Slashdot Mirror
New Xbox 360 Dev Kits Shipped Out
GamesIndustry.biz is reporting that Microsoft has sent out new versions of the beta development kit for the Xbox 360, replacing the Apple platforms used up to this point. From the article: "Prior to E3, developers reported that a very small number of these more advanced kits had been manufactured, but it's only in recent weeks that they have begun shipping to Microsoft's development partners on a wide scale."
I am!!
First off, How can you call any project that has averaged losses in the BILLIONS every year a success? The only reason the XBox has survived so long is that Microsoft believes that they can buy their way to market dominance. Face the facts, all XBox fans were saying that the Power Difference and Microsoft's ability to buy exclusive games was going to 'win the console war'; all Microsoft can say that they did was to virtually tie a company that has a fraction of the financial assets (Nintendo) while bleeding out money.
I would be surprised if there is a third XBox if the 360 is nearly as unprofitable. I think that only an idiot would think that Microsoft would continue to produce the XBox if Microsoft's entertainment division doesn't break even in 5 years.
Lets get facts straight here:
The Xbox is now making a profit for Microsoft, meaning that the entertainment division will break even quickly. What you casually forget, is that while the console sales were averaging a loss, the games were making a considerable profit. Microsoft is not stupid, it knows that the Windows and Office business streams can make enough money to subsidise the entire company (Microsoft is making an overall profit). The best scenario for Microsoft is to sell Xboxes at a loss, in large numbers, and make the money on software licensing. This is exactly what Microsoft should be planning to do with the early 360 launch... sell as many units as possible and tie those people into buying games at $50 a pop for the next 4 years. If one person buys 20 games (a conservative estimate) at $50, thats $1000 dollars. Thats where the real money is... not in the $400 hardware.
Look at the installed userbase for the Xbox.. last time I read, it was 29% compared to Sony's 60%. That doesn't sound great... but compared to Nintendo's 11%, Microsoft has been very successful at pushing into a new market. The reason that PS2s count for 60% is clear.. Sony had a whole year's headstart on the other two. This is EXACTLY what Microsoft want to replicate with the 360 launch.. even though they'll only get 4-5 months, they'll get the all important holiday sales. They'll build up a userbase quickly, and make a fortune on the games sales. Provided brand loyalty doesn't stop 360 sales, they'll be in a very good position to fight against Sony in the next 4 years. Nintendo is no longer a true competitor to these two; Microsoft has muscled them out of the running in the current-gen consoles and unless they pull something fantastic out of the bag, it's unlikely they'll recover. (Which is a shame, as Nintendo made some very good games.)
PS -- Note the sig, exceptions can be made for modded posts.
"This is exactly what Microsoft should be planning to do with the early 360 launch... sell as many units as possible and tie those people into buying games at $50 a pop for the next 4 years. If one person buys 20 games (a conservative estimate) at $50, thats $1000 dollars. Thats where the real money is... not in the $400 hardware."
You don't really understand the economics of Console based videogames do you?
No one, not even retailers, makes money off of Hardware; the entire market makes money off of software. This means that their is a huge mark-up at every level in order to justify the costs. Believe it or not, off of a third party title Sony / Microsoft / Nintendo make around $8 for every one that is sold; off of a second party title it is around $12 and a first party title will be around $15. If either Sony or Microsoft sell their systems with a $100 loss they have to sell ~8 first party or ~12 third party games (per system) to break even. If you never understood how Nintendo is profitable when Microsoft isn't here is the reasoning: Nintendo doesn't sell their hardware at any real loss and they sell a ton of first party game. On the other Hand, the XBox sold for around a $100-$150 loss (depending on who you ask) and was heavily dependant on third party games. For simple math compare the strategies (made up numbers for demonstration):
Nintendo Gamecube
Loss per system: $0 (for most of it's life it was sold at a profit)
Average number of games sold: 10
Average profit per game: $12 (mostly first party games)
Average total profit per system: $120
Microsoft XBox
Loss per system: $100
Average number of games sold: 22
Average profit per game: $10 (mostly third party games)
Average total profit per system: $120
If you notice, with reasonable numbers, Microsoft would have to sell over TWICE as many games as Nintendo in order to approach their profit margins. The fact is that Microsoft was NOT profitable in the previous generation; using a conservative estimate of $2 billion in losses on about 20 million units is a $100 loss per system.
The thing that XBox fans seem to forget is that the 360 is not ensured success even if Microsoft continues to throw money at it. History shows us that Fans are reluctant to purchace new hardware for their system if a sequel is produced less than 5 years after the original system was released; people are remarkably unfazed on technical specifications of a system; people do not care about 'fancy' features like HDTV and internet connections; and most people wait for the system to become affordable before purchacing it. I know these things are hard to understand in the Slashdot crowd, being that a large portion of us pay WAY too much attention to these things.
I know I come across remarkably negative towards the XBox and Microsoft, but believe it or not I am planning to purchace the 360; that is if Perfect Dark and Kameo turn out to be good games. I have always been a Rare fan but (except for Perfect Dark) many of their 'newer' games (Donkey Kong 64, Banjo Twoie, Starfox Adventures, etc.) have been of lower quality and on top of that they haven't released a game in years (which is always a bad sign). But, if they're the Rare of old, I can't resist Rare's games.