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Re: SUPERFUD! :)
Posted By: Kellen Squire <squire@manty.biz>	Date: 5/23/02 9:43 a.m.
In Response To: SUPERFUD! :) (Narcogen) Oh ho, your secret dastardly plan has failed! No class today! Mwah hahahaha! : Well, it must be the former, since it certainly isn't the latter. Either : that, or you're using the osmosis method to work on your business case : studies. No, actually, you just miss a lot of stuff that us people who spend waaaayyy too much time on the Internet would get. Since I've decided you know a lot more than I took you to know, I'll assume it isn't the business thing. : No offense, of course, but if you want to take cheap shots, we can waste : bandwidth trading them all day if you like, or at least during my few free : moments. Cool! I'll start! j00 4r3 0wnZ3d! I'll also start the not-related-to-anything topic and state that, for the record, Dave Thomas isn't dead. He's cooking burgers for Tupac. : Try starting with Advertising Age. *shudder* Please, don't do that to me. The last time I thought of an age comprised entirely of advertising, it took me a week to clean the sheets. : MS spent a quarter of a billion just on Christmas 2001/2002. For the XBOX, or Microsoft overall? : The five-year plan for Xbox marketing is $2 Billion. This figure was just : detailed at E3. Over five years, ahhhhh. This sounds much more reas... uhhmm... well... not-bad. : http://www.adage.com/news.cms?newsId=34845 Cool. : Incidentally, that article also cites the worldwide installed base for the : Xbox-- 3.5 million units, or a shade over 10% of the PS2's. Yep. Sounds about right. : With a year of lead time, and only from Nov til now for the Xbox to sell, one : might assume that the PS2 would have sold 300% more units if they were : equally popular. But it's closer to 1000%. Well, uhmm, that's the sticking point, isn't it? PS2 was like the Star Wars movies. Oooh, hey, that's a good analogy! I'll use it later. : This is a well-known, well-publicized figure discussed in the past 6-9 months : by many business analysts. I'm shocked someone privy to "Microsoft's : internal structures" is unaware of it. Okay, I'll settle this once and for all. That was a joke, I was insinuating that I'd been in Bill Gate's pants. Other than having to keep an eye on what they do for The Holm Depot (Professor Holm is my Marketing teacher) because I gotta (along with a few other companies), I don't have any "insider information," per se. : Of course MS has made profit. But not on Xbox, which was the context of the : discussion, so I felt it didn't Ahh, but I think that maybe it does. Hold on while I go look up the balance sheets for Sony and Nintendo... ... Hold on, the guy next to me and I are in a PS2/XBOX fight about quality... ... Here we go. Nintendo grossed $3.6 billion and profited $764 million off of that last FY. Sony... goddamn it, I'm out of time. Stupid required core classes, anyway. : Again, it's a generally acknowledged (and announced by MS) fact. Plus : "xbox adveritising budget" into Google and you can see it pretty : quickly. And it is marketing AND advertising-- but ONLY for Xbox. This : includes the promotional events in US, UK and Japan. : Never liked NASCAR. Pick a different analogy :) : See, that's a little strange. As much as I may dislike MS, for various : reasons, I never felt that Sony was so dominant MS could not challenge : them. At the start, it seems that everyone was either saying MS had no : chance at all, or that they would completely dominate. : They haven't done the latter. Neither have they proven they can do the : former. I'm slightly more pessimistic about MS' chances than I was prior : to launch. I don't think the launch and the 6 months after have gone as : well as MS would have liked, nor as well as they needed to in order to : really challenge Sony. : In the meanwhile, it seems like lots of Xbox owners and MS boosters have : jumped onto the bandwagon, proclaiming victory, while a lot of the : doomsayers have pretty much kept the same tune. : I think a realistic reading of the data shows that MS isn't exactly out of : the game yet, but there's no way to call what's going on now : "winning" without serious distortion of the facts. : Only a poor writer blames his readers. Or is that "only a poor workman : blames his tools"? I forget. : As for sarcasm and satire, I'm fairly familiar with both, and your intimation : that I am bereft of information on the subject was neither. Be that as it : may. : No. The market leaders always have a choice. : No conceivable increase in Xbox sales over the life of the console could : begin to approach Sony's lead in the market with the PS2. For that to : happen, over the next 3 years sales figures per quarter would have to : increase dramatically. That just doesn't happen. Nobody ever sells as many : consoles in the second and third years as in the first, no matter how low : you make the price-- if that were true, the DC would be selling like : hotcakes (although it is interesting that in some places cheap DCs have : been outselling the Xbox at times). : So Sony *did* have a choice. Instead of choosing to ignore MS and let them : gain a little market share, they chose to slam the door. They didn't have : to. They were not forced. If Sony has a fear about MS and the Xbox, it's a : long term fear because of MS' size and resources, not a short-term fear : that they will suddenly wake up to find the Xbox king of the hill because : of a $100 price cut. : First, I don't think they could do it "easily". If it was easy, : they'd have done it already. They haven't. Second, they (MS) needs to do : things right. My whole point has been that up to now, they haven't quite : done enough things right. : It's a fine distinction. But you're telling your story entirely from the : position of MS, alleging that their perception (that they intended to cut : price, and that Sony's cut was a reaction). I doubt Sony executives : describe it this way. Why are you assuming that MS' perception of the : event is necessarily the correct one? : [snip] : Ah, there again we are in complete agreement :) : Not lately. When will your Bachelor's in Business Administration be finished, : anyway? Just curious. : And at any rate, we hadn't even been delving into the two companies' stock : values, their returns on investment on their respective console divisions, : or their P/E ratios. I'm always amused when I see articles in the industry : that talk about why one product will beat another product, alleging that : the current stock price and P/E ratios are the determining factors-- : almost completely ignoring the relative merits of the products, the : campaigns used to promote them, or the companies' individual philosophies. : The only thing I think the hard financial data can tell us is what resources : each company has to throw at these projects-- and both MS and Sony are so : big and successful that I think the differences are less important than : the similarities. Sufficed to say, both companies have sufficient : resources so that if either were to admit defeat it will likely be a : choice to refocus on other markets, rather than financial reality. The : console war will destroy neither company. Nor will either lose because of : a lack of resources. : I think we can probably agree on that. : I'm not sure on what basis you call a statement "true" which can : neither be measured or evaluated, unless you're offering faith in the Xbox : as a religion....which perhaps is the point :) : At any rate, it strikes me as more hyperbole than anything else. And it's : apparently not a widely recognized truth-- and as such, becomes less and : less important with time. : You cannot consider the console without the games. The console without a game : is nothing. The whole purpose of the thing is to play games. How much : better an Xbox is doesn't matter a whit if there are fewer (or no games) : to play on it. : I'm not saying that's not the case, I'm saying it's impossible to discuss the : relative merits of the machines except in a rather narrow, meaningless : way, without discussing how those merits are demonstrated in concrete : form-- that is, through games and gaming-related services. : Ah, OK-- no, I didn't see the reference that way, I thought you were making : some oblique reference to the political attempts to officialize Linux as a : government operating system in some South American countries (something : opponents of MS might likely celebrate). : But anyway, I'd still disagree. If Sony can't celebrate after selling ten : times as many units as the closest competition... good lord, when can you? : Perhaps the real answer is "never"-- that's certainly the way MS : has always acted. That's the real advantage of having a founder and : chairman with an inferiority complex that manifests itself as a : superiority complex. : I think that's probably where we disagree the most. I think MS is paranoid, : and they would have been wise to have low expectations. And I think they : did. But not that low. : If their expectations had been really low-- let's say, sales figures about : half what they are now-- that would have been a disgrace. A big, fat, : in-your-face, Microsoft Bob-type disgrace. To be outsold 20:1 by Sony and : 2:1 by Nintendo (or worse) would have been an embarassment. It would have : seriously impacted MS' stock value during a slowdown in the entire tech : market. : In short-- I don't think if their worst case had really been that bad, that : they'd have attempted the project at all. It wouldn't have made much : sense. : The console market is *very* cyclical. They could just as well have decided : to take a pass this round and challenge the PS3 with a different machine a : few years down the road. They'd still have the money then. And domination : of the living room is just not the same as domination of the desktop-- : legacy support is much less important. Dominance of the living room is a : battle that is going to keep going on for years and years, because : consumer electronics are generally cheaper and more "disposable" : than computers. : OMG NOE! : [snip] : I don't think they ignore them-- I just don't think they fear them in a : here-and-now sense. More the way you fear a sleeping bear... it's big, : it's there, it COULD be dangerous, even if it doesn't SEEM to be right : now. But it's still a stretch to use that to say that Sony's price cut : means they are running scared. : So.. you want it both ways? Sony both fears and ignores MS? Which is it? ;) : Hmm... I still don't think it rises to that level. The Xbox is an incremental : step from what's come before. The most interesting thing about it, from an : industry standpoint, is that it's a consumer electronics device with MS' : name on it. It's revolutionary from MS' perspective, not the industry's. : What do you mean, "nope"? : 1) It's evolutionary. It's a box that plays games on your TV. These existed : before. The graphics are nicer. It has features that are not new to the : industry, but not usually bundled in the box. How is it revolutionary? : 2) It's parts-bin innovation. All the components are used in other products : save the nvidia GPU, which was designed NOT solely for the Xbox, but was a : natural outgrowth of the nvidia 2x line, and has only minor differences : from the GPUs now being shipped on AGP cards for PCs. : If this is a revolutionary product, categorically different from all that has : come before, destined to change the consumer electronics industry, please : explain why and how... I just don't see any evidence for it. : It just as easily be MS in that third spot. In terms of worldwide installed : base, right now, that's where they are. : Good grief, man... based on what? : Sony's installed base worldwide is 30 million, sold in a period of about 18 : months or so. : MS' worldwide installed base is 3.5 million, sold in a period of about 7 : months. : Work out the figures for sales worldwide per month, then plot a graph showing : what combination of PS2 sales decreases and Xbox sales increases over the : next, say, two or three years, that would combine to give the Xbox a : larger installed base worldwide than the PS2... and you'll come up with a : scenario so unlikely that I'd be very likely to bet my life against it : ever happening. In fact, I don't think it'll even come close to happening, : not by a long shot. Not even if MS started giving them away for free. : Actually, let's go ahead and do it out: 3.5 M sold over 7 months = .5M per : month. : 30 M sold over 18 months = 1.6M per month : So Sony's been averaging more than 300% more unit sales per month. : Even if Sony's sales are cut in HALF, and MS' sales DOUBLE, and we follow : that trend for three years... the PS2 installed base is STILL larger-- : they'd have an installed base of nearly sixty million units, and MS would : have about 10 million. : Even if you take off the last year of that for Sony but not for MS (given : that the PS2 is a year older, and assuming that all consoles have about : the same useful lifetime) it still doesn't work. : The gap is just too large. : And despite that, there's little or no rationale from anyone-- even MS-- for : speculating that monthly sales will double and sustain themselves at that : rate for three years. : In fact... according to those figures, even if MS doubled the current sales : rate, and sustained it for three years, they wouldn't reach the Sony's : installed base in less than six years, even assuming Sony NEVER SOLD : ANOTHER PS2. : Nevermind the fact that long before that ever happened, there'd be a PS3. : In short... I'm really not sure where you're coming from there. Please : explain to me what happy set of circumstances would result in MS somehow : selling an additional 26.5 million units worldwide while Sony somehow : forgets how to sell PS2s completely. : Well... historically, in the console industry, the #3 man takes it in the : rear, Sega being the most recent example. But then again, MS is not Sega. : Yes, but time consuming, I really should be working :)

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.