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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.
... 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."
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.
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
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
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"
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?
> How the hell does one business line exceed 100% of a compannies profits?
When the company, exclusive of that business line, is losing money. For example: product A made by company X shows a net profit of $120 million a year. Leaving aside the revenues and costs associated with A, X loses $20 million a year. Result: Company X as a whole shows a net profit of $100 million a year, with product A being 120% of X's profits.
Chris Mattern
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
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.
My guess would be royalties. After all, your PC game company can create a new PC game and not have to pay a dime in royalties to Microsoft. If the company takes the time to make an XBox port, then they have to worry about copies of their XBox port stealing sales from their more lucrative PC version. When the XBox market gets large enough so that it is worth the risk the PC game companies will probably do the necessary work. In the meantime, however, only those companies that Microsoft is paying are likely to come out with XBox titles first.