Analyst: "Gaming has been a disastrous endeavor for Microsoft"

"Particularly from an investment perspective," says Wall Streeter Roger Ehrenberg. Note, this doesn't mean the Xbox has been a disaster for gamers -- far from it (cough, cough Halo) -- but Ehrenberg makes a strong case that the Xbox has failed investors by hemorrhaging Microsoft's Home & Electronics profits. He also believes that when a console fails in Japan, as the 360 appears to have done, it cannot succeed in the world market (Caveat: NEC's PC Engine did very well in Japan, and Japan alone).

[FordGTGuy]

and creating one of the best franchises to gaming yep they are the suck.

[MikeMichaels]

You n4g'ers are the champions of missing the point. This is not a stab at the 360's ability to play games.

It's a financial assement.

..and i quote.

"my perspective is that of a financial analyst. Therefore, my primary interest is in the strategic and financial implications of business decisions, in this case the Xbox 360 and Microsoft's Home & Entertainment strategy, and NOT whether or not the Xbox 360 is a rocking product. As I've stated before, I have many friends who think the Xbox 360 is awesome. This, however, is not my concern. And to state the obvious for those who know me and/or are regular readers, I am neither a fanboy nor an investor in single stocks, so I have no interest in partisanship one way or the other."

...and an interesting article to boot.

[dantesparda]

The reason they cant see it (the point) is because they are fanboys, super fanboys, and cant see anything without their fanboy goggles on. They are just political spinners

@VirtualGamer

Amen, brother, i agree with you, i dont wanna see MS go away either, competition is good for us, for it yields us better products/results.

[VirtualGamer]

While I prefer the PS3 I certainly do not want to see MS pull out of the console business. We have MS to be thankful for showing Sony what online is all about. I also think they are the only 2 console manufactures that compete at the same level as in they push what the hardware and games are capable of. Competition is good for the industry and everyone should support that regardless of which console you prefer.

[nicodemus]

It's good to finally hear a thoughtful comment like that!

I can't stand these people who run around hoping that the other console fails. For some reason, fanboys just can't understand how the competition between Sony and MS has forced both companies to step up their hardware/features/services. It's done nothing but good things for gamers! Why do people want it to end?

Oh, and for people who want to relive the glory days where Nintendo was the only console and everything was fine back then, just remember---at one time, Playstation was the newcomer. At another time, so was xbox. Competition is good, and rooting for your own console is fine, but wishing the other to fail, I just don't see the point.

[Hayabusa 117]

Well said.

[gta_cb]

well said VirtualGamer i have said this many times before, but when there are people trying to make there point accross peoples comments like this one doesnt get noticed so, but yeh nicely said

[Funky Town_TX]

Nintendo should be embarrassed for what they charge for the Wii. I don't care who wins the console race, but I do like to see competition.

[Sphinx]

and couldn't have said it better than myself... except that I prefer the 360. Different strokes!

[power of Green]

Keep-em coming. lol

[Marty8370]

Microsoft have shipped close too 10 million, yet they ar'nt close to selling 10 million. Microsoft has lost serious ammount of cash thru gaming, there is no denying this. Xbox lost Microsoft 4 billion dollars thats why the canned it early to launch the X360. Microsoft like Sony are loosing cash now, and probably will do untill later half of 2007 or early 2008.

[FordGTGuy]

last year they have definitely sold more they 10 million

[XxZxX]

Yeah GT, When PS3 have a lot on shelves, they are not selling, when XBOX 360 have a lot on shelves, they are selling 10 million..woooo. If you want to say that, hell PS3 already sold 6 million.

[power of Green]

All the 360 has to do is stay cheaper and pump out Good games theres no competing with that, never has been.

[JIN KAZAMA]

in this industry. If we get a monopoly of either side, that would be the worst case scenario. MS aint goin nowhere.

[TheMART]

This dude is a bit behind on the latest knowledge.

MS makes 75 dollar profit on each XBOX 360 premium sold now (those were numbers from months ago, so maybe even more now.

Each 360 unit has an average attach rate of 5.3 games per unit sold.
Each 360 unit has an avarage hardware attach rate of 3 pieces per unit sold.

There are 6 million live subscribers.

Let's say from each game, MS gets 10 dollar. So at lest 50 dollar per unit on games + 75 profit on the unit, plus 50 dollar a year for live.

That's at least 175 Euro the first year for each console sold now (not @ launch when they had loss on each unit sold).

The PS3 on the other hand looses 250 dollar each unit. Which means, 10 million units sold is 3 Billion dollar loss.

Thus: Sony made money on PS1/PS2, but is doing VERY BAD on PS3. You may call it an investment, but 2 billion dollar loss in 2006 alone on PS3... The original XBOX to enter the market did cost MS 4 Billion Euro over 5 years time. So burning 2 Billion in one year over a console that didn't even launched before the end of the year... Last quarter, Sony managed to lose another half Billion. They loose that about every quarter of this year.

So that's 4 Billion probably in 2 years.

Gaming seems to get disastrous for Sony this time around, not for MS. There is a wind of change

[bobbybrown]

i think you forgot the 1 million repairs and replacements

[EZCheez]

Who the hell are you and why do you bother to talk? I'm not even goin to bother trying to follow you math because as soon as I see your avatar I realise that all I am about to read is biased BS. Save the space for people that have something intelligent to say.

ANYWAY

I am a PS3 owner, but I value the opposition of Microsoft in many respects. If it were not for Microsoft and XBox Live, Sony would not be making one of the things I am looking forward to the most, PS Home!!!

Besides, this is a fact= Many of the worlds greatest inventions were created at a time of war.

You can quote me on that. In fact, just write that down.

[Omicronn]

Why even bother bashing Sony all the time and not your main competition the Wii that was so hyped up as the Wii360 till they MS realized it was more of a threat initially then the PS3 who needed to gain momentum with games.
MS is the only company that can take losing this kind of money and keep going due to their huge wallet. But any investor (not kiddie fanboys who dont see reality) looks at the numbers of their company, not the math you just showed which contradicts itself.
Everyone should be happy with competition because it helps all of the real people who matter in this all and thats you and me...the gamers who get better things when competition makes them work for us.

[dantesparda]

Hostpic, and that's just TheMart, he is a super fanatic, one of the biggest on this site. Dont mind him, his opinions are always super biased

[kingboy]

10 million what? Original xbox 1 owners being forced to buy a 360 cause Microsoft stopped support for the xbox right?

[SlippyMadFrog]

No one was forced to buy anything, they bought an Xbox360 cause it offeres a great gaming experience and the chose it above the PS (not that PS3 doesn't have a great gaming experience but they still chose the Xbox360)

[PSN Starfleets]

Difference between Sony and MS; is that MS wont give a piece of sheet about how much money they're losing on the Xbox as long as they take some marketshare away from the PS3.

And I cant believe Sony fanboys are talking about a company losing money, and not looking at their own company.

Pssh

[techie]

"their own company."

Stop being ruled by companies! Down with the dehumanization of individuals in capitalism!

[Firewire]

Umm dude, remember one thing, all those rich executives that run Microsoft, don't realy have a say. Its the investors that will decide the fate of either company.
If the investors at the next shareholders meeting decide, enough is enough and decide to pull out, there is nothing any of those executives can do about it. That goes for MS & Sony & Nintendo.
I'm not sure but wasn't it the investors that told MS to scrap the original xbox, and redesign another one, I think thats how it happened but I'm not entirley sure.....
Anyways either one of these companies going down, is terrible for gaming and us gamers. So lets not dwell on it, its depressing!

[Armyless]

If capitalism didn't exist, neither would video games.
At all.
Period.
Nada.
Nunca.

I love how these Marxist idealogues hate everything.

[techie]

Did I say get rid of capitalism!? Did I!? Read what I said.

I said people should not love companies and peole should not be dehumanized by capitalism. I DID NOT SAY DOWN WITH CAPITALISM. sheesh

[kewlkat007]

"The original Xbox 1 had a difficult time breaking into this industry with SONY of a million Users going against Microsoft's "300".
The Xbox 1 did what it was suppose to, Crack the market. Even though the Xbox 1 died in vain, just like those "300" men Vs the Persian Empire, it's legacy lives on and thats why we have the Xbox 360.

Unlike the "Panasonic 3DO" that just gave up and didn't put a dent in the Video Game Market-Share,thanks to Gates deep pockets, the Xbox did not encounter the same fate. If you make Movie 1 and it flunks at the Box-office there most likely will not be a part 2.

Xbox gamers and I think (Halo somehow), gave MS/developing partners a reason to continue. Well now they know they have a following, just as SONY did when they release the PS2.

-1.The gaming library is getting bigger.
-2.Good amount of Users, online/offline
-3.They are making good partnerships with developers.(Great Tools)
-4.Getting Exclusive games that were attached to SONY the last 10 years.(Don't worry Sony you did the same to Nintendo)
-5.XBOX live(Streaming Video, User Interface, Matched Games,Keyboard for Easy Text, IPtv soon, need I say more)

For all the negative issue, they can only get better, such as the Hardware,(pricing sh!t so high) and a few minor things, most Companies go through. MS strengths is in the Software not Hardware, I'll admit, but you gotta start somewhere.(I just don't think gamers thats only played a Sony consoles, give MS some credit where it's due)

This is Generation console 2 from MS, while Every other Console Maker is on it's third or more.(Nintendo Makes great Hardware because of that, SONY had mad issues with the PS2 itself. Thanks to "TRUE GAMERS", that will purchase any console to play a AAA game regardless."

Sometimes the numbers don't truly represent what MS has done coming into this industry at the time they did and sweeping awards from a Lazy, Sleeping and Arrogant GIANT(SONY). I actually agree with JIN KAZAMA for once, We don't want a Monopoly gamers.

[Kyur4ThePain]

A "bad news" article on MS, and Marty-boy has to drag Sony and the PS3 into it.

Back on topic...whether MS is making a profit on the 360 yet is up in the air (I haven't seen them say anything yet), but it'll take a long time for them (or anyone else) to make back the money that goes into the R&D, manufacturing etc.

[Odion]

They said that they are on track to start making profit this summer, so they'll start to see a return on their profit sooner then later. Hell Bill Gates could personally have funded this entire endevourer and still have over 50 billion dollars.

[GameJunkieJim]

Pure, bull stubborness.

Anyone remember when MS decided to put MS Office on the PC and stop making it for Mac? Analysts predicted disaster.

When Microsoft decided to stop using the Tandy for development and went to IBM PCs? Analysts predicted disaster.

When Microsoft was sued by the United States for monopolistic practices for including IE and WMP in Windows? Analysts predicted disaster.

Microsoft has resources at it's disposal that Sony dreams about.

Sony's net income for 2006 was $1.04B, Microsoft's net income was $12.5B.

Microsoft ain't going anywhere.

<<<edit>>Almos t forgot about Nintendo, who had $4.5B last year.<<</edit>> >

[EZCheez]

Where are you getting your numbers from? Do you have a reputable source? I find it hard to believe that Nintendo would bank more than Sony especially before the launch of the Wii. In fact, I don't believe it at all. Let's not forget that the two biggest companies vying for power in this race make products other than videogame consoles.

[Armyless]

$

[GameJunkieJim]

or even Wikipedia for the companies declared 2006 profit margins.

[Hayabusa 117]

I'm still enjoying the XBox 360.

EDIT: Wow, I got a disagreement for saying I enjoy the XBox 360...

[Boink]

sony fanboys will disagree with anything positive said about the 360, it's quite pathetic.

[Fenman]

until last night that is! (Hence the avatar!)

[Hayabusa 117]

I didn't even blame anyone for disagreeing, yet I get 2 more disagreements and loose a caption. Ofcourse, it can only be the PSFangirls. Thankyou. This really proves how desperate they are.

[Covenant]

"Disastrous endeavor?" That's awfully harsh, and definitely incorrect.

Bear in mind that their Entertainment division isn't just games; it's also the (so far) unsuccessful Zune. That--not the 360--accounts for much of their recent losses.

There's no doubt that MS hemorrhaged money on the original Xbox. But it served its purpose: Make a dent in the market, and establish a user base to expand upon. They were also prescient in launching an excellent, comprehensive online gaming service that has become the console industry standard.

That said, they're still losing money, just not as much. Effective cost-cutting has made the 360 far more profitable than the Xbox at the same point in its life cycle; the drawback seems to be that cheaper parts mean more defective systems. (Example: I still have my original Xbox, purchased 4 1/2 years ago, and it still works; on the other hand, I'm on my 3rd 360 since October).

Their biggest profit lever right now seems to be Xbox Live. It's not just successful; it's THRIVING. Millions--probably billions--of played matches; millions of downloads and transactions, and more people join every day. Once Halo 3 hits, it'll EXPLODE.

MS will eventually turn a profit on the 360, but it may take a while, and their new warranty--essentially guaranteeing a lifetime warranty--will hurt their bottom line. They'll gain market share with the 360, and whenever the next-gen system comes out, they'll be poised to lead the market. That doesn't mean they will, but their position will be better than it was at the start of the current gen.

"Disastrous endeavor?" Hardly.

[XxZxX]

They lost $9 billion on XBOX 1 and the XBOX 1 did sell better than XBOX 360. That's why they came out with this conclusion. Is XBOX 360 doom, no.. too early to tell, maybe they will pull a PS2 or not, who knows.

[TetraNinja]

Although i do not like some of the aspects of the M$ plan or there track record, a company was needed to keep sony honest. With the disasterous failure of the dreamcast M$ basically came out of no where with its infinite funds and (good or bad point you can decide for urself)it has placed significant pressure on sony this gen. If it didnt appear you could be rest assured you would be paying atleast cost production retail for you already expensive ps3. This was also emphasized by nintendo's decision to focus on redefining gameplay rather then graphics and sound with the wii. So if u wanted a true next gen console you would've paid highly inflated next gen price. Like it or not M$ is hear to stay, and its required to keep companies like sony constantly listening to the consumers, and making sure we dont have to mortgage our homes to play the video games we ALL love ;).

[BubblesDAVERAGE]

360 has came to play ball his generation. I wan to see where xbox is sales wise next year then we can tell you how it will fair. Also ps3 is doing fine it sold more then 360 did in the same amount of time ppeople stop saying that I dont care about supply strains we talking about numbrs and that wat matters.

[JIN KAZAMA]

I really cant believe you called SONY lazy. Arrogant, yes, but LAZY?? Come on man. Just because MS beat them to the punch with XBL, doesnt meant Sony is lazy. They are at the forefront of technology. They have their electronics in everyhting, from tv's to laptops, to phones, to camera's..etc. Look at the marvel that is the Playstation 3. It is truly a marvel of hardware. They fit all of that cutting edge technology into the PS3, and i havent heard any news like the 360's hardware issues. The PS3 is a stroke of genious hardware wise. And It offers so much more than jut a gaming system. I believe its worth every single cent of the 600 dollars. Also, people who say, well Sony should give you a choice of Blu-Ray or not. Well, thats Sony's strategy, you DO have a CHOICE. A CHOICE of buying it OR NOT. No ONE is forcing you to buy the PS3, they are offering it with a built in BLU-RAY player, plain and simple. I for one LOVE the PS3, and I do not see MS's 360 besting it, thats my oppinion, just like MartyBoy is in love with his 360(well maybe I am not in love with it like him). But like I said before, we need MS in this game, we need MS to take the same market share as Sony, we need MS to take exclusives from Sony, which will MAKE SONY come up with totally NEW GAMES and IDEAS, and Vice Versa, therefore, all of us consumers will have a REAL CHOICE, a CHOICE of which console to buy, or both.

Also, i am getting tired of NINTENDO getting all these props just because they are the underdog. What REVOLUTION were they talking about?? What...a controller that is motion sensitive, GREAT. But the REST OF THE MACHINE SUCKS people. The graphics suck, the whole virtual console thing, its a nice idea, but talk about LIVING IN THE PAST! How may more times can you play CONTRA, yes it was a great game, but DAMN, it was 22 YEARS ago! LOL.
Well, thats enough of my rant. I hope you 360 fans can see, that I am not flaming whatsoever and respect my oppinion. I would like to see a response with some respect.
I'm Out.

[PS360PCROCKS]

Haha and you will get it my friend. Nice post, your 2/2 for good posts out of the last two that I have read in the past few days. I tried giving you more bubbles but I guess I can't...Anyways nah your right, Microsoft joining the gaming market is great for everyone as it does push Sony to come out with new ip's and technologies and it just expands the console markets outreach with their new ideas. Microsoft and online gaming is one of the biggest things to ever happen to console gamers. Sony has brought great games and hardware for many many years now. Now they are losing some of their grip and they have to fight even harder to control what they controlled before which is a beautiful thing. Anyways I think both consoles are a stroke of genius, from the cell processor in the PS3, to the Xenos in the 360 they both have some awesome future technologies in them this time around. I think the triple core is pretty awesome too, I wouldn't mind having one in my PC lol. Oh and I agree about Nintendo, but god damn them they still own Zelda and Mario and that is like being a kid again, it's like crack.

[Marriot VP]

Hey, without Bungie's Halo, there wouldn't even be a 360 because the original xbox would have flopped.

But I'm very happy there is a 360, and once a price drop happens down to 300 for a premium there goes another 10 million. Halo 3 is all I need, but of course than gears came out and surprised me. Plus others on the list. The 360 is a strong competitor for both the PS3 and Wii, and everyone should pray that nobody's console flops because of the benefits of competition.

[Bathyj]

Nor should it. With all respect to Nintendo and their success, they're not really pushing any boundarys as far as hardware or even content is concerned. They're in their own world.

I would hate to go back to only having Nintendo and Sony. The industry needs the competition and its good for all of us despite fanboy that only want their console to thrive and everything else to die.

Look how far consoles have come in 2 generations. The power available now is incredible and its because of competition, trying to out do the other guy.

The guys right but, no other company in the world would get away with such sustained losses. Eventually the shareholders would say enough is enough. Let hope Bill keeps them in check so we can have a XB720 in a few years time. Xbox still wont have turned a profit by then but i dont see Bill giving up and losing face to the world.

[likeaboss302]

Working in the financial industry I can say without a doubt some of these analysts don’t have a clue as to what it takes to make it in the gaming industry. Yes so far MS has been losing money. However, for MS to get there foot in the door they needed to do that. When this generation is over MS will end up making money and as an investor that’s a good thing. Problem is too many people now are short term investors…

[fjtorres]

Guy's way off base.
Microsoft's investment in 360 isn't solely (or even primarily) about making money off the console itself. Sure, they intend to make a ton of money by the end of this generation (2012), but XBOX exists for two well documented reasons:

1- back in 1999, Sony started bragging how they were going to take over the living room with the PS2 which was going to be a freakishly powerful multimedia PC. Well, MS has been investing in and making money of multimedia PCs since 1992 so they weren't going to roll over and play dead.

2- The PC gaming business around that time was flattening out and it looked like it was falling behind consoles. MS was a big game publisher on PCs but not consoles. If the gaming business moved from PCs to a console model (especially one dominated by Sony) MS stood to lose a hell of a lot more than the ten to sixteen billion they were prepared to drop into a new console platform. Especially after finding out that buying Nintendo would cost more than that.

So, bottom line, MS walked into this prepared to lose a lot of money early on, prepared to sell nothing in Japan, and prepared for a dogfight with Sony.

So nothing has happened yet that they didn't plan for.

With one exception: Sony has pleasantly surprised them by over-promising and underdelivering, so they are currently ahead of schedule. Microsoft expected to be *behind* Sony at this point, not comfortably ahead.

And, in case nobody has noticed: PC gaming is hot once again, in no small measure because of the 360 and how easy it is to port from consoles to PC. And Sony's plans to make build a Media PC empire off PS2 got nowhere while MS built MCE into a 40% share of the retail PC business and now even Sony sells Windows MCE PCs. This is what is generally called a strategic victory. What MS may or not be losing on 360, they make up in MCE PC sales, which use 360s as extenders, remember? And, similarly, MS has been investing in IPTV for 15 years and are now starting to take a chunk of that market with their server software on the back end and 360 on the front end.

Give it time, guys; they're going to make a mint off 360 regardless of who wins the so-called console war.

Anybody interested in the full story of how 360 came to be, which is a very fun read, dig up "XBOX 360 uncloaked".

[PS360PCROCKS]

clap clap clap, damn man very very well written, you deserve bubbles galore. I don't smell sh*t actually I don't smell anything, maybe this is what common sense smells like.

[Hayabusa 117]

I agree. it's far too early to say who will win this console war. And the original XBox was not meant to dethrown the PS, only to help Microsoft break into the console biz.

[BIadestarX]

Wow, sometimes I wonder how on earth microsoft is still in business. It must be the most envied and hated corporation on earth. Analysts are on the roll to try to take microsoft down.
Well, Sony fans I guess there is always a chance your dreams may come true where Sony is the only console in the market. It would be a interesting world. I guess we will have to pay $1,200 for the PS4 since Sony wouldnt have any competition and hopefully online service.

[Bhai]

Losing 4 Billion on first Xbox means killing one Donald Trump out of the face of the planet. Also it became a 'loss-leader' which means even its shutting down of production is a continuation of loss for MS.

Killing the xbox means they abandoned their fanbase with such short-term thinking.

Shipping of 360 around 10 million and selling around 9 million in a whole year without competition is not a feat at all, especially when a 7 years old PS2 sold around 10 million the very same year, Sony's current-gen system providing same level of profits as ever.

360 upgraded with HDMI even when first MS announced its no-need of it is a clear indication that MS is learning by experimenting with their fooled fanbase.

Recent acceptance of MS about the continued disc scratching issue of 360 shows they are in no way near the hardware excellence of PS3.

.......So all in all, MS is only out for market-share and in retirn provides its fanbase with the same old gen games but normal-mapped HaHaHa ! Cerula might need only Halo3 but that is not the case with the rest of the world, most of the folks want true-next-gen-experience with insane physics, procedural synthesis, cinematic excellence and innovative art-directions...none of these features are in any 360 game yet even after a whole year and a half of its launch...neither these are in any of the announced titles !

[snoop_dizzle]

just remember the 360 and PS2 had around a year start.

And the PS3 hasn't been out for long, so stuff can still happen. Remember the original xbox? for a long time not many had problems, but all a sudden it had power cable issues.

maybe even sony could have a bunch of bluray drives die. Either way, it won't stop me form getting a PS3, neither will the problems with the disk scratches on the 360.

Thats nice and all that the PS3 is powerful, but not everyone wants what you stated. If so, how come so many bought the Wii, and 360? Now granted the Wii might go quickly , but still i have yet to see a game on the PS3 TOTALLY outperform the 360. While i have seen some better stuff(lair could change that), i haven't seen anything that made me wet myself. Thats why im waiting a while for my PS3.

[JasonPC360PS3Wii]

What gives half of these analyst the credentials to analyze anything? Most of these guys are just like us they offer oppinions and think by putting the word analyst in front of makes them some kind of specialist. Why are there so many "analyst" analyzing consoles would 2 or 3 be enough? I mean these guys come out of the wood work everyday on N4G, the gaming buisness is great but not that great.

[Firewire]

Guys, remember one thing, all those rich executives that run Microsoft, don't realy have a say. Its the investors that will decide the fate of either company.
If the investors at the next shareholders meeting decide, enough is enough and decide to pull out, there is nothing any of those executives can do about it. That goes for MS & Sony & Nintendo.
I'm not sure but wasn't it the investors that told MS to scrap the original xbox, and redesign another one, I think thats how it happened but I'm not entirley sure.....
Anyways either one of these companies going down, is terrible for gaming and us gamers. So lets not dwell on it, its depressing!

[harpua]

still trying to figure out which camp cries more when negative news comes out. would have to go with 360 fans for now. how about worrying more about games then who makes your console? I have both and each is cool with alot of great games on the horizon.

[DJ]

regarding the 360 lately, and it's not surprising. I mean come on, less than 10 million consoles after a worldwide launch 17 months ago? The Wii's only been out for 5 months and already hit over 6 million.

[kewlkat007]

You know what happens after a while when a certain company Dominates for years. They loose their edge, they get lazy, they run out of ways to innovate becasue nobody is forcing them to.

Try not to contradict yourself,

"we need MS to take exclusives from Sony, which will MAKE SONY come up with totally NEW GAMES and IDEAS,"

If Sony didn't Plateaued why would they need Microsoft to push them?

This is why I say these things about SONY. MS is still climbing that Mointain while SONY was sitting there thinking they are king, while plateauing. Hopefully, takin M S serious they will begin to bring out the best for their fans, instead of alienating them, Like I feel like they did this tiem around with thier strategy(still wait to be seen with the PS3's adoption rate, and the lost Market-Share)

Plus I was reffering to Sony's game division(who was talking about LCD tv's bro?). Like I was saying SONY became very arrogant,(I'm not even going to explain that one).

Stop lieing to yourself, Nintendo was the same way, only if they had taken Sony's Idea of a CD-Rom drive then they would still be KING of the Hill. Noo they wanted a big share of the Profits, Arrogance..(we don't need CD-Rom based games)

I stand by my reasonings....

[ApocalypseShadow]

i agree on some of what you have said.but the over promising and underdelivering?i do believe:

selling 100 million plus ps1s was DELIVERING.

selling 100 million plus ps2s was DELIVERING.

selling the ps3 faster in the same time frame as ps1 or ps2 is.....well..... YOU KNOW.

what other console sold that many?name one?that's what i thought.

even selling 20 plus million psps in a nintendo controlled portable market is a success.nintendo virtually owned the market.and psp is about to sell more than the original xbox.

which leads me to...microsoft.

they may have known that they would lose some money.but not more than 5 billion dollars.find me an official release than microsoft is now making money on 360?post it as soon as you can find it.and that goes out to everybody.

would i want microsoft to leave the market?no.it has benefited gamers by them being in the industry.but only because they keep sony on their toes.not because they did anything really special.

nickel and diming the hardcore is not what i call great.not admitting to other flaws in the system besides the scratching is not what i call great.not future proofing the system or just future thinking is not what i call great.adding features but charging you more for it is not great either.especially when nintendo and sony did modifications and charged the same price.not increased the price.without xbox live,xbox would be nothing.

microsoft added something to gaming then abandoned it with 360.the hard drive as standard.you may still be able to do custom soundtracks(which is cool),but they hurt developers by doing this.if you were going to lose money anyway,why not have included the drive as standard?then devs would have had no real issues except for the dvd-9 space.oops.did i add another issue?

let's say xbox live is a great innovation.for consoles anyway.name something microsoft has added this gen that's innovative besides it?yes you in the back.......that's right.they didn't add a thing that's new.

no new controls.
no new types of gaming.
no new camera features..

if you want to call yourself(microsoft)the leader,shouldn't you be leading the way instead of waiting for what sony will come up next with,then COPY IT?

how long will they want to lose money?for the next ten years?nope.how smart is that strategy?

i'd say that nintendo at least has something on both microsoft and sony.even though i don't agree with the wii as a system(even though i like the controller):

they make money on software and HARDWARE.why lose money on hardware anymore?it no longer makes sense.

[fjtorres]

Honest.
Just go back and look at what Sony promised for PS3 *initially*.
Back in 2002.
Back in 2003.
Back in 2005.
(Dual HDMI 1080p displays ring a Bell?)

When MS started designing the 360 they expected *multiple* Cells in a PS3. They expected real-time ray-traced *game* graphics done solely with Cell processors inside the box, not as a *demo* across a network.

Instead they got a box with one Cell and one 2005 mid-range DirectX9 chip. You must've heard the sighs of relief coming from Redmond all the way to Tokyo. MS was prepared for a bloodbath. They didn't get it. So they are quite happy, as they tell everybody, with the way 360 is performing.

The reason MS never bragged or talked trash about 360 graphics was that they honestly expected PS3 to be better in graphics. Sony certainly *talked* like they would be lightyears ahead. (Not "point a jeweler's loupe on the freeze-frame to see where PS3 is better"-ahead.)

This generation was always Sony's to lose.
They may still win it.
But so far, as of April 07, they are losing it.
They are losing Japan to Nintendo and everywhere else to MS.
To Microsoft that is just fine.

To be clear here: in the future, PS3 *may* (or not) deliver better graphics and/or games. But people are buying consoles today at today's prices with today's money. And they're buying Wii's and 360s.
Plain simple fact.

In the future, when and if Sony delivers *gaming* value to match the price (or drop the price to match the gaming value) things could change.

But for now, Sony's retailers said it best: PS3 Blu-ray player--it also plays games.
Give it time and things will change for both platforms.

Just keep in mind that MS is not looking to put Sony out of the console business--otherwise they would've cut prices already--they are perfectly happy to let Sony do that by themselves if they don't get their act in gear.

[Boink]

however the xbox is just one part of their entertainment division, and a small part in their grand scheme of things.

is loosing 4-5 billion a big deal? yes

is loosing 4-5 billion a big deal when it's defending a 40 billion dollar a year PC market, and complete and utter internet dominance? nope.

and I would love to see their future plans, turning the 360 into a DVR has me intrigued, and i'm sure that's the tip of the iceberg.

sony is in for 1 hell of a fight, and we will likely be the winners:)

[kewlkat007]

shadowgamer -"selling the ps3 faster in the same time frame as ps1 or ps2 is.....well..... YOU KNOW."

1.I'll respect this this quote from you, when you can easily write this one, "selling 100 million plus ps3s and DELIVERING."

2.Without much Harcore competition any console can sell jsut as much.
-PSone vs N64-No competition
-PStwo Vs Gamecube Vs Dead Dreamcast Vs late Xbox1 entry-The winner was already decided becasue of PSone.
-Xbox 360 Vs PS3- I Think PS3 will have more market-share, but Ps2 will not be the scapegoat for most of it's success, like the PSone was for the PS2.(lost Exclusives is why)

3.Well if you don't call XBL something special, then I don't know,Unless Sony did it first in your eyes. First HDD based Console. Oh yeah don't you think that Keyboard will be something nice? What FPS game on the PS have sold more than Halo series? Killzone?

4. Every console have had issues. How many Ps2's have millions of users gone through. The Xbox 360 is a second Generation Console, while all other console makers are on their third or more. I admit MS's strength is not in Hardware but the longer your in the Game the better the Hardware will get, as far as the Engineering and Manufacturing processes.(Take it from Nintendo They have been making HArdware for a while so their sh!t is solid.)

5. Every company doesn't come into this Industry making money right away. You seen the fate of the Panasonic 3DO. You act like it was easy for MS to crack this industry, when Sony was ruling. Gamers will never give MS, the credit it deserves. Just the way it is, when your precious product is no longer obliterating the competition like they promised.

What has sony done thats so innovating with the PS3?Blue-ray?Home? WIFI? Card Readers? 4-D graphics?

Your downplaying the fact that you want MS to just just quit the hardware business,
shadowgamer -"they make money on software and HARDWARE.why lose money on hardware anymore?it no longer makes sense."

They go and say,
shadowgamer-"would i want microsoft to leave the market?no.it has benefited gamers by them being in the industry.but only because they keep sony on their toes.not because they did anything really special"

Oh thanks MS hears ya.

[MikeIsOnFire84]

Tell that sh*t to my bank account!

[b3to 369]

your MOM is disastrous 2 mankind and u dont see me writin an article

[FeralPhoenix]

All I know is that myself and millions of gamers are GLAD M$ was willing to suffer the loses and give me some of the best hours and hours of gaming I have ever had on any console....and I've owned every console, and IMO the 360 is awesome.

I also own a PS3 which is also very good, especially the look of the hardware -it looks very hi-tech, sharp design, however the 360's content(games and online) dominates the PS3 at the moment and I'm not even considering the games and services that will be available for 360 next month or so or in the near future, I'm talking right now, head to head, but of course I understand that the PS3 needs time.....the 360 took some time although I disagree with those who say it took a year(Gears) because I think the 360 launch games and online were still much better than Sonys, but hey thats very subjective.

My point is that M$ is clearly in a better position than last gen, whether they win or not doesn't matter so much, either way they have very deep pockets and they aren't going anywhere, which is good for Gamers and Sony is going to have to work hard if they want to keep even the smallest market share= another plus for Gamers.

[skylar2000]

LOL

[ApocalypseShadow]

your excuse for nintendo,the most innovative company today,on why they can't sell 100 million consoles is because of competition?from nintendo,snes, to now,that's your excuse?gameboy did.i think gba did.how come their consoles can't?

it was sony's first go at it and they wiped the floor with nintendo and sega.both companies i love?

your excuse for microsoft was becuase of competition?one year late means nothing.sony did that twice(being late) and sold 100 million twice.they arrived late each time.what's your excuse?the xbox was better.it had better features,it had better graphics,it had more money support.

building on established themes in games and games that are already hits is not innovative.making something new is.

nintendo adds the analog stick.sony adds two analog sticks and dual vibration.nintendo creates an innovative wii-mote.sony creates a motion controller.sony creates the eyetoy.sony adds cd.sony adds dvd.sony adds bluray.sony adds the cell.sony added a hard drive but didn't build it in.now they did.even if they lost money from it.

microsoft adds...well nothing.just builds on what was already put out.the eyetoy came out years ago.what's your excuse for microsoft not making superior eyetoy games for their camera(years later)?what's your excuse for microsoft not making or adding next gen force feedback?what's your excuse for microsoft not coming up with new types of games?viva pinata is the only one i'll give you.oohhhh.wowwwww.a keyboard controller.for what games?keyboard controllers came out on ps2.not innovative there.

there is a difference between a system used by kids as well as adults in cars,suvs,houses,etc.and it getting overused and abused.

and a system that has broken down repeatedly at the start.scratches discs at the start.has died from upgrading firmware.overheats at the start.i know because i managed a game store.some gamers on this site alone are on their second, third or forth 360.you call that quality?it's only been a year and a half buddy.do you hear nintendo with these issues?nope.sony?nope.microsof t?YES INDEEDY!!

i didn't say microsoft should abandon the game industry,even if they abandoned 24 million xbox gamers and hd-dvd with iptv.i want them to keep sony on their toes.keeps good games coming all around.if the 360 didn't break,i'd have one now.if my pong system works,my atari system,and everyone i bought and kept including xbox,why is the 360 made so poorly?

i'll give microsoft credit for online.but they shouldn't lie and say 6 million connected gamers but neglect to tell you how many are paying for live.

if microsoft is the leader this gen,where is the innovation?with that kind of money they have,they could buy innovation.if they intend to continue to lose money to just take market share,it will bite them in the butt later.buying exclusives will bite them in the butt.microsoft can't buy sony made exclusives.microsoft is going for old exclusives.sony is making new ones.

stop making excuses for them not selling more systems and losing lots of money.

[Boink]

they are not lying when they say there are 6 millino gamers connected, why CAUSE THERE ARE 6 MILLINO GAMERS CONNECTED TO LIVE. they just don't say how many are gold, although judging by the amount of multiplayer matches going on, i'd say the majority.

no innovation?

lets take a little bit, not much cause I don't want to overwhelm you.

streaming video from PC's in most formats

accessing the menu while in game (seems simple, but not everyone has mastered it yet)

your own music in every game(something else pretty simple)

streaming HD movie/tv service, and the most successful one yet

chatting with players in other games(wow a lot of this is simple stuff, don't know why it's not standard in every console???)

interacting with media center PC's to receive rss feeds, video feeds, surfing the web, chatting with messenger, viewing pics(i'll cut it short there, as most know there is much more media center can do).

chatting with people on the xbox website, even possible while in game.

alowing users to create their own games and then even share them with the community(XNA stuff) although I think some other console tried that, but it failed miserably.

coming very soon is chatting with live messenger on the internet.
and later this year turning the 360 into a DVR, and also being able to chat with friends while watching TV.

yeah, not very innovative.

call them many things, but lacking innovation? c'mon man, take off the fanboy goggles. MS has done quite a bit for this industry, and it makes you wonder what would have happened without them, would there be as many feature now with the ps3? would they actually be putting serious work into making a good online service? would the console actually be 600$? would it be out yet?

[FeralPhoenix]

You act as if Sony is God or something....I understand if you believe Sony is the best and harsh criticism of M$ is fine too but every one of your posts are always trashing anything 360 related, same as Mart always bashing PS3, yet I remember you complaining about him.

I don't think anybody in their right mind believes that its OK that alot 360's had defects, most of which stem for the launch consoles, yes this is a big problem for M$ because no consumer should have to deal with it, but all you can do is hope that a company will take steps to fix the problem and repair and replace those affected....unfortunately when a new electronics product is released it is quite possible to have errors in the manufacturing process that can lead to problems, however it doesn't render the entire product being junk -No it means you have to figure out where you screwed up and fix it....and if you can do that, "IF" your product is worthy you can recover. -If you disagree with that then you how did Sony recover from the PS2 drive failures?, and are Sony's laptops garbage because of their battery recalls?.....hmmm, I guess in your mind Sony can do no wrong and M$ is evil. -I actually think this is just your Sony defense mechanism, its like a lil kid on the play ground repeating the same line over and over again, no matter what the topic is because he can't think of anything else useful to say when he's losing an arguement.

You talk about innovation but WHY?, when clearly in your mind if Sony does it its innovation, if M$ does it, its nothing special. I got a clue for you....99% of what Sony and M$ are doing this gen has been done before, they are simply improving on "old" idea's. It always comes down to the games...peripherals are nice little extra's but you have to have the (great)games to show them off and I don't presume to tell anybody what games are best for them but Sony biggest and most anticipated games are not new "innovative" IP's, and M$ is "somewhat" guilty of the same...but I'm not the one complaining about innovation....Hell Ninty is without a doubt the leader in innovation this gen when talking about playing games differently, but hey its not really my thing....so sometimes innovation can have a limited potential, but hey if Wii continues at this pace or leads the bunch maybe its what gamers were looking for.

Why does M$ success bother you so much?, I remember you used to cry when people said anything negative about Sony?

Did you know that even "IF" M$ maintains its market share lead, Sony is not "doomed" -right? and you'll be able to enjoy future FF games for years to come, right? -lol, Sony and M$ are companies...you don't have to fall in love with them, nor do you need to "bash" them to promote your agenda.

[Bigmac573]

SORRY!

[ApocalypseShadow]

you get acheivement points for a well thought out comeback.

this is the thing though.most of what you said doesn't benefit the average gamer who doesn't go online.and since most 360 gamers would say "it's all about the games."none of what you mentioned is really game related.what if i don't have a pc to stream content?

also the things you mentioned were already done on pc.so what you are saying is microsoft is using it's pc software skills and turning the xbox into a pc.i could do work on pc, chat,message and video chat on pc.that's not new.but i gave you credit because it is new for consoles.but how many of people who are not pc literate will care about those features?how many more people who aren't gamers will by an xbox for those features?

see,it's easier to add gamers when the features are in your face and built in or plug and play.the wii-mote was standard.the motion controller was standard.analog,dual analog,rumble,eyetoy,etc.the average joe has no clue how to set all that up you mentioned.nor do they care.they just want to play.and they want to see those innovations without having to look for it,download it,pay for it.

when the features benefit all,then it can be included as innovative.so microsoft may be innovative when it comes to doing the "already done that thing" on pc.and allowing community building with these features.but it adds no new gamers to the mix.only the ones that already use it benefit(hardcore gamers).

which ones would you say would add more gamers?and which ones won't.which ones can you create a commercial around?

the wii-mote?
the motion control?
the eyetoy?
bluray playback?

streaming media?
messaging in-game?
accessing the menu in-game?
adding music playback(didn't sell the xbox with that feature.it's not selling the 360 with this feature.)
watching tv.(i can already do that.it's called picture in picture).

but i'll give you credit though.microsoft has made some software innovations.even if it adds no new gamers.they need to step outside their comfortzone and take risks like sony and nintendo.

EDIT:as for you feral.why does my opinion bother you?i didn't say sony was perfect.they make many mistakes.but it hasn't stopped them from selling systems.if the ps1/ps2 were that broken,they would not have sold as many.or there would have been a recall.basically what microsoft should do for knowingly selling a defective system.

what controllers in the past had rumble built in?dual analogs?what games did you play on consoles in the past that were controlled by camera?you've played as long as i have.and it wasn't there.

also batteries have nothing to do with consoles.you didn't hit a nerve.but when that 360 breaks on you,then you will see that i was right.but i wouldn't care.i will just sit back and laugh while you hold microsoft up on a pedestal waiting for repairs.

[Xi]

In game music, friends messaging, achievement points, and streaming thank you.
Blu-ray, I don't care, SD t.v.
Motion control, sloppy.
Wii-mote, I got a wii.
eyetoy? psh, never used it on the ps2 wont use it on my 360 either, (unless I can get my face in a game somehow, or maybe video chat in game, mech-assault would be awesome with multiplayer and your teammates face on the side of the hud).

It's nice to know that microsoft is in it for the long run, and even though they're losing money they don't market games that don't exist, and out of the ordinary claims, like 4d graphics.

But why are you so defensive about the p$3 in a 360 article?

[Boink]

it's nice debating with someone who doesn't just say "your console sucks"

the wii-mote is very innovative, the question will remain as to wether or not it will actually survive since there does not seem to be a lot of innovative games making use of it(other than sports titles) but I intend to get a wii as well.

"the motion control?"
-seems pretty useless so far, no offence to sony, could have been great, but seems like a last-minute poorly implemented feature, that is likely to die off when rumble returns as developers are not really taking advantage of it.

"the eyetoy?"
-motion control games for all systems have been fairly lackluster to date. but it was still a great idea(but had also been done on the PC before sony did it on the ps2)

"bluray playback?"
-bluray and HDdvd are useless, no use for games, as far as for HD movies, digital distribution is cheaper way for the consumer to do it, and doesn't require more stupid disks that need to upgrade when the "next" format comes.

"streaming media?"
-good for gamers? maybe not, but it is great to have, and makes a super easy way for people to watch stuff on their TV as most of the PC ways to do this are annoying to setup, and usually not as good quality.

"messaging in-game?"
-VERY useful for gamers, nothing like inviting your buddy to play, especially if he is on his PC and you want him to come play.
accessing the menu in-game? again, very useful, change music, invite friends, send messages, leave feedabck.

"adding music playback(didn't sell the xbox with that feature.it's not selling the 360 with this feature.)"
-it's not a selling point for most, but usualy turns out to be a nice surprise.

"watching tv.(i can already do that.it's called picture in picture)."
-but can you message your buddy to tell him what time to go play online, or chat with them while watching something? does picture in picture let you record it as well? most DVR's are 300-400$ for a good quality one, and you a a great games console too, tough to beat that deal.

and since sony fanboys have taken away my bubbles because I don't think the ps3 is the second coming, I'm out.

cheers:)

[deathtok]

This is an interesting assessment and an extremely short article though. I said this in a previous comment about the X360's profitability when someone was making outrageous claims about how well the system is doing.

From a gamer's perspective the XBox 360 has done well. From a financial aspect it HAS NOT been profitable. The XBox was not profitable either. Microsoft is going to need a lot more than their current cap of 24 million from the last round for them to profit.

Somewhere down the line it's going to make a lot of business sense for two players in this game to partner.

[FeralPhoenix]

Your statements go along with your your extreme bias; you say:

"if the ps1/ps2 were that broken,they would not have sold as many.or there would have been a recall.basically what microsoft should do for knowingly selling a defective system."

-I specifically mentioned the PS2, and yes they were that broken, Sony had a lawsuit filed against them, they settled, but it was EARLY in the lifespan of the PS2, they fixed them, and they RECOVERED but of course unlike you I'm not in denial that M$ has had problems but I recognize they can be fixed, and of course PC batteries are irrevelant to you also, even though its revelant to the issue of all companies having a manufacturing defects.

Yes PS1 had problems too but they were relatively small....I notice you overlook the how well the original xbox performed in general over its life-span, but thats because it doesn't fit your agenda that "M$ is crap, buy a PS3 so I will feel better!" and then you take a "classic" fanboy tactic of stating completely false info with no proof because no one in their right mind would think M$ would knowingly release something defective when it would be alot less costly and embarrassing to fix it before hand. -lol, and you keep going on about eyetoy and blu-ray....now tell me about the games? not last gen, this gen...we're talking about this gen so tell me about all these innovative ideas that are currently pushing PS3 games beyond what I have on my 360?; then I will go get it now for my PS3.

[Edit]vvvv Nix, actually M$ haters have been predicting 360's doom 6 months before it was released, so the only change is "reality" setting in, and they are suddenly realizing that 360 is much more competitive than they assumed. Sometimes change IS a good thing.

[nix]

suddenly everyone is bad-mouthing MS now!

well... xbox fanboys - prepare to defend your precious console... PS3 guys have been doing it for the last 6 months. for MS, it's just started!

enjoy the change! q:

[Black Republican]

actually defending of the X360 began since day of launch

remember? ps3 fanboys sitting and wait for it so they said stuff like xbox 1.5
stuff like that

I don't really care, I am just saying it hasn't just started, it was since launch date.

I am unbiased and on this website I would have to say that the fanboys are equally biased on both ends.

But you do have to keep in mind that ps3 fanboys started bashing the xbox360 since launch and prior.

[Figboy]

you're basing your argument concering the losses Sony takes manufacturing PS3's on information we got last year, before the console launched.

since then, Sony has undergone quite a few cost cutting measures:

1.) they moved from 90nm Cell production, to the much cheaper, and efficient 69nm process.

2.) they removed the EE from PS3 hardware, which was adding to the cost of the unit.

3.) Blue laser diode problems have been ironed out, and are being mass produced now, and at cheaper cost.

4.) discontinuing production of the 20gig PS3 means there is now only one PS3 console being used. no need to have two different manufacturing plants pumping out two different versions of the console, saving them money.

5.) Blu Ray is doing rather well for itself ever since the PS3 launched. the more it entrenches itself as a profitable next gen HD format, the more money Sony will make, of course, but it will then become cheaper to manufacture the discs and components as it becomes more widespread.

i'd imagine that they are losing much, much less than $250 these days.

they're still losing money, don't get me wrong, but i'm sure it's closer to $150 or so. could even be less.

they are also offsetting costs with the PSN, and advertisement supported content. the creation of Home, for example, is probably their biggest potential cost recouping measure yet.

[Shaka2K6]

microsoft has yet to make a profit on thier gaming division the xbox cost them 4 billion $. lol

[CrazzyMan]

well, according to some news, they started making money on x360 since november 2006 with around 75$ per console.

but they didn`t make lower price for x360.
when xbox/GC came out, there were about 30 mln. ps2 sold by the end of 2001.

and now, with not droping price on x360 in november 2006, by the end of 2007 in best case they will probably sell by 2-3 mln. more x360 then ps3, and in worst, will sell less.
with droping price, by the end of 2007, they could have 20 mln. difference, but this would cost to them around 500 mln $.

M$ decided not to drop price.. so that means, they probably have some problems, because usually M$ kicks out it`s rivals with money, but not this time..

[schnodder]

poor microsoft

[JasonPC360PS3Wii]

Then I woke up out of my dream looked around at reality and noticed that the Xbox 360 was still selling and still in first and still had the most next gen experience of all the consoles and the most games available of all consoles.

For a second there I though I lost the best exclusives games line up, an un matched online service years ahead of any other console and a true HD gaming experience that still is unmatched by anything out (Gears of War)

I thought I lost a next gen console where I can start at $299 and get a next gen HD gaming console and build the ultimate gaming console by buying only things I want (CHOICE CHOICE CHOICE)

Wow what a horrible nightmare. Thank god reality kicked in and showed me the truth that the 360 is still and Microsoft is making a profit which means its (successful)

Maybe what the nightmare really means is Sony is in deep sh!t this round.

[schnodder]

sometimes your dreams come true ... just wait and see ;-)

[JasonPC360PS3Wii]

"just wait and see" thats what it allways is even after seven months.

[FCOLitsjustagame]

Both companies are apparently losing money. With MS its a financial analyst saying its a failure for Sony they are just laying off a bunch of people. This makes me sad and afraid. I do NOT want one console. Competition makes things better, one console means they can charge more and do less.

Which company is in better position to survive the current environment? Whos shareholders will bail on them first? I hope they both make it.

With MS everyone complains about the bad the quality control on the xbox 360. With Sony its their fancy new TVs (SXRD) that people complain about quality control on. I would think Sony's TV issue is a bigger money hole then MS xbox issue as far as who is in more trouble if all the complainers are right and the product tanks. It would also seem that MS is in a stronger position to survive any financial issues.

On the other hand Sony has been at the game thing a long long time and MS is the big target everyone seems to go after. Some people act like MS is a big greedy, dont care about the customer organization and Sony is some lowly little loving mom and pop shop. Both are the same, with the same goals. Both want to dominate the market and create a situation where everyone HAS to come to them. And guess what, Nintendo is like that too, they are just not anywhere near as powerful as the other two, but if they could be you bet your azz they would be. Best that none of them "win". Competition makes things better.