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Doomsayers vs MS Kool-Aid
Posted By: Narcogen <narcogen@rampancy.net>	Date: 5/21/02 9:38 p.m.
In Response To: Re: Death of the Xbox? (ferrex) : That article is full of negative spins and half truths, and surprisingly void : of any references. Their account of how the Xbox launch failed to be what : it was secretly planned to be is pure fiction, and their "fact" : that Microsoft makes at most $5 per software title is pure bull--they're : completely ignoring first party titles, like (you guessed it!) Halo. Counterpoints: Unlike other developers, MS has fewer first party titles than third party titles. At the moment, this may be compensated for by the fact that the best-selling single title is a first-party title (Halo). However, Rex... if we consider the purchase price of Bungie, plus the operating costs of Bungie Studios since the purchase, plus a percentage of the overhead of the whole Xbox project-- development, marketing, advertising-- do you think MS is clearing (profit) $5 per copy of Halo sold? To be honest, I'd doubt it. Once there's more than one Bungie Xbox title out in the market generating revenue that allows you to amortize the initial purchase cost, spreading it out over several titles, maybe... but at the moment I'd seriously doubt it. As far as failing to meet the secret plans-- I rather doubt anyone on this board is privy to what MS' real expectations were. If you want to do well in the market, you always underpromise and overdeliver. It is logical and common practice by just about any business analyst to assume that company predictions on sales are conservative, and that just like in the stock market, there is an internal-only "whisper number" that is the real figure. The company wants the positive reaction in the press when they exceed their own expectations. Within the first few weeks of the Xbox's release, it was unclear whether MS had met their own *public* expectations. And besides that, I doubt that either MS' private or public plans for the Xbox included "finish 3rd in 3 horse race". They may have admitted that this might happen for the console's first iteration and committed themselves to continuing with the product regardless, but this is an internal game of setting expectations so low that failure can be called success. : They also do a lovely job of condemning Microsoft for not having hardware : costs as low as the PS2, yet neglect to take into account that the PS2 has : a) Been being refined for more than a year : b) No internal hard drive I think you're failing to see the point. It's not criticizing MS for failing to somhow sell a machine with a HD at the same price as a machine without one. It's questioning the business judgment of putting a HD in a console, thus increasing the price, when so far it seems that price is, in some cases, a determining factor. : Their suggestion that Microsoft is scrambling to keep up with Sony's : aggressive pricing amuses me as well, given that it is generally believed : to be the opposite situation. Perhaps this is generally believed within MS; I've yet to read any other article anywhere that indicates that. In fact, it flies in the face of good sense. The Sony unit was already $100 cheaper; MS changed its price point first after failing to outsell either the Sony or Nintendo units in any single market by a significant margin, and being more expensive than both. Both competitors chose to reduce prices to maintain their price advantage, but it is a gross mischaracterization to call this "aggressive pricing" on MS' part. Perhaps if they had dropped to $99, cheaper than the GC, you could call it that, or $150, cheaper than the PS2. All MS did was throw in the towel, and then Sony and Nintendo moved the bar again. So while the Xbox may still offer more bang for the buck, it's still no better than even with a console with tons more available games (Sony) and more expensive than the other option (GC). In order to choose an Xbox, you've either got to have a real particular reason to (like Halo) or a lot of faith that the upcoming Xbox games will be better than whatever Nintendo has coming down the pike, or that the Xbox's later release means it has a longer life than the PS2 (although to be honest, this doesn't seem to be bothering the vast majority of the world's citizens just yet). : Ultimately, they also forget the most important point: that Microsoft has : gone on record as saying they don't expect to turn a profit on the Xbox : for a few years, and that they're willing to accept the loss in order to : get their proverbial foot in the proverbial door. Not that it surprises me : to see people assuming this means the Xbox is dead in the water... To say it is "dead in the water" is obviously a bit of exaggerated rhetoric. But to claim that anyone at MS is wringing their hands and gleefully muttering "we've got them RIGHT WHERE WE WANT THEM" is also a bit ridiculous. You're citing expectations that were, in all likelihood, more conservative than internal estimates (because that is SOP). Anyone who's been watching this thing for the last year or so does know that MS was going to take a loss, and was willing to do so. The questions were-- how big a loss, and for how long? Given the current results, I think it's a valid speculation that at the moment MS may be losing more than it expected to-- even if that does not affect the company's commitment to the product (which, at the moment, it doesn't seem to be). : Just my $.03 CDN, of course. : Cheers, : rex

rampancy

Message Index

Death of the Xbox?	FunkDaddy	5/20/02 4:34 p.m.
Re: Death of the Xbox?	PCDestroyer	5/20/02 4:46 p.m.
Re: Death of the Xbox?	Surrepticius	5/20/02 4:58 p.m.
Death of the Xbox??...My @$$	Mutti	5/20/02 6:48 p.m.
Re: Death of the Xbox??...My @$$	Mr. Bobo	5/20/02 8:07 p.m.
Re: Death of the Xbox?	ferrex	5/20/02 6:03 p.m.
Hurrah!	Kellen Squire	5/20/02 11:00 p.m.
Re: Death of the Xbox?	Kanen Faud'r	5/21/02 3:12 a.m.
Re: Death of the Xbox?	ferrex	5/21/02 1:24 p.m.
Re: Death of the Xbox?	Kanen Faud'r	5/21/02 2:12 p.m.
What about the profits from...	Ulf	5/21/02 3:08 p.m.
Gross vs. Profit	Narcogen	5/21/02 10:39 p.m.
Re: Hard Drive	NthDegree256	5/21/02 11:12 p.m.
Re: Hard Drive	NthDegree256	5/21/02 11:13 p.m.
hard drive vs. memory card	Narcogen	5/22/02 1:38 a.m.
Re: hard drive vs. memory card	Mark Levin	5/22/02 1:46 a.m.
nice feature, just not essential	Narcogen	5/22/02 4:39 a.m.
Re: hard drive vs. memory card	Miguel Chavez	5/22/02 1:51 a.m.
Re: hard drive vs. memory card	poena.dare #CP#	5/22/02 2:23 a.m.
Re: hard drive vs. memory card	Mark Levin	5/22/02 3:21 a.m.
DVD Consortium Charges	Narcogen	5/22/02 4:48 a.m.
Re: DVD Consortium Charges	Louis Wu	5/22/02 8:30 a.m.
Re: DVD Consortium Charges	Narcogen	5/23/02 1:33 a.m.
Re: DVD Consortium Charges	Mark Levin	5/23/02 2:15 a.m.
Re: DVD Consortium Charges	Narcogen	5/23/02 3:05 a.m.
Re: DVD Consortium Charges	Mark Levin	5/23/02 3:09 a.m.
Re: DVD Consortium Charges	Narcogen	5/24/02 4:14 a.m.
xbox as music player	Narcogen	5/22/02 4:45 a.m.
The Console Cave	Narcogen	5/22/02 4:42 a.m.
Re: hard drive vs. memory card	SpudBoy	5/22/02 1:52 a.m.
PGR ghosts and Myth Filmz	Narcogen	5/22/02 5:04 a.m.
Re: Gross vs. Profit	vector40	5/21/02 11:28 p.m.
Grosse Profit Pointe	Narcogen	5/22/02 1:44 a.m.
Re: Gross vs. Profit	Miguel Chavez	5/22/02 1:22 a.m.
Profit vs. Revenue	Narcogen	5/22/02 1:52 a.m.
Doomsayers vs MS Kool-Aid	Narcogen	5/21/02 9:38 p.m.
Re: Doomsayers vs MS Kool-Aid	Kellen Squire	5/21/02 10:57 p.m.
Kool Aid vs FUD	Narcogen	5/22/02 4:18 a.m.
*blink*	Kellen Squire	5/22/02 6:29 p.m.
Well, uh banshee "challenge" *NM*	Black_Jackal	5/22/02 6:47 p.m.
WHAT THE !@#$!	Black_Jackal	5/22/02 6:51 p.m.
Re: WHAT THE !@#$!	Narcogen	5/23/02 2:40 a.m.
SUPERFUD! :)	Narcogen	5/23/02 2:38 a.m.
Dratness!	Kellen Squire	5/23/02 8:30 a.m.
Re: SUPERFUD! :)	Kellen Squire	5/23/02 9:43 a.m.
Good Grief, this is great. *NM*	vector40	5/23/02 9:25 p.m.
Re: SUPERFUD! :)	Narcogen	5/24/02 4:09 a.m.
Re: SUPERFUD IS FINALLY REPLIED TO	Kellen Squire	5/24/02 12:23 a.m.
Jesus.	Zapf Dingbats	5/24/02 12:58 a.m.
Re: Jesus.	Kellen Squire	5/24/02 8:24 a.m.
Re: Doomsayers vs MS Kool-Aid	Miguel Chavez	5/22/02 1:33 a.m.
Re: Doomsayers vs MS Kool-Aid	Narcogen	5/22/02 4:54 a.m.
Re: Death of the Xbox?	Cunbelin The Longwinded	5/23/02 5:40 a.m.