Slashdot Mirror
Microsoft Loses $177m on Xbox in Three Months
Albanach writes "The BBC News are reporting in this story that Microsoft's Home Entertainment Division has filed a submission to the Securities and Exchange Commission reporting a loss of $177 million for the three months to 30 September 2002. The loss comes on revenues of $505m for the division that manufactures the Xbox games console. Microsoft are said to be prepared to spend $2 billion funding Xbox live over the next five years, suggesting it will be some time before the home entertainment division break into the black."
That's probably less than billg's annual pizza budget.
Story here!
(-1, Raw and Uncut is the only way to read)
Of course... This could be an accounting tactic to allow them taxbreaks on their losses.
or is there something actually legitimate about this? Granted there's stiff competition in the home console market, but MS was throwing consoles at people in hopes that they'd recoup their losses with the sale of games. to hear that they're losing money with game sales seems odd to me.
The World's Worst Webcomic!
Yay! Xbox rules!!!
$177 million, that's what, about four seconds worth of profits on Office and Windows. Why's this news?
If *I* were MS, I'd take almost a total loss on the consoles...make those things appear everywhere. Then, after like 3 years, I'd start charging for the consoles. Kinda like the IE approach.
It'd certainly make sure that everyone has them.
JoeLinux
It is astounding how much economic muscle MS has...
WOO HOO!! Just think how much it would be if Linux on it really took off.
They have said from the get go that they didn't care about losing money to dominate the market.. And they have taken some market share from Nintendo and a small amount from Sony.. But that number seems pretty small for a company with like 20 billion in cash..
*narf!*
We really need to redefine business loss. Microsoft didn't lose money. They knew ahead of time that they were going to be in the red on the Xbox. Not that I'm saying Microsoft is bad for following this practice, it's common practice in many markets.
I just don't think that purposefully loses should count like a standard lost. They know that this $177m they drop now, it's an expense. Not a loss. They will get it back, they are just taking credit out on their budget and getting the government to pay the interest.
Dacels Jewelers can't be trusted.
This is of course, how Microsoft takes over a marketplace. They are eternally funded, and can oulast anyone.
They'll chip away at Sony and Nintendo's profits until even these successful companies can't make a profit.
I wonder why they're trying to pull out of the DVR market. They say that there's no money in it. Maybe. I thinks that maybe it conflicts with their DRM agenda.
Here.
As El Reg points out: "it's also clear that Microsoft is the dominant force in the PC market, and only the PC market. It can afford to shoulder big losses in the areas where it wishes to be the dominant force for a very long time. Which is fortunate, because in several cases these look suspiciously like ventures normal businesses would be forced to put a bullet into. Now."
--
E_NOSIG
You're right, I did lose a million dollars last year. I expect to lose a million dollars this year. I expect to lose a million dollars *next* year. You know, Mr. Thatcher, at the rate of a million dollars a year, I'll have to close this place in... 60 years.
-- Charles Foster Kane
Yet Another Web Site
I've done it... I've sold my soul to the Beast and picked up an x-box live kit. I felt bad enough supporting MS, but when I had to give them a CREDIT CARD NUMBER, I knew I was screwed. But like all those that have sold their souls before me for riches, wealth, power, etc... I'm having one hell of a time. Mmmm... mech assault.
I'll probably be able to pick my soul back up on e-bay soon anyway, but eh.
-- Minds are like parachutes... they work best when open.
As long as there is profit in the Office and Windows end, other divisions can languish for as long as they want. Or until they embrace and extend.
The waiting game continues, let's see who runs out of money faster (yeah, right)...
when you have $40b in the bank I guess 2 doesn't sound so bad. Another sad aspect of the monopoly is that MS is in a position to brute force its way into other markets like this.
I'm not too sad to hear about this. Microsoft bought Rare and the rights to Perfect Dark Zero. That's a big reason I bought my GC. So when/if the X-box goes away, maybe Rare will start putting out quality shooters on the GC again.
Why is no one playing it? I got my first blowjob while playing Halo, so I guess I don't have a rational view.
When XBox linux finally gets out, and stable. I would like to buy an XBox just to fsck it to microsoft, and use the XBox as an MP3 player for my home stereo. Too bad I already have a really nice Sony DVD, otherwise I would use it for that too!
I want my rights back. I was actually using them when our government stole them after 9/11.
Who here thinks games consoles are profitable?!? The money is made from the games.
I'm not at all suprised that they are willing to throw all this money. The real question remains, however. How in the world are they going to be able to get the cost of the Xbox down such that they can ever compete with Sony? I think I've heard that Sony is actually making a sliver of a profit on the PS2 per box. I see that as the fundamental flaw in Microsoft's attempt.
Bel, the mostly sane.. "Of course I can't see anything! I'm standing on the shoulders of idiots." -- Me
I'm not surprised; they lose money selling the systems, and since they didn't make a huge splash when it debuted, they're not catching up with the software sales. I mean, hey, the library is pitifully small compared to the Playstation 2 (it's about the same as Gamecube, but the Gamecube is cheaper and the games just look more fun.)
I played an Xbox a couple times... I don't know. I just don't have the same fun that I do on a PS2 or Gamecube. Xbox has all this horsepower and no track to race it on.
evil adrian
Billy Henderson always wins, 'cause his dad's the scout leader.
It seems that this will only be a short-term hit. How long will it be before certain types of game are only available on the X-Box? Already, you can't get Colin McRae 3 on PC - you have to go for X-Box or PlayStation.
Surely this the way Microsoft want things to go... gamers will move away from PC if they want the latest stuff.
1) Create Gaming platform
2) ???
3) Losses
4) ???
5) Profit!
Buy an Xbox. Hurt MIcrosoft. Buy three. Destroy Them.
M$ will just sell it to a non-assuming company that will use Linux to clean it up and make a profit.
Then blame the Open Source community for stealing all the games anyway
throw the baby out. The bathwater is cold
One of the tactics Standard Oil would employ was to sell oil and petroleum products well below cost, absorbing the loss for the sake of driving competitors to the point of ruin, and then buying their ruined competitors' assets.
Sony is a strong, powerful company. Nintendo is slightly less so. I think, however, that if you were to do a direct comparison, Microsoft has the ability to lose more money and stay solvent for longer than either Sony or Nintendo.
This tactic was found to be in violation of the Sherman act when applied to Standard oil. It's amazing to me that MS is able to get away with the same thing without its competitors screaming more loudly at the US government.
The next Slashdot story will be ready soon, but subscribers can beat the rush and slashdot the links early!
an abusive monopoly. No other company can just throw this kind of money away in this market. The only reason why people are not saying something is because Sony is actually beating Microsoft's stupidity.
Bel, the mostly sane.. "Of course I can't see anything! I'm standing on the shoulders of idiots." -- Me
haha
Guess the console crowd are a little smarter than the desktop computer crowd in choosing which is best platform to use. With titles like SOCOM, GTA3 and GTA3-VC, ps2 will be king a little while longer. M$ probably never felt comfortable making something that couldn't be hacked by a 12 yr old or would BSOD at the drop of a hat.
M$, I wouldn't piss on them if they were on fire
If you don't say anything, you won't be called on to repeat it. -- Calvin Coolidge
Ignore short term losses. Few companies do, by MS can afford to. The company as a whole is making a profit, so the shareholders will allow it to carry on.
In the long run, the plan is to eliminate console competition, just as Sony tried to do beforehand. They'll give X-boxes away if they have to.
I always hate the bit in the movies when the bad guy gets what's coming to him. Why don't we organise a whip-round to show Ole Bill that there are no hard feelings, and maybe he wll be so touched that he will go open source and let us run VB?
Virtually serving coffee
You know, I always hear the argument that, although Microsoft's products are arguably poor, their superior business practices (whether legal or otherwise) keep them financially on top.
One interesting thing in the article is that several of their divisions (mobile divices, xbox, msn) are consistently losing money.
So, is Microsoft as a company really good at business strategies? It seems to me that the "$3.5 billion profits from its operating system and software divisions in the quarter" are what keeps it afloat. I doubt any other business could fail quite as much as Microsoft and still survive.
So when/if the X-box goes away, maybe Rare will start putting out quality shooters on the GC again.
What makes you think Rare will crawl back to Nintendo? If the Xbox fails, Microsoft could just make Rare develop games for Windows XP.
Will I retire or break 10K?
I know, I know, we all hate Microsoft yadda yadda yadaa. Then why everytime time, there is something related to the xbox we get a submission on it, last time I checked this was not a video game site. Hell Capcom just announced 5 killer apps for the Gamecube, but I don't see that on here. Xbox IMHO is a cheap ass pc, I got one free with my dsl sign up, and I gave it away for a Nextel, something I actually will use. Microsoft is just trying to take another market, one that I hope they do not.
Ubuntu- Linux for human beings.
XBox: Down.
Windows OS sales: Up.
Office Package: Up.
Pre-packaged units with retail machines: Up.
MSN Subscriptions: Up.
Mouse sales: Up.
Boo hoo hoo? Psh.
Informatus Technologicus
This is similar to how we report linux and windows vulnerabilities. When a windows vuln is mentioned, we bitch about the OS and its quality etc. etc.; when a linux vuln is mentioned, we downplay the potential risks, and then compliment the speed of patch/update/fix release.
Don't get me wrong--I love linux, use nothing else, and haven't for many years; this ridiculous attitude of most zealots is annoying, however.
Proving you can put anything in homes across america, assuming you have $2 billion to spend on it.
I dont want to start a fight here, I admit I've never even used an X-Box, but I think I could have freezers installed in every Igloo if I had $2 billion to market them.
Why stick up for big business?
I killed a corp just to watch it die.
OK, I expected kind of big losses foir the XBox - new product, tough marketplace, lots of competition... and I'm not sure how much Sony and Nintendo are losing on their consoles.
But I'd think that Microsoft had a huge advantage - after all, they own MS-Windows and can leverage that technology within the internals of the X-Box. Furthermore, the X-Box should be a great game box, because there are so many software vendors that already produce software for Windows.
So where did Microsoft go wrong? Is the X-Box just grossly mismanaged, with a seemingly unlimited budget? Or is this something that is "expected", and therefore was part of the grand plan, and therefore will ultimately result in the glowing profits and new markets for Microsoft?
The only other thing I know is that I bought a PS2. I thought of going with the X-Box - heck, it is a sweet game console. But I stuck it out with the PS2 because of game availability - after all, the PS2 has already been proven. Not sure if I made the right choice, but I don't think I made a bad choice.
Oh, did I just violate the DMCA? Oops... -Nafry.
G=C800:5
i'm a (not so proud ;) ) xbox owner, and while i'm excited about various applications (sega's games, xbox live), the xbox is already #3 in this console war and will stay that way. the main reason is their DISAPPOINTING presence in japan (which is virtually non-existent). you simply can't win a console war without support from nihongo developers and users.
that said, i don't this MS really cares. for a first iteration console they've done well, and you can kind of think of xbox as a testbed for future MS consoles (especially xbox live). also, they only have some 50 billion left in the bank (oh, the convenience a desktop OS provides!).
my bet is that xbox2 will come out BEFORE ps3 simply because first-mover momentum in the industry has become more important. the ps2 is hard to develop for, but the installed base is NUTS so developers flock to the ps2. MS realizes this so i wouldn't be surprised xbox2 comes out by 2004ish.
smd4985
MS is trying to gain market share by selling hardware below cost. The trouble is that that strategy won't work against a dominant force like Sony. So while MS takes a $177mill loss on the XBox, but touts its US market share, Nintendo is laughing all the way to the bank with strong software sales for the GCN and dominance of the handheld market with the GBA (even MS produces games for it).
What are you a former AA employee? Did you work on the Enron account?
If expenses > revenue = LOSS
If expenses < revenue = PROFIT
It is that simple. This playing stupid accounting tricks is one of the reason the stockmarket went down so much. The investorers could not trust the numbers the companies where giving out.
Hey... I read that link. Did you notice he was being charged with "Terroristic threats" ?
:)
What the heck is that?
Dont mod me down, he started it!! I'm on HIS topic, his off-topic.
Why stick up for big business?
- Keep it open, stupid. The barrier to entry is very high for
Xbox development - the very opposite of the strategy that have made Linux
and Windows very successful amongst amateur programmers such as the founder
of this site. "Developer" Xboxes which will run all signed and unsigned
software should be plentiful and cheap - not subsidized, but rather
sold slightly above cost. This has the benefit of making Microsoft's
economy of scale pay off for thousands of potential game developers (read:
licensees) as well as hardware hackers who are looking for a cheap PC.
- Buck the content industry. Manufacturing Xboxes that defeat
region encoding and macrovision with small modifications would cause sales
to skyrocket. Likewise, since Sony has their own gaming arm and no other
RIAA/MPAA company is involved in game production, the support of the
content industry is meaningless.
- Focus on getting better games. Why does nobody develop good
games for the Xbox? For starters, Microsoft has failed to push Xboxes in
the game capital of the world, Japan. Microsoft needs to revamp their
entire strategy with regard to this country, starting with the release of
hentai games and ending with the successful ports of many PS2 games over to
the Xbox platform. The Xbox will go nowhere if there is no good software
to run on it.
- Keep manufacturing costs down. Microsoft needs to switch to AMD
or Transmeta chips, which pack more power for the buck, run cooler, and are
100% compatible with their existing software base. Also, this will allow
them to use cheaper graphics coprocessors by using a cheaper, more powerful
main CPU.
These are just a start, but if Microsoft takes these suggestions, their Xbox division will be well on its way to profitability.That's odd...
The $300 iMac I bought off eBay plays iTunes. :)
I like big butts and I cannot lie.
I expect that they will scale back their marketing a LOT as soon as they proliferate a base number of boxes, which was their entire objective anyways.
Besides, Microsoft was already planning for first year loses so it isn't like that this wasn't forseen.
"Microsoft are said to be prepared to spend $2 billion funding Xbox live over the next five years, suggesting it will be some time before the home entertainment division break into the black."
Must be nice to flood a market, and push out all the existing competition, thats the advantage of a monopoly that has no bonuds, branching out into other markets, to do the same practices that worked so well before..
---- Booth was a patriot ----
All stupid companies should be killed!
get a clue or stop trolling.
Sony sells linux for PS2, that debunks your whole thesis. This is well known.
How sad that on the day Microsoft launches Xbox Live, we have a story about how much money MS is losing on the Xbox.
The desire among the overzelous Linuxites for the Xbox to fail is palpatable at Slashdot. Just look all the posts advising people to buy a Xbox but not buy any games. Just so MS can lose money. Its pathetic and sad.
Go ahead and buy a Xbox, waste your time and install Linux on it. But I dare you not to play Halo on it (Game of the Year and a work of art).
I dare you not to plug in your Cat-5 and fire up Unreal Championship (released Today!). Oh! and when Halo2 is released later late 2003, please do'nt go and buy it. Leave it to the serious gamers.
The Xbox is a great piece of tech. Real gamers know it. Thats why in the states its outselling the GameCube (read linked article above).
And we will lose 1 million next year, and the year after that.
We will go out of business in 1000 years.
So there!
The 2 billion over 5 years was the initial projected loss. I imagine this was the loss figure that was presented to Gates and Ballmer so that the project could get an approval.
They have since upped the loss projects to 2 billion over the first two years of the project. See:
http://www.msnbc.com/news/772001.asp?0si=-
The XBox is classic monopoly leverage at work. Use the revenue from the desktop monopoly to dump product on an emerging market and attempt to control it.
I suggest boycotting Microsoft and purchasing a GameCube or PS2.
I'm surprised that's even legal?!
Even if that's not a lot of money for MS, in Belgium it's forbidden to sell products for less money than you needed to produce it...
It's unfair competition.
If they put Playstation and Nintendo out of business because they don't have the money to use this trick, some American judge should finally see what MS is doing and give them a REAL punishment...
If I am wrong, please tell me. I have an oogy feeling about it.
The problem is that Microsoft tried to buy their way into the console market with money, and not quality. They tried to throw money at the problem in the hopes that it would yield a huge market share, thinking their 'good name' would get them in with gamers. Hate to tell Microsoft, but Blue Screens are the LAST thing a gamer wants to see, and seems like every other time Bill has shown us a new OS, its has done that for him. Its nice to see that the gamer market isn't as blind as MS hoped they were. Give me a PS2 and Gamecube anyday.
.sig: It's what's for dinner.
Do you really think enough XBoxes were sold for linux hackers that it would actually undercut Microsoft that much? Most of their losses are probably from MOD chips (once you have those installed you don't have to pay for games and Microsoft loses out on licensing) and the expensive R&D costs of starting in this market from scratch. Nintendo is really the only company immune (right now) as they use completely proprietary discs.
"For instance you can't buy a gamecube or playstation2 to and run linux on it"
Hmmmm. The main reason this post makes no sense is quite simple: wildly innacurate statements like the above throughout*.
*written from a PS2 running Linux
try and back up your false claims with a link...
YOU CAN'T
Is this really news? It's my understanding that all console makers lose money on the consoles, but make the cash back up via the games. With this type of revenue model, it takes a little time. It's not quite interesting to look at the months near a platform launch. Of course, I could be wrong..
-- jimmycarter
Are you joking? Many companies invest hundreds of million dollars to build a product, take it to market, and scale it. Look at projects like Sprint's Broadband Wireless Group and their national ISP build-out to companies laying dark fiber across the country and around the world -- huge capital investment before they see any ROI.
Now anybody here could scoff at the meager relative amount, or the fact that MS doesn't get a clue about gaming, or whatnot. I take this for what it is: Microsoft's Xbox is not going to ever be economically profitable.
Sure, they may capture the market, but consoling gaming is way too competative, and fast moving, to get swept by any single machine, IMHO. I believe this is simply news because MS is finding it tough to crack the market.
But let's combine the stories here, folks. We've seen the "all eyes on MS" comments from those involved in the anti-trust litigation. We have the new licensing scheme brewing in the pot, with poor suckers tasting the spoon now and then. Plus, we have the
I have no summation. Somebody tell me what this smells like altogether.. Errant direction-by-committee? Or is there a cohesive strategy?
Should we expect secure versions of Banking, Movies, Games and whatnot to be pouring through an xBox? Will they upgrade on push/demand via
Oh the drama. Pass them chips.
Is this really frontpage news?
:)
After all, M$ has repeatedly said that it is expecting to lose $2billion over the next few years, and has had to drop the prices od the unit a couple of times since its launch to shift the units. Plus, with the extra costs of constantly remodifiying the boxes to stop the Xbox-linux crowd etc. etc.
Microsoft has taken a big gamble by putting the amount of money that it has into the Xbox, and hopes that its unit will the THE home entertainment system of the future. It is common knowledge that they are banking on losing money selling the units to recoup their losses with the sales of games, but with the recent winning battles by the Xbox-Linux crowd, and M$ losing every 'closed box DRM encryption' battle so far, maybe its a gamble that will seriously cripple the company in the future....
Its going to be interesting to see how this turns out
-- 7 string electric violin + live loop samplers
I don't want to downplay the Linux effect, but I'm sure people using mod chips or buying an Xbox as a DVD player have made more of an impact.
It's my understanding that the anti-trust laws are in place not to prevent monopolies, but to prevent companies with monopolies from using that monopoly to muscle in to other markets. I'm fully aware that this isn't the legal definition, but I've always heard it explained this way.
It's a clear situation when BrandX widgets have total market dominance, and suddenly they only accept BrandX replacement fillers. That's a case of BrandX obsoleting all the competing replacement firms.
What if BrandX has $30 billion in loose change resources and can afford to sink the competition by writing off hugely unsuccessful business ventures? Is this not precisely the type of anti-competitive action the anti-trust laws are supposed to prevent? Why is one company, leveraged by its monopoly in one market, allowed to compete with a business model in a market that would bankrupt all the competition?
Is there some aspect of the anti-trust laws that elude me? Is there some other principle at play? I'm seriously inquiring, it would seem to me that this is a flagrant, blatant, and overt abuse of Microsoft's monopoly, and they own up to doing it in writing.
A "loss" for a business might just mean they didn't gross as much money as they promised their shareholders. Sometimes "loss" means "profits are down from the same time last year"-- but there are still profits to be had, just not *as much*.
I'm leaning towards the explanation that Microsoft is always making money, just how much money goes up or down and where their loss/gain is calculated against some break even point that we are not made aware of.
Height: 38U, Weight: 0 Newtons, Eyes: #0000FF, OS: Gray Matter 1.0 (Alpha)
This will NOT happen. That is like saying that MacOS will drive Windows off the desktop.
Sony is HUGE, and they could probably fight MS toe-to-toe, especially in the console market. Nintendo is the 800 lb gorilla when it comes to game consoles, with Sony weighing in at a hefty 700 lbs. Microsoft is a screeching, shit-flinging chimpanzee.
My beliefs do not require that you agree with them.
Other systems such as the playstation2 or the gamecube have been sucessful because they have a large amount of propreitary games and use propreuitary hardware. For instance you can't buy a gamecube or playstation2 to and run linux on it, but on the x-box you can.
Actually, you can run linux on a PS2. Here's the FAQ.
AFAIK it's perfectly legal here.
They make a huge profit on the games, so maybe that's a loophole or something.
xbox consoles have always been sold at a loss. the more they sell, the more they lose.
ianal, but i remember some sort of antitrust law that says you can't sell at a loss to force out your competition. to be able to do so just proves that you are using your existing dominance in one market to expand into another.
so if MS has never made an attempt to make money on the consoles, it doesn't take a whole lot of imagination to think it just could be possible that losing money was part of the plan from the beginning. they need to lose money in order to sell the console at the same price as a ps2. but then they can put more graphics power into it because a loss is ok. we laughed in the beginning when we heard that xbox was sold at $100 loss. but somehow i don't think that ever worried MS.
plus this is a loss for the division that makes the consoles, not necessarily the same division that collects royalties from game sales.
i'd love to see a huge xbox cluster running linux. cheap hardware and it has a reverse windows tax.
you probably shouldn't have read this.
See this story which says Xbox has overtaken GameCube, at least in UK.
Stop complaining about how this is unfair and buy one!! If you don't like M$, buy one, but Linux on it and they lose money. If you like M$, buy one and games, and give them money. Either way you win!.
Check back, see how long it took the Playstation divsision of Sony to make any money.
As the story at the Register points out, any other business with ventures losing money like Xbox and MSN would kill them off as clearly bad business decisions.
A company willing and able to sustain hundreds of millions of dollars poured down a holes that are peripherally related to their core business of PC software, for years at a time, is crazy.
A company willing and able to do that against large, established business like AOL/Time Warner and Sony is downright scary.
A normal business, run to increase profits, would look at the margins on Office and Windows and simply jack up their prices. It's an iron-clad guarantee to increase profits at MSFT. There is virtually zero price elasticity of demand for Windows and Office and MSFT management owes it to their shareholders to optimize profits by taking advantage of their stranglehold on the market.
[Note: I don't own any MSFT.]
"Provided by the management for your protection."
The simple answer is: Linux has killed the X-box sales.
Yes. Of course. That's the reason. Everybody that bought an XBox hacked it to run Linux instead of buying games.
Maybe they lost money because:
1) Couldn't break into key Japanese market
2) Expensive, generic hardware that lends itself to piracy (far more likely than, say, Linux use)
3) Ugly machine, shitty controllers (this stuff counts in the console market)
4) They had to pay to get third party developers (ie/ Bungie)
5) They wanted to combine PCs and consoles (in a fashion) but failed miserably on both counts
Obviously, they went in knowing they would lose money. They are losing money in other sectors too (ie/ MSN).
Robots are everywhere, and they eat old people's medicine for fuel.
If they spent $500 million on marketing, that would have bought approximately 2 million machines completely. Why not give out a million and a half machines free, then you have a market share already, and then you get games guaranteed. Of course I'm not in marketing, but if somebody gave me a free game system, I'd be very willing to buy games (probably a lot) to play on it.
Not quite sure about Nintendo but Sony sells at a loss as well. It's part of their bus. plan. All the money is "earned" from the software.
(Sponsored by cheeseSource for President 2012)
First, revene (all amounts in billions):
Now, I'm not an MBA so I'm probably doing the math wrong, but doesn't that indicate a profit margin of 4.88/6.79 = 71.8%? At a time when pretty much the entire industry is bleeding red? Rockefeller and Hearst would be proud. I swear that Microsoft blows as much money as possible on their loser ventures like MSN just to cover up the obscene profits they make on Windows and Office.
My understanding is that the rules in Belgium apply to products which are also produced in Belgium. So, if I sold cheese at a loss the law would apply. However, since the consoles are designed and produced in other nations and have no direct competitors in Belgium (or anywhere else int he EU for that matter) that the law would not apply.
It's bad from a PR perspective. It's bad considering that Nintendo and Sony are now actually turning a profit on the consoles, a slim one but a profit nonetheless. Sony has managed to fit the entire Emotion Engine + CPU + sundry other parts onto a single chip, which reduces cost significantly. I'm not sure how Nintendo has pulled it off.
Xbox Live is doing better than expected, but the total numbers are pretty intimidating for MS. Last I checked (2 weeks ago), the score is:
- approximately 8 million GameCubes
- approximately 10 million XBoxen
- approximately 52 million PlayStation 2s
By those numbers, it's safe to say Sony has wrapped up this round, if you're looking for a 'winner'. 5X the market share is too compelling for game designers. The games go where the customers are.
[tangent]
I like the Xbox, even if it is a little limited in scope. There's a completely different philosophy at work at Sony's computer entertainment division that I don't think MS really understands. The Xbox is basically a kickass 3D sandbox. The PS2 is a super-flexible games machine; by this I mean that the PS2 is oriented for all kinds of games, not just 3D. The PMUs for example, can generate procedural textures on the fly. Take the oft-lamented VRAM issue. VRAM holds lots of shiny textures. But what if you are generating textures from (basically) pure math? No texture overhead. (Bryce 3D, to name a weird example, gets away almost entirely without using graphical textures.)
And now we see Sony moving fast to innovate in areas that Microsoft basically can't... namely, they've gone and asked IBM for a radically different kind of chip. MS is in no position to do this, as part of their whole pitch is the fact that it's a PC in a box, with MS's x86 programming tools.
[/tangent]
If Jesus wants me it knows where to find me.
I'm completely lost as to how this post is relevant to the xbox.
Aw crap, ninjas!
According to the 10-Q filing, the article is wrong. The $177M net loss is for all of home and entertainment, only a subset of which is Xbox. In fact, comparing it to last year, where the losses were at $68 M and there was NO xbox, you can conclude that total losses resulting from xbox activities would not be greater than $109 M, and in fact probably even less than that. There are many other things in the home and entertainment division such as Windows Media Center PC, UltimateTV, MSN TV, and so on, many of which were probably not profitable, and contributed to the overall losses.
I know from past stories that Iraq is in the market for game consoles. I say that Bill should lobby the UN to allow him to open the Iraqi game console market. Hell, they should just force the entire country to adopt Windows on all their hardware. The whole place would shut down inside two days. War over.
blog |
Amazingly that is not even half of what VA Softare burned through. At least Microsoft has a tangible product to sell.
If we don't fight for ourselves no one will.
Value of goods sold: $682m
Money for goods sold: $505m
That is a 35% oopsy!
Assuming for a second that this is only concerning consoles, to break even, Microsoft has to sell the XBOX for ~ $269.00 each. That is based on current pricing of $199.99.
If accessories are included (games, controllers, mem cards etc), the are still losing money hand over fist w.r.t. the console itself.
Ouch.
Interesting to see what these numbers will look like for Oct-Dec 2002.
were we ever wrong when we predicted that they'd take a loss to ensure that they dominated the market.... I mean... if we were any more wrong we'd be uh..... .. . .
...... er.... right on the..... money ... .. ??
Oh god, that woman is John Romero!
$2 bill investment by MS into anything should have a favorable impact on the [present/upcoming] economic recovery (both short-term and long-term).
I have to disagree with all the MS-haters on this one. Personally, I like the xbox, and if the $40 bill company behind it is pouring money into the economy (in one form or another), hurrah for them.
E -- I'm not an economist, nor do I play one on TV.
The losses are negligible, and indeed as many posts said, planned. Microsoft will have no trouble brute forcing their way into the market over time, particularly if they continue tying together a superior platform and inticing software houses, as well as focusing on their target market, which isn't so much the teenager, but the young adult game player.
---
When I grow up, I want to be a kid again.
The simple answer is: Linux has killed the X-box sales.
Yeah, 'cause MS is really going to feel the financial hit from the 50 people who bought X-boxes to run Linux on. The $5000 they lost will break their morale, I suppose.
If it was, Sega would still be making consoles. Sega made so many consoles that failed in the industry that when the Dreamcast came out no one was interested because several of their previous machines had failed. Microsoft can't allow Xbox to fail and then produce Xbox2 and then Xbox3 and then Xbox4 until one of them works because people just won't buy something that has repeatedly failed.
Summation 2
Yes, I know that, but maybe the US should implement such a law...
If a huge company like that just spends tons of money on a certain product, and sells it a lot cheaper than it's competitors (who need to make profit of it) the competitors will be out of bussines. Wich isn't only bad because a lot of people will loose their job, but this way the big company can make his product a lot more expensive and there would be no need to improve it significantly...
Clever faux goatse.cx link. Why do I always hit these right at lunch time?
Oh sure they're selling consoles at the nice, cheap price *but*... ...does X-Box have Vice City?
Despite Microsoft's attempts Sony is really keeping its grip on the console market. People are still choosing PS2 over the technically superior X-Box - why? Because PS2 has the killer apps, and that's really what counts.
This is all part of MS's plan. The goal is to force Nintendo and Sony to drop prices until they go out of business, then raise the prices up again. The problem they're running into is that they CANNOT beat Nintendo and Sony with a mini-PC. It has to be distinct, otherwise when they raise the price people will ignore it and buy PCs. That's why they keep emphasizing that it's not a PC and that's why they won't publish titles (even award winning ones!) that started out as PC games unless changes and upgrades are made for the console. They want to harness the console|computer dichotomy for monetary gain (i.e. same hardware, more money because it can play games with the "console" DRM marking. As long as customers still feel there's a PC/console distinction, this won't raise any price fixing red flags).
And they WILL sink money into it. 15 billion dollars and four generations of console machines? Sure! Each iteration is cheaper (since they have more R&D) and each one teaches them more about how to cut price without screwing themselves.
In 10 years we'll look back and wonder why we let MS buy all the best console developers, use their money to force everyone else out of the market, and the practice absurd price fixing. The answer? "It looked like they were screwing up! We didn't know it was a plan!"
I really don't care if Microsoft makes money or looses money when selling the XBox. I don't really care if they are going to take over a market or not. At the end of the day, all I care about is whether or there will be good games for it. As of now, there are a lot of games for the XBox. Unfortunately, most of them are not very good. A handfull of games are decent and very fun to play. And that's all I really care about: will there be fun games to play? Yea, I can get a mod chip and spend the time to install linux, yada, yada. But my time isn't worth trying to hack up something. Just because you can do it doesn't mean it's worth your time. I just want to turn the power on, load up the ammo, and start blowing away some Covenant Troops.
Megacorporation means a big corporation.
Monopoly means a corporation that is as big as it is for unfair reasons.
They're not the same.
Sony is big, but MS is bigger, and MS can eat money in a way Sony can't because it is a monopoly.
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I think on all points, M$'s hands may be tied.
Keep it open - M$ wisely backed away from producing PC platforms, focussing only on SW. I think their wish is that XBox's are produced by many competing companies, but I don't see that happening.
Buck content - M$ probably has a corporate strategy that can't be reversed on this one. Don't know.
Better Games - Japan is Sony's playground, not M$'s. Though M$ would love to get into Japan, Sony is firmly entrenched.
Keep Manufacturing Costs Down - M$ may have an agreement with Intel that prohibits them from using other chips.
That is like saying that MacOS will drive Windows off the desktop
Not even close. This is like saying that IE will take over the browser market (four years ago). Hey, guess what, they did. Sony is not even in the same league as M$ as far as corporate resources. Not that Sony is a tiny company, obviously, but M$ not only has it's war chest, but they have a monopolistic hold on the OS/Business Suite market that affords them huge quarterly profits (3.5billion, yikes), they don't even have to dip into the warchest if they don't want to. Sony has no such single cash cow to suckle on. Note that Sony's profits for the last quarter were in the $350million range, a full 10% of M$!
Now I'm not saying that Sony can't compete, just that if M$ really, REALLY wanted to, they could easily outlast Sony in a battle of wills. Oh, one other point about M$ and profits, you have to remember that this was profits in a quarter that did NOT see the introduction of new versions of any of their major titles, esp new OS versions.
Is it just me or did it looks those kids were in
front of urinals instead of xbox stations.
Just like Microsoft is pissing away there money.
You are missing the point. If I start a company tomorrow it will need some capital to get going. There very, very few businesses that you can go into and start producing and selling immediately. There are even fewer businesses that you can enter and make a profit instantly. Most new businesses lose money for a time while they make capital expenditures and get their product developed and marketed. These new businesses also have to get funding from their founders, investors, family, or whoever. So really, there is not much difference between MS taking a loss in a new market like video game consoles and me starting my own console company and losing money.
That being said, there are laws in the US against price dumping. Price dumping is intentionally undercutting your competition to put them out of business. I believe it is pretty hard to prove. However, in the console market, MS is certainly not undercutting b/c they are still higher priced than Nintendo and the same as Sony. Microsoft has been forced to this price point by competition.
I have no idea how much money has evaporated due to lost productivity by businesses using MS products that crash left and right.
Hell, the value of man-hours consumed by Solitaire alone must be close to the GNP of your average South American country...
GMFTatsujin
$177 million is less than half what they lost in Q1 of FY02, and the Xbox wasn't even on the shelves then.
;)
The Division the Xbox is in lost 1.77 BILLION USD for FY2002 on revenue of approximately 3.6 Billion USD.
Of course, its not like that division ever did make money
used by cash-rich companies against cash-poor competitors. There's really nothing unusual about it except that it's Microsoft. Take Blockbuster video and Hollywood video, for example. When they try to crack a new market (region), they basically do the economic equivalent of carpet-bombing. They open stores every TWO BLOCKS in some cases. The reason is: even if there's a mom-n-pop video store only a mile away, they want to make sure you walk/drive past three of their stores before you reach their competitor. If they divert enough customers, their competitor goes out of business. Then, they close down their excess stores, because they've been losing money like crazy by having way too many stores in a small area. But in the long-term, they make money, because without competition, you can charge whatever you want and make it all back.
Much as MS abuses the law in many many other areas, this is just a (shitty) business practice you see every day.
I don't begrudge people their money and I'm not an anti-corporate type. MS may be evil, but not for simply making money. Still, it's good to put numbers like $2 billion in perspective. The state I live in has about 8 million people. We're facing a budget shortfall (two-year budget, compared to MS's five-year plan) of about $2-3 billion, and people are flipping out -- school funding may be cut, roads might not get fixed or else taxes are going seriously up. One can argue about the reasons -- like government spending way too much already -- and it's not really important to my point. I just wanted to give that figure a context: It's a statewide disaster. Or an investment in making a line of video game hardware successful. Take your pick.
Don't most companies sit in the red for quite a while? How is this so much different from other business ventures? I mean, look at how long Amazon.com was in the red. Being in the red after the first year is hardly news.
Doing something at a loss to get ahead somewhere else is a common plan.
Grocery stores do it on "staples"
Sell bread, eggs, milk, butter really cheap, almost give it away.
Then the consumer might buy other stuff, meat, vegetables, and they end up coming out profitable overall.
Car dealerships might subsidize oil changes to keep you coming back to them for bigger service.
Video game consoles might sell the console below cost because they think they'll make it back in games.
This is standard business practice.
Revenue - Expenses = Profit or Loss
Profit if it is positive, loss if it is negative
This is a simple equation.
As far as American law is concerned, there's an ongoing trade dispute over stumpage fees charged by the Canadian government to Canadian softwood producers. The US government has lost in the courts 18 times, but still fights it, arguing that the lower stumpage fees allow Canadian companies to sell lumber at below actual cost, and hurts American producers.
No - that would be against the law. The first XBox will have cost the price of manufacture plus the R&D budget to make. The second and subsequent XBoxes will have cost just the price of manufacture.
So under this law, make sure you don't put your name down to get a new product as it's released --- you might find yourself lumbered with the one that costs $10,000,200!
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Phew....Pleased I was working in a small window. Just caught the top bit.
However, I don't think Microsoft will fail with XBox.
The reason is simple: Microsoft has US$40+ BILLION in liquid assets. That gives Microsoft more than enough time to wait and watch Sony and/or Nintendo make a marketing misstep and Microsoft will swoop in to take marketshare in a blink of an eye.
Please, we have enough laws here. I don't wish laws on you. Just be glad the law in Belgium doesn't apply (or so it is theorized) as then it would cost more... and I'm sure they wouldn't lower the cost of the games to compensate.
"I don't know how I let anybody talk me in to the X-Box"
Don't get me wrong!
Rather then spend the mod points, I'll just correct the fallacy... Your math is just a little bit _too_ simple.
$177M/quarter == $708M/year > $500M/year
Granted, a linear extrapolation may not be quite appropriate, but it make a good straw man. Anyway, without the PR they are looking at a loss of just over $200M for the year.
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I saw this coming since they expected everyone to buy at least 30 games in order to break even on each console sold. How many people do you know that buy 30 games at $50 a pop? Not many college students that I know... I don't even have that many ps2 games (and that's my only console)
The ps2 on the other hand is a lot cheaper to produce because it's all done in house. The initial cost is great but for a company like sony, having a production line and their own chip making machines, it pays off in the long run because they can match Microsofts price and still break even whereas M$ is losing money.
-Chris
Can you cite a reference? Please!? So cool!
I swear by MacOS X. Although I use to swear *at* MacOS 9...
No its not legal.
America has so called anti dumping laws.
However they get only applied if a non american company tries to sell for dumping prices inside of the US.
E.g. Korean car manufactors selling 30% cheaper than US car manufactors or VCR crafting companies regulary got a punishment import tax.
The US puts taxes at will on any kind of product if they think their own industrie soffers from forreign laws. E.g. genetic manipulated Soja needs to be noted as incridience in european food(by law). Europeans as majority do not buy genetic manipulated food. Feeding animals with genetic manipulated food is not allowed, as it gets to difficult to prove its absence in the final products (like ham). Result: US is threatening europe with a tax war since years just because Soja sales droped in Europe.
However: what is legal and what not, all over the world, is final descided by a US court.
Silly situation.
angel'o'sphere
Cost free eBook I read (by iBook/Kobo/Amazon/ObookO/Gutenberg etc.): "The Green Odyssey" by Philip Jose Farmer.
I am also not an accountant, but I don't think my accountant would be too pleased with me if I sold products/services for less than they cost me. And, I have serious doubts as to whether the IRS would look kindly at a loss that was created *on purpose*.
MSFT knew they were coming in this console war in at a loss. Xbox was a chance to introduce themselves in the market and understand how the console market works. Maybe towards the end of the lifespan of the Xbox they'll make a profit. But, I assure you, they're already working on their next generation system.
Come their next gen system, they'll know what developers want to see, manufacterers, distributors, and customers. They'll butter up each one, and since each of them will know how MSFT operates, it'll be much easier for them the next time around. PS2 was initially infamous to be a developer's nightmare; new chipset, unknown intruction set, brand new stuff. But now people have gotten used to it, so it became easier with time.
Xbox operating in the console wars at a loss is a new buisness practice. It's not what other companies do. Sony can sell their hardware cheaper b/c that's what they are, a HARDWARE company. Nintendo knows what they're doing b/c they've been dong it for more than a decade. MSFT knows that once they get into the groove of things they'll start seeing profits, large profits. The Xbox is a chance to get their foot in the door.
As far as American law is concerned, there's an ongoing trade dispute over stumpage fees charged by the Canadian government to Canadian softwood producers. The US government has lost in the courts 18 times, but still fights it, arguing that the lower stumpage fees allow Canadian companies to sell lumber at below actual cost, and hurts American producers.
In British Columbia (A Canadian Province), the stumpage fees go to the government. The government then uses the money to ensure adequate regulation of the companies. Cutblocks get re-planted, streams are protected, roads are deactivated. The problem is that in the US, they have a auction systems for timber. Private landholders auction their lumber from their private land holdings. Not only do they have to do their own re-planting (adding expense) they also require a profit. (Adding more expense)
When you look at the lumber barons who are doing the lobbying in Washington, most are from the southeastern US. They sell inferior quality wood compared to BC softwood. THeir product is also higher cost, mainly because they refused to spend the money to upgrade their mills. So they produce a low grade, high cost product (very labor intensive) that simply cannot compete in the marketplace. The BC mills spent billions upgrading their mills to be highly efficient. Now they are being penalized for their foresight.
Inevitably, whenever a US industry gets into a non-competitive situation where they can't dominate, out come the lawyers and the lobbyists. (steel) The WTO will overturn this tariff. Until then, thousands of workers and business' in British Columbia will suffer.
Did I mention that the average new house in the US is costing $3K-$5K more? They don't tell you that in Businessweek do they?
Fascism should more properly be called corporatism, since it is the merger of state and corporate power.
This was from a friend of mine who works for MS, at one of the yearly MS-employee-brainwash sessions (like the one where the 'monkey-video' was shot at, where this friend was also present, btw).
Don't get me wrong!
Have you guys tried this thing? Stop whining about Microsoft and play some Halo. XBox is down to $199 and Halo is only $29. The way I look at it, MS is funding my Halo habit by chipping in $200 for my XBox. Nothing comes close on PS2 or Gamecube.
$5 / month hosted VPS on linux = awesome!
I heard somewhere that if billg were to see a thousand-dollar bill on the ground, it would cost him more to stop what he's doing, bend down and grab the thousand-dollar bill than to just keep on doing whatever he was doing before.
There are a huge number of yeast infections in this county. Probably because we're downriver from the bread factory.
It's obvious that Microsoft is trying to adopt the business philosophies of Linux-based companies in order to better compete with Linux. The idea of losing millions with a slim chance of attaining profitability in the distant future is something that companies like VA Software, Lineo, etc have been very good at.
The best thing about a boolean is even if you are wrong, you are only off by a bit.
No, Sony does not and never has sold at a loss. Please stop perpetuating this myth.
Info here.
To sum it up, most people (at this point) believe that Sony still makes at least $50 per console sold, Nintendo is just about breaking even, and Microsoft is still losing at least $70 per console sold. (this is taking into account drops in production prices, drops in sale prices, etc).
-[Blaine]- "'Oh dear,' says God, 'I hadn't thought of that,' and promptly vanishes in a puff of logic."
Zelda and Mario Kart
The Game Cube is still sleeping, just wait until these franchise games hit the market.
"Karma can only be portioned out by the cosmos." -Homer Simpson
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Perhaps not today, perhaps not tommorow... but you WILL buy an xbox.
"Things are more moderner than before- bigger, and yet smaller- it's computers-- San Dimas High School football RULES!"
All things considered, dumping sounds perfectly in-character. A pity. MS has the potential to do great good. It certainly has the resources to revolutionise society for the better. Nope, we get dumping and questionable networking practices instead.
It's a small world and it smells funny; I'd buy another if it wasn't for the money; Take back what I paid (SoM)
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It's all an investment.
How much do you think Microsoft lost on Internet Explorer through its first three or four versions?
How much did that end up costing Netscape?
Of course, even taking the dynamics of the bubble into consideration, Sony has much deeper pockets than Netscape ever did...
Eloi, Eloi, lema sabachtani?
www.fogbound.net
Did you look at the numbers? Do you really think that you are going to "fsck it to microsoft" (If you want to say "fuck" then say "fuck", Jesus!) by buying an XBox and running Linux on it? They are reporting a loss of $177,000,000.00 on revenues of over $500,000,000.00 with an estimated department budget in the billions of dollars over the next five years!
You might as well try to kill a blue whale with a Nerf bat for all the good your little act will do.
If you want to buy an XBox because you wan to tuen the worlds most powerfull (spec-wise) console into a crappy (spec-wise) and unubradable PC then have at it. If you want to hack an XBox for the fun of hacking something, go for it. But doing it to "stick it to the Man" is just pathetic.
Why bother. all you are doing is padding their sales numbers and reducing the greater loss they would suffer if that XBox sat unsold in some wearhouse somewhere.
Boobies never hurt anyone. - Sherry Glaser.
In the UK the XBOX has now put itself as the number 2 console , ahead of Nintendo's gamecube.
Xbox wins race of the also-rans
http://www.guardian.co.uk/online/comment/story/0,
EVERYBODY does this, especially Apple. How many times has the "They're supported by hardware sales" argument been invoked against x86 OS X here? How much do you think Apple is losing on the iApps or movie trailer hosting? How many other companies are shelling out for research that won't bear fruit for another few years? This is perfectly normal corporate gambling, except that MS is doing it in the market instead of the lab.
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Actually, this is a myth.
Actually, its not legal if the only intent is to damage the competitor, if its just a good marketing strategy, its not illegal.
Additionally, the fact that there is a subscription (XBox live) and accessories involved makes the case more complex. Companies can, will, and has argued successfully that dumping should be determined on the costs of everything the average buyer buys.
I wonder why they're trying to pull out of the DVR market. They say that there's no money in it. Maybe. I thinks that maybe it conflicts with their DRM agenda.
They aren't pulling out of the DVR Market, they're just trying to redefine what a DVR is. Haven't you even heard of WindowsXP Media Center Edition? It does Time Shifting DVR functionality, with much much more. Check here for more info on it.
This is typical of slashdot: "Hey, lets bash on Microsoft for whatever we can"
MS wouldn't suddenly de-value their prize company.
And selling Rare back to Nintendo and creating a competitor would devalue Rare in Microsoft's eyes just as much, no? What would Rare do if Microsoft were to discontinue the Xbox and not introduce an Xbox 2?
Will I retire or break 10K?
bwa ha ha...The monopolist eats their own words.
http://www.sec.gov/Archives/edgar/data/789019/000
Cheers,
-b
Don't believe the FUD you hear on Slashdot.
Take a look at MSFT's financials. I'm quoting the two relevant lines:
Income Before Tax $2,243,000,000 $4,026,000,000 $3,357,000,000 $1,887,000,000
Income Tax Expense $718,000,000 $1,288,000,000 $1,074,000,000 $604,000,000
Mmmm.. Donuts
I am amazed at how ignorant people are of the basis of genetics. . .
Genetically engineered food is, err,
*sigh*
food but with just a few molecules changed in the GENETIC STRUCTURE.
This has ZERO effect on the food after it has BEEN DIGESTED.
Genetic structures are inherently weak, unless they are protected by some coating such as certain bacteria or viruses have, they are EASILY dissolved by the high acidity in most mammalian stomachs.
And even if they weren't, plant genes are NOT going to cause your children to take root to the ground. If that was so then REGULAR UNMODIFIED FOOD would effect you the same as GENETICALLY MODIFIED FOOD.
But hell, if Europeans want to pay more for their food, they can go right ahead and do so.
Suckers.
Now I will admit that a number of genetic food companies are total pricks and I will not buy from them for various reasons (being horrible "corporate citizens" and all) but I am all for genetically modified food in general.
[/end europo rant]
Need help treating your acne? Come here!
While not an Xbox exculsive, it is definately a great game. It was part of the XBox Live Beta and it quickly became a favorite amoung the testers. Whatever system you have, you must play this game. Online is ten times better than solo.
After having played online on a PC and online on a console, I think its safe to say that broadband console games will put gamers into heaven. Forget PC games and forget dial-up (sorry, but its true).
Here's the crime:
Windows: $2.48 on $2.89revenue = 85% margin
Office: $1.88 on $2.38 revenue = 78% margin
Servers: $.519 on $1.52 revenue = 35% margin
<fact>I know a lot of companies that would literaly kill to get those kinds of margins!</fact> <sarcasm>But certainly windows is a bargain at their prices.</sarcasm>
THIS SPACE FOR RENT
The XBox is a rather expensive DVD player. US $200.00 plus US $39.00 for the DVD remote. You can get a perfectly good DVD player from CostCo/Sams/whatever for $79.00.
Boobies never hurt anyone. - Sherry Glaser.
Otherwise Sony (being the only vertically integrated of the three companies) would be the only one able to sell their console at a low price.
Look, I hate MS as much as anyone, but romaticizing Sony or Nintendo as good guys is a pretty biased view.
If people really cared about the good guys winning the console war, people would've bought more Dreamcasts. Since they didn't win, you just have to go on which one has the games you want.
Besides, we're not talking about Wal-Mart selling drugs below cost to drive the local competition out of business; we're talking about a "give the razor, sell the blades" pricing model here.
There's a world of difference.
Scott
That is not how dumping works. Dumping is when I sell an XBOX in the US for USD$300, then sell it in Japan for USD$150 at a huge loss just to take business from Sony. The main reason these laws were enacted is because Japanese and Korean companies were doing this with electronics and motorcycles in the '60s and '70s. You make it sound like these are US centric laws but all countries have similar laws. I think what you describe is a tariff. Don't complain about US import laws, guess who is the #1 importer in the world? (hint: it is the US).
It's not just selling under your own costs - it's selling under your own costs, AND your competitors price point. For example: I have a better engineering line, so I can make my units 10% cheaper than my competition. If I then undercut them by 10%, that's not dumping. I'm just passing on my savings. If my pipeline sucks, and it costs me 10% more, but I sell at the same price because otherwise I won't sell anything at all, thats not dumping either. But if I make them for the same price, but I sell for 10% cheaper(note that I'm assuming in all these cases that we sell for the exact price it costs to produce), because I've got large cash reserves and they don't, THEN I'm dumping.
1) World Domination
2) ?
3) Profit
The good and new comes from no quarter where it is looked for, and is always something different from what is expected.
Sure about that?
From IT Matters: The Nihon Keizai Shimbun business daily said without citing sources that Sony's group operating profit would likely reach ¥270 billion (US$2 billion) in the fiscal year to March 2003,
Yes, while Sony's Playstation2 unit only became profitable in the first half of this year, you can't forget that Sony, in addition to consoles, also has Sony Consumer Electronics, Cellphones, Laptops, televisions, VCRs, DVDs, phones, Sony Professional (DAT recorders, CD-Rs, mixing consoles), and Sony Music, to name just a few.
Microsloth is a juggernaut in the computer industry. Sony is a juggernaut in the electronics/entertainment industry... which is much bigger.
-T
its posts like this that kind of make me WISH that MS controls all computer/entertainment/media industries in ten years. Then I could go visit these MS sympathizers and see their faces as they try to explain how the world is better by having a monopoly control and charge fees for everything that was once free. Of course, they will probably still be in their parents basement playing "Halo 11" on Xbox 23 . . .
Sdelat' Ameriku velikoy Snova!
The reason why non American companies are the only ones ever caught for dumping is because countries like Russia and Japan have a tendency to go way overboard when it comes to dumping goods.
Look at what these countries were doing about 5 years ago with the steel trade. They were dumping steel at such a low cost that US companies like Huntco were getting creamed and having to shut down facilities. The cost of imported steel was so low that after paying to ship it over, process it, and then ship it to the location the imported steel was still way under US rates. The steel was at such a low price that it was almost like the foreign companies were giving it away.
It takes a while, and blatant dumping, for a company or country to get called for it. The steel dumping suits almost did not go through. Microsoft might be dumping their product, but dumping goes on so much that it wouldn't see the light of day. If MS was to be accused of dumping, they would have to lower the price to an insanely low cost.
I mean, if you can't drop a quarter billion on selling next year's boat anchor, what's the point of getting out of bed in the morning?
MS is required to post a financial report by the SEC. The SEC defines how often this has to occur (2 times a year I think). If your business plan lasts longer than this period you are going to post short term losses and gains that have no meaning outside the larger context.
If I open a new comic book store, I have to pay 1st months and last months rent (2x rent), Buy shelves, inventory, register, computer, business license, phone installation, internet installation, website setup costs...
Now I start to sell comic books at the going rate. Can the comic book store up the street call foul because I'm operating in the red at this very moment? I won't have all that start up stuff paid off within the next 6 months (when a public company would have to file a financial report). I won't have it paid off in a 12 months. I'll be lucky to be operating in the black in 18-24 months. I'm not cheating, I just have a business plan that lasts longer than the SEC filing period.
=Shreak
palpatable (n.) - worthy of a pat on the back by a friend
And these past 3 months have been selling MORE XBoxs, so that figure is more likely to be 1.5Billion in total XBox losses! Insane! Byebye XBox.
It's on the Internet! It must be true!
"I ain't got no flyin' shoes."
God, how many times can you play Halo? Yeah so they are going online? So are the Game Cube and PS2. Yeah, and Halo is going to the "real" PC, where we can play it with a keyboard and mouse set up.
But there are heaps of FPS's for the PC. So many the market is saturated. And Halo is great, but SUFFERED for having to be ported to a console, which is was never intended for. I would rather play my FPS's online on my PC, and save my console for adventure, survival horror, RPG's, and 3D platformer's.
Does the Xbox have any other cool games besides Halo? Yeah like I wanna spend $300+ just so I can play that *rolls eyes*
I respect the fact that MS is showing a willingness to nurture their product for the long term rather than giving up at the get-go just because it failed to change the playing field over night.
**>>BELCH
And that's about it.
not proprietary.
The discs that nintendo uses are DVD Minidiscs. if you've got a DVDR, or whatever DVDcompatable burner, you can buy discs that are about 3 inches in diameter.
Luigi's mansion has been ripped, no one's been able to actually burn it IIRC.
Non impediti ratione cogitationus.
From the horses mouth
I know that Sony has all that other stuff (and cool stuff it is), but my main point was that even with all that stuff, they don't enjoy the monopoly and the profits from that monopoly that M$ enjoys. Also, $2billion for the year still pales to $3.5billion for the quarter, even given the larger overall market that Sony participates in.
Disclaimer - I'm not anti-genetically modified food, nor am I particularly pro.
I agree that the genes themselves are going to get destroyed in your stomach, so there is no danger of some kind of "genetic contamination", whatever the hell that would be. But genes aren't (always) inert - and the whole point of GMOs is to modify the origninal organism. That means that the inserted genes are coding for some protein (or regulating another gene... either way there is a change). That change, be it a new protein or whatever is not necessarily borken down by your stomach, and even if it is, the metabolites could still be potentially harmful.
So, genetically modified food isn't necessarily bad, but it isn't necessarily harmless either. Not all of the people skeptical of GMOs are complete froot loops.
If my enemy's enemy is my friend, what happens if my enemy is his own worst enemy?
And considering the competitors are making PROFITS, this is super bad. This is terrible bad. This is .. time to let the platform die bad.
You misunderstand the dumping law. Basically you cannot sell the same item in the US as another country and have a huge difference in price. So if Nintendo decides to "dump" in the US it's gamecube for $50, they would have to sell it for an equivelant amount in Japan to not be considered dumping. So that means they can take a loss selling in the US if they also take a loss selling in Japan, but they can't sell in Japan for $100 and in the US for $50.
Ha! Ha!
MSN has never EVER made money. Microsoft is in the ISP buisness for the long haul, believing (just as most students do) that spending money now will incur future profits. Its no different at all. MS thinks that they can be in the "home entertainment" space, maybe branching x-box into a PVR, a satalite box, or something different all together.
And Halo was far from "Game of the Year" compared to the Cubes' Star Wars offering. And overall Microsoft is in 3rd place worldwide. They will never get Japan, and this means no Japanese developers, which means no decent games. Why should XBox owners all run out and buy PC ports anyways? It's pretty sad.. And XBox live will be a huge failure, after 1st year, it goes $10/MONTH .. No kid is going to be paying that.
Even if it did not have this huge amount of cash on hand the $3.5 billion profits from its operating system and software divisions in the quarter more than offset any loss.
I imagine billg broke into a cold sweat when he heard the news of this financial catastrophe...
t_t_b
I'm on PJ's "enemies" list! Are you?
Not that it matters in the grand scheme of things but if you read the actual info the reason that Sony supposidly makes a profit is because "Gord" is tacking on all possible profits e.g. software and accessories. As opposed to just the value of the console. Sounds like a bit of the 'ole propaganda to me.
(Sponsored by cheeseSource for President 2012)
It's not dumping. Period.
Microsoft, like every other game console producer, takes a hit on the console. It isn't to put the other guy out of business (though sometimes that's a benefit), but rather, to get you hooked on a specific console. After that, they recoup their loss on the games. After all, who buys a console and then never buys a game? The only significant difference here is that Microsoft is banking on turning the profit in an online system, rather than just games.
Last year, the Sheetz gas station near us was selling gas for $0.95/gallon, significantly less than what they paid for it. It wasn't to kill the competitor, but rather to get people in the habit of filling up there. The money they made from their food, drinks, and various items inside the store made up their loss and they slowly raised the cost of gas to normal rates. I fully recognize that, but you know what? I still shop there and I'm not the only one.
...if this number takes into account valid accounting procedures?
If they are not expensing stock options, this number could be much higher (unless the depressed stock price has also depressed their accounting gimmickry). It would be interesting to know what the real numbers are.
It will also be interesting to know if the Enron-WorldCom scandals will result in shutting down this phony accounting scheme, especially since MS is the foremost practitioner. It could really send their stock into a tailspin if the people holding their stock found out their "profits" are often really losses.
Eternal vigilance only works if you look in every direction.
I dont know how hardcore you have to be to dish out 45 bucks for an entire year of subscription to the Xbox live service. i'm wondering if Microsoft is losing money on this as well ...?
to $129, I wonder how much more money they will lose? I'm sure Bill is regretting that he jumped into the console industry. I wish Bill would continue investing huge chunks of money into other ideas, and one day lose all his money?
When all else fails, piss on it. At least you will feel better in some kind of way.
I thought the concern with GM food isn't the genetic code itself, it's the various enzymes or other chemicals the genetically modified food produces. It's a similar concern as feeding cows growth hormone so they grow up bigger and fatter and have a higher return, but then that hormone is in the food you eat and causes you to grow big and fat as well. I havn't seen any scientific studies that actually back this up, but it is at least plausable.
I read the internet for the articles.
A while back, Nintendo reps stated that they were selling Gamecubes for a profit... but this was in the news _before_ the price drop, so maybe they aren't now. Also, they could have been lying, I guess.
Common, if you're gonna hit microsoft on this practice, you're going to have to hit Nintendo, Sony and the late-great Sega on it as well. They all sell their consoles at a loss in order to hit the consumer's impulse buy range. The only real difference here is that Microsoft has deeper pockets with which to do this with. It gives them the ability to market superior hardware while hitting the same impulse buy zone. And yes, it also creates hideously large loss numbers.
As for putting Sony and Nintendo out of business, somebody really isn't in touch with the real world. First, the XBox is nearly dead last in console sales. That differential will decrease over time, but unless Sony and Nintendo do something incredibly stupid or MS incredibly brilliant, that's not likely to change in this round of the console wars. Second, Sony is a big boy. It has a diversified market beyond gaming. Their products have global reach and ideal penetration within their respected markets. Sony isn't going anywhere. Nintendo, on the other hand, has a far smaller foundation and hasn't exactly been making stellar decisions as of late. They haven't had a great console since the SNES, and the Gameboy is STILL their principle source of income. They're more likely to kill themselves off rather than be a victim of any MS "dumping" campaign that everybody else also seems to be engaged in.
But it's just another day in the anti-MS neighborhood, I guess...
You need a FREE iPod Nano
Uhh, no, if you read it you'd notice that of $175 they were making per console, roughly $120 was from the console itself. $55 was from software and accessories.
Sony is not stupid. They do not sell at a loss. Sega sold at a loss and is now defunct as a hardware business. Nintendo sold the Gamecube at a slight loss but most accounts have them as about even now. Microsoft has billions it can throw down the drain, and so it sells at a loss.
Also, just a FYI, when Nintendo sells at a small loss it is almost meaningless to them, and I'll tell you why:
When a game is sold for $50, maybe $20 of it is profit. Of that, typically the console maker gets $5, and the game producer gets $15. However, Nintendo is in a special position in that it makes most of the really popular games for it's own console. Thus, if they sell at a $20 loss (which is about twice what most people estimated), but you buy the Gamecube and a single Nintendo produced game (which I guarantee you will), they've broken even, because they get all $20 of profit.
Microsoft, on the other hand, does not produce the games. Therefore, even if you are nice and say they're only losing $30 per console (which is way below most estimates), they need to sell 6 games just to break even. How many people do you know who have 6 XBox games? I don't know any. Every person I know with an XBox has less than 5 games, and typically has bought a single extra controller. Every person I know with a Gamecube has at least 5-6 games and most of them also buy 3 extra controllers due to the number of good 4 player games.
Something tells me MS is the only company really digging itself into a hole in the console business right now.
-[Blaine]- "'Oh dear,' says God, 'I hadn't thought of that,' and promptly vanishes in a puff of logic."
I don't think that's dumping, either... As I understand it, as long as your prices are consistant in all markets you are not dumping.
I've seen several offers here in the UK of 'choose any 4 X-Box games and get a free X-Box'.
Coincidentally walked into my local mall games store today. X-Box used to have a small section (about half the size of the PS2 and a little smaller than GC) at the front of the shop. It's now been relegated to a dark corner right at the back.
Have you ever listened to the X-Box? The last time I was around one I was at Best Buy. I could hear the damn thing through the plastic display case, and the jerkoffs blasting Linkin Park in the car audio department! They're loosing sales because it sounds like Stimpy's hairballs (Anyone remember Ren and Stimpy?) come as a "bonus" entangled with the cooling fan.
Every video game is sold this way. PS2 and Gamecube were reportedly sold below manufacturing cost.
The PS1 was sold below cost as well.
This is not illegal.
So try not to be "Larry Lawyer" when you haven't a clue.
No, the anti-dumping only applies when you are taking a complete loss to force others out of the market.
In the case of console systems, selling the hardware for a loss is the standard business model, becuase the companies make up the loss by taking a percentage of the software (games).
So, according to the law, this is not dumping, because the business model is set up to make a profit. Also, since the X-Box is the same price as the Playstation 2, how do you figure it is dumping?
Try thinking these things thru before you hit that "Submit" button.
The great thing about the Internet is that if you have nothing intelligent to say, you can say it here.
Lost 177 millidollars on 505 millidollars revenue? Why is that even worth mentioning?
Please correct me if I got my facts wrong.
Microsoft, like every other game console producer, takes a hit on the console.
Geez...you don't still believe that myth, do you?
Chapter of Proclamations
"Mod, mod, mod...and another troll bites the dust."
Profit and loss are so fluid that its easy to jigger numbers (legally).
Running a small business, at the end of a year, I could easily show a loss of several thousand dollars for a single year, or a gain of $100.
Keeping in mind that nothing had changed. It had everything to do with when I said I got my cash receipts. Large businesses with CPA's and Lawyers can be infinitely more clever in loaning money to themselves (legally) to make things look like a profit or loss depending on what they're trying to accomplish taxwise and market-wise.
So when I hear people talking about how easy it is to define profit and loss, I know they're completely ignorant and talking out of their ass.
You sir, are talking out of your ass.
MS stated they were going to spend $500 million in advertising during the first year. The numbers you're looking at now are related to what, the current quarter? (Lost $177m in 3 months ended Sept 30th.)
When do you think they spent most of that $500 million? That's right, the launch events, the pre-release hype, and everything leading up to that first day. (Think of all of those campus tours and giveaways and what not.)
This is talking about the losses of the box for the most recent quarter. Marketing expenditures for the XBox have decreased dramatically since then.
In fact, losses accelerated when they clipped $100 off the price tag. They've managed to do some work to decrease the cost of the box since then but nowhere near a 33% cost reduction.
--- I wish I could hear the soundtrack to my life. That way I'd know when to duck.
Did anyone notice the innoucious statement at the bottom of the article that they are down $10bn over the last year? Sure, they can sustain that kind of loss for a while, but every non-monopoly division hasn't woken up and smelled the 21st century. Sure, u gotta spend money to make money, but, they can't do it forever?!?!?
"You never want a serious crisis to go to waste." - Rahm Emanuel
Many of you seem so surprised by this per unit loss yet every cell phone company in North America "subsidizes" phone handsents - creating such a loss. Do you think the cell provider gets your phone for 9.99 ? Do you know why GSM phones in Europe at generally start over US$200 yet in North America they are $19.99 with a contract? This is a common practice in many service industries, broadband internet providers do the same. They subsidize the modems and other hardware - wireless providers do this to such an extent that many have limited growth based on capital available. Anyone who thinks this is abnormal or illegal is not aware of common business practices as the list of examples is immense.
People working in Microsoft: 300000 (programmers, cleaning personel, lawyers, bill, ...)
Average salary: $3000
Year expenses: 900,000,000 -> $1 billions
Advertisment expenses (worldwide): $4 billions
In the case of companies like Microsoft, the profits must be **increasing** every year otherwise the company will start firing, and then die. The thing is that most of the profits are *invested* to future products. If these future products don't return the expectations, then we have a problem. Right now, the sales of XBox are much below the expectations of the most pessimistic (and many will be fired for this).
It's all until the point where stock-holders panic and despite the exciting numbers you have shown us, we -unfortunatelly- are not far...
Nelson: Ha, ha!
Yeah, if the evangelists within MS are forceful enough they can carry this thing for 2 years, no problem. Microsoft has like $30 billion cash reserves, and Bill could personally lose $177 million just by leaving his wallet in his other pants.
Last year, the Sheetz gas station near us was selling gas for $0.95/gallon, significantly less than what they paid for it. It wasn't to kill the competitor, but rather to get people in the habit of filling up there.
Bad news for you...that's called dumping. Of course, for that small scale nobody cares, it will not affect the industry. But it still is dumping.
The thing is clear: sell at a loss, have the clients think you are more competitive. Then raise the price. Ideally, offer your product at unresonable prices until either you get the most customer share (and your competitors resources are not enough after that so that they can play the same game on you) or, "a la microsoft" wait until they have to close.
Great capitalism...do as we say not as we do (afaik, the USA is one of the difficult markets to export goods and services, Europe beign the most though. But europe doesn't claim to be as pro-market as the USA claims).
I don't mind the USA doing this, only the open-market free trade self declarations bother me.
unfinished: (adj.)
"When Sega came out with the Dreamcast, there was no way that I, or any of my friends were going to buy one simply because we knew that Sega never seems to meet expectations"
Sorry for the provocative title.
But.
The Dreamcast had a decent lineup on 9/9/99 and before it was killed, it had put together a list of games that are only now beginning to be matched by the PS2.
Simply put, the Dreamcast is and was a great console. Its a pity you didn't buy it, but I still play mine at least twice a week because of the high quality games (that are now dirt cheap).
People here are so anti-M$ its pathetic...
I own a XBox its great system. I also own a PS2, GCN, and Dreamcast. Only 2 are any good that being the PS2 and XBox. GCN is nice but they have less games then XBox that I can play and DC is dead. In the end M$ will probally kill off Nintendo or force it to merge with itself or sony or it will end up like sega. M$ has the cash sony has the tech simple as that. Then again if M$ goes off and drops few billion on R&D for XB2 or gives its an NV30 or better for 3d well... we'll have to wait and see won't we.
Xbox is the entry level the next gen is where all the fun will be.
Hmm, if the reason the Xbox didn't take off was because Linux runs on it, but not on Playstation 2 or Gamecube, how would you explain the fact that Sony produces a version of Linux for the Playstation 2?
[http://playstation2-linux.com/]
Perhaps the reason the Xbox didn't take off was because it's a PC in a box (the processor is a Coppermine-derivitive) and is locked down to only play Xbox games.
it's not a myth... initially they sell at a loss and they improve manufacturing techniques to eventually sell at a slim profit, at least everything I've read indicates that. It's a matter of anticipating what the true cost will be and smoothing your pricing... meaning initially, when manufacturing costs are higher, you sell under the cost. This is also why the game companies tend toward the draconian on requiring developers to pay up for the priviledge (which to me is insane... if I want to make an accessory that fits Fords... why should I have to pay ford for the priv?)
-pyrrho
Consoles don't lose money, except for a small period right at the start. Economies of scale kick in, allowing the games to make up early console losses. Over a recuring 6 to 8 month period, technology advances reduce the cost of producing the console. Sony sells PS2s for $200 USD, but they produce them for far less than that. They're currently on their 7th internal revision, and have integrated many I/O, sound, and video chips into once larger chip (think back to when VLSI came into vogue with PC motherboards back in the early 1990s).
So while early products may be sold at a bit of a loss, these loss periods are short-lived as long as the console maker merely waits a while.
--
Internet Explorer (n): Another bug -- that is, a feature that can't be turned off -- in Windows.
Price dumping is intentionally undercutting your competition to put them out of business.
But in practice, in the US this is used to prevent imports that are more competitive. For example, the steel industry. Companies abroad can sell cheaper because they have to pay less for work, they have better minefields, lower taxes and good productivity. They can sell at a profit. But nope, the US calls it's dumping and blocks the sales. You see, laws have a very different meaning depending on who you are hurting. It's not about justice, it's just what a country think it's best for their economy (or world domination plan or whatever).
unfinished: (adj.)
the point however, is still that they are selling these things near cost, which means that sometimes it's a loss (when some cost temporarilly rises) and sometimes it is a gain (when they manage to cut some cost). The basic dynamic is still accurate. Profit from the games (and momentum) by controlling a platform that has critical mass. It's a lock in technique...which is why MS covets it. I think the time is coming for a commodotized set-top/console. Yep, should happen in the next 50 years! roflamoj
-pyrrho
Dumping is discriminatory pricing based on what marketing you are selling in. For example, the Xbox sells for $200 in the US, and $200 (candian) in Canada. Since the Exchange rate is roughly $.63 (?) US dollars to Canadian dollars, Microsoft would effectively be selling for cheaper abroad (Canada) than domestically. The Association of Canadian Console Manufacturers gets upset that Microsoft is "dumping" in Canada because they are charging less in one market that in another. IT HAS ZERO TO DO WITH COSTS OF MANUFACTURING!
Why does dumping occur? It happens much more often in the United States because the US is the hub of the world economy. The US buyer (business or consumer) or has a better selection of goods than any other in the world. This results in more competition and LOWER PRICES. On the other hand, the importer's home country may have much less competition. Correct price setting theory for this importer should state then that they charges less money in the market with more competition (US) than the one with less competition (their home country). Thus, countries that have a higher degree of imports tend to see higher degrees of dumping.
Predatory Pricing is carried out by a company with monopolistic power to maintain or grow its monopolistic powers. Essentially a pricing strategy that reduces price below the manufacturing prices of its smaller competitors. Usually it applies in a case where a large, national firm is going in to drive a smaller, local firm out of business. The presumption is that the monopoly has lower costs than the smaller competitor. This really doesn't apply to Microsoft in this case.
A) We know that Xbox has higher manufacturing costs than Sony or Nintendo.
B) Microsoft is not a monopoly in the Console industry. If anything, Sony is.
Microsoft has one thing going for them-- a big war chest. This allows them to invest massive amounts of money ($2 billion) into growing their business. But, wait a minute, didn't Sony spend $2 Billion in Research and Development on Playstation 2 chip production?
How is this any different? I'll tell you... Microsoft has sold fewer units. Of course they're going to lose money per unit. They simply chose to account for R&D in a different way-- by paying chip (mobo and graphics card) manufacturers to take care of it for them. From a business perspective, not a conspiracy theory perspective, what they're doing is fairly normal for strategists who intend to get their product into every home in the US that has a television.
You mean they're doing something WRONG over at the economic superpower of Belgium?!
Macintosh humor! MacComedy.com
I find it a little sad to see how Microsoft can remain a force in almost any industry they care to stick their fingers into, simply by merit of having far too much cash in a general pile. It isn't an issue for them to keep incredible amounts of muscle behind what is, more or less, a small aspect of their company while others work to do what is their entire product line. And in the end, it won't matter if MS becomes a console success. If, in five years, that 2 billion is gone it won't effect them much at all. They can just shrug their shoulders, drop support for the console and focus back on other things.
That aside, I'll stick with Nintendo. I haven't bought a console yet, but by virtue of games, price and portability GameCube wins in all three, IMHO.
Kalen D'arrie
Well--- Who is ignorant on genetics?
;-)
The genetic molecules really are the blueprints for the enzymes, antibodies, and other protiens that build every facet of the food. And BTW, I don't buy the ecological argument against GMO's but I so think that there is a public safety issue.
For example: Some people are alergic to peanuts. The allergy is actually a reaction to certain protiens in the food itself. These protiens are built based on the structure of the DNA (DNA -> RNA -> protiens). Now if you take the gene responsible for this allergy and move it to say, corn because maybe you get better pest resistance, what happens when someone eats a piece of cornbread and dies of the allergic reaction? This is the fundamental public safety issue. If it affects, say one person in 500, that would have a minimal ecological impact, but the public safety issue would be pretty severe. Basically one could no longer controll allergies well by avoiding certain classes of foods.
The other argument against GMO's in food is an economic one-- companies like Mon$anto are trying to proprietize what is fundamentally a commodity market-- food. They want to license the food to farmers, particularly in the third world. In this way, they seek to controll the very food supply we all depend on, and that is a very dangious issue too. The battle against GMO's is the same as the battle for open source software.
Which is why I am all for Linux on the XBox
LedgerSMB: Open source Accounting/ERP
Stuff it if you think otherwise, this are right from the horses mouth. You can already buy the cube for $99 at EB as long as you buy 2 games with it (Metroid and Mario anyone?) .. They've been making mad profits since the release. Not to mention the biggest games are all from nintendo directly. Sadly, MS will probably kill the XBox because they had no idea how to make a console.
To paraphrase Charles Foster Kane, at that rate, they'll be able to keep selling XBoxes for another 50 years.
ROOFLES. Mod parent up!
they are selling these things near cost
Who is "they"?
Sony does not sell the PS2 near cost. They sell it to make a profit, and a healthy one at that. This is possible mainly due to the fact that Sony makes almost all of the components, and so they can control prices. Also, if anything, production costs have gone down for these components since the PS2's inception. Making $50+ per console is not "selling near cost".
Nintendo sells near cost, but like I said, they make far more on games. Most people I know who own 6 Gamecube games own 3 that were made by Nintendo. That means that they have made the profit equivalent of 15 game sales for the XBox or the PS2, assuming no Sony or MS produced games (which is generally true).
Microsoft sells nowhere near cost, but on the other end of the spectrum. They were selling between $50 and $100 below cost before they were forced to drop the price of the XBox by $100 due to Sony's price drop. This happened way before MS wanted to drop that price. They had hoped (from what we know from interviews) to hold at $300 for at least a year to a year and a half after releasing the XBox, but ended up dropping to $200 after only about 7 or 8 months. At this point, they're selling at least $70 below cost, and that doesn't count as "near cost" in my book.
-[Blaine]- "'Oh dear,' says God, 'I hadn't thought of that,' and promptly vanishes in a puff of logic."
Comment removed based on user account deletion
I have a very large collection of equipment, including 7 distinct console types (the actual number of gaming systems is close to 12 or so, but I'm going for unique types, so I don't count GBC and GB, or both Dreamcasts). A lot of my games are Dreamcast games (I have about 40 or 50 in that collection), plus the 2 consoles (1 for front room, 1 for bedroom.. I love the VGA pack).
:) The PSX and PS2 were only popular because of shovelware. I can count the number of PS2 games I'm interested in and want to play on with the same amount of fingers I need to count the N64 games I'm interested in!
Have I been out in the cold? No! I was able (and can still) to buy tons of games that kick ass at firesale prices. Jet Grind Radio for the DC was 15$ CDN new at EB. That's 8$ USD! You don't get that kind of value often. That, and the fact that a greater ratio of the games were FUN, is why it's the largest collection of all of my game collections.
I am most certainly not in the cold!
What games do I own for my GameCube? Nintendo first-party ones that kick ass (as Nintendo always has), Capcom's Resident Evil series (which I fell in love with), and Sega games (Monkey Ball, etc). What games do I have for my Xbox? Sega games (JSRF, Sega GT, Shenmue 2, etc), and the odd non-Sega one (Munch, since it was cheap; Mech Assault, for Xbox Live!). As this one fellow I know says, the Xbox has the spirit of the Dreamcast. I bought the Xbox on the strenth of the 3 Sega games listed above. Everything else is cake, like PSO with voice support coming in 2003 for the Xbox.
As to Sony: how many games do I have for my PSX? A handful. I bought some of the MegaMan games (I loved the series on the NES, GB, and SNES), and a couple of RPGs that disapoint (nobody's matched FF3's story yet). I have a similar small collection for the TG16, a much less "popular" console
Nintendo and Sega have are a couple of the companies that have the most experience in game making, and they are the ones who I regularly give money to. I think you'll find that most professional gamers (in that they prefer it to other forms of entertainment, and spend their time and money there to the exclusion of other pursuits) share the same preference that I do.
--
Internet Explorer (n): Another bug -- that is, a feature that can't be turned off -- in Windows.
Consider yourself OWNED.
It's "lose", you fucking idiot. One goddamn o. How fucking difficult is that?
Okay let us use your stats for a moment. A Sony ps2 priced at $300 before the recent cut posts a profit of $120 which means that the box itself would cost $170 to make which somehow seems a tad bit low to me. However; the stats at
3 33
http://hankfiles.pcvsconsole.com/answer.php?file=
seem a bit high though more realistic. It raises an interesting point though: if MSoft is willing to put up an additional $220 on top of Sony ($350 system total, though I think that is low) then who is indeed making the better console? Or more accurately who is making the effort? Right about nintendo though they're definately on the ball - any loss they take they more than make up for with their own software. It should be noted that they just sold Rare to MSoft (and MSoft owns bungie = HALO} so they are building up some software plans. It's all about how far into the future they plan: Sony and Nintendo are taking minor hits on the consoles but nothing in comparison to MSoft but MSoft has the LIVE system up now which might secure their future in the market. (I should note my bias: I have both an Xbox and a GameCube, I tend to avoid Sony. but that's another story.)
(Sponsored by cheeseSource for President 2012)
Microsoft is the only american player in the game.
Don't get me wrong, I'm just as concerned about M$ as the next guy, but it seems to boil down to buying my entertainment from either some big japanese company or some bigger american company. I'm no economist, but isn't it better for my nation if my money stays in my nation's economy?
Uh, I have two words for you
Region Coding.
thank you.
" Xbox Live is doing better than expected, but the total numbers are pretty intimidating for MS. Last I checked (2 weeks ago), the score is:
- approximately 8 million GameCubes
- approximately 10 million XBoxen
- approximately 52 million PlayStation 2s
By those numbers, it's safe to say Sony has wrapped up this round, if you're looking for a 'winner'. "
I thought I'd highlight your comment about the Xbox Live! There are 10 million potential customers who spend 50$ USD and get it all working out of the box for one year. Everything is tracked, you have a friends list, and they even include VoIP for you to chat. I'm even tempted to look in to Xbox Live! without any games as a VoIP solution for keeping up with distant relatives, since it's so cheap and easy! How many PS2 online games support voice chat? Right, SOCOM.
How many of those 52 million PS2s will support online play? Let's see... " Sony, too, is selling add-on hardware to gamers who want to play online; a spokeswoman said the company hopes to sell 400,000 adapters this year. "
You may be asking yourself why they expect to sell so few. To most people, the PS2 is just a DVD player that also plays their legacy PS1 games.
Of the 10 million potential Xbox Live! customers, quite a few million of which will probably go for the easy-to-use service, vs. the 400,000 PS2 people. Besides, if you've ever gamed online for a long time, you know that to get a continued quality service, you need to put money in to it. Myth2's public servers went away because Bungie never received money for it, so did a lot of the "free" online service parts of the Dreamcast games. I'm confident that as long as Xbox Live! gets money, the servers will be there. I don't feel the same way about Sony or Nintendo's (lack of) plans.
--
Internet Explorer (n): Another bug -- that is, a feature that can't be turned off -- in Windows.
Im sick and tired of hearing about America's low quality minefields! We produce some of the highest quality anti-personel mines on the planet and our anti-tank mines are second to none.
Viral software licensing is not freedom, it is in fact GNU/Socialism.
> No, Sony does not and never has sold at a loss.
.18 micron process, and eventually they did combine both chips onto a single die. These and many other cost-savings moves I'm sure have brought the PS2 to a point where they can sell it at a profit.
This is false, but I doubt you'll listen to reason.
When the PS2 came out, the CPU and graphics chip were manufactured using a 0.25 micron process. The chips were 240 mm^2 and 279 mm^2 respectively. Microprocessor Report, a specialized publication that studies VLSI electronics very intensely, used a cost model that suggested the PS2 CPU costs $100 to manufacture at these specifications. Here's a quote:
"The EE and GS die sizes are frightening; vendors of PC processors break out in a cold sweat at the mere thought of a die larger than about 180 mm^2."
So if you can figure out how to take more than $200 worth of chips, add that to the rest of what's in a PS2 package, and sell it at a profit for $300, I'm sure Sony would like to hire you.
Now, eventually of course Sony did move the chips to a
But anyone who just looks at the current picture and assumes it's been that way all along is an idiot.
Sony's selling their box at a loss. do you care now?
So I'm supposed to take estimations by people not involved in the production of the chips over the fiscal reports of the company in question? Either Sony is cooking their books, or the estimations by Microprocessor Report are wrong. I tend to think the latter.
-[Blaine]- "'Oh dear,' says God, 'I hadn't thought of that,' and promptly vanishes in a puff of logic."
well, Sony's business model on PS and PS2 only worked because they ended up having the most popular system. If you have to spend $2B to make a console, it hardly seems like you arent willing to take a loss (even if it isnt, technically, on each machine).
What I guess I am saying is that, no matter how you spin it, you are going to lose money in the short term. But since MS is only losing less than $200mil, as opposed to Sony's first-year loss of $2b for the factory, parts, etc, it seems they are getting off cheap in the short term.
I will say this, however: I think X-Box is going to lose just on the weakness of its games lineup. Technologically, I really like the X-Box, and if someone can hack it so that it can be used as a file server or something I would really be tempted to buy one. But as just a games machine, their lineup seems weak. I know for a fact I will be buying a GameCube just for Metroid and Zelda, and I really like a bunch of the games for PS2 (and it will play my old PS games), so I will probably get that eventually. But there just doesnt seem to be a killer, must-have game for the X-Box. Halo is great, but I want to play it on my PC, since it will have better multiplayer support.
Manipulate the moderator system! Mod someone as "overrated" today.
Documents filed with the US financial watchdog show that Microsoft's Home and Entertainment division, which includes the Xbox, lost $177m (£112m) in the three months to 30 September.
key words being loss in MS home and entertainment; i bet a lot of that was on WebTV and some of the other misc projects that they tried to push out but never caught on...
Oh, I used the wrong word I guess :( (how do you call "canteras" there?)...
unfinished: (adj.)
Wouldn't M$ be able to cut prices on Windows & Office by 50%? Still making enough profit to feed their other divisions. And making more money because users are more open to these lower prices?? I'd be much more open to upgrading my existing desktops if the software wasn't so expensive.
Under the original Sherman Anti-Trust act, being a monopoly was punishable by breakup. Only later was the law changed to allow "good" monopolies.
Compare the current MS situation to the Micron/Hynix court cases recently. Micron is wanting the Feds to punish import of Korean ram because the government of Korea has bailed the memory maker out with tax breaks, bank loans, etc. Just like the US govt bailed out Crysler several years ago.
By the Feds not acting Punitively, and denying the "fruits of the crime" they are allowing the same thing to occur here. But is is a US company so I guess that's ok. Just too bad Uncle Sam's not getting his taxes out of 'um.
There's another reason for gas stations...
Gas stations work differently. A gas station owner buys X amount of gas to be delivered in the future based on speculations. HOWEVER, if he does not have room in the tank for the new gas when the tanker gets there, he get's fined and loses whatever left-over-gas there was.
Therefore, if it's like a couple of days (or week) before the delivery and sales have been lower than expected, he's gotta get rid of it somehow. So he lowers the price so he doesn't get screwed when the tanker gets there. Better to take a small hit-per-gallon then a massive whopper of a loss.
If you reread my post, you will see it currently will only cost your $230 to play Halo, plus you get two free decent games with the XBox - Sega GT and JSRF. And yes, it is worth it just to play Halo anyhow.
Many people write "let's buy XBox, install Linux there and not buy any games", but I haven't read idea about breaking Xbox into pieces. Is it possible to use any part of Xbox with standard PC? Imagine "PC factory" buying underpriced Xbox parts...
BTW is it legal to sell Xbox? What about selling part of it?
i shot a man in reno, just to watch him die...
-- john
Of course it's easiest just to believe that any information counter to your beliefs is wrong. To question your beliefs would be much more work!
Microprocessor Report didn't just spring up out of nowhere and come up with this cost model. They've been analyzing CPUs for years, and they have a track record.
Furthermore, even if you totally disbelieve Microprocessor Report, you yourself can find out data about processors produced in early 1999. Remember that the Sony chips were larger than most all of them.
> Don't get me wrong--I love linux,
No --- you're an SM shill pretending to be on Linux...
Sure it gains customers but when you have a couple of succesful companies in a niche market and your neighbor the multi billionere monopolist marches in and spends his lunch money on taking it over life isnt fun.
I do hope that they end like the germans though. Too greedy and engaging in to many fronts in the war of money. They are attacking PDA, Mobiles, servers, consoles, siebel, linux and many more at the same time.
HTTP/1.1 400
This is not news. This is simple product development.
Very few new products are cash-flow positive in year one. Start-up costs, including building the team, spooling up manufacturing, and marketing are usually far greater than first-year revenues. Most product lifecycles span many years. Products at first generate horrible losses, but as sales volume picks up and manufacturing and distribution costs drop, they creep toward cash-flow positive status. Once mature, successful products are throwing off free cash flow. Products die, and the cycle begins anew.
Talk with your friends in product development and financial analysis. Ask them about discounted cash flow with terminal value, net present value, internal rate of return, present value of breakeven, benefit cost ratio, profitability index, weighted average cost of capital, risk-adjusted return, and scores of other metrics and methods used when creating business models. Most in this forum focus on the technology that enables new products and services. Much has to happen before a project is green-lighted to even get to the technology architecture phase.
Speaking of green lights, the Xbox offers a fine example of this cycle at work. Microsoft planned to lose -- and lose big -- selling consoles the first few years. The game console business is like the razor business. Gillette loses money on each razor, but makes it up on the blades. Console games are blades.
Microsoft is counting on yet another revenue stream, however. The holy grail of recurring revenue -- Xbox Live subscriptions. Neither Sony nor Nintendo is following a similar model. Investors like recurring revenue.
Is Microsoft engaging in anti-competitive behavior by dumping Xboxes on the market below cost? Heck no. They're just early on in the product lifecycle. Their YE2004 results will look much different.
BTW, up until recently the Ford Escort was the top selling car worldwide (I think the Toyota Corolla recently passed it). The Escort program by itself lost money for Ford, even though a gigillian models were sold. All those fuel-sipping cars allowed Ford to sell more pickups and SUVs, however, and not violate the government-imposed CAFE (Corporate Average Fuel Economy) limits. Ford lost money on the Escort to make boatloads on the F-Series.
For those with an Xbox, enjoy 'em. I'll pick up Ghost Recon tonight, so I can play on my black Xbox, not just the green one. Sure, I also enjoy PC games and SOCOM on the PS2. To each his own. Happy gaming.
-Ray
Gord is a fairly dumb person, and is a known Sony apologist. Talk to him or buy a game from him some time.
First: I am (among other things) an mba student so I know accounting quite well (in europe).
The concept with taxes, profit and loss is basically very simple. If you make a profit, you pay taxes, if you make a loss you can deduct that from the next profit you make when you pay taxes. That is, if you make a profit:
tax=percentage*(profit-previous losses).
Karma. Moderation. Is my
"Documents filed with the US financial watchdog show that Microsoft's Home and Entertainment division, which includes the Xbox, lost $177m (£112m) in the three months to 30 September.
"The documents also reveal that five of the seven divisions of the company are operating at a loss. "
Could you possible sensationalize this article anymore? "XBox falls from orbit, kills wife and kids!" The XBox did not lose $117 million. The Home and Entertainment Division did. Not only that, Five other divisions of Microsoft are also operating at a loss, not that those deserve mentioning.
Jeez, Taco, can't you screen these articles just a tad bit better?
You need a FREE iPod Nano
As for your specific example of wood, I think it's time to move away from use of timber, anyway. We produce so much plastic, we should be thinking of newer and better ways to make use of it (Recycled) in building. There have been some nice initial examples in the form of decking, but not enough structural use.
"You're right," Fisheye says. "I should have set it on 'whip' or 'chop.'"
Woohoo! XBox dies! Let's pass that law right now!
Okay, it's possible that you have a reasonable point, but next time try to use an example where i'd actually feel sorry for the company being hurt :)
This Space Intentionally Left Blank
"No, Sony does not and never has sold at a loss. Please stop perpetuating this myth."
So why is it that when you do a Google Search for 'Sony "at a loss"' that you get a bunch of sites discussing Sony's selling of PS2's at a launch?
Here's one article that states Sony sold PS2's at a loss.
Here's another, but it's not clear if they meant the PS2 or not. They might have meant the PS 1.
And here's another indirect reference to PS2's losses.
So no, you are the one perpeutating the myth. The PS2's launch in the USA was hampered by a parts shortage. What happens when parts are scarce? Prices go up. Think about that.
Well, you can rest easy, because Nintendo has been complimenting their franchises with plenty of innovative games as well. Games such as Pikmin, Animal Crossing and Cubivore are completetly unlike any games that are currently out there, and Miyamoto says that 2003 will be the year Nintendo focuses on new franchises!
However, the real difference with the Gamecube is in the 3rd/2nd party support. Unlike the N64, which barely had any support outside of Nitendo (mainly Rare), the Gamecube is getting original games from Capcom (P.N.03, Dead Phoenix, Killer7), Sega (Super Monkey Ball, PSO) and others (Eternal Darkness, Ikaruga). And none of these are even RPGs.
Truth be told, your statements counter each other. You talk about Nintendo breaking free, but you suggest they do it by making a game in a static genre, much like may other games. If anything, Nintendo may be innovating too much, as none of these highly original works made so far have taken off dramatically.
In British Columbia (A Canadian Province),
What is this "Canadia" you speak of?
There are no trails. There are no trees out here.
I am in the privelidged position of having owned (or been a long time user of) several different computer platforms including the nauseating Acorn series and the sublime Atari ST. These days my usual haunts are Windows machines of various version number. You could say I've been round the block a bit (my mummy won't let me cross the road yet and play with the rough Un*x boys though). Anyway from my lofty vantage point I notice that people that graduated from the old school micros like those mentioned above, tend to malign MS much less than those that started using MS products as their first intro to computing. Also, those that began their road to userdom playing on things like Master Systems and Gameboys throughout their childhood rather than micros tend to rant about more or less any personal computer platform regardless of its ancestry. Which leads me to surmise that MS products have been a better introduction to modern IT skills than most people would give them credit for. I'm not an ardent fan of MS but I do have a lot of respect for their dogfood department. Tasty morsels all, upto but not including VS.net. Ye gods I'm glad I bought an XBOX after the price dropped. They dropped a serious b****** with the marketing for the XBOX here, but I reckon it kicks the snot out of all of its contemporaries. Should do so for a few months to come, judging by the number of companies flocking to the format. Summary, go easy on MS, or at least have a reason for hating them, and buy an XBOX.
MS probably will make up the money by charging Sony's Computer division high windows licensing fee..
So Sony competes with MS but yet bundles MS products with their computers.
MS isn't a Monoply.. Really...
$177M loss huh? Sounds like another plot to screw Stan Lee out of his cut of the action.
There's a difference between what you describe and opening a comic book store where you sell comics at below your cost, in an attempt to drive your comptitors out of business, so that you'll eventually have a monopoly on the market. Once you have your monopoly you can raise prices to recoup your losses.
What you describe is legal.
What I described isn't.
I would say microsoft falls somewhere in between. But, perhaps only because they're losing a small-medium sized amount of money on each sale, which they can always claim they plan to makes back on games.
Life is too short to proofread.
And truth be told, subsidizing the console is the standard business model for all console manufacturers, isn't it? We all know that.
/., who says "Microsoft are said to be prepared to spend $2 billion funding Xbox live over the next five years, suggesting it will be some time before the home entertainment division break into the black", the suggestion of how long it takes Microsoft to be profitable cannot be made simply on this statement from Microsoft, which is neither binding nor filed in any formal report. When Microsoft becomes profitable all depends on the competitors to it in the console market, and if there is any cross-competition between the console market and any other market like PC games. So when Microsoft becomes profitable (are we using only when, and not if?) is all up in the air.
All manufacturers do this to some extent - Nintendo recoups on its games, same with Sony and Microsoft. This isn't dumping, it isn't an unfair corporate subsidy.
And actually, the losses are partially explained:
"The loss in the home entertainment division has been put down to the high cost of marketing the game console and absorbing the cost of the price cuts Microsoft has been forced to get people buying it."
So we can at least assign an unquantified number to the marketing, which would have been a huge figure. We all know what Microsoft will spend on marketing its products (Half a billion on Windows 95 in 1995 dollars, and a similar figure on Win2K or WinXP, can't remember), so the marketing could account for a significant portion of the loss.
As for the last comment of the person who submitted the article to
What is this "Canadia" you speak of?
A few years back I was backpacking in Europe - happened to check into a hostel with a lot of Canadians in it - not all as a group, just several smaller groups that had randomly all ended up in the same place. So one day we're sitting around have a few beers and someone mentions how it's funny to have this many Canadians in the hostel at one time....when up pipes a good 'ol boy from Louisiana "Yeah, I never thought I'd meet this many people from Canadia in Europe!"
Of course his girlfriend was also from Louisiana and she laughed just as hard as the rest of us.
Sony had to outlay $1 billion for the fab that makes their chip. There's no way the PS2 was anywhere close to being profitable at the console level for well over a year.
You're just talking out of your ass, ya silly faggot.
Xbox dies, and instead of having three gaming consoles we now have two.
Which is exactly twice as much as consumers have in the OS arena now.
I fail to see how regional coding of games has any bearing on dumping laws. While it's certainly true that an Xbox sold in the U.S. can't play Japanese Xbox games, and vice versa, the fact remains that the products are identical except for the region encoded in their BIOS/firmware. There's no substantial difference between the systems otherwise.
By way of analogy, consider automobiles (which are an item often dumped in the U.S.). Automobiles sold in the U.S. have the steering wheel on the left side of the dashboard, because roads in North America require you to drive on the right hand side of the road. The same cars have the steering wheel on the right hand side of the dashboard in the Japanese models. Clearly, a Mitsubishi Eclipse is a Mitsubishi Eclipse, regardless of where the steering wheel is located. The dumping laws only care whether the product is sold at a drastically lower price in one country versus another.
Of course, region coding can be used to sell the same piece of software for drastically different prices in different countries -- this phenomenon is already well documented with DVD sales. But in the case of software, the cost of producing the software (development, replication) is so much lower than the actual selling price of the media, the dumping laws would probably never come into play, since the publisher is making a huge profit regardless of whether they charge $10 or $50 for the disc.
Companies may sell below cost because the parent country is desperate for hard currency to pay for imports. If the only viable export they have is steel, they will lower the export price of steel to the point that the increased sales of steel brings in the needed amount of hard currency. They may consider the production costs irrelevant if they are paid for in the local currency.
Mea navis aericumbens anguillis abundat
The joke originated for me with my little brother. He would put on a Hawaiian shirt, wear a camera around his neck, get blitzed in bars in Vancouver, and embrace strangers while shouting in a vaguely eastern European accent, "I love Canadia!" and "You have such beautiful peoples and faces! Yesterday I see the Bell of Liberty!!!" etc.
That kid's a damn genius...
There are no trails. There are no trees out here.
Sony took huge losses on the PS1, and that was during a better economy and a less heated console war.
:)
Yes, but let's just remember that this was just because prior to about the time Final Fantasy 7 was released, all the games for the PS1 sucked.
Actually, i do have a point here. Yes, Sony took huge losses, but during the time in which they took those losses, the super nintendo and such were all still "good enough" and some fantastic games were being released for those platforms. Meanwhile on the other side of the fence from the genesis and SNES, we had the Jaguar and the 3D0 and sega's mess of SegaCD+32X+Saturn..
In the end, when people started tiring of SNES and looking for something better, atari and sega had abandoned the market, and only PS1 was left. So of course the moral here is that if you want to get anywhere in the console market, you have to have tenacity, and not just bail out if it isnt' working like sega did with the Dreamcast.
But then you also have to keep in mind that things aren't going to change unless there's a reason to.
The playstation 1 was competing with two products which were technically inferior but had rock-solid market presence, and about like six products (three from Sega) which were about technically equal or better but had absolutely no market presence whatsoever. In this case, waiting out made sense; in the end, the technically equal products died off from not having as much funding as Sony could provide, and when people finally tired of the techncially inferior products, Sony was waiting. FF7 was released, and people started to jump ship, the PS1 looked extremely attractive suddenly to both developers and consumers. Suddenly, the PS1 had more than just this "rayman" crap going for it, and there were games worth playing on it.
Meanwhile, look at the Xbox's situation. It's competing with two products, both of which are EQUAL OR BETTER technically to the x-box, and both of which have *better* market penetration than the x-box. The X-box's games, in my opinion (and apparently the opinion of a lot of other people, judging from the thing's sub-optimal sales), all suck, with the exception of about four games that came out for all three platforms simultaneously. Quite similar to the PS1. Microsoft can wait this out and hope to find their killer app eventually, but again nothing's going to change without a reason.
Microsoft's one hope, as i see it, is the Xbox Live thing. The Xbox Live setup isn't considerably better than the PS2 or the GC setups, but MS does seem at least on the surface more committed to online gaming than sony or nintendo. If MS convinces, like, everybody who makes an MS game to do xbox-live, and Nintendo and Sony screw stuff up and don't get more than a handful of developers to go internet, maybe that'll be a chance for MS to gain a bunch of ground with both consumers and developers, as the xbox gets a name as the platform for the gamer who wants 'net connectivity.. but that won't be enough for MS to win, just enough for them to put them on equal footing, or possibly in the situation of being the market leader. At that point Nintendo and Sony will probably realize MS's one-big-central-server model is better, and switch to that (if nintendo can afford to). At that point MS will have reached its goal of being seriously part of the console market, and absolutely anything could happen from there.. but unless MS plays its cards exactly right and Nintendo and Sony play theirs exactly wrong, MS will remain an outsider who has to struggle just to appear as more than a joke.
In other words, i think MS has one more chance for Nintendo and Sony to flub everything, and then past that there just isn't going to be any benefit from 'waiting it out' anymore. (Yeah, there's the Xbox 2, but the Xbox 2 is going to be competing against a technically equal product-- the PS3. If people don't make good xbox games prior to the xbox 2, they probably aren't going to after either.) Good game developers are everything. And to my mind, even in terms of third-party developers the GC has the best offering right now. Guess what i'm getting for Christmas.. ^_^
Irritable, left-wing and possibly humorous bumper stickers and t-shirts
It seems like companies are only sued for price dumping if they have already succeeded in driving their competitors out of that business. If (and it is a very big if indeed) Microsoft actually wins the console wars then Sony may be able to sue them after its too late.
The real problem is that we continue to let Microsoft spend less than a billion dollars "improving" Windows (the client version) and Office and earn more than 5 billion dollars from that paltry investment. They can afford to corner the market in platinum boat anchors with that kinda cash. They could put 3 billion dollars in big trash bags and just burn it and still be the darling of American business. There has to be something illegal about that.
>So why is it that when you do a Google Search for 'Sony "at a loss"'
>that you get a bunch of sites discussing Sony's selling of PS2's at a
>launch?
>
>
Because these sites were created and run by a bunch of x86 based PC using know-nothings like you?
Of course the fact that the machines were selling for a hell of a lot more doesn't offset that cost in your view. Back in the real world instantaneous profitability may well show a loss, businesses amortize over periods long enough to wipe out those blips.
15 years working with consoles (back to the orginal Gameboy) has taught me that they are invariably built with less, cheaper & shittier components than seems possible and any shortcut its possible to take will be taken. That's how Gameboy has no memory contention logic, Genesis could not run some instructions safely (capacitors instead of logic chips - cheaper at the time!), Sony PSX1 memory cards just plain don't work in any normal sense etc. They always make the poor sods programming games do the work of covering up missing hardware.
Console hardware is not sold at a loss after you properly amortize the costs even over relatively short timescales. Micro$ofts mistake was to believe the myth, their problem is an inability to build simple (hence cheap) systems. They're too used to designing computers when what they're really selling are cheap consumer devices.
"What happens when parts are scarce? Prices go up. Think about that."
Except when the company buying the parts == the company making the parts. Remember, the usualy rules of supply and demand don't necessarily apply to Sony within their own vertically integrated market segment.
If you can't play games on Windoze 50% of ./ers won't need Windoze any longer!
:)
And as a game developer I could finally jettison this buggy pile of dung
Way back in the day I could buy a joystick and it would work for my Commodore 64, an Atari 2600, and even my Sega Genesis (with only one button though). Any of these machines could be hooked up to a TV using the same RF box with a slider switch to send the console/computer signal on channel 3/4. Even the power supplies for several of my old consoles are interchangeable.
Nowadays the console makers are so greedy everything is proprietary. There isn't a single connection on a Dreamcast, PS2, GameCube or XBox that is interchangeable with a rival unit. The PS2 is reasonably compatible with the PSOne, which probably means that Sony puts the accessories for both platforms in the same accounting bucket.
I'm sorry, but this is a pet peeve of mine. Every idiot in the world speaks authoritatively about dumping when they have no idea whatsoever what it actually is.
Here's a hint: "Selling a product at a loss" is not dumping. Not even a little bit. If you produced a product and gave it away for free, that still wouldn't be dumping.
Dumping is very simple: It is selling a product in a foreign market for less than you normally sell it for in your domestic market. If you don't believe me ask the World Trade Organization. So unless you believe that MS is selling the Xbox cheaper overseas (hint: they're not), MS is not dumping.
You may now all return to your ignorant, dogmatic lives.
It should be noted that they just sold Rare to MSoft
Nintendo sold Rare because Rare has outlived it's worth. What most people don't know about Rare is that they've been around for a very long time. They were making games back in the NES days and even since those days have remained a relatively small company. Much of the key talent at the company has been making games now for a time-span that's getting close to 20 years. From what I've read, many of the big names are retiring, moving on, or just plain quitting the business altogether. So what is Rare, then?
Rare is a company like any other. They own some big titles but not any important ones. They didn't get Donkey Kong. They didn't get Starfox. They get to keep Conker's and Perfect Dark. Big deal. As great as the games were they didn't live up to Rare's best stuff. Nothing they develope may ever live up to the success of the SNES version of Killer Instinct, and now that the key talent is gone or leaving, I personally think it's even more likely that they'll start dumping out crap.
Nintendo has done really well with Rare in the past, but I'm betting that Nintendo saw it best to let go of them for a really good reason. They certainly aren't hurting for cash so money wasn't the primary selling factor. Figure it out.
It's also really important to bring up something else in regards to Nintendo and their 3rd parties. There has been some serious tension between the big names and Nintendo because it's a given that Nintendo can soak up a good chunk of holiday sales by just throwing out a few big name titles. But that bitterness seems to have died down here in the past year. The names that really matter are coming back around. Capcom, Sega, Sunsoft, Konami, Namco, and EA all seem to be getting all warm and cozy with Nintendo. Capcom and Sega esspecially so. Even Square is testing the 'cube waters, something many people thought would never happen.
Nintendo is a big competitor to these companies, and that really can't be helped. There are going to be Mario and Zelda games. And thankfully, just a few days from now there will be a new Metroid game. That's just the way the business goes. But I'm speculating the move made by Nintendo to get rid of Rare wasn't only due to the fact that they're really not as great as they once were, but also a sign to other 3rd Party developers that Nintendo isn't all about trying to take the entire Gamecube software market by themselves. They tried sticking it out with few 3rd parties on the N64 and it just didn't work out so well for them.
So while Microsoft may now have Rare, I'm thinking it's more their gain than it is Nintendo's loss. Seeing the line-up of 3rd parties knocking on Nintendo's door I'd easily say they've gained much more than they've lost.
I have all three systems. My software library is largest for the PS2 simply because the system has more games. But I can honestly say that for the most part, all of my favorite games (with a few exceptions) are on the Gamecube. Some of the titles I'm looking forward to the most are coming out only on the 'cube, or also on the 'cube. And the FEW must-haves that are only coming out on the PS2 or XBox are vastly out-numbered by the must-haves out or coming out on the Gamecube.
It'll turn back around here and say I actually do like the XBox. Having seen what it can do I'm eager to see more games make proper use of it. I just think at the moment the game selection for the Xbox is very bland. To many bad ports, a lot of copy-cat-titles, and no real innovations.
Oh well, at least there is DOAX, Ninja Gaiden, and Halo 2 to look forward to.
"Everything you know is wrong. (And stupid.)"
Moderation Totals: Wrong=2, Stupid=3, Total=5.
"Bucking the content industry" would have ensured that they would not have been able to bundle DVD player software with the console, a big feature to lose when their competitor the PS2 does work as a dvd player.
Jon Acheson
All opinions expressed herein are my own, and not those of my employers, who are appalled.
And there are ways to get around anti-dumping laws. When Sony announced that they would release the Playstation in the US at $100 less than it was selling for in Japan, to undercut Sega's Saturn, they removed the separate RCA video port. That made the US Playstation a different model from the Japanese one, so the anti-dumping laws did not apply.
byebye xbox? Not friggin' likely. First of all, that's a horrendous extrapolation. About 7 years ago my father bought a 486SX25 computer for ~$1000. Now, you can buy 2GHZ computers for less than that. Manufacturing prices go down down down as time goes on. And besides, for a first effort, the Xbox is insanely popular. (It's a damn fine system, too.) The Xbox isn't going anywhere.
The average house where I'm at costs around $300,000. Somehow that $3000 to $5000 you quote isn't quaking my financial sensibilities.
stipe42
The thing that urks me about the US is how they talk out of both sides of their mouths. Free trade is great and all, but if it cuts into their profit potential in the US, screw it. Slap on some import taxes, forget it. Same thing goes for farm subsidies.
You know that generic third world country that has all those terrorists in it? The reason they can't make a living as farmers and now have to turn to (insert your evil way of making a living here) is because of those farm subsidies.
Ain't it a bitch?
Well, what you've heard is wrong. The only consoles to sell at a loss are Dreamcast and Xbox.
"We returned the General to El Salvador, or maybe Guatemala, it's difficult to tell from 10,000 feet"
I get it now. It's like wine, only more masochistic!
THIS THING CAN TURN ON A DIME, MACROSSZERO STYLE ALSO FUCK BETA, ~NYORON
IIRC from my undergrad days in econ, technically MS would not be covered by US anti-dumping laws, but by the anti-trust laws under a doctrine known as deep pockets. The idea is that you have enough cash stashed away that you can afford to drop your prices for a sufficiently long time to drive less well endowed competitors out of business and then raise prices to the monopoly level. Here is an example from the US airlines industry. Anti-dumping is a similar idea but under US law applies to foreign companies selling for less than production costs.
There are a couple of problems with both the deep pockets notion and anti-dumping laws. First, a large competitor may well have a lower cost of production than a smaller competitor and costs can be notoriously hard to measure. This can lead to charges that what is really happening is that the DOJ is bringing the case for political reasons, i.e. the protection of small business (the A&P grocery case is the classic example). The second problem is that cutting the price imposes a cost on the big competitor as well (e.g. $177 million quarterly loss for the MS game console) and so it isn't entirely clear that this is a rational strategy. Remember that both the large and small guys do best where their marginal revenue = their marginal cost (i.e. profit maximization) and this is not necessarily the same as maximizing market share as many Korean and Japanese firms have discovered in the past decade or so.
And for the parent who wrote:
The US puts taxes at will on any kind of product if they think their own industrie soffers from forreign laws... However: what is legal and what not, all over the world, is final descided by a US court.
The EU and the Japanese are at least as guilty of protection as the US (try selling Guatemalan bananas in the EU). Most of these disputes are now settled under GATT treaties by the WTO, not US courts. In fact, the US 1916 anti-dumping law has been held to violate the WTO and GATT treaty by the WTO. Under the rules, the US is required to bring its domestic laws into conformity with WTO and GATT rules as are all of the other signatories.
FreeSpeech.org
These are privately held companies that I am talking about. No goverment involved. And of course, if you don't let them export because you don't like that they are more competitive than you in ONE market, then how do you expect them have an open economy.
After all, countries do specialize in what they do best and it's a logical conclusion that they will have lower prices than you on all these products.
I mean, where I live we do not mind not producing our own movies or our own games. We know you can do better (though people here might try to do a game, but not as good) and we import them. But we do expect our exports to be accepted.
You can't request them to repay any debt they have if you block their imports. After all, the monetary side of any operation is the relex of a real good that must be traded. And a debt is a good that MUST be traded in the future.
unfinished: (adj.)
> Except when the company buying the parts == the company making the parts.
Well, but what does happen in this case? Either the demand remains unmet, or else the company has to do whatever it can to increase supply, which typically involves more expenditure.
How is Microsoft being anti-competitive? They are taking massive losses per unit to try and compete with Sony and Nintendo.
In the long run, sure, Microsoft would like to see Nintendo and Sony put under so they may reign supreme as the console kings. Would Sony not want the same? As for Nintendo, did you notice any portable offerings besides the Game Boy when you were at Wal-Mart recently?
Sony was very successful because they have a massive home entertainment industry and associated marketing gorillas at their disposal. Microsoft assumed they could achieve victory along those same lines, but instead of a home entertainment industry, they are using a home computing industry. I'm sure we all remember the XBox is not a computer rantings before release.
You are a great belever in the trickle down effect are you?
That if we give a smart, resourcefull business men all the money, that they will use it to make more money, and we will all be better off.
In short, if Mr Gates gets another 50 or 100 houses, he might let you have a job washing windows?
Microsofts books will have the 200 odd million down as an expense. The expense will be offset by the tax they dont have to pay.
This particular loop hole is designed to be there. Ritch people vote every time. Big companys have loby groups that systematicaly loby and influence politicians.
Thus a system of taxes that inherntly favors ritch men who own big companys. Them who has, gets.
All that yadda yadda being said, when MS *actually* does something meritorious, the slashdot "intelligencia" full of shit posters who supposedly value merit as a virtue, can't get past their own bile ridden prejudices. Halo is so good it makes Id software and its wares look like has beens.
The Xbox is a great product. That doesn't mean PS2 or GameCube are bad or worse or better, whatever, it just means they did a hell of a job and it's good. I hate MS for their lack of merit--totaling the amount of time lost rebooting and fixing bombs on the OS (in hours/life span lost) will probably be greater than total life lost in WWII. But what is, perhaps, creepier is that the /. crowd is just as duplicitous in applying its own huge pool of intellect.
My clique frequently refers to Canada as Canadia, and I assure you that none of us do so out of ignorance.
I think your problem is that you think an entire country
1. thinks the same way
2. is willing to sacrifice itself for ideology
Given how much produce the U.S. fucking exports, I think you're kind of daft.
They could have 178 million...
If they sent me a cool million...
evidence? then.
-pyrrho
I can't figure out *why* there's such a massive aversion among Europeans to genetically enhanced food, food from animals that were given antibiotics, food that pesticide was applied to, even (to some degree) non-free-range meat.
What's the big deal? Health organizations were all over this, have scrutinized it, and I can guarantee you (I know people that work in the medical industry) that the FDA is unbelivably uptight about letting *anything* past them if there's even the remotest unfounded possibility that something might have some risk to it. The only reason *not* to eat improved food is because of some irrational gut emotional response.
May we never see th
Another consideration is how many games people buy per console.
Most people with an X-Box that I've seen get Halo, and maybe two or three other games, and that's it.
May we never see th
Assuming it's a myth, I seriously doubt that M$ would blindly follow the myth and simply accept losses on console sales without asking questions. They must have done serious market research and analyzed the business models before taking a plunge into this market. If they did not, then the company is run by idiots, which is less plausible.
...that Bungie, which used to be held up as the anti-Microsoft by Mac fans, is now the *only* thing holding MS's console in place. "Well, there's Halo..."
May we never see th
Yep, that's US Protectionism.
It's same thing with nukes. We can have them, but no, not you.
But hey, they're the good guys, right?!
Did I miss a memo?
Well, if you haven't heard the news from Japan yet, (I have, because I live there...) Nintendo is doing a gigantic push for the Gamecube this winter. Basically they are making a stab at the market to try and reclaim the market that it has lost to Sony over the years...
First, just recently released was Biohazard 0 (Resident Evil 0) in the states, which is getting incredible reviews in all the Japanese video gaming magazines I have seen, I haven't seen the US reviews of it. Famitsu, probably the best respected magazine in Japan for video games said it had the best graphics ever seen in a video game.
Second, they are releasing Metroid Prime prior to Christmas, which if anyone has paid any attention to video games for the last 13 years or so, will be a monster seller. Read "killer app" here.
But third, and probably the most surprising of their promotions, is what they are doing with the new Zelda game...
Nintendo is doing a pre-order deal for the newest Zelda game for Gamecube, that is fairly unprecedented. If you pre-order Zelda, you get a Gamecube-remake of the N64 Title "Zelda: The Ocarina of Time" which was one of the best selling titles for N64, and an incredible game. On top of this, you get a gamecube remake of a never-before-released Zelda game that was designed for the never-released N64-DD. Both of these remakes feature revamped graphics and gameplay... These are not just ports, but actual remakes. Oh, and did I mention it comes with a promo DVD with demos of the new Biohazard 4, and another title that is slipping my mind at the moment.
So yes, Nintendo is making quite a stab at the market this Christmas, at least in Japan. XBox needs to do something fast, or they will never have a foothold in the Japanese market. Every week the console sale amounts are posted in Famitsu magazine, and Microsoft has had a 0.0 amount for as long as I can remember, (thats 0.0 percent of all consoles sold in the week.) that amount is so low, because it doesn't sell enough to even register the minumum amount on the poll. They are actually selling more Sega Dreamcasts and Gameboys on a weekly basis here than XBoxes.
So anyway, just thought I would spread the news.
-Tofusensei
Just a small calculation:
If they loose $177m in three month and they want to spend $2b for subsidicing the xbox, the money lasts for 2.8 years. This is half the five years it should last.
Just a small calculation.
As for your specific example of wood, I think it's time to move away from use of timber, anyway. We produce so much plastic, we should be thinking of newer and better ways to make use of it (Recycled) in building.
Timber recycles perfectly well. Probably with less hassle than trying to convert plastics into building materials.
Dreamcast used Microsoft Windows CE, dumbass.
I'm glad Dreamcast crashed and burned.
Plus remember that Sega sued companies for producing software compatible with their consoles.
GCHQ Quantum Insert installed. If only our tongues were made of glass, how much more careful we would be when we speak
Well, check out Gord's page on the subject. It's just a little bit more factual than something you heard somewhere. Also check this out. Finally, note that it would probably be illegal for sony, sega, or nintendo to sell consoles below cost.
"We returned the General to El Salvador, or maybe Guatemala, it's difficult to tell from 10,000 feet"
Produce an XBox interpreter for a PC and then sell that for a few bucks. Costs them nothing to produce. Granted most computers can't keep up with the XBox, but anything with a GF3 or GF4 should be okay.
:)
That said, I do enjoy seeing M$ lose money, so, nevermind.
[insert witty comment here]
(Very similar things have happened more recently.) So, essentially, what you are saying is that that its illegal for any country to produce steel at a lower price than a US foundry can? And it's especially, especially illegal if it will force good old american companies out of buisness?
Summary: "Look at what [they did]. Huntco [... had] to shut down facilities. The cost of [...] steel was so low that after [production,processing,shipping] it was still under US rates.
If eastern steel producers are really dumping the price (as in selling below profit) why can't the US companies simply compete? Do you really believe a poor Ukranian steel company could sell below cost for a decade? (hardly likely). Do you think a major US steel company could price fight with the Ukranian one for the period? (extremely likely).
Perhaps the real problem is oversaturation in the US steel market?
I choose to remain celibate, like my father and his father before him.
Even before then, they were originally Ultimate - Play the Game and used to write exclusively for the ZX Spectrum. As a Commodore 64 owner I had to go round to a friend's to play Atic Atac and the like.
Sigh, nostalgia.
Another story doing to rounds about Rare is that they have lost a lot of staff recently and the Stamper brothers who founded the company are no longer so interested in writing games.
Still, we'll see. And let's face it a bad Rare game is going to be better than almost anything the XBox has to offer at the moment.
Best wishes,
Mike.
It's just a little bit more factual than something you heard somewhere.
I worked as a software engineer in the game industry for six years at the senior and lead level.
The PlayStation 2 has been on the market for almost two years and has sold more than 30 million units worldwide, giving Sony plenty of time to rein in production costs.
this is how I described the situation, as happenening initially under cost, while reducing the cost of production to turn a profit. The short term profit is generated by game licencing and really is more important.
actsofgord is not up at the moment, so I'll have to read that later, although I believe I may have read it in the past.
It's common knowledge in the game business... 3D0 was said to have had the same plan. It may still be myth, but it's more than "something you heard somewhere". Especially if Gord is the only source you are basing this on. But I'll have to check it to reply.
-pyrrho
The problem with wood is twofold. First, the quality of wood in the US is nothing like what it used to be only ten years ago. It is, quite frankly, crap. Of course you can get better wood, but it's much more expensive. If you live somewhere else you may or may not have this problem. Damn you, Canada!
Wood can be recycled but its usefulness varies. The second problem with wood is that the most useful wood is fairly large contiguous sheets of wood cut from the heart of large (old) trees, which means that you're not producing the really quality stuff on any kind of reasonable timescale to be harvesting much of it, if any, in most places -- some would say anywhere. I don't particularly want to open that debate (and I doubt it would happen this deep in the threads anyway.)
You can make wood into pulp, which is good for a number of things, or possibly into various composite wood products, or into smaller pieces of wood, often with some holes in them. But plastic can often be made (at some expense which varies but is generally coming down to nearly nothing with the byproducts being saved because they are valuable) back into exactly what it started as, or something else equally useful.
I hope (but do not expect) that we will start seeing more use of various plastics, both petroleum and plant based, and subsequent recycling. I know a lot of landfills are required to separate out recyclables so at least some of what you throw away that could be recycled is, or at least it's collected for recycling. Whether it ends up on a barge somewhere, headed for international waters, is beyond the scope of this comment.
"You're right," Fisheye says. "I should have set it on 'whip' or 'chop.'"
And let's face it a bad Rare game is going to be better than almost anything the XBox has to offer at the moment.
I dunno, I'm pretty disappointed by Starfox, to be honest with you. And I think Halo kicks 7 kinds of ass.
What really annoys the shit out of me is that the XBox might as well (at the moment) just be a Halo box, because that's about the ONLY truely must-have game for the system. Don't get me wrong though, it has a few good titles, but most of the best ones it has are also available for the other systems, and the best offerings it has coming out are still many months away.
So, while the people who only own XBoxes are still waiting, I'm loading up on some really killer titles here lately.
Just a few more days till METROID PRIME! WOOHOO!
Fortunately I have all three systems, so I get to stay pretty unbiased between the systems and I get to play the best that each has to offer. I just think it's a shame that my Dreamcast gets more use than my XBox.
"Everything you know is wrong. (And stupid.)"
Moderation Totals: Wrong=2, Stupid=3, Total=5.
Xbox Live is doing better than expected, but the total numbers are pretty intimidating for MS. Last I checked (2 weeks ago), the score is:
- approximately 8 million GameCubes
- approximately 10 million XBoxen
- approximately 52 million PlayStation 2s
Substitute Internet Explorer, Mosaic and Netscape for GameCube, XBoxen and Playstation 2 respectively and you get the picture at the beginning of the Browser Wars. Now m$ have, what? 98.8% or something, depending how you count it.
Starfox is bad? That's a shame (it hasn't arrived in the UK yet).
Quite agree about Halo - it is fabulous and a worthy game for any system, but the fact it is still riding so high in the charts after all of these months seems to show the lack of XBox must-have games. So far all the hyped titles - 'Buffy', that platform game with the really ugly cat - have all been disappointments.
What's also worrying me about the XBox is that Microsoft have hyped its on-line abilities but made the system closed and broadband only. Here in the UK, broadband is reaching about 6% of online homes and vast swathes of the country (including me :( ) just can't get any broadband. Conversely, Nintendo and Sony are accommodating modem users which will make their systems much more palatable to users.
The XBox is now competitively priced, but it really needs some exclusive, top-notch games to pull ahead. And where are those games?
Best wishes,
Mike.
PS. Dreamcast - yep mine still gets regular outings for the post-pub madness that is 'Chu Chu Rocket'.
Damn straight! ^_^
Damn it! Are you tired of people looking at that game and saying it is a kid's game? Fuckers.
Just out of curiosity, what company did you work for?
Obviously not 3DO (not zero)...but who? And in a console division, or in PC/Mac software?
"Mod, mod, mod...and another troll bites the dust."
Starfox is bad? That's a shame (it hasn't arrived in the UK yet).
I won't say it totally sucks, but it's not up to Rare's standards. It uses the Zelda engine for the most part whicd is readily apparent right down to the way items are picked up, thrown, and jumps and Z-Targeting are done.
If you replaced Starfox with Link, nobody would know any different.
So that should mean that it kicks ass, right? I mean, Zelda games always kick ass? Well, it's not that easy I'm affraid. See, while it PLAYS like Zelda, it doesn't keep the interest like Zelda. The story is irritatingly cheesy, the voice acting is obnoxious, and the plot is slow to get off of the ground.
But it IS very playable, the graphics ARE outstanding, and there ARE a few Arwing levels that are well done. So it's not total crap. I would recommend buying it after it's been out a while and you can get a good used copy or a discounted new one. It's certainly not worth the full price. Save your money for Metroid Prime and The Legend of Zelda.
"Everything you know is wrong. (And stupid.)"
Moderation Totals: Wrong=2, Stupid=3, Total=5.
why do you ask?
do you also say it is just a myth that consoles have often been sold below their manufacturing costs?
Point one: make that "initial cost".
I have read the Actsofgord page and I'm not that impressed. I remember people talking about this sort of a plan for computers long before Sony Playstation as the industry in general constantly buzzes about how to really make money, where to put the margins, etc. In consumer software you can make a load off volume software, and every title benefits from the wide base. Selling the machine for as little as possible is an obvious and good strategy.
I worked for The Sierra Network. I claim only that this is an industry myth if it's a myth at all, and not just some internet outsider myth, as implied. Further, I don't think it's a myth just because it's not an immutible law. It's common knowledge. It bears some accuracy to the way console economics have been set up so far.
I think the actsofgord answer is too pat. The analysis of where the profit on a million Playstation's might come from was simplistic. And it doesn't change the fact that the profit is driven up from below. If you start selling near cost or even below initially, you can be sure to get profit in proportion to your ability to optimize your processes. It's a great way to do techical capitalism because it's agressive and the reward becomes directly proportional to the technical improvements you can accomplish from increased efficiency.
-pyrrho
Did you even read the rest of the fucking post, you dumb shit?
the very next line says:
However they get only applied if a non american company tries to sell for dumping prices inside of the US.
I was just curious. I wasn't trying to skew your statements or anything by saying "Oh...well you just think that because ___".
do you also say it is just a myth that consoles have often been sold below their manufacturing costs?
Point one: make that "initial cost".
Personally, I don't know how much I trust ActsOfGord. I long subscribed to the belief that consoles were sold at or around cost, and that the royalties were where the profits came from. If necessary, a console could sell under cost, so long as the market conditions would support it. Sony, for instance, could have afforded to sell the PS2 at $249 on its launch, as the only competition it had at the time was the Dreamcast, which, as history shows, wasn't doing all that well to begin with. The GameCube now has a higher install base in the US than the Dreamcast does.
Of course, Sony sold the PS2 at $299 because it was the right price for the hardware, and they had generated enough hype to make that price seem perfectly feasible. It was the price that the market would support. It's a shame too, because the Dreamcast had exceptional hardware, and a *proper* Internet gaming model - Give everyone the hardware, let the publishers do stuff with it.
The thing is, as I said before, the market has to support your ability to take a loss on the hardware. The dotcom "market" demonstrated this all too well. If you have five vendors in the same space that are all competing to be "loss leaders", you might be the first one hitting the ground, but you're no better off without a parachute. Microsoft had the right idea, but
- Shackled itself to the hardware of the ever-advancing computer market
- Didn't adequately negotiate with the Japanese market and publishers, who will ultimately make or break a console
- Put the name Microsoft on it
Realistically speaking, had Microsoft built the *whole* system and put it out to market under another name or another company (Sega comes to mind), it'd probably be doing *ten* times as well as it is now. However, it's still a gaijin system, and it's made by a company that more and more people are growing to distrust.A lot of gamers I know that are fans of the Xbox say "Microsoft has $40B in the bank. I know that if I buy this console, my investment isn't going to just go away. Microsoft has the cash to do whatever it takes to make this a worthwhile investment.", which is essentially based off the selfish premise that Microsoft would actually *use* that much money to push the console off on people. Yeah, if there weren't any product-dumping laws, and if the government wasn't keeping such a watchful eye on Microsoft, they'd probably have taken the risk of selling the Xbox even cheaper just to get it out to market.
"Mod, mod, mod...and another troll bites the dust."
Multiply by 500,000. Put the total into the pockets of fat, lazy lumber barons. Repeat next month.
Fascism should more properly be called corporatism, since it is the merger of state and corporate power.
Do people like check the Debian website every 5 minutes to check it hasn't morphed into another one?
Not that I'm one to talk, but some people seriously need to get a life
-- james on #Debian
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