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*blink*
Posted By: Kellen Squire <squire@coronafilm.biz>	Date: 5/22/02 6:29 p.m.
In Response To: Kool Aid vs FUD (Narcogen) Either you're more naive than I took you to be, or I've been working on my business case studies too hard... : Oh, of course. There's no doubt of that at all. Sony isn't, that's all. Sure enough. : Now take the $1b advertising campaign, the Bungie purchase price (if we knew : it) and the likely development costs (Bungie head count X median salary : guess X amount of time between acquisition and release of Halo). The WHAT now? A BILLION dollars in advertising? I haven't found that number ANYWHERE, and I sure as hell haven't seen evidence of a billion-dollar advertising campaign. : Even lowballing most of those numbers, it is extremely doubtful MS has : profited dollar one yet. But they DID profit. Nine billion bucks. Just not on XBOX. : Let's assume, for a second, that the total # of all titles sold is 10x that : of Halo-- which I think is a generous assumption given the number of : titles out there. That would be ten million games. Call the average price : $50. That's five hundred million dollars-- or HALF a billion, the cost of : the MARKETING alone. I : So even if sales are TWICE a reasonable estimate, it would only have paid for : the marketing-- not for the development, production, distribution or sales : commissions. Now, I'm going to have to stick you there. Marketing and Advertising are different things. A billion dollars in marketing overall, I could see- it'd still be a fucking lot, and you'd have to prove it to me. : Wow... in horse-talk, we'd call that "wearing blinders"-- you can : only call this a two-horse race by wilfully ignoring the PS2. It's early : release doesn't make it an older generation. The PS2, Xbox and GC are all : "next generation" consoles (IE, post-PS1 generation). No, see, the two horses are Microsoft and Nintendo, and Sony was represented by the stock car- y'know. Rednecks? NASCAR? 200 miles per hour? Get it now? : As for strong-- I'm not even sure that's true at all. Xbox's lead over GC in : the US was slim last time I looked, and it's dead last in Europe and : Japan. Not sure how that works out to be a strong 1/2 or even 2/3. Because Microsoft's never done video gaming before, and they're the company people love to hate. To get where they are now- that's fuckin' impressive. That's why Sony is scared- see, they figured (as I once did) "Eh- Microsoft. Pffft. Nobody can challenge our 733t PS2ing sk1llz!." But they were wrrrooonnngggg. : You'd do well to avoid such gross generalizations, I think. The only thing : more common on these boards than "geeky by sensitive" computer : programmers are people claiming inside knowledge with varying degrees of : certainty. I neither belong to, nor do I claim to belong to, either : category. I meant geeky BUT sensitive. And you seriously need to learn to read sarcasm and satirization in text. : I never said MS had a choice, or was wrong to cut prices. No one has. The : point was that doing so, even if it's the right choice, the only choice, : lowers MS' margin. And for Sony and Nintendo, too. : And the characterization of Sony's move as "scared" is not only : speculative-- but a little bit amusing, given the PS2's installed base. A : more accurate characterization might be to suggest that given their : already insurmountable lead, Sony sought to make sure that MS would not : gain any ground due to a price advantage. Exactly. See, for the longest time, companies never cared about the future. Ever. Strategic planning didn't exist. Companies concentrated on the here and now of what they were doing. After the gas crisis, this shifted dramatically. Now companies seem to look at the future too much sometimes, not finding a hapyy medium between future and present. Or the past, for that matter. That's why Sony's scared. Microsoft's got it's foot in the door and, with XBOX 2, could easily topple Sony's lead in the market if they do things right. : And yes, it already was cheaper. As in "Sony cut before MS". : Regardless of the motivations, they did it first, even if they acted on : MS' announced (or unannounced) intentions. Bullshit. Stop splitting hairs. : Again... that's a bit of spin. To say that Microsoft, with less (much less, : at last count) than 10 million units sold had so threatened Sony with more : than 30 million units sold by announcing an *intention* to cut prices that : they were *forced* to "follow suit" Again, see above. : I'm not being a pedantic bastard. Perhaps, but I sure am. : Look. I like the Xbox. I *own* a bloody Xbox. I'm aware of it's technical : superiorities, just as I was aware of the technical advantages of Beta, : the AmigaOS, OS/2, the Macintosh, and dozens of other technologies which : I've liked, used, and even continue to use, because of their inherent : technological advantages. Goodies. : That does NOT mean I call them market leaders, or distort sales, revenue and : profit figures to try and show that "Apple Rules, Microsoft : Drools". So? I didn't, either. That's why to understand a company, you can't just look at it's revenues or profits or dividends paid on it's stock. Ever done an analysis of two companies? Their Curren ratio? Quick ratio? Average day's inventory on hand? P/E Ratio? And that's just math- otherwise, we'd have to debate the business phillosiphies both companies follow. : To say that the Xbox, with its hard drive and ethernet, is better than : "two consoles put together" is such a subjective, meaningless : statement that it's hard to even evaluate. Which was, in itself, not meant to be a statement you measure or evaluate, even though it's probably true. : Does it play more games than those two consoles, put together? Well... no. Were we talking about games? Well... no. : So, are each of the Xbox's individual games twice as good? Well... since a : lot of the games appear on more than one platform and some even look : pretty much the same... that probably doesn't make sense, either. Ooookay, I'm going to snip this stuff, since I made it clear you took me way too seriously. : Good grief. What does the South American market have to do with anything? I was saying that Nintendo and Sony were as unthreatened about MS and excited about their own consoles, and were calling drug dealers in Columbia to provide them with hefty shipments of crack to celebrate with. Obviously, that was a satirical statement- well, maybe not obviously. You said Microsoft wasn't partying- I said Nintendo and Sony were sure as hell not, either. : If you'd even bothered to read my posts in this thread, you would know I was : aware of that. What's your point? I'm just saying that simply because it's : a known fact that MS was prepared to lose *some* money in the endeavor : does not automatically mean that no loss of any amount might not qualify : the project as a failure. Well, no shit. But I'm willing to bet good money they were a helluva lot farther above their lowest projections than you'd believe. : I think you've got something stuck in your keyboard. Better have a look at : it. j00 4r3 iN$0l3nt! 1 w1ll D3$tR0Y j00! : I think I can agree with that. After all, if they really had exceeded their : worst case scenario, the Xbox really WOULD be doomed, and they'd likely : already have binned it along with Microsoft Bob. Clearly that's not the : case. I'm just emphasizing the "losing more than they wanted do" : over the "not losing as much as they thought they might". All : the latter means is that perhaps they were even more pessimistic about : their chances than even their critics. Losing anything is losing more than they want to. And I'm willing to bet that they place they thought they'd actually be is inbetween where they are and what their worst critics expected them to be. : Good grief, who was talking about evil monopolies? No, that was about people ignoring innovative things- one of the reasons why Sony can't ignore Microsoft. Go look up that whole thing, it's interesting. Nobody wanted to fund a copy machine because everyone figured the Evil Carbon Paper consortiums (I'm not making this up) would control the market forever. See: Sony ignores Microsoft and the XBOX because Sony can do no wrong. : And at any rate-- I'm sorry, no matter how much you, I, or anyone else loves : his or her Xbox, it's not a paradigm shift in the industry. It isn't a : revolutionary invention destined to change the face of gaming, the way the : Xerox machine and the PC did to the office. It's just a gaming rig with a : hard drive and ethernet. That's debatable. I'll agree it's not that bold and breath-taking or able to change everything overnight like the PC was, but my Xerox (so you do understand) example stands. I think it's a good one. : It's evolutionary, parts-bin innovation, nothing that by its mere nature or : existence is going to unseat one of-- if not the-- largest consumer : electronics company in the world. Nope. : That doesn't mean that it can't happen. Yep. : But I think it's a fair estimation to say the following things: 1) It is far : from inevitable that MS will claim the #1 console spot with either the : current or succeeding iterations of the Xbox. I believe so. I think Sony and MS will be fighting like Coke and Pepsi do, with Nintendo bringing up the 3rd place like Dr Pepper/7-Up. Or, Ford and GM with DaimlerChrysler tagging along. : 2) It is nearly impossible that MS will claim the #1 console spot with the : current iteration of the Xbox (in other words, have the largest installed : base). Not true. Not true at all. : 3) It is likely that Microsoft will continue with the product for at least : one more iteration (by that I mean an "Xbox2", not just the Xbox : Live service). Yup. : 4) It is conceivable that future products from Sony, Nintendo, or perhaps : even an unknown third party will continue to succeed to compete : successfully against future Xbox iterations in a way that hasn't happened : in the PC industry because game consoles are less dependent on legacy : software. That's true, too, but I already told you what I think is going to happen. : 5) In the current situation, MS can at *best* be described as second in a : field of three or first in a field of two if you exclude the PS2 (which I : think is a gross distortion of the market, given that the gap between the : three consoles (about one year) is shorter than the usual gap between : console generations (2-3 years). That, and the gap in installed base : between Sony's PS2 and the other two machines is so great during that one : year that it dwarfs any gap between the GC and the Xbox, rendering said : gap rather unimportant-- unless you're one of those who believes there's : really only room for 2 consoles in the market and the #3 player is doomed : to extinction. MS easily fits the second in a field of two scenario. Sony was never afraid of Gamecube. And, like I said, the #3 man not only isn't doomed, he could make a good amount of money. : In short... it may be possible that MS will one day rule the the console : gaming roost. But I'd say that it's more possible than probable, that it : won't happen with the current machine in the forseeable future, and that, : at least at the moment, there are no indications that it is happening. : It's a speculation based more on MS' financial resources and corporate : history than it is on the performance of the product in the marketplace. We need to debate more. This is fun.

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.