-Microsoft approved software. We might see a lockdown like that in mainstream PCs someday. The MPAA and the RIAA would like that.

Re:Losing money never hurt Bill

[lysurgon]

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.

the dreamcast has great game selection

[AtaruMoroboshi]

What crack are you smoking?

I bought a Dreamcast late last year and I've aquired all of these games for under $30 each, most at $14.99 or less:

Chu Chu Rocket
Space Channel 5
Sonic Adventure
Street Fighter Alpha 3
Marvel vs. Capcom
Crazy Taxi
Jet Grind Radio
Resident Evil: Code Name Veronica
Sega Bass Fishing
Sega Marine Fishing
Shenmue
Soul Caliber
Virtua Tennis
Sword of Beserk
Typing of the Dead (hilarious! type at zombies to kill them!)
Dead or Alive 2
Power Stone (AMAZING 3-D fighter, a genre I'm only kinda into, this game is serious fun. I got it for $8.99 last week and have been playing it non-stop!)

There are a lot of seriously awesome games for the dreamcast that while you might have to search a bit, are worth the effort. Here's my list of games I'm currently tracking down (some are still easily availible, I just can't drop $300 on a dozen games right now.):

powerstone 2
seaman
sega bass fishing 2
skies of arcadia
granda II
shenmue 2
Street Fighter 3: Third Strike
Marvel v. Capcom 2
Capcom v. SNK 1
Capcom v. SNK 2
bust a move 4
house of the dead 2 (and light gun)
samba de amigo (and special controller)
alone in the dark 4
sonic adventure 2
crazy taxi 2
tony hawk pro skater
tony hawk pro skater 2
fatal fury: mark of the wolves
Bangai-O
Bomberman Online
Giga Wing 2
Gunbird 2
Project Justice (rival schools sequel)
Dance Dance Revolution (and dance pad)

now, i realize hunting high and low for games isn't most people's idea of a good time, but if you're up for it, the dreamcast is WELL worth the effort. Not to mention all the neat hax0r things you can do with it, like boot linux, burn your own boot discs and play nes emulators...

the fishing controller and keyboards are easily availible, as are memory cards and additional regular controllers. Aracde stick controllers are a bit rarer.

the dreamcast is well worth the investment.

I do plan on getting a used ps1 to play metal gear solid, final fantasy 7, and dance dance revolution (easier than tracking down the import only DC version), so I see your point about if you're only going to buy one console, but I think for me, that one console would be the dreamcast. I'm starting to be fond of it in the way I am fond of my iBook, which says a lot.

.

Re:Oops. Try again.

[CynicTheHedgehog]

I'm in the gaming biz and I can tell you that this is not the case.

Perhaps, but do you have a link to a purely speculative article written by an obscure web comic scriptwriter to back up your statement?

That's right. Who da man.