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Nintendo Gaming / RE:The Console Wars: Game On - Article in TIME Magazine
« on: December 11, 2003, 04:41:28 AM »
Before I make these comments I want to clear one thing up. I'm not an XBox fan in the least. What is typed below only amounts to acknowledging the facts.
"It does seem weird that, while BigN and M$ are locked in a battle for #2, and Microsoft is loosing money on the XBox, M$ never gets criticised for it."
That's because most people understand that the XBox is a capital investment for Microsoft. Microsoft knew they weren't going to be number one going in, but future returns almost always change things, especially when you have Microsofts money. Even if you count in diseconomies of scale, the current losses are a drop in the bucket for the big boys at M$. For an example, look at Internet Explorer as a browser, back in the early-mid ninties almost no one believe that it would overtake Netscape. Strangely enough, it did.
"In fact, XBox is a success in everyones mind it seems. I hardly think you can call one a success and the other an "unmitigated disaster" when they're both in the exact same place."
Not quite. If you count in who can afford to take more losses (Nintendo is technically gaining profits but losing market share in the long run), Microsoft is actually doing better than most people predicted.
As a side note, to my mind Microsofts entry into the video game market gave it a boost it wouldn't have gotten otherwise. Their excessive advertising drew more people into consumption, even if it may have been for other systems. In Network Economic lingo, I'd say that they "fed the net". Strangely, this observation is almost always absent from mainstream publications like the above article.
"It does seem weird that, while BigN and M$ are locked in a battle for #2, and Microsoft is loosing money on the XBox, M$ never gets criticised for it."
That's because most people understand that the XBox is a capital investment for Microsoft. Microsoft knew they weren't going to be number one going in, but future returns almost always change things, especially when you have Microsofts money. Even if you count in diseconomies of scale, the current losses are a drop in the bucket for the big boys at M$. For an example, look at Internet Explorer as a browser, back in the early-mid ninties almost no one believe that it would overtake Netscape. Strangely enough, it did.
"In fact, XBox is a success in everyones mind it seems. I hardly think you can call one a success and the other an "unmitigated disaster" when they're both in the exact same place."
Not quite. If you count in who can afford to take more losses (Nintendo is technically gaining profits but losing market share in the long run), Microsoft is actually doing better than most people predicted.
As a side note, to my mind Microsofts entry into the video game market gave it a boost it wouldn't have gotten otherwise. Their excessive advertising drew more people into consumption, even if it may have been for other systems. In Network Economic lingo, I'd say that they "fed the net". Strangely, this observation is almost always absent from mainstream publications like the above article.
