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The Economist Looks At The Console Industry
Fromeo writes "The Economist is running an interesting article discussing the state of the console industry, along with their usual interesting graph, showing the cycle that the industry follows."
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Why buy them? As my friend would say "They're a downgraded computer in a shitty-looking box".
I found the following interesting:
the opportunity to create a network of consoles through which all kinds of entertainment content, including films, games and music, can be distributed. That was Sony's original aim with the PlayStation 2.
All of the XBox naysayers talk about how the "XBox is a PC" and how MS won't focus on the gaming experience but try to bundle it (see the recent PVR leak). However, it is obvious that Sony is trying to do the exact same thing - this is not the first time I've seen mention of a "Sony digital media center". So, really, the only "true" console is the GC, which of course a silly contention.
There is no longer anything that can be done with computers that is nontrivial and clearly legal. -- Paul Phillips
Gotta love how the game industry plays with their numbers of bits. I imagine it'll take another hardware generation or two before the marketing guys come up with another number to hype.
When Ill be getting My Playstation 20?
In college, really poor, need a flatscreen.
For people who may have misread the summary as I did ...
The Economist article concerns game
consoles. Given the range of topics on /.
it very well may have been about "consoles"
(e.g., WYSE terminals).
Clarity isn't a four-letter word.
Also, the actual games themselves don't cost more than a couple dollars each to manufacture (even on DVD), and that's including the box, instructions, etc.
Aren't you forgetting those pasty-faced, caffeine-consuming individuals that produce the funny patterns of 1's and 0's on the DVD? What do you call them now ... programmers? Most of the programmers I've talked to need to eat occasionally, and live somewhere with a roof.
Toronto-area transit rider? Rate your ride.
... is like the National Enquirer mentioning Scientific American.
The X-Box has a 128bit processor, dude I can't wait until Intel releases that for my PC.
My god...this article has more inaccuracies than a Slashdot story!
but Sony, Microsoft and Nintendo all intend to release plug-in adaptors to link their boxes to networks.
And WHERE do you plug in the Xbox broadband adapter, eh?
Both Sony and Microsoft decided that ordinary modem connections were too slow to do justice to their advanced consoles.
Really? Then why does the PS2 network adapter have BOTH network and modem ports?
All three firms are losing money on their consoles, though exactly how much is difficult to say.
Wrong again! Microsoft is the only one doing this!
And as far as that sales graph goes...not a single one of these systems is 128 bit. The GameCube and Xbox are both 32-bit systems (PowerPC-based and Intel x86, respectively). I don't know about the Emotion engine in the PS2, but I suspect that with less than 32 MB of RAM, there's no reason for it to have more address lines, so it's probably 32-bit as well. And the Dreamcast uses a SH4 processor...That certainly isn't 128-bit either.
"Mod, mod, mod...and another troll bites the dust."
...play Neverwinter Nights on my console.
:)
oh
But we WILL be able to play it on our Linux boxes, once we get all the flakey software drivers and hardware compatibility out of the way.
"For a successful technology, honesty must take precedence over public relations for nature cannot be fooled." -Feynman
Just one minor note... Yes, it's the software that makes the money on consoles. But, not all that profit goes to the console maker. If EA or Sega or someone else develops the game, I believe M$ makes about $10 on each unit that developer sells for the X-Pox. That $10 is a licensing fee of some sort. When M$ is the game developer (as in their first big seller-- Halo) then they probably get something closer to $40. Anyway, rumor has it -- http://www.redherring.com/insider/2002/0624/xbox06 2402.html
-- that M$ will lose about $2 Billion (with a B) on the X-Pox over the next two years. Don't feel sorry for them. They have something like $40 Billion in the bank.
Just finished a read that covered the beginnings of the console wars pretty well called The Ultimate History of Video Games, while it's not quite as complete as the title would have you believe, and it's not the easiest read in the world, it's still has a lot of information about how the economy and people who purchase video games drive the market.
It will be very interesting to see how the competition pans out over the years... Microsoft and Sony make quite an assumption that gamers are really looking for the "Total-Multimedia-Experience" and "Network Gaming". Personally, I'd just like to see innovation replace the same old styles of games being re-released with a facelift every year...
--
I've had to create 4 new accounts trying to avoid karma... dammit!
Okay, this is a matter of some debate from the many articles I've read on the console industry. Are they all really losing money on the consoles?
It seems pretty clear that Microsoft is losing money in a big way on the consoles. I have seen nobody suggest otherwise, and if you think about what their hardware is and the price it makes sense that they are losing money.
For sony, the profit/loss question seems more up in the air. I've seen most places say that they are losing money on it but I've seen some articles suggesting that the loss is minimal or may in fact be a small profit.
As for Nintendo, I've gotten the sense that they are actually making at least a small amount on their consoles. They didn't throw in all the power that the other two companies did planning to instead rely on the power of their collection of games as incentive to buy.
So does anybody have any reasonable factual information about how much the companies are or are not losing?
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Rather frightening that on the graph, everything pre-nintendo is labelled "Atari systems". Of course, society back then pretty much equated Atari with video games (see: Blade Runner for a good chuckle).
I know the VCS pretty much decimated all competition back then, but does anyone have any harder figures? Adding the Colecovision and Intellivision into the pot, there must have been some signifigant inroads into Atari's numbers.
The funniest though, has to be the fact that they say Atari systemS. Sorry folks, but other than the venerable VCS/2600, Atari didn't really do squat in the marketplace.
Endless arguments over trivial contradictions in books written by ignorant savages to explain thunder in the dark.
Sony and Nintendo both plan to release adaptors for their consoles
So they really don't know what they are saying.
All the consoles to date have not had greater then 32 bits worth of addressing. The new consoles PS2, DC, X-Box (in the GPU) , even Jaguar, have many 128-bit (or larger) data paths and multimedia registers. The PS2 has a over 2000 bit wide bus in the GS, but only 4 Megs of vram. I love how they say the nintendo 64 is actually 64 bits ;p
Also they missed the Atari comeback effort in the early 90's after the Genesis came out. Both the Lynx and the Jaguar are not on this graph.
Just because programmers don't get paid per unit sold doesn't mean they don't factor into the profits of a game. Games cost upwards of $5 million to program upfront. Your $40 of profit per game doesn't even get factored in until this investment is returned.
Nintendo stated many times that they plan to eventually offer the Gamecube for $99 and they will still be turning a profit on the machine itself. However, they didn't plan on cutting prices so soon to fight the competition. As usual the person writing the article just assumes all the consoles are losing money when in fact Sony has refab'd their system for the pricecut so they dont lose money, and Microsoft has done nothing but lose tons of money from the start.
It makes people cry? Maybe the hardware makers, I guess.
-Dave
Microsoft stated when the XBox was released, that they were discontinuing their UltimateTV PVR in hopes of merging it into the XBox. This pissed a lot of people off in both camps. First, who wants a console when they just want a PVR, and second, who wants a PVR with monthly charges when all they want is an XBox. Their online strategy costs even more money on a yearly basis. Nintendo was smart and has seen what has happened to the CDTV, Dreamcast, and soon Microsoft and will just stay a true to life 100% console machine for the masses while Sony and Microsoft try and duke it out in an unwinable online arena (Really, who cares when all the online games are already on the PC and play BETTER on the PC?) .. Kudos to Nintendo for keeping their boat afloat.
Perhaps the reason why 'gaming is no longer the province for children and teenagers' is because that when gaming consoles became popular (i.e. in the day of Atari/Colecovision and then NES/SMS) these same people were children/teenagers themselves? (Ok, that may be stating the obvious)
And why didn't NEO-GEO make it into the chart? That was by far the best console during that time...too bad it was $100 a game (or some ungodly price like that) and some ridiculous amount for the console. I knew a kid who had one, but he was a prick and never invited me over to play it, because he was a spoiled brat.
So it would appear from those figures that Sony, at least, may be making a small profit. But I'm wondering, are those prices purely the hardware cost per unit?
Each manufacturer does a lot of marketing. Also add to Microsoft's hemorraging that I'm sure they have to put quite a bit of money into getting exclusive titles for the X-box. Sony has enough market share that developing only for PS2 makes perfect sense. Most of the exclusives on Nintendo are all manufactured by Nintendo. So, in the end i have to believe Microsoft is really hurting relative to the other manufacturers. Having said that though, they have billions in the bank, they can afford to take a hit in the short term if it pans out long term.
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It was that the bit rating of the console was always the main processor. Not the graphics. The NES only had 4 bit graphics, but it was an '8-bit' system. Sega genesis could only display 64 colors at once and the SNES 256, yet these were all, '16-bit' systems. The main processor was the heart and soul of all the consoles before the current generation. As it would do almost all the work. Only in the last generation did we finally see co-processors that could actually do more then flip a couple of bits. So now they rate it by the largest thing in the system they can get away with, which is usually the size of an internal register.
You really just can't compare apples to oranges which is what they are doing. All these systems over the years have compeletly different architechures. From the Atari 2600 to the X-Box, the only similarity is that they are all modeled after turing machines. So at the end of the day, they should be compared on which games they have and not how powerful they are.
That sounds like either new math or Andersen accounting practices.
To many, total abstinence is easier than perfect moderation. -- St. Augustine
Wtf? This is a surprise to me. So Sony is basically dependent on their video game console? If the number "exceeds" 100%, then all of Sony's electronic hardware and music properties are (or were), losing money. And Sony has only been in the 'console' business for 8 years or so.....
This is probably false info, considering all the other inaccuracies in this bad article.
The $5 million number is a *very* rough estimate, and most of the bigger selling titles cost much more than that to develop. Then you have to take into account advertisement costs, distribution (you do have to pay trucks to take your game to best buys across the country you know), and apparently legal fees (at least most current game companies feel the need to sue anyone that writes any program that interacts with their game in any way (companies like Id withstanding)).
People who arnt in the business of comparing (ie, not techies or wannabe techies) rarely make that comparison. Doubly so for products they would never even be comparing when making purchasing decisions.
Its just a number for sales people to rattle off to parents, who invariably think one of two things:
- gee, that number's higher than the last time I heard it
or even worse
- gee, that number's high
It was like MMX - it was a useless feature when salespeople were pushing it, but shoppers really seem to be fooled by numbers and acronyms. The only part that ticks me off is how hard it is to teach a non-technical person to never put stock into what they hear, and more importantly, never put stock in their own ability to interpret it. For some reason, people dont all seem to act like they can talk the talk with cars, planes, other technical things - but there is something about technology that makes lots of newbies think they can get some sense of perspective in the jungle of specs and features out there. I know I might sound somewhat elitist, but I hope for my sake a mechanic knocks some shit into me if I ever go off on engine specs and prepare to drop serious money on my assesment of the sales lingo I'm presented.
"Old man yells at systemd"
How the hell does one business line exceed 100% of a compannies profits?
Funny, I kepp hearing about the ps2 having problems with movies, but every dvd I put in has worked fine. Granted I've only tried about 50 or so...
Shift happens. Fire it up.
It's called subsidies. They were using profits from the games to offset losses in other groups. Because of this, the profits from the PlayStation business were actually larger than the profits for the whole company.
Well, what do you expect when Microsoft used their petty cash account to buy Bungie (a long-time Mac-first or hybrid-first company)?
Remember, the original plan was for Halo to come out for PC, Mac, and PS/2 (the latter was officially killed, the other two are merely "delayed"). Do you think they would have sold more copies for PS/2 than they did for XBox? Do you think that Microsoft therefore basically gave up profits so they could use Halo to help XBox sales? Doesn't that sound kind of like the actions they've been convicted of in other areas?
First off, the external addressing of the chip has nothing to do with the internal width of the chips registers. The last time I checked, the Nintendo Gamecube was MIPS 5000-based, which is an enhancement of the 64-bit MIPS 4000 core. And the Sony Emotion engine is a customized MIPS 4000 core with a specialized 128-bit SIMD execution unit and registers.
The only reason the X-box can challenge them with its general Intel x86 approach is the fact that the CPU clock is much faster (almost 4x the PS2's) and has a GPU that is 18 months newer in design. Otherwise, at least the PS2 is a much sweeter custom design -- and it costs far less to reproduce at today's feature sizes in the massive volume consoles are reproduced at.
-- Bryan "TheBS" Smith
Independent Author, Consultant and Trainer
When the xbox was first brought to the public's attention, one of the strengths mentioned was that since it was at heart an intel cpu and nvdia gpu (which are common in PCs), a great quantity of games would quickly be ported from the PC to the xbox. This has not happened, and the lack of game titles available has become a very severe criticism of the xbox.
What is preventing PC games from being ported?
All of them used the same initial business model, but Sony and Nintendo are far beyond the "initial entry." Regardless, their smaller, more efficient, custom MIPS designs have shrunk in die size as fabrication technology as shrunk to smaller feature sizes. Normally "commodity x86" wins in economies of scale, but the sheer quantities of Sony and Ninendo volume also gives them the same econoies of scale benefit despite their custom chipsets. So then it becomes a matter of total die size -- X-box loses, big time!
One only needs to read EETimes and a few other engineering magazines to see articles about how much it is actually costing Sony and Nintendo to reproduce their MIPS-based solutions. Microsoft? What would Microsoft know about Sony and Nintendo's costs?!?!?!
-- Bryan "TheBS" Smith
Independent Author, Consultant and Trainer
Back when original GeForce (NV-10) first came out?
do you know how nVidia (supposedly a respectable company) pulled 256 out of its you-know-where? this is quoted from Tomshardware:
Well, it took me some time to really understand that as well. First of all it isn't the price, Creative Labs are supposed to ship theirs for $249, but if you're in the right state with low tax it may still add up to $256. It should also not really be the memory interface, because this is only 128-bit wide. Some think that the usage of DDR ('double data rate') memory excuses the use of '256' for the memory interface, but that's in my humble opinion not quite all right. GeForce-cards with SDR- RAM would anyway not deserve the '256' then and the fact that data is transferred with the rising as well as falling edge of the memory clock does still not make it wider than 128-bit. The memory interface is anyway my critique-point number one, because it provides the boards equipped with SDR-RAM with a slower memory bandwidth than TNT2-Ultra-boards. GeForce's memory is currently clocked at 166 MHz, while TNT2-Ultra runs it at 183+ MHz and both chips have the same memory bus width of 128-bit. NVIDIA did not tell us the memory clock of the DDR-RAM card in our test, but I guess it's 166 MHz too, so that this card has at least 81% more memory bandwidth than TNT2-Ultra.
But let's get back to the magic '256'. I could hardly believe my ears when I was finally told what the '256' stands for. NVIDIA adds the 32-bit deep color, the 24-bit deep Z-buffer and the 8-bit stencil buffer of each rendering pipeline and multiplies it with 4, for each pipeline, which indeed ads up to 256. So far about the fantasy of marketing people, they are a very special breed indeed.
My life in the land of the rising sun.
Sony owns its own factories and is an R&D company - they have been lowering the size of each of the PS2's chips, and very recently put both the Emotion Engine and Graphics Synthesizer on one chip, allowing them to further cut costs on production.
Look at it this way - back when the PSX was released, the price of $300 meant it sold at a loss. Opening up a PSX showed a mess of an architecture and the things were commonly known to overheat (infact, when PSX-mastermind Ken Kutaragi showed that the PS2 could be kept in a 'vertical' position, a lot of people had to chuckle at the fact that the only way their PSX's wouldn't overheat is if they were in the same position). But by the time the PS2 was unveiled, the cost to make a PSX core was around a couple of bucks at most, a reason why a PSX chip is the I/O processor inside the PS2 (and thus allows just-about perfect PSX emulation on the PS2.
That was over a period of 5-6 years, so I imagine at this point Sony has been able to drastically cut costs to the point where $199 might actually be a profitable price.
Meanwhile, both Intel and NVidia are pocketing whatever production improvements they make, and are sticking it to Microsoft. I believe this might be the reason Microsoft has recently been getting ready to start their own chip production (for the Xbox 2, of course).
As for Nintendo, I have no idea how ArtX's Flipper GPU license is being handled (especially since ArtX is now a part of ATI, the reason ATI's logo appears on every GameCube), nor do I know too much about the Gekko, other than it was done with the help of IBM. Panasonic helped with the proprietary disc format, but I believe the only thing they got from that is the right to make a DVD-playing GameCube, the Q. The only thing I know is that the GameCube doesn't cost nearly as much to make as an Xbox, and probably less than or equal to (but more likely less than) a PS2.
I think all these guys talking about how much Microsoft, or Nintendo or Sony is losing are repeating stuff that they've heard with no independant confirmation. How could they? With the exception of a handful of managers at MS, who could possibly know what MS "loses" on the hardware? Nobody. And MS or Sony isn't going to tell a reporter the truth.
I happen to think that it costs about $100 to make an X-Box, but MS "leaks" these loss numbers to make it seem as if buying the console is close to theft
(e.g. "Hey bobby joe, I got me a X-Box. I only paid $200, but it costs MS $350 to make. Boy, ain't they dumb! Mebbe I'll buy 2 more 'cause I earn $150 for every X Box I buy")
You were mistaken. Which is odd, since memory shouldn't be a problem for you
What's the bet that Microsoft will release Xbox 2 and 3 in a short time period? They will stick to the PC mindset which says "why squeeze most out of a system when you can upgrade?" That will be the downfall of the Xbox (and its predecessors) because they won't push the system to it's full potential. The original playstation had every bit of power used in its later games. This is what allowed it to become top console because it was around for years without changing (originally the ps2 was to be released in 1998 and ps3 in 2001/ 2002 but this was obviously pushed back).
Anyway, that's my 2
Does this make my brain look big?
I do not know what the main processor in the PS2 is derived from, but MIPS does ring a tiny bell.
It means that the other divisions at Sony operated at a loss, so the total profit at Sony was less than the profit generated by the Playstation related items.
-asb
My problem isn't with emulators, or the people who use them to check out games. It's with the people who think that it's not stealing from the programmer and content people of the original game and the people who justify the theft of the original ROM. /.) should respect that if they like to play games.
All the 12 year olds who never had a SNES now think it's their right to go back and steal all these games? I don't think so. I don't care if you do it, just do sit there and try to say that you have some right to do it just because the original company went out of business or some such nonsence. Making games is/was hard work, and people (especially geeks on
Most video games are like pop music, they are shallow and only ment to be used for a short time. They don't really have depth or meaning. They are ment to distract you for a short while and then you move on.