Topic: What's MS' next move with the XBox 360?

[IceCold]

Microsoft has blown its load. Well, there's GTA but it's multiplatform. At this point, most of the people who want a 360 have bought one..

On another note, what's going on with Too Human? It's the only game/series (well, other than the NHL games) that I'm interested in on the 360, almost against my rational mind. But I loved Eternal Darkness.

[Ceric]

I thought the software attach Ratio for the Wii was at the very least 2 games for every 1 console.  Plus if the 360 really does have a great attach ratio + Live it could be profitable without selling more consoles.

[NWR_insanolord]

Last I read the Wii's attach rate is more like 4 or 5 per console.

[Luigi Dude]

According to recent reports the Wii's software ratio is 5 games per system compared to the 360's 8 games per system.  But it's said that the Wii's ratio has been rising pretty fast recently meaning the Wii could catch up to the 360 in the future.

Which makes sense, there wasn't much on the Wii until last fall really.  Since the Wii has gotten a lot more games and more higher quality titles in the last 6 months compared to what was on the system before, that would explain why the Wii ratio has been rising faster recently.

[NWR_insanolord]

Yeah, it's not really fair to compare the attach rate of a console that's been out for a year and a half to one that's been out for two and a half.

[Chozo Ghost]

The Wii attach rate is going to get at least 1 game higher now that Smash Bros. is out.

As for MS, what more can they do? They are clearly the FPS console of choice and they have that locked up good, but there is a lot more to gaming than FPS games.

[NWR_insanolord]

The Wii attach rate is going to get at least 1 game higher now that Smash Bros. is out.

As for MS, what more can they do? They are clearly the FPS console of choice and they have that locked up good, but there is a lot more to gaming than FPS games.

There's a big enough segment of "hardcore" gamers who would disagree with that statement to keep MS going.

[Nick DiMola]

The Wii attach rate is going to get at least 1 game higher now that Smash Bros. is out.

As for MS, what more can they do? They are clearly the FPS console of choice and they have that locked up good, but there is a lot more to gaming than FPS games.

There's a big enough segment of "hardcore" gamers who would disagree with that statement to keep MS going.

Agreed 100%.

[Ceric]

An Attach rate of 8 games per system is still excellent even with a year lead.  Especially at the higher prices.

[BranDonk Kong]

The simple answer is there are more games for the 360, and they aren't 90% PS2 ports with waggle thrown in. Even with the Wii having a larger install base in almost every territory, the 360 has a year's worth of games more than the Wii and PS3.

[Adrock]

Am I the only person who doesn't think 360 is in trouble? I think they're still in a pretty good position. PS3 outsold X360 two months in a row? Big deal, 360 dominated PS3 every month before that. I don't think there's anything to worry about, not yet anyway.

Microsoft heavily contributed to Sony no longer being market leader and even if Sony pull off a miracle and becomes market leader by the end of this generation, they won't ever have the lead they had the past few generations. The fact that Microsoft is not only still making consoles, but doing well in the market is proof that they're making progress.

[Kairon]

Yeah, MS isn';t in trouble, actually, it appeaers that they're actually starting to earn money! However, one does have to wodner as to when the next price cut will come and what else they have up their sleeve.

[Deguello]

Microsoft still hasn't made one red cent on video games.  The cost of them "doing well in the market" is somewhere between $6 and $8 billion dollars.  They've only had 3 or 4 out of 27 or so quarters actually be profitable, compared to Sony's consistent (until recently) profit and Nintendo's RECORD profits.

Think of it this way, imagine a woman hacking her face to pieces through plastic surgery in order to look better than a slightly aging beautiful actress and a young beauty queen.  She may end up with comparable looks, but she's killing herself doing it, and those scars will have to heal later.  Imagine if Microsoft does wrest control of the market.  They'll have to make up those billions somehow, and they're already charging more for games this gen.

Microsoft APPEARS to be doing well, but under the surface it's a different story, no matter how many games get a 9.0 from enthusiast press sites.  The attach rate is impressive, but consider that total games sales will remain under the N64's, due to the complete lack of appeal in Japan and limited appeal in Europe.  I don't seem to remember the press writing many congratulatory editorials for the N64, do you?

They appear to have met the threshold for outright purchasing marketshare at the cost of their own blood, and it appears to be a stagnant figure.

[ShyGuy]

The solution? $80 games next-gen. You heard it here first. Let's mine this hardcore niche until it's miniscule.

[Ceric]

I think if Microsoft can just keep there attach rate up and have good solid in-house titles.  The could turn to true yearly profitability.  You'll have to ignore the earlier debt though.

[Chozo Ghost]

They'll have to make up those billions somehow,

Actually, they don't. Regardless of how unprofitable the Xbox division is, Microsoft is still extremely profitable in its other divisions. You say they lost 6-8 billion on the xbox as if this is a big deal to them; it's not. A 6-8 billion loss would be a serious issue to Nintendo and perhaps Sony, but it doesn't make much difference to Microsoft.

If you need evidence of this, consider how they are trying right now to purchase Yahoo for like 100 billion dollars right now. They basically have 300 billion dollars that they can either spend or just throw away without any care in the world. So a loss of 6-8 billion on the xbox is absolutely nothing from their point of view. Plus as I said, they are profitable anyways thanks to Vista and Office and so forth.

[Luigi Dude]

But the big question remain, how long does Microsoft want to continue wasting money on the videogame industry if they're getting nothing in return.  Microsoft's whole business plan is built around dominating what they're in.  The whole point of the original X-Box was to make them a well known brand, while the 360 was to put Microsoft in a position that would allow them to become the market leader with their 3rd system.

Now this might have worked since Sony screwed up in 2006, but because of Nintendo regaining the industry with the Wii, Microsoft's plans have been set back.  Microsoft thought it would be a 2 console race between the 360 and PS3, which would allow them to come in at least second and with a stronger present then the original Xbox had.  But since Nintendo is dominating the industry and gaining alot of the people that had a PS2 last gen, Microsoft is stuck fighting Sony for second place by appealing to mostly Western gamers with nothing but Shooters and Sports games.

Of course Microsofts biggest problem is they've failed in Europe where the Wii and PS3 have over taken them and they're non existent in Japan.  So all they have now is North America where Nintendo will over take them this summer and the PS3 is slowly gaining on them.  Since it's clear Microsoft doesn't have a good chance at becoming market leader with they're 3rd console, what is their longterm plan going to become now.

Even though Microsoft has billions to spend, eventually the shareholders are going to get angry that they've gained nothing from the videogame market and continue to lose billions more with each passing year.

[Deguello]

They'll have to make up those billions somehow,

Actually, they don't. Regardless of how unprofitable the Xbox division is, Microsoft is still extremely profitable in its other divisions. You say they lost 6-8 billion on the xbox as if this is a big deal to them; it's not. A 6-8 billion loss would be a serious issue to Nintendo and perhaps Sony, but it doesn't make much difference to Microsoft.

If you need evidence of this, consider how they are trying right now to purchase Yahoo for like 100 billion dollars right now. They basically have 300 billion dollars that they can either spend or just throw away without any care in the world. So a loss of 6-8 billion on the xbox is absolutely nothing from their point of view. Plus as I said, they are profitable anyways thanks to Vista and Office and so forth.

No, they DO have to make those billions back up, or the shareholders will lynch them.  I am by no means saying MICROSOFT ITSELF will just implode, but their Home and Entertainment division is that much in debt, and you can't just throw billions into a division and get no profit forever.  Again imagine Microsoft dominating the industry. Would they continue their current practices which have them in the hole?  Do you think they'd NEVER want to profit from videogames, ever?

[oohhboy]

The offer for Yahoo as far as I am certain was a little over 40 Billion USD. Keep in mind, most of that isn't cash. It gets paid out by draining MS stock value. MS's market cap is massive, but it isn't cash and you can't spend it as such.

As deguello has stated, they can't continue losing money in the H & E division. It drains the companies overall profit. It bunts the share price and shareholders directly lose money from less dividends. I am actually surprised this adventure has been allowed to continue for this long.

MS must make a profit and do it consistently. Their current business model works, if they control the market. But videogames are a luxury. As is they could make profit short term, but they will trash the market in the process.

Overpowered, expensive hardware. Exploding production costs. Terrible quality control. Massive advertising costs. Blockbuster mentality. Expensive games. Patches.

[animecyberrat]

I think they are in trouble just because everyone I know who has a 360 has gotten that red ring of death and 2 out of the 3 people I know who bought 360's also have Wii's and 1 has all three.

[Chozo Ghost]

Microsoft does plan to dominate the industry eventually, but as Luigi Dude said that may not happen with their 3rd system as they hoped. Even if they don't reach first place they may be profitable by then, and the stage will be set for them to reach 1st place with their 4th system in the distant future.

So no, they're not planning on bleeding money on it forever, but they can hold out for as long as it takes. With the massive amount of money they have its bound to happen sooner or later.

[GoldenPhoenix]

Companies wanting to dominate an industry? Unheard of!

[Deguello]

Chozo, they're in second place and already in debt.  The reason they are in debt is also the reason they're in second place, because they're bleeding themselves just to get a foothold, and this foothold is smaller than the N64's.  Imagine how much a first place berth would cost, because they'd probably have to buy out Japan.  It's a fool's game.  And "holding out for as long as it takes" is also believing that Microsoft's shareholders will all be indefinitely on board with the idea if it continues to bleed billions.  Long term goals are nice, but you gotta seethe writing on the wall, too, ya know?

Gaming has been an absolute disaster for Microsoft.  And probably disastrous for the industry as a whole, because they seem to be inspiring Acer to launch a console and causing EA to buy everybody up because MS forced HD on everybody, which raised dev costs, which raised prices which drove down profits (EA's profits turned into losses just on 360 software).  Now everybody's consolidating.  And what's to stop EA from launching a console themselves?  That might throw a wrench into Microsoft's long term goals too.     The industry moves too fast for such long term plans.

[oohhboy]

I am sure as a company, they can hold on indefinitely. But I don't think they have infinite patience. By the end of this generation it will be ten years since the XBOX. Billions in the hole. Single digit number of quarters of profit that only happened when the stars align with things like Halo which blows it's load on day one. This is after nickel and diming everything.

Their idea of profit is to increase prices. Crank up that revenue. Who cares about how ghastly inefficient the back room is. Who cares if you have to rebuild the same machine over and over again.

There is no next move for the 360. There is the status quo. Through their own marketing and policies they have cornered themselves for this generation. The user base is set. It flooded with shooters because that is almost the only thing they buy.

People say Nintendo gamers only buy Nintendo games. That might be a problem if the majority of Nintendo games were of one genera. But it isn't. They make games of all types. The Nintendo brand is something the average person can trust to provide a good game to almost everybody. MS is head shot land. By cultivating more open gamers, Nintendo help themselves and third parties.

MS just have to wait out this generation until they can reset for the next. Fire every single executive they have. Start hiring people who can actually use their brains and not their e-wangs. Every single one of them right now are technologist hacks. Tim Allens of the computer world. MOAR POWER HOHOHOHO.

[NinGurl69 *huggles]

LAFFO!