Those specs look fantastic - with this much power under the hood Sony have definately raised the bar for next gen gaming. but...
Remember SNES vs. Sega Megadrive? Remember VHS vs. Betamax?
What about P4 vs. Athlon? What about Windows XP vs. Mac OS X ?
Performance specifications, stability, features, general geek cool factor are one thing - actually delivering a market share grabbing consumer product is another thing. Not saying that market share is the be all and end all, think Porsche vs. Toyota.
In your list of specifications - I would add a few (software) things.
XBox Live vs. Sony unannounced online service. MS IDEs vs. Metroworks.
The great thing about XBox Live and the planned 360 Live service is the common interface across the games, and the common APIs which programmers have access to when coding 360 / XBox Live games.
If I am not mistaken - each PS2 online game has it's particular idiosyncracies in their networking set up. With my XBox Live service, I have an annual charge, and only need to set up networking once and it works uniformly across all Live games.
I would like to see Sony collaborating with Apple to bring Mac OS X technology to the PS3.
For Sony to compete meaningfully against Microsoft? They'll need a software stack and development libraries to compete against Microsoft's.
Although you have a grasp of micro economics, you need also to take a closer look at the underlying business strategy before you can understand the bigger picture. Microeconomics alone does not cut it. As all the other child posts point out, your thinking is flawed in certain respects.
So you say that it is a "popular myth" that MS does not profit from the sale of individual XBoxes?
I understand your economic reasoning. In substance you are saying that although the initial, fixed, sunk costs in the XBox project is large, the variable cost of producing an XBox is materially lower than the selling price. By your own admission, what you have is a gross profit, and a net loss after taking into account the fixed costs.
Taking your bottling analogy and simplifying:
Sale of one Bottle US$50. Cost of bottle US$0. Gross profit US$50.
Other costs US$50,000,000 Net loss US$49,999,950
No matter how you slice it, despite making a gross profit, you've made a loss selling bottles. You need to hit the "sweet spot" and sell AT LEAST 1 million bottles before you break even and start to make money. This is a little simplistic.
So no matter how you slice fixed costs & variable costs, this does not detract from the fact that the XBox division is not a profit generating business unit.
Also, you need to have a closer look at one of your biggest assumptions: that the marginal cost of producing the XBox is very small. It's not, because the last time I checked MSc ontracted out the production of the XBox to a 3rd party contractor. And MS does not control all the technology in the XBox: Intel and NVidia do. Contrast this to Sony, who operates at all levels in the manufacture of the PS2, and after 3-4 years can simplify the silicon andm anufacturing processes to produce a "slimmer" version. You only have to see the PSOne (The PS2 has a PS-on-a-chip, and the PSOne used this technology) and the upcoming PS2.
The marginal cost of producing an XBox to Microsoft is not very small.
Although I understand economics, rephrasing the question in terms of fixed & variable costs does not assist in our understanding of the underlying business. Let me try and explain it simply: You are either profitable or you're not. And if you're not profitable, then there should be a damn good reason for spending cash and losing money.
At the end of the day, the bottom line is the net loss of US$50m. And if I've contributed to increasing MS's bottom line losses, then I would say that by buying an XBox I've "cost" Microsoft money.
So why should Microsoft go into a loss making business?
The way I see it, the XBox is a part of a wider MS strategy to break into the home entertainment market. Maybe MS saw that the Sony PS2 holds up Sony's profits worldwide and that they want to get into that game too.
You ever read Neal Stephenson's Snow Crash? The way I see it, MS want to have a hand in designing the infrastructure for the Metaverse. Do you see all those fixed costs in developing the XBox and the XBox Live service? One of the big selling features of the XBox was it's network connectivity built into the machine.
Sony and the PS3 will have a lot to catch up on to match Microsoft's investment in XBox Live (the network infrastructure and software code) and to deliver an experience that is as compelling. To be honest, I suspect that Sony will miss the boat entirely and XBox 2 will stomp all over the PS3's online capability.
One day we may all get to experience something like the Metaverse. I won't be surprised if it's delivered via technology & infrastructure that was developed for the XBox.
The Chinese government reaction is quite similar to the knee-jerk reaction faced by Internet Cafe's all over South East Asia: especially in Brunei, maybe not so in Malaysia and Indonesia.
Nicholas Negroponte points out in "Being Digital" that the next "gap" won't be a "Digital Gap"... between Digital Haves and Have-Nots... but a Generation Gap. Basically, the majority of Slashdot readers [people who have a clue] and those who don't [have a clue].
Personally, I think that all organisations must contend with the fundamental reality: that they operate not as an island, surrounded by water, but as organisations in a socio-economic context. This advocates a broader view, not just seeing "Customers" + "Suppliers" + "Sources of Capital" but also considering "Society as a Whole". So, if the Internet Cafe cottage industry faces extinction, it must do what it should have done a long time ago: OPEN COMMUNICATION with "Society as a Whole". A public forum, in real life and over http would do wonders for their public image.
On the flip side, if this cottage industry DOES go belly up, along goes the jobs it has created, the dreams it has brought. This is people's livelihoods we're talking about, so let's not forget them too.
The case in Brunei: [unclued] society has similar concerns of the Chinese government. Concern for morality: pornography & other insiduous materials. If I was them, I would feel the same too... a potentially damaging technology is inviting my kids to do potentially stupid things.
But people like BMW still make [damn fine] cars that exceed the speed limit in my country. Nobody complains about them. Except maybe how expensive they are. Contrast this to people like Governments: who make painful things called guns [AK-47, M4A1 Carbine].
I think it's only a matter of time, until people in charge and society as a whole fully understand the potentials of the Internet. Or until the clued generation get old enough, whichever comes first.
Now, I'm not one to tell other people how to run their lives. [`cause I'm not going to listen to you telling me how to run MINE]. but parents should be the FIRST to encourage RESPONSIBILITY. I mean, mom & dad trust me with their car. And that's a real empowering experience, not to mention a *practical* one. I can go about my business without relying on other people. But I know the consequences of not living up to my responsibility results in: PENALTY and PENALISATION. [Read: prison for drunk driving]
Similarly, if it's such a problem with kids, who asked you to let them loose on the `net without sitting down with them and teaching them how to make efficient use of it? Dad sat me down, and told me of the ills that could happen, should I digress from the path. Mom scolded me, telling me of the reality drug addicts face in reprimand.
Granted, Counter Strike is a FSCKING cool game... but after a while, any moderately intelligent kid with a life and healthy interests is gonna get bored of it... come on, who's gonna spend a 3 hours in a row, sat in front of a PC playing CS... ? Apart from me, and you who just put your hand up... and you, you know who you are ch|cken.
Slashdot Mirror
http://www.brudirect.com/DailyInfo/News/Archive/Apr07/170407/nite16.htm
:p
April last year this guy was in Brunei.
He's married to a Bruneian girl called Koh Bee Lian.
Too bad I don't have pix, otherwise you could see what kind of guy it is we're up against
Those specs look fantastic - with this much power under the hood Sony have definately raised the bar for next gen gaming. but ...
Remember SNES vs. Sega Megadrive?
Remember VHS vs. Betamax?
What about P4 vs. Athlon?
What about Windows XP vs. Mac OS X ?
Performance specifications, stability, features, general geek cool factor are one thing - actually delivering a market share grabbing consumer product is another thing. Not saying that market share is the be all and end all, think Porsche vs. Toyota.
In your list of specifications - I would add a few (software) things.
XBox Live vs. Sony unannounced online service.
MS IDEs vs. Metroworks.
The great thing about XBox Live and the planned 360 Live service is the common interface across the games, and the common APIs which programmers have access to when coding 360 / XBox Live games.
If I am not mistaken - each PS2 online game has it's particular idiosyncracies in their networking set up. With my XBox Live service, I have an annual charge, and only need to set up networking once and it works uniformly across all Live games.
I would like to see Sony collaborating with Apple to bring Mac OS X technology to the PS3.
For Sony to compete meaningfully against Microsoft? They'll need a software stack and development libraries to compete against Microsoft's.
Although you have a grasp of micro economics, you need also to take a closer look at the underlying business strategy before you can understand the bigger picture. Microeconomics alone does not cut it. As all the other child posts point out, your thinking is flawed in certain respects.
So you say that it is a "popular myth" that MS does not profit from the sale of individual XBoxes?
I understand your economic reasoning. In substance you are saying that although the initial, fixed, sunk costs in the XBox project is large, the variable cost of producing an XBox is materially lower than the selling price. By your own admission, what you have is a gross profit, and a net loss after taking into account the fixed costs.
Taking your bottling analogy and simplifying:
Sale of one Bottle US$50.
Cost of bottle US$0.
Gross profit US$50.
Other costs US$50,000,000
Net loss US$49,999,950
No matter how you slice it, despite making a gross profit, you've made a loss selling bottles. You need to hit the "sweet spot" and sell AT LEAST 1 million bottles before you break even and start to make money. This is a little simplistic.
So no matter how you slice fixed costs & variable costs, this does not detract from the fact that the XBox division is not a profit generating business unit.
Also, you need to have a closer look at one of your biggest assumptions: that the marginal cost of producing the XBox is very small. It's not, because the last time I checked MSc ontracted out the production of the XBox to a 3rd party contractor. And MS does not control all the technology in the XBox: Intel and NVidia do. Contrast this to Sony, who operates at all levels in the manufacture of the PS2, and after 3-4 years can simplify the silicon andm anufacturing processes to produce a "slimmer" version. You only have to see the PSOne (The PS2 has a PS-on-a-chip, and the PSOne used this technology) and the upcoming PS2.
The marginal cost of producing an XBox to Microsoft is not very small.
Although I understand economics, rephrasing the question in terms of fixed & variable costs does not assist in our understanding of the underlying business. Let me try and explain it simply: You are either profitable or you're not. And if you're not profitable, then there should be a damn good reason for spending cash and losing money.
At the end of the day, the bottom line is the net loss of US$50m. And if I've contributed to
increasing MS's bottom line losses, then I would say that by buying an XBox I've "cost" Microsoft money.
So why should Microsoft go into a loss making business?
The way I see it, the XBox is a part of a wider MS strategy to break into the home entertainment market. Maybe MS saw that the Sony PS2 holds up Sony's profits worldwide and that they want to get into that game too.
You ever read Neal Stephenson's Snow Crash? The way I see it, MS want to have a hand in designing the infrastructure for the Metaverse. Do you see all those fixed costs in developing the XBox and the XBox Live service? One of the big selling features of the XBox was it's network connectivity built into the machine.
Sony and the PS3 will have a lot to catch up on to match Microsoft's investment in XBox Live (the network infrastructure and software code) and to deliver an experience that is as compelling. To be honest, I suspect that Sony will miss the boat entirely and XBox 2 will stomp all over the PS3's online capability.
One day we may all get to experience something like the Metaverse. I won't be surprised if it's delivered via technology & infrastructure that was developed for the XBox.
Nicholas Negroponte points out in "Being Digital" that the next "gap" won't be a "Digital Gap" ... between Digital Haves and Have-Nots ... but a Generation Gap. Basically, the majority of Slashdot readers [people who have a clue] and those who don't [have a clue].
Personally, I think that all organisations must contend with the fundamental reality: that they operate not as an island, surrounded by water, but as organisations in a socio-economic context. This advocates a broader view, not just seeing "Customers" + "Suppliers" + "Sources of Capital" but also considering "Society as a Whole". So, if the Internet Cafe cottage industry faces extinction, it must do what it should have done a long time ago: OPEN COMMUNICATION with "Society as a Whole". A public forum, in real life and over http would do wonders for their public image.
On the flip side, if this cottage industry DOES go belly up, along goes the jobs it has created, the dreams it has brought. This is people's livelihoods we're talking about, so let's not forget them too.
The case in Brunei: [unclued] society has similar concerns of the Chinese government. Concern for morality: pornography & other insiduous materials. If I was them, I would feel the same too ... a potentially damaging technology is inviting my kids to do potentially stupid things.
But people like BMW still make [damn fine] cars that exceed the speed limit in my country. Nobody complains about them. Except maybe how expensive they are. Contrast this to people like Governments: who make painful things called guns [AK-47, M4A1 Carbine]. I think it's only a matter of time, until people in charge and society as a whole fully understand the potentials of the Internet. Or until the clued generation get old enough, whichever comes first.
Now, I'm not one to tell other people how to run their lives. [`cause I'm not going to listen to you telling me how to run MINE]. but parents should be the FIRST to encourage RESPONSIBILITY. I mean, mom & dad trust me with their car. And that's a real empowering experience, not to mention a *practical* one. I can go about my business without relying on other people. But I know the consequences of not living up to my responsibility results in: PENALTY and PENALISATION. [Read: prison for drunk driving]
Similarly, if it's such a problem with kids, who asked you to let them loose on the `net without sitting down with them and teaching them how to make efficient use of it? Dad sat me down, and told me of the ills that could happen, should I digress from the path. Mom scolded me, telling me of the reality drug addicts face in reprimand.
Granted, Counter Strike is a FSCKING cool game ... but after a while, any moderately intelligent kid with a life and healthy interests is gonna get bored of it ... come on, who's gonna spend a 3 hours in a row, sat in front of a PC playing CS ... ? Apart from me, and you who just put your hand up ... and you, you know who you are ch|cken.
Peace. Love. and Tux.