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How IBM Out-foxed Intel With The Xbox 360
xcaverx writes "Learning from failure is a hallmark of the technology business. Nick Baker, a 37-year-old system architect at Microsoft, knows that well. A British transplant at the software giant's Silicon Valley campus, he went from failed project to failed project in his career. He worked on such dogs as Apple Computer's defunct video card business, 3DO's failed game consoles, a chip startup that screwed up a deal with Nintendo, the never successful WebTV and Microsoft's canceled Ultimate TV satellite TV recorder.
But Baker finally has a hot seller with the Xbox 360, Microsoft's video game console launched worldwide last holiday season."
I realize you were joking, but just to give this numbers:
Apple's entire value of "Goodwill" as of Sept '05 (last number I could easily find and yes they actually have to value these things though it certainly isn't easy to come to a precise number): 69,000,000
IBM's market cap: 127,630,000,000
IBM's Cash And Cash Equivalents (as of Dec '05) 12,568,000,000
"reality has a well-known liberal bias" - Steven Colbert
Apple may not count for a huge amount in sales, but the amount of hype Apple fan's created for PPC is worth more money then IBM has ;-)
Delusional. "Hype" for one product that accounts for maybe 10% of IBM's business is worth more than the net worth of the company? I'll bet IBM's calculation here is that a)the "hype" generated by Mac PPC sales was worth little to nothing, given that the sales they care about are to large corporate buyers; b)console sales will generate hype themselves which will likely be similarly (read: not very) powerful; c)the console market requires chip volumes a couple of orders of magnitude higher than Apple; d)the new partnering fits better with future plans for Cell, which mostly involve consumer-electronics embedding.
Hype is not better than money. Companies that fail to recognize this don't last. Your nick and post are well-coordinated.
Given a choice between free speech and free beer, most people will take the beer.
Check post history.
Known paid for Microsoft astroturfer using multiple accounts to self mod up posts.
"Microsoft couldn't care less about losing a few million/tens of million/even hundred million on the first run of XBOX."
The XBox has lost upwards of $4 billion. I think the XBox either qualifies as a failure or a disaster. If the 360 doesn't turn a profit in a couple years I think they are going to throw the towel in.
Apple's entire value of "Goodwill" as of Sept '05 (last number I could easily find and yes they actually have to value these things though it certainly isn't easy to come to a precise number): 69,000,000
Your description of Goodwill is incorrect.
Goodwill is a very specific number used to define an intangable asset that was aquired.
So, lets say I buy a company for 5 million dollars. On the books, the company has materials and property worth 1.5 million dollars.
For accounting, I say that I spent 5 million dollars on 1.5 million of assets, and 3.5 million of "Goodwill" Every year (at least) I evaluate the 3.5 million dollars worth of Goodwill and make sure it is worth as much as I think it is.
The accountants don't get together and say: "People really, really like us. Lets call it 69 million dollars worth of "like"!"
... they would shut down the factories and stop manufacturing them. Fact is they have a game plan, fact is they are still flying off the shelves, fact is they are gaining market share... that's all that matters. People with consoles buy games. The more colsoles you have out there the more games you potentially sell. You have to spend money to make money.
this article states Microsoft expects to make money in 2007. Also note that all figures on how much microsoft is "actually losing" is speculation by industry analysts. No one actually knows precisely how much Microsoft is paying for what component.
If you want to crack a market you have to pull out the checkbook and take a hit. You can't go in timid. Microsoft has shown that and look at the market share they have gained. They have a good percentage of gamers hooked, now on the third generation consoles they don't have to take as big a hit on the console price.