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

No, no, no

[Mz6]

"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..."

You do realize that you are talking about a company that has almost $60 Billion (with a B) just in reserves alone. They are sitting on this money! Add into what they make in revenue and the profit off that.

I know this is an editorial and all and very light on research findings but this paragraph right here struck me as odd:

"The belief within Microsoft's top Xbox executives, according to company insiders, is that the main reason that Xbox has failed to seriously challenge the PlayStation 2 is because Sony had first mover advantage - a gap of a year in which to build up its installed base and convince consumers and industry alike that it was the key platform of the next generation. Hence the urgency around launching Xbox 2 well ahead of its competitors; if, as seems increasingly likely, PlayStation 3 doesn't arrive until late 2006 or even early 2007, Microsoft believes that it will have won a huge competitive advantage by being to market as much as two years earlier. This, the conventional wisdom says, is how Microsoft will crush Sony."

Just because you release a platform before a competitor doesn't automatically make it better. The movie industry is notorious for this. Think back in 1999, The release of Armageddon was very hyped at this time, Hell, McDonalds had a friggin contest for it. However, before that release came this little movie called Deep Impact. It was an OK movie, but lacked some parts. It was rushed, designed to make it out before Armageddon and take a cut into it's sales. The movies had the same premise and theme, but Armageddon destroyed Deep Impact in both the box office and dvd/vhs sales. In this case, Microsfot doesn;t know when Sony will release the PS3. 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.

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? When will companies learn that to make a market share, you have to be different. Playstation become popular back in the day because they were disc-based. They were able to hold more space, add better graphics, play music, play full-motion video. But most of all they had the game developers behind them.

I would be very interested to see what Microsfot has to offer that will be different from the rest. It definitly wasn't a 40 GB hard drive. 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.

Just my $0.02.

Re:No, no, no

[Chiasmus_]

The belief within Microsoft's top Xbox executives, according to company insiders, is that the main reason that Xbox has failed to seriously challenge the PlayStation 2 is because Sony had first mover advantage

Isn't this obvious to everyone??! What the hell is wrong with these Xbox executives?

The reason that the Xbox hasn't challenged the PlayStation 2 is that when you walk into a GameStop, there's an entire wall of PS2 games - plenty of good titles, at that - and three little rows of stuff that's either terrible (Outlaw Golf, anyone?) or available on PS2.

The reason XBox hasn't challenged PlayStation 2 is the same reason the Sega Master System couldn't challenge the NES: Despite the fact that the former are superior pieces of hardware, the latter has the best, and most, contracts with game designers.

I think the XBox is a fantastic machine. I've played GTA3 on both XBox and PS2, and it's simply more enjoyable for XBox.

But, as an XBox owner, every time I think "You know, I'd like to play a strategy game.. or maybe an RPG..." all I can do is lament the fact that all the good titles are on the other wall.

History says this is bad, mmmk.

[schild]

Sega tried this. Remember the dreamcast erhmmm the 32x and THEN the dreamcast?

Remember the CD-i?
Remember the 3D0?
Remember the Atari Jaguar?

These weren't experimental systems. They were meant to beat the big guys to the punch, whether it was Nintendo or Sega back then.

The Dreamcast (still my favorite recent gen system) got trashed by the ps1 and the n64. It keeps me up at night thinking about how much better games for the Dreamcast would have been.

However, if I remember correctly, the PS2 was launched a year before the GC and the Xbox....Hmmmm, no one was naysaying when Sony was planning on doing that, and look at them now - on top by a large margin.

XBox shooting themselves in the foot? Not if they have Ninja Gaiden, a Halo spinoff and other stuff coming out. Oh and backwards compatibility, they NEED backwards compatibility, no matter HOW HARD it is. I'd put some cash, money, hoes on that being the reason the PS2 succeeded as quickly as it did.

Re:History says this is bad, mmmk.

[The Lynxpro]

"The dreamcast got trashed by two things, in my opinion. The first one, which is more or less provable, is Sony's announcement of PS2 specs. They made it look like the PS2 would put the DC down like a dog. Fact is, while the PS2 has greater capabilities than the DC, they are seldom used to their full extent because of the difficulty of developing for the system to that extent. Anyone who can write C can write a PS2 game, but to really use the hardware takes talent. I firmly believe that the second factor was piracy, it was just too easy to copy Dreamcast games. Sega brought out a system with no meaningful copy protection just at the time when it became trivial to download ISOs from the internet, with predictable results."

The Dreamcast failed for a variety of reasons. However, it is chief to remember that the Dreamcast was essentially the Xbox v. 1.0. Many people forget this crucial fact.

The pact with the demon Sega signed up for was the condition that the Dreamcast's operating system would be Microsoft's WindowsCE. Then, behind the scenes, Microsoft manipulated Sega into cancelling its contract with 3dfx to provide the graphics chipset (which became the Voodoo3) in order to use NEC's PowerVR chipset (which was a complete failure in the PC market). NEC had pressured Microsoft into orchestrating the deal considering NEC (at the time) was a major PC vendor and customer of the Windows operating system via Packard Bell. Sega breached their contract with 3dfx (not to mention the fact they were a large shareholder of 3dfx) which cost them a major lawsuit.

Now add to all of that the number of consumers who waited for the PS2 and you can see why the machine failed. But do remember that it was a cheap way for Microsoft to rid itself of a future competitor of console hardware and learn how to work the industry.

Been here before -- Nvidia?

[Monkelectric]

Isn't this just what Nvidia did? The XBOX is already the most capable console out there, it makes the ps2 look primitive, and it is signifigantly more powerful than the GC but I wouldn't say dramatically so. For years when Nvidia was the only real manufacturer of GPU's, instead of resting on their laurels they pushed ahead and released new products month after month after month. A lot of companies were prevented from competing with Nvidia had raised the bar dramatically. I submit this is exactly what MS is trying to do, raise the bar for Sony, make it more expensive for them, to screw up their PS3 plans, and prevent competition in the general sense.

Re:Halo 2?

[Apocalypse111]

Halo 2's release date is supposedly set in stone. The guy who announced it had it tatooed on his arm, and was showing it off at E3. After a publicity stunt like that, I don't think they're about to push it back any further - if I had an important event date tatooed on me, I'd make DAMN SURE that event happened on time.

Bigger risk is to wait

[cmacb]

I thought I read AT LEAST two years ago that Sony had all the parts needed to make a Playstation 3 but was holding back due to the fact that there was no competition they needed to whomp at the time. Had XBox done better the PS3 would probably be out there now. I'd love to see the PS3 come out though, since as it was described it might not only be an XBox killer but a PC killer as well.

I hardly see how this move is a "risk" for Microsoft though. The bigger risk to Microsoft is that they just sit on their 50 Billion $ nest egg and wait for the Windows/Office monopoly to dry up. Having shot blanks with just about everything else they have tried, even Bill must be doubting his own genius by now.

If you had Sony to go up against in consumer electronics, IBM in IT consulting and hardware, Google, Yahoo and AOL in Internet space, and Open Software gradually picking up steam against your existing monopoly, wouldn't you be a bit worried? I bet the stock holders are.

Besides, who says the end of 2005 is a rush? In MS time that means 2007 at least.

Online Console Gaming is the Future

[CodeBuster]

It seems to me that Microsoft would do better to concentrate on pressing their advantage in the online console gaming market with their XBOX Live service. This is an area where Microsoft is definitely ahead of Sony, which has left online gaming largely up to the individual publishers whereas Microsoft has concentrated on a single branded and managed service. The XBOX Live network can include a greater variety of content and better integration of online gaming services with the centralized service model. Also, smaller publishers, who would balk at the cost of maintaining their own online console gaming infrastructure, would definitely take advantage of the Microsoft branded service and the marketing support that comes with it.

The next generation console wars will clearly be decided in the online space. If Microsoft concentrates on this then they have a chance.

Re:Online Console Gaming is the Future

[ThousandStars]

The next generation console wars will clearly be decided in the online space. If Microsoft concentrates on this then they have a chance.

Despite the +1 interesting mod, I reject your premise. I think the abysmal showing (in terms of sales in the overall game market) of virtually every MMO with the exception of Everquest demonstrates that most people aren't that interested in on-line only play. When they are interested, they want free, like Battle.net or FPS servers. I know about 20 people who own an X-Box. Zero of those people use the X-Box Live service.

Online content in the console market faces two important hurdles, in my view: 1) Most American homes lack broadband internet. While broadband continues to grow, the fact remains that modems will continue to dominate in terms of number for the near future. 2) Most console gamers I know prefer to play literally live, against friends in houses, dorm rooms or apartments.

Then there are other things: parents don't want to pay for or set up online games; service outages; increased costs; etc.

Granted, I'm arguing primarily with anecdote, but I've seen no data that indicates that Microsoft can win the next generation with online games. I think that other factors will play a much larger role. Another poster wrote about his experience in the electronics section of Wal-Mart, at which he sold hundreds of PS-2s because of the DVD playback feature. Things like DVD playback and backwards compatibility will probably play such a larger role that the online market alone gives MS a chance. Certainly, they may win the next generation, but I think it will be for different reasons than those you state.

Re:Backwards compatibility

[Dark Paladin]

Only conjecture, really. We're "pretty sure" the Xbox2 dev kits are Apple G5 computers (savor the irony), and "pretty sure" that there won't be a hard drive - but nothing is set in stone yet, and MS themselves might not really know.

So it just comes down to what they really decide to do. For all we know, they could hard code a Virtual PC chip into the machine that emulates an Xbox1, so it might be a moot point. Time will tell.

Re:Halo 2?

[Exitthree]

As a Mac user and former Bungie fanboy, I will entirely agree that they were better off before being assimilated (and the irony of their founding principals and what finally happened to the company still disturbs me).

However, to avoid being a "me too" poster, I'll add something about Marathon which you have mistaken. You could walk under a bridge in Marathon, as long as the bridge was closed and the inside of the bridge was described in the map as a different set of enclosing polygons from the set outside. Marathon could handle elevation data, but not different levels of elevation in the same column of space...without tricking the engine. A lot of the more complex level designs used this hack to accomplish pretty impressive feats for the time.

Article completely misses the point.

[Thag]

And the point is, Microsoft is still losing money on every XBox they sell, and it's not going to get better for them. They are stuck buying PC parts that don't follow the same price curve as console electronics. For instance, hard drives don't get cheaper, they get bigger, and after a couple years, any given model of hard drive is out of production.

Because of this, Microsoft has to get the XBox 2 out as soon as possible to stem their losses.

The other console manufacturers, from all indications, are still making money on their consoles, so they are not under the same pressure to put out the next generation.

As for compatibility, that will most likely be secondary to "not losing money" in the design of the new XBox.

Jon Acheson

Solid lineup...of games you don't need an Xbox for

[analog_line]

Halo - PC version available
KotOR - PC Version available
Prince of Persia - PC, PS2, and GameCube versions available
Splinter Cell - PC, PS2, and GameCube version available
Splinter Cell: Pandora Tomorrow - PC, PS2, and GameCube versions available
Full Spectrum Warrior - Coming out for PC
Halo 2 - Will have a PC version eventually
Prince of Persia 2 - coming out for PC, PS2 and GameCube as well
Doom 3 - If you're playing this on the Xbox...I feel sorry for you.
KotOR 2 - Scheduled to be released on the PC

So that's a grand total of 3 of the 13 games you listed as the "solic" Xbox lineup all scheduled to have or already having a release for a different platform.

Doesn't sound like a super duper reason I need to go get an Xbox, if I can already play 76% of the good Xbox games without needing to buy an Xbox.