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XBox + UltimateTV for $500

Posted by ryuzaki0 on from the integration-time-come-on dept.

Daetrin writes "Red Herring reports in this article that Microsoft is planing on combining the XBox with their UltimateTV Recorder with a projected final cost of about $500. The article also talks in some detail about the massive (though partially expected) losses that the XBox is costing Microsoft. There's also another article on Yahoo that sums up what Red Herring said."

12 of 297 comments (clear)

  1. In other news.... by T3kno · · Score: 4, Funny

    Root canal + Proctological Exam for $275

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  2. Grand 'ol MS tradition by quantaman · · Score: 4, Insightful

    Seems that MS is trying to make it by heaping on the features. Not that this is a bad thing in itself but when you do so you have to make sure you don't lose direction.

    The product is controversial in part because it creates a conflict within the machine: will the game slow down so that the hard drive can record "BattleBots"? Balancing the needs of gamers and general users will not be easy.

    Why not throw in some word processing capabilities for another couple hundred? Add a CD-R and printer so you can printout docs and scoresheets and copy saved games (of course a DRM drive). MS has too be careful they don't start to lose direction and the XBox no longer becomes a gaming console and starts to lose its user freindliness (never used one so I don't know what the environment is like). Perhaps the console market will turn out to be a market where feature bloat isn't as nearly a good thing.

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  3. What about upgrade cycles? by Zelet · · Score: 5, Insightful

    Don't people (generally younger people) like to replace their console much more often then they would replace a tv-recorder? It seems to me like you are getting locked in to two separate pieces of hardware that have very different upgrade/replace cycles.

    Also, with dual-use systems you generally save money, but in this case I'm not seeing a huge amount of savings. What are the benefits? Save a little space? What about when you replace your Xbox and have to keep the old one around as your tv-recorder. Maybe I am missing something, but it doesn't seem to make much sense to me.

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    ...And when they came for me, there was no one left to speak out for me." - Martin Niemoeller (1892-1984)
    1. Re:What about upgrade cycles? by Jason+Earl · · Score: 4, Interesting

      There is some chance that Microsoft could salvage XBox if they are able to sign up a significant number of people on their upcoming subscription-based gaming network. However, Microsoft loses too much money on the hardware to ever make a profit on the software at current prices. Current royalties per game are generally below $10. So Microsoft has to sell a whopping fifteen games over the life of the console before it starts to see any profit. What's worse, is that Microsoft has already squeezed all of the price out of the XBox, and they are still selling at a huge loss. Nintendo is actually making money on their console, and Sony is breaking even, and both of these companies are going to be able to save money down the line by integrating the chips in their consoles.

      In other words, Sony and Nintendo both have the power to go to war with Microsoft on price and still make money, and they will be able to make Microsoft bleed for years. A year from now Sony and Nintendo will really be able to punish Microsoft. The price of making an XBox is only going to drop $100 over the next five years.

      Now, if Microsoft can get a significant number of current XBox owners to sign up for their gaming network, then they are in the clear. Plenty of companies have used subsidized hardware to sell internet service. Over time the subscription model would generate enough money to cover the initial cost of the hardware. The dodgy bit is that Microsoft is essentially betting billions of dollars on the success of their gaming network. As things stand now an Xbox gamer that purchases an XBox and ten games, but does not sign up for the online gaming network, causes Microsoft to lose money. In fact, the numbers are so bad for Microsoft that I can't quite figure out why they don't require a subscription. They can't possibly believe that they are going to make up their hardware subsidy with game royalties at the current price structure.

      In the end I think that Microsoft is going to end up taking a bath on the XBox. Sure, they can afford to lose money on the XBox, but I could also afford to give my house away and live in a box. Being able to afford something doesn't make it good business.

  4. who are they targetting? by Lumpy · · Score: 4, Informative

    With older tivo's available at bargan basement prices of $99 to $150 and many other alternatives available, who are they after? The parents surely dont want the kids to have their own pvr or spend that money on them... the hardcore adult gamer is a very small segment of the total console gamer population (Look nintendo is targetting kids... little kids... there's a reason for this) Along with this the PVR market is having trouble... most stores are dropping PVR's (you cant get a tivo in best buy or circuit city anymore...) as the sales are prett much over with.. everyone who wanted a pvr has one, everyone else isnt buying them or are waiting for someone to make one that doesnt require a service.. (Do NOT tell me the Tivo will work without it.. until they give me a way to set the clock without having it ever dial in to the company with all my viewing habits I dont want their crap.) or who look at the device and say.. "MY $99.00 VCR does that. why should I buy something expensive that I cant just keep that tape of that show/movie/porn feature?"

    I really want to know what they think will gravitate people to this? they killed the Ultimate TV project because of dismal sales.. do they think that combining a poor selling product to a good selling product will result in a stellar product?

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  5. Microsoft should learn from Nintendo's example.... by Rahga · · Score: 4, Insightful

    While we had the NES, Nintendo had the Family Computer. During the 80's, Nintendo's Famicom could hook up to a disk reading system, a keyboard with a tape drive, microphones, digital punching bags, and typing tutors....

    The similarities between the Famicom and X-Box don't end there.

    Sharp partnered with Nintendo quite a bit before casting their lot with the X68000.... besides releasing a combination Disk System/Famicom (the Twin Famicom) and a TV with a Famicom built-in, they even released a combination Famicom/Video Titling unit. Of course, the coolest thing about this unit happened to be that it was the only Famicom with S-Video out.

    Anyway, Nintendo learned and evolved. Though they could do some amazing things with technology at the time, they learned that treating a video game system as a component of a constantly changing entertainment system was the way to go. They are sticking to this way of thinking with the gamecube. One box meant to do one thing. You should neve have to buy anything besides memory cards, controllers, and games for it, because the market simply won't support much more than that in the long run.

    I have a feeling Nintendo knows the game market much better than Microsoft does, and slightly better than Sony does.... if nothing else, they know that gameplay rules, and if Sony's developers don't keep producing games that match Nintendo's consistent level of quality, customers won't keep buying Playstation titles. Nintendo's in-house titles were matched in closest by Sega, and the Gamecube shows that Nintendo learned from Sega's mistakes in the hardware department.

  6. Console cost reduction... by aron_wallaker · · Score: 4, Informative

    Interesting - Sony & Nintendo designed their units from scratch so as they ramp up their production volume of custom chips they get sizable decreases in cost.

    Microsoft went with mostly standard parts which already had sizeable production volumes, so there wasn't nearly as much room for their cost to drop down. Even worse, their CPU speed is now lower than anything sold in the PC market, so Intel is seing overall volumes of that chip drop, meaning costs can't get any lower. Likewise the small (by PC standards) hard-drive they use. RAM prices were dropping but have slowed lately. Throw in the custom video/audio/system chip that NVidia did for them - for which NVidia & MS are in court over chip pricing - and that's the bulk of the cost.

    Maybe it's just me, but it looks like MS painted themselves into a corner. Because so many of their components were already "volume-discounted" from day one they have far less room to lower costs. Meanwhile Sony is supposed to combine the two main chips in the PS2 into a single chip to drive down costs even more - something I don't think MS could get NVidia & Intel to do - and I think MS has a lot more pain to come.

  7. The Swiss Army Knife Effect by EXTomar · · Score: 5, Insightful

    Black Aardvark is describing this problem exactly.

    The Swiss Army Knife Effect is when designers see a group of disparate things that have some sort of likeness and try to stick them together. The problem is when you stick them together you get a chimera instead of a value added tool. A Swiss Army Knife may have a screwdriver, a scissor, and a knife but none of them are really that good to use and often times you find yourself looking for the seperate tools to complish your task.

    Could you put together a computer with just your Swiss Army Knife? Sure...the tools are all there but they don't perform as well as finding them tools seperately. You'd be better off gathering the tools and leave the Swiss Army Knife to emergency usage(ie. think MacGyver).

    I am leary of spending $500 for a machine that is that is nearly as good as a Tivo and nearly as good as a console. For me to buy the machine it has to be just as good as both otherwise it is a waste of money.

  8. Re:There's that myth again... by Fred+IV · · Score: 5, Informative

    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

  9. XBox: How long can it defy the laws of economics? by bryanbrunton · · Score: 5, Interesting


    The XBox really really is amazing. Here we have a product that defies the laws of economics. At this point its just a matter of how much money Gates and Ballmer can stand to lose. Its an ego thing. Every other company on the face of the planet would drop a money losing project like the XBox as fast as possible. The world is filled with companies that are not named Microsoft which have stock holders and corporate boards that actually have influence over the decisions of executive management. Not so with Microsoft.

    We all know that XBox is finished in Japan. If Microsoft is lucky they will manage to sell their original shipment of 250,000 Japanese XBoxes before the end of this year.

    http://www.the-magicbox.com

    The XBox is in the process of dying in Europe. Just look at the European software charts. The XBox has just one exclusive game in the top 20:

    http://www.elspa.com

    And now one of MS game developer partners has pressured MS into allowing it to publish title for the Nintendo GameBoy:

    http://biz.yahoo.com/rf/020625/tech_thq_microsof t_ 1.html

    Is there anyone out there who will force Gates and Ballmer to come to their senses? Or would dropping the XBox at this point be such a face losing position for Microsoft that they have no choice but to keep throwing money at it?

  10. Lotsa Money by fm6 · · Score: 5, Interesting
    Jeez, look at those figures. MS has $40 Billion in cash and $30 billion in annual revenue -- one-third of which is profit! At that rate, they can sustain the losses of the X-Box division forever.

    And in fact they sort of need to spend money. It might sound nice to have so much cash lying around, but for a big corporation it can be a nightmare. In the current money market, that $40 Bil will not stay $40 Bil for long. And since they follow the "recycle the profits" model (MS stock does not pay dividends), it's only going to get worse. Better to throw the money at a Blue Sky project and tell the stockholders they're generating long-term growth. Which might even be true.

    But damnit, it's time to drop all the Reagan-era cliches and face facts. That much economic clout in the hands of one company is bad for the whole software industry. Including Microsoft. This is not a free market. Pretending otherwise is like saying Al Capone was just another illicit beer vendor.

  11. Oh my Gawd, you're right! by drew_kime · · Score: 5, Funny

    Imagine, you can still play Halo even when your favorite show is on because its being recorded for you to watch after you've blown some shit up.

    Holy crap, I wish I could do that today. I mean, if I could go out and buy some kind of product that would let me record what's coming in over the cable while I'm using the TV to play games. Something that I could connect inline before the cable goes in to the TV. Something like maybe a freakin' VCR.

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