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  1. Re:Piracy ... on TiVoToGo For iPods and PSPs · · Score: 1
    it was not. AFAIK it was "time shifting", a form of "fair use".


    Sorry, no. "Timeshifting" allows you to do just that, record a program to shift the viewing time to one more convenient for you.

    The fair use timeshifting exemption has no provision to allow you to give or loan such a recording to your friends. That would be distributing a copyrighted work.
  2. Re:Er, huh? on Hidden Codes in Printers Cracked · · Score: 2, Informative

    Working in big box retail sales, specifically in warranty repair, I do know what I'm talking about.

    It is astoundingly rare for cashiers to actually scan the serial numbers off product boxes, even when they're available as barcodes. Far more often they simply scan the normal UPC a second time or scan the model number UPC.

    If they have to actually read the serial number and type it in they generally either skip the serial or fat finger the keyboard to make it look as if they've entered a serial number, creating no end of problems for warranty reimbursement.

    If the security of the nation is coming down to cashiers who make six dollars an hour... well then, I guess we're up the creek.

  3. Re:More importantly. on London Tube Dangerous for Technophiles? · · Score: 1

    In response to 9/11, we invaded two countries and spent tens of billions of dollars and decades of accumulated political goodwill.


    You seem to have made a typo. We only invaded one country because of 9/11, Afganistan. We invaded Iraq to stroke GW Bush's ego.

    Republicans pretend that war with Iraq wasn't inevitable, but hell, we had a betting pool at work to see how many months it would take for GWB to invade after his election. Everyone knew it was coming.
  4. Re:the defense of liberty on London Tube Dangerous for Technophiles? · · Score: 1

    They aren't skipping 'Jews', they aren't searcing 'Muslims' or 'Arabs', they looking at a list of Israeli citizens who have left the country, and comparing that picture to the person and their ID. You match that, you get less security. That's all, that's it.

    So terrorists would never kidnap an Israli that left the country and subsitute their own person in his place to come back across the border?

    Ah, here's the problem. I agree that no Muslim group is going to attack the US with non-Muslims. I also agree (and some people won't) that Muslim groups are what we mainly need to worry about right now, so we really don't need to worry about non-Muslims.
    Now. Where's the list of Muslims?
    See, we can figure out people's ethnicity. We can usually figure out their nationality, (What country they owe loyalty to.), although we can be tricked there.
    We can trivially figure out someone's religion, unless they are hiding it. (Hopefully the terrorists haven't figure this out yet.)

    Okay... so you agree what we mainly need to wory about is Muslim extremist groups. So we'd want to target Muslim's for searches. But how do we identify the Muslims.

    Well, lets see checking with PBS.org we find that 90 to 100% of the population of Egypt, Turkey, Iran, Syria, Iraq, Oman, Yemen, Afganistan, Pakista, Saudi Arabia and all of the north african coast is Muslim.

    Bing. Identified 90 to 100% of Arab, Persian, Egyptian and Turkish peoples as Muslim. Say, that wasn't hard at all, was it?

    At a guess, I'd have to suppose that male from these racial groups is a THOUSAND of times more likely than a female schoolteacher of French decent to be a member of a Muslim terrorist organization, don't you think? Actually, its worse odds than that. Women are VERY rarely members of terrorist groups.

    (Note that I'm not suggesting we don't search female french schoolteachers at all, only that they be searched with regard to the percentage of them that carry out terrorist plots. If terrorists start recruiting french teachers, lets start searching them)

    Of course, that doesn't rule out Muslims from Russia, India, or even Austrailia. Heck, it doesn't even rule out American Muslims.
    But it does catch the vast majority of members of the terrorist organizations we're worried about.

    There probably are some groups we shouldn't search on airplanes.

    Who says? This discussion is about who should always be searched. Nowhere in this thread has anyone ever discussed excluding people from searches.

    We have discussed who should or should not be searched given two alternatives, but never has someone suggested, before now, that some people should NEVER be searched.

    Erm, I'm afraid it is you who just set up a strawman. You see, that line didn't say that others said people shouldn't searched, and this was wrong. It said, indeed, there are some groups we don't need to searched. Namely, people who could do much more harm via other means. Whether they are trustworthy or not, we don't need to worry about them hijacking airplanes.

    If I implied it was wrong that some people shouldn't be searched I didn't mean to. You see, up to that point, you had been saying it was wrong to give more attention to some people based on profiling than others. Now all of a sudden it's okay to give less attention to someone because of a favorable profile... and to quote you...

    However, a fundamental premise of profiling is that we search some people more, which pretty much automatically means we search some people less. Specifically, 'non-suspicious' people.

    So... you agree with me? It's okay to search people like senators and pilots less, and therefor search others (more suspicious people) more. Thanks. We can all go home now. We agree.

    Okay, okay, so you're probably going to say we don't agree. Back to the discussion.

  5. Re:the defense of liberty on London Tube Dangerous for Technophiles? · · Score: 1

    Actually, the 'box cutters' is a myth spread by airlines to distract from the fact that the terrorists probably had normal knifes.


    Although American 11 and United 175 were reported to be hijacked using knives, according to the 9/11 Report (see page 26) American 77 was hijacked using box cutters.


    You see, you're right, a few box cutters are all anyone could get past security


    Sigh. Why can't you manage a reply without putting words into my mouth? I never said box cutters were the only thing somone could get past security. In fact it was just the very first thing I thought of, within seconds of reading your post. Seconds.


    So you're asserting that (non-suspicious) people have carried single box cutters onto the plane without being detected?


    Uh...if they weren't detected how would anyone know they ever had them? They were found and confiscated during searches of the planes before takeoff.

    But even if you did manage to get your box cutters on board, in the post 9/11 world they wouldn't be very effective. Once American 93 knew that the terrorists were crashing planes the passengers overpowered their knife wielding attackers. The only reason such weapons worked is because the passengers believed it was a kidnapping, not a murder/suicide. The terrorists wouldn't have that advantage now. So your "pack of razor blades" would be next to useless.

    However, that's not what this part of the discussion is about. You asked "I'd like a single example of a realistic weapon that it's possible to sneak one past security, but gets harder the more you sneak."

    I provided it... all the message I'm replying to is smoke and mirrors to try to obscure the fact that somehow you missed the obvious answer to your own question. We were not debating the effectiveness of any particular weapon... at least not until you brought up a weapon that would never work after 9/11...

    Just as a side note, although these messages have been fun, it is getting a bit boring. I'll keep going for one more reply, maybe two at the outside, but after that I'm done. It's just not interesting knocking down your arguments anymore.
  6. Re:the defense of liberty on London Tube Dangerous for Technophiles? · · Score: 1

    Your example is just lame. The only people that the terrorists could recruit to not get searched are Israelis, and there probably actually aren't any Israelis who are willing to do it.


    But there's always makeup....

    Remember, facial structures of Arabs and Jews are very similar...it's just a matter of skin color and documents and still they don't bother.

    and to quote you...


    However, every single nationality, every single religion, every single ethnicity, has at some point had a grudge with the US. Every single one of those with more than, say, fifty million people has had some nutjob go crazy and attack us, with varying levels of success. Even, yes, Americans.


    Can we both agree we can safely substitue "US" with "Israel" and have this be equally true?

    So terrorists can recruit Americans nutjobs but not Israli nutjobs?

    It would appear you're vastly overrating the ability and willingness of muslim terrorist groups to recruit non-muslims.


    There probably are some groups we shouldn't search on airplanes.


    Who says? This discussion is about who should always be searched. Nowhere in this thread has anyone ever discussed excluding people from searches.

    We have discussed who should or should not be searched given two alternatives, but never has someone suggested, before now, that some people should NEVER be searched.

    Sigh. Another straw man.

    Keep standing them up, I'll keep knocking them down.
  7. Re:the defense of liberty on London Tube Dangerous for Technophiles? · · Score: 1

    I'd like a single example of a realistic weapon that it's possible to sneak one past security, but gets harder the more you sneak.


    Uh... how about a box cutter? Remember those? I seem to recall some group who used those...

    The one I have here is 3 3/4" x 1" x 1/8th inch.

    Fifteen are a chunk of metal 3 & 3/4" x 1" x 1 & 5/8ths. While people have brough box cutters accidently on planes since 9/11
    do you seriously believe someone could get a solid metal block the size of a pack of cigarettes past a metal detector?

    Keep standing them up, I'll keep knocking them down.
  8. Re:the defense of liberty on London Tube Dangerous for Technophiles? · · Score: 1

    And this is assume some magical computer. In the real world, we have no idea of the odds of someone being a terrorist.


    Right. Also in the real world they don't even search all 15 of your hypothetical terrorists. They're busy searching some 85 year old from Newfoundland who needs an O2 tank to breathe and some girl scouts and a Japanese businessman.

    All 15 terrorists get in because you think its a bad idea to search based on race.

    And lets not forget, everyone is getting searched to some degree. It's just some people are getting searched more than others.

    How exactly do you propose that those two mystery terrorists would manage to carry in enough weapons for 15 people. Even the routine screen everyone gets would catch that.

    Enough of your straw men.

    The majority of terrorists the US is having trouble with and have been having trouble with are Islamic. These terrorist organizations, such as Hamas and Al-Qaeda have shown that despite being targeted by race they've continued to use terrorists that are pretty much exclusivly Muslim for going on 20 years now....
  9. Re:the defense of liberty on London Tube Dangerous for Technophiles? · · Score: 1

    Gee, I wonder what that would lead to almost immediately.


    Absolutly nothing. See below.


    See, terrorist recruiting doesn't work anything like you apparently think it does. They don't stroll up to people on the street and ask them. They know what 'white' people are sympathic to their cause, and if they need them, they can certainly recruit a few. Or, hell, they can just use make up. Sure, caucasion is hard, but what about Japanese or Kenyan?


    You see, we have the perfect place to look to see what terrorists do when they're targeted based on race. The Israel/"Palestine" border. Guess what? Aside from one recent example of a disfigured young woman all the suicide bombers are Muslim males.

    Despite being targeted they've repeatedly shown that they'll walk right into the crosshairs and get caught. Over and over and over again.
  10. Re:the defense of liberty on London Tube Dangerous for Technophiles? · · Score: 1

    Nor did you answer his. Or do you consider being targeted for searches "no misfortune"?


    Actually, if you read again, I did answer his question. He didn't actually make an argument to refute.

    Let's go with your argument though. He stated he had the misfortune to be dark skinned. I believe all people have equal rights regardless of skin color, race, creed or national origin. But if you're looking for Yakuza members in a crowd, you talk to Japanese people. If you're looking for members of the IRA you'd probably have better suspects to speak to than native Argentineans, if you're trying to find terroristicly minded Militia members, talking to immigrants from India won't help you. Want to track down some members of the Klu Klux Klan? Best not to be spending time talking to African-Americans... and if you want to find terrorists who blow up buildings, crash airplanes into buildings and suicide bomb, who by and large are Muslim extremists, then you damn well better be investigating young Muslim males. To not do so is the ultimate in political correctness run amok.

    Now, to more directly address your argument, while I concede that it's a misfortune to happen to share identifying characteristics
    with a group known to commit terroristic acts I can't imagine anyone thinking of their race or creed as an unfortunate happenstance. I'm proud of my heritage and the poster should be proud of his.

    It may seem like splitting hairs, but I'm in favor of targeting searches before boarding mass transit on whatever demographic group is supplying the most terrorists. If there's a sudden change and short irish guys start blowing up buildings then it's time to target them for searches.

    But that's not happening, not on a large scale, even in places like Israel where they know the terrorists are likely to be young "Palestinians". The terrorists and suicide bombers are still, by and large young muslim men. The day that changes we should shift our focus and not before.
  11. Re:the defense of liberty on London Tube Dangerous for Technophiles? · · Score: 2, Interesting
    The plain fact of the matter is that young, tall, blond-haired blue-eyed men blow up buildings

    Care to name one such incident?

    Timothy McVeigh


    Sorry, no... The stated example was a blonde, blue-eyed bomber.

    McVeigh is brown haired, brown eyed.
  12. Re:the defense of liberty on London Tube Dangerous for Technophiles? · · Score: 1
    The plain fact of the matter is that young, tall, blond-haired blue-eyed men blow up buildings


    Care to name one such incident?
  13. Re:the defense of liberty on London Tube Dangerous for Technophiles? · · Score: 1
    Do you belief that all the young muslims are engaged in this ?


    No. Nor did I say or imply that I believed all young muslims are engaged in terrorisim.
    Putting words in my mouth won't help you win the argument.

    Trust me I am not a muslim and have the misfortune of being dark skinned because of which almost all the security guys at the airport stop me and search me.


    As far as I'm concerned there's no misfortune in being muslim or dark skinned . I'm sorry if you feel there is.

    Curiously, although your message appears to be a reply to mine, you don't seem to have bothered actually trying to refute my
    argument... or did I miss something?
  14. Re:the defense of liberty on London Tube Dangerous for Technophiles? · · Score: 1
    It works, but the price is too high. I have much greater fear of living in a society where it's a crime to be male, or young, or dark-skinned, or muslim, than a society that suffers very rare and mild terrorist attacks. (Killing Americans at 0.001% the rate of common car accidents.)


    Please.

    The plain fact of the matter is that 80 year old grandmothers of sweedish decent aren't crashing airplanes into buildings and blowing up subways. No amount of politcal correctness will change the fact that young muslim males ARE doing these things.

    Spending money randomly searching those 80 year old grannies rather than targeting groups that actually ARE engaging in terrorisim is not only wasteful, it's stupid and it compromises our security and it's disingenious to claim otherwise.
  15. The War Between the Pitiful Teachers... on Slashback: Archives, Leak, Fanfilm · · Score: 2, Interesting

    The War Between the Pitiful Teachers and the Splendid Kids

    Best Book EVER.

    http://www.amazon.com/exec/obidos/tg/detail/-/0380 578026/102-5071418-2785734?v=glance

  16. Re:License violation and legal action against Appl on Safari And KHTML May Never Meet · · Score: 2, Insightful
    I think http://www.gpl-violations.org/ would really like to hear about this. Apple have been a bit too litigation-happy lately, it'll be nice to see them have to eat some of their own crows.


    Uh, just how is this a GPL violation? They're providing the modified source code. The GPL doesn't require you to explain how you wrote your code or how you got from the old code to the new.
  17. Upgradablility on Price Drops For Mac mini Upgrades · · Score: 0

    Now if it only had a PCI slot I'd be hooked.

  18. Of course.... on SCO Code to be Protected in Closed Court · · Score: 2, Interesting

    IBM could just publish a listing of the code which is not in dispute.

    "No your honor, we didn't release the code SCO said was copied into Linux. We just released a listing of what SCO says isn't theirs. Surely that isn't secret..."

  19. Re:laws of nature on Evangelion Live Action Movie · · Score: 1

    What? They're making a Love Hina live action film? Where'd you hear that????

  20. Re:There's just no way - look at the costs! on Rumours of Playstation 3 in 2003 · · Score: 1

    Uh oh... looks like someone's ego has been a little bruised. :

    Again with the insults. If you haven't realized by now there is a reason personal attacks have nothing to do with a well reasoned, logical response. Had you bothered to read the link I posted or any of the hundreds of other pages a quick trip to the search engine found you would have noted that most of the pages agreed that personal attacks in a debate are but one sign that the attacker simply doesn't have a valid argument. If he had one he wouldn't have to attempt to inflame, but could convince his opponent merely on the basis of his argument. Seeing that you refuse to debate in a rational matter (much less address a very telling point I've brought up several times and challenged you to reply to)(1) I see no point in continuing this conversation.

    Drop a line when you've grown up.

    (Now, as not to be accused of just ducking the issues..)

    Hmm... just sit back and read this a few times. Savor in it's breathless, misfired-insult idiocy. It's all downhill from here.

    That was the point. I was asking if you were really that stupid.

    Is RCA selling every television it makes at a loss until they pay back their R&D expences?

    If you invested a billion dollars in a factory, and then for some reason you didn't sell as many widgets as you expected to sell... so you didn't make back your billion... I suppose you'd have to say... on that investment... you took a loss.


    No one asked you about the investment, Listen to the questions being debated.

    Divide the 2 billion dollar startup cost by the 50 million units sold.

    Why don't you divide it by 69, Bill and Ted's favorite number?

    It is about as relevant. I will neglect to address the rest of your math springing from this meaningless comparison.


    Ammortization is the division of a debt or payment into smaller, equal installments over the life of the debt.

    You were the one that said that Sony's profit per unit didn't take into account the ammortized cost of their initial investment. The math, which you dismissed out of hand, proves this to be incorrect.

    At least if you actually ment "ammortized".

    The correct point to draw from this is that (given that we accept the gross profit per console figure) Sony had to sell 20 million playstations to break even on their initial investment. The source you plagiarized made this connection - why not you too?

    I do and always have. This has absolutly nothing to do with the question of Sony's per unit gross profit on consoles.

    You want to compare XBox's total production costs, to Sony's production costs minus a big piece of their initial investment (which you have decided is not relevant in your comparison for some reason).

    Do you never get tired of misstating my position? I have always quoted Sony's full production costs ($2 billion)

    Let's see if you're with me on this so far. If Sony had sold 5 million units instead of 50, they would have taken a loss instead of a gain. I know, you're itching to answer it's not the same. Take your time. Think about it carefully.

    This is a really nice point. Except no one is talking about Sony's profit on the Playstation line. Everyone else is talking about the fact they aren't selling -each unit- at a loss. That has absolutely nothing to do with their total profit/loss statement.

    I'm repeating the section below from my last post. One can only assume since you didn't bother to reply you simply had no answer. Not a wonder, as the only answer shows that the gross profit per console is important and your core argument is that the distiction is unimportant.

    -----

    Somehow you kept missing an important part of the problem with selling a console with a gross profit loss. Let me repeat it so you remember to address it this time.

    If you sell a product at a gross profit loss, the more successful it is before the cost of your bill of materials drops, the more money you lose. If Microsoft suddenly tomorrow had sold a total of 50 million XBOXes they would have lost between 2.5 billion and 5 billion additional dollars (given that they have a gross profit loss of $50 to $100 each).

    With the same number of sales Sony made at least 3 billion dollars profit ($100 gross profit per console minus the $40 per console ammortorized development and facilities cost times 50 million units sold). Note that the gross profit figure on the Playstation 2 console was gleened from Sony's annual report the year the console was released. Since then Sony has released a cost-reduced version of their console, thus increasing both the gross and net profit per console.

  21. Re:There's just no way - look at the costs! on Rumours of Playstation 3 in 2003 · · Score: 1

    I'm not sure whether you're not following along, or you're just trying to change the subject.

    Me?

    Since you're very first reply you've engaged in logical fallacies which, until now, I've ignored. But if you're going to start accusing me of changing the topic...

    (for definitions of your logical fallacy see:http://www.geocities.com/anatheist2001/subskep ticismfallacies.htm)

    So basically the article you plagiarised admits

    Ad Hominem

    This kind of error makes you look like you don't really know what you're talking about.

    Ad Hominem (also you convienently forgot that my point was correct)

    Tragically, you still don't seem to understand. I'll keep trying a little longer. If you need help, show your teacher, parent or guardian, and maybe they can explain it in more detail.

    Ad Hominem. (Do you really think you're winning points with slashdot readers with these retorts?)

    The essay you plagiarized is BS

    Ad Hominem. (Get enough mileage off this one yet?)

    You said: [plagiarized an essay claiming Sony doesn't do that].

    Ad Hominem. (I guess not.)

    But lets move beyond that, shall we. Are you seriously suggesting that unless Sony sold it's first Playstation 2 for 2 billion dollars that it is selling each unit at a loss until they pay back their R&D expences?

    Is RCA selling every television it makes at a loss until they pay back their R&D expences?

    Is Toyota selling every car it makes at a loss until they pay back their R&D expences?

    The answer, of course, is no.

    The gross profit per unit = the sale price of a product minus the cost of a product (the price of the Bill of materials plus the labor to assemble the parts)

    actually not taking into account the ammortized cost of the tooling and facilities

    Lets look at that, shall we? The Playstation 2 has sold 50 million units wordwide. (http://www.ps2web.com/articles/viewnews.cgi?newsi d1043186072,96220,) Divide the 2 billion dollar startup cost by the 50 million units sold.

    The ammortized cost you were so worried about is $40.
    Subtract the ammorized cost from the gross profit per Playstation 2 ($100) and you will see that Sony made $60 net profit per console sold.

    Well, ok, what I said was complete bullshit.

    I said no such thing. I tried to demonstrate how Microsoft and Nintendo (Bob) differ from practically any other company in the world, Sony included (Stan).

    you lose the race, you lose your entire much bigger initial investment.

    Not at all. Even if Sony stopped making Playstation 2 consoles tomorrow they have a massive chip production plant and assembly factories that in and of themselves have considerable value. But this is all besides the point.

    The fact is Sony's Playstation 2, much like televisions, bottled water, automobiles and even the shirt on your back, had a huge startup cost before the first unit rolled off the assembly line.

    By selling their products for more than the cost of the labor to assemble them and the cost of the bill of materials all the companies that make the products noted above pay back those startup costs and make a profit.

    Something you cannot do if you don't sell your product for more than it costs to manufacture each unit.

    But wouldn't you rather be Sony nonetheless?

    Again, not what I said. I asked if you'd rather be the company that makes a gross profit on each unit or the one that doesn't.

    Would anyone want to be in Bob's shoes, hoping that maybe, someday they could start paying back their loans or would they rather be Stan, who is making payments against their debt since day one.

    Somehow you kept missing an important part of the problem with selling a console with a gross profit loss. Let me repeat it so you remember to address it this time.

    If you sell a product at a gross profit loss, the more successful it is before the cost of your bill of materials drops, the more money you lose. If Microsoft suddenly tomorrow had sold a total of 50 million XBOXes they would have lost between 2.5 billion and 5 billion additional dollars (given that they have a gross profit loss of $50 to $100 each).

    With the same number of sales Sony made at least 3 billion dollars profit ($100 gross profit per console minus the $40 per console ammortorized development and facilities cost times 50 million units sold). Note that the gross profit figure on the Playstation 2 console was gleened from Sony's annual report the year the console was released. Since then Sony has released a cost-reduced version of their console, thus increasing both the gross and net profit per console.

  22. Re:There's just no way - look at the costs! on Rumours of Playstation 3 in 2003 · · Score: 1

    Lets try this again with a simple analogy.

    Bob and Stan both own businesses making similar products.

    Bob buys smaller quantities of components at a higher cost. Bob loses money on each product sold but he is confidant that, given time, the cost of the components will drop and that sales after the price drop will make up for losses incurred before the drop in production costs.

    Stan buys larger quantities of components at a lower price. Stan makes money on each product sold. Stan does not need to wait for component costs to drop before he can begin paying back his initial investment.

    The problem? Only one of the two products will ever sell enough units to pay back the initial costs.

    What if Bob wins? Bob's product sells like hotcakes for several years. With every unit sold Bob goes deeper into the hole. The cost of materials drops over time until eventualy Bob begins to pay back his initial costs. If Bob makes as much money on the profitable units as he lost on the non-profitable ones he must sell twice as many units just to break even. The more popular Bob's product is initialy, the the more units Bob must sell to begin to pay back his startup costs.

    What if Stan wins? Stan's product sells like hotcakes for several years. With each unit sold Stan pays back a portion of his initial investment. As the cost of materials drops, Stan pays off his startup cost faster and faster, until he's making a net profit. The more popular Stan's product is initialy, the faster he pays back his startup costs.

    Who cares how quickly the startup costs are paid back? Well, no one would if they would keep selling each product forever. But both products have a limited lifespan, selling for perhaps five years each. Building sales quickly is the only way to win the market share war and to keep selling units over the products whole lifespan, but Bob loses more money if he builds market share quickly. Bob needs to sell the bulk of his units later, after component prices drop.

    If Bob sells 20 billion of his product before the component prices drop and never sells another unit he has lost not only his initial investment but also his per-unit-loss times 20 billion.

    If Stan sells 20 billion of his product before the component prices drop and never sells another unit he becomes a very wealthy man.

    Who do you want to be, Stan or Bob?

  23. Re:There's just no way - look at the costs! on Rumours of Playstation 3 in 2003 · · Score: 1


    Drawing the gross/net profit distinction is specious - holding aside "taxes, interest, depreciation, and other expenses" doesn't matter. This kind of error makes you look like you don't really know what you're talking about.


    The difference is very relevant. What do you think research and development, design, plant upgrades,advertising etc. are? They are "other expences"

    Cost of a product is the price of the components plus the labor to assemble the components. If you sell an item above it's cost you have made a gross profit.

    Sony does make a gross profit on every unit sold. After they sold aproximatly 20 million PS2's they paid back the entire 2 billion dollars in "other expences".

    Microsoft loses money on every unit sold, by some estimates between $50 and $100 per console. According to Microsoft's Home Entertainment Division own estimates they expected to lose 1.85 billion dollars in 2001 and 2002. (1)

    Microsoft could sell 20 million XBOXes tomorrow and they would instantly lose 2 billion dollars. Why? Because they don't make any gross profit on each unit sold. Instead they lose about $100. The more successful the XBOX is the worse it is for Microsoft.

    (1) http://www.redherring.com/insider/2002/0624/xbox06 2402.html

  24. Re:There's just no way - look at the costs! on Rumours of Playstation 3 in 2003 · · Score: 1

    It's not the same thing at all.

    Every product, including the XBOX, PS2 and Gamecube, have huge startup costs. The profit made on each PS2 console is gross profit, not net. Unfortunatly the Gamecube and XBOX are taking a gross profit loss. Not only are they not able to pay for the cost of the development and tooling from sales, they cannot even pay the price of the components that make up the console itself.

    The XBox and Gamecube can never make a profit until component costs drop. Never. In fact, they will lose more money as time goes on. The big question becomes, what reason could component suppliers possibly have to lower prices on parts?

    ATI, unlike Nintendo, has made a profit on every Gamecube sold. What's more, Nintendo cannot buy its GPU from anyone but ATI without the new manufacturer incurring huge startup costs. ATI has a captive audience for the Gamecube GPU and no reason to ever drop the price.

    But, you might say, then Nintendo won't use an ATI chip in it's next console. Thats expected. No console maker has ever used the same 3rd party manufacturer's components in its next generation console in the history of console gaming. ATI and other 3rd party component manufacturers know this. They have to make money while they can.

    This whole discussion is academic when it comes to the XBOX, which uses mostly off-the-shelf components. The price on components in the XBOX has dropped and will continue to do so. Unfortunatly, so have sales. XBOX will never go into net profit. Even if they suddenly began making $100 per console instead of losing $100 per console they would have to double their installed base to make up for the gross profit losses alone, not to mention the production and advertising losses.

  25. Re:There's just no way - look at the costs! on Rumours of Playstation 3 in 2003 · · Score: 2, Interesting

    This money losing stratagy may be true for other manufacturers, but not for Sony.

    The Dreamcast was a money losing venture for Sega. Sega went for broke in building the bestconsole they could buy with the Dreamcast, and sold them at less than cost. A lot less than cost. The theory being that scale of economics would catch up to let them rebuild their once glorious market share and, that the margins on their own games would be good enough to justify a loss.

    $800 million lost later, Sega cancelled the Dreamcast.

    Xbox. MS has decided to follow the Sega model. Buy off the shelf parts, have someone else build it, and take a loss in order to push units out the door.

    Microsoft is losing money per console sold, not including what they are spending advertising and support. Reports have it fall between $50 to $105 lost per console. MS has only said that they are losing money, and won't comment on how much.

    Notice what isn't on that list? The PS2.

    Unlike Sega and MS, Sony is an R&D hardware company. They make a lot of things. In designing up the PS2, they spent a ot of cash. Then they spent a hell of a lot more cash to build things like the chip foundries to produce the chips for the PS2.

    In the end, before the first PS2 rolled off the production line for consumers, Sony had spent $2 billion.

    Then we look at Sony's stock report for Oct-Dec 2000, and there is an interesting little blurb. It said that had Sony been able to meet demand with another 1 million PS2 units, they would have pocketed $175 million in profits. $175 million divided by one million consoles equals $175 per console profit.

    Now, that is a bit high. This assumed that the average consumer continues to buy four games per console (so around $24 in royalties), and 2 accessories (about $30 in profit total). That reduces the $175 to about $120. Sony is making $120 profit per system.