Microsoft's Rush To Xbox 2 A Danger?

Game Boy writes "Brit games business site Gamesindustry.biz has posted a fascinating editorial asking whether Microsoft is about to shoot itself in the foot over Xbox 2 by rushing to launch the console years ahead of its rivals' next-generation platforms. It's a pretty good analysis of how Microsoft is thinking about this marketplace, and why they could be pretty drastically wrong - I work at a major games publisher, and a lot of people here are worried about exactly the same things, but it's rare to see anyone actually discussing them openly. Xbox has done pretty well so far, but Microsoft could be heading for a disaster that even Bill's billions won't dig them out of..."

Comments

Re:No, no, no

[7Ghent]

Gaming platforms != movies

A gaming platform is an investment that you'll spend several hundred on, games, controllers, etc.. A movie is just a movie. Because I see a movie this weekend doesnt mean I won't see one next weekend, even if it's similar. However, if I buy a console this weekend, I'm definitely not buying one next weekend.

Your analogy sucks.

Re:No, no, no

[Anonymous Coward]

The XBox outsold the PS2 in April of this year due to the $150 pricing, that was rapidly reversed in May with the matching PS2 price cut.

"First-Mover Advantage" Won't Help...

[GTRacer]

...If PS3 is backwards-compatible. Follow me here - Sure, Xbox 2 (or Ybox, or why bother?) will have prettier graphics and a lot of "new-tech" cachet. But the fracture in the game-space of having two incompatible Xboxen might be the opening PS3 needs to keep Sony on top.

Since PS2 dev won't have to stop for PS3, all the investment and tricks learned will still be valuable. Sure, some developers and publishers will stop PS2 coding, but look at how many PS1 games are still out there!

Microsoft won't have that, and they're also asking gamers to keep two systems. Sony is effectively saying "Upgrade to the $350 PS3 by trading in the PS2 for $100, and keep all your games!".

Much less risk to go Sony.

I still want an X2, but I know who's getting my money first!

GTRacer
- Read the FA for once!

Re: you've got your consoles confused

[mapmaker]

It was the Sega Saturn that got trounced by the PS1 and N64. The Dreamcast got trounced by the PS2 and Xbox.

But your point is right on. Sega proved it not once but twice!

Re:No, no, no

[vitaflo]

The PS3 is so highly anticipated right now, that developers are already writing games for it, studios have already put aside funds. The same cannot be said for a next generation Xbox.

There are no dev kits yet for PS3, nobody is writing anything for it, unless you mean writing design docs.

MS has already given XNA to devs, and they very much are already developing games for Xbox2/Xenon.

I am not totally sure on this, but has the Xbox managed to outsell the PS2 in any month except for when the Xbox was first released?

Xbox outsold PS2 by over 100,000 units in April when it dropped its price to $150.

I think this will be great for Sony to see what they can enhance upon for their game system, considering the PS3 has been in development for what? 3-4 years now.. perhaps longer? I think they might have a slight advantage and a better product.

Xbox2/Xenon has been in devlopement for just as long, so has Nintendo's next console (Revolution). Who has the "better" product remains to be seen.

Re:No, no, no

[Crispin Cowan]

You compare Deep Impact to Armagedon, and claim that Armagedon "destroyed" Deep Impact in box office and rentals. Some data:

• Deep Impact business
• • Box office: $140M
  • Rentals: $67M
  • Total revenue: $207M
  • Budget: $75M
  • Profit margin: (140+67)/75 = 176%
• Armagedon business
• • Box office: $201M
  • Rentals: $104M
  • Budget: $140M
  • Total revenue: $305M
  • Profit margin: (201+104)/140 = 118%

Deep Impact did 2/3 of the business, which is hardly "destroyed". It did it on 1/2 the money, which is arguably a better investment.

And IMHO, Deep Impact was a much better movie; the plot was much more believable. IMDB somewhat concurs, in that the viewer rating for Deep Impact is 5.9 and Armagedon is 5.7. I cannot confirm or refute the claim of which film was rushed to market, but the Deep Impact people clearly did a better job.

Back to video games: anyone have data on how much Sony spent developing PS/2 vs. what MS spent developing XBox?

Crispin

Console Life

[vasqzr]

I'd guess that the average game console life is probably around three years.

You guessed wrong.

1985 - NES released in the USA
1991 - SNES released in the USA
1996 - N64 released in the USA
2001 - GCN released in the USA

6, 5, and 5 years

1994 - PSX released in the USA
2000 - PS2 released in the USA

6 years

Re:Console Life

[lukewarmfusion]

I was trying to include the not-so-successful consoles in my estimate.

1995 Sega Saturn
1998 Dreamcast

There are an awful lot that didn't last even three years.

Playstation came out in 94, but by the time 1999 rolled around the popularity was waning; if PS2 didn't come out in 2000 they might have lost a lot of customers.

Re:No, no, no

[ThosLives]

That's not entirely correct:

There actually is an OS on all the "disc based" systems. Xbox actually has a specialized version of Windows NT and runs DirectX. Sony's PSn boxes also have a kind of OS. What do you think manages disc reads, writing to/from hard disks/memory cards, and handles all the I/O scheduling and the like? The fact that you can change an XBox to run [Linux] means that you're changing the OS on the thing.

Just because hardware doesn't change doesn't mean it doesn't have an operating system. You'd be surprised at how many things have an "operating system" - like cell phones for example. Even your automobile engine controller probably has an operating system...

Re:No, no, no

[boosman]

You do not realize that this $60 Billion is paper-money only, there is hardly any cash. All this money is stuck in other people's projects. It will probably take them 10 - 20 years to be able to cash all their assets if they can at all.

Please check your figures before you post. According to Microsoft's 8-K filed 23 April 2004, as of 31 March 2004, they had $9.348 billion in cash and cash equivalents, and an additional $47.059 billion in short-term investments. (See FreeEdgar for the 8-K and other reports.)