xbox 1 hasn't been manufactured for ~12 months

[Ika]

Originally posted by: theNEOone

Originally posted by: junkerman123
Nickels and dimes for MS, and overall I think their strategy to get into the market has been excellent. 5 years ago they weren't even in the market, now they have over 40% market share. Not too bad.

What's 3 billion for M$?

yup. i think the real success lies in how much of the market they've captured since their inception. they may not be extremely profitable right now, but they're sure as heck setting themselves up to be in the future.


=|

one of the main points of selling an xbox for less than it cost to manufacture it was to get market penetration. MS makes the most money on licensing and games, and because they got the xbox out to people, people bought games (over-priced games, at that), making MS lots of money.

 

[batmang]

Originally posted by: dethman
they made money on games.

and xbox live.

 

[Minjin]

Originally posted by: zephyrprime
What's surprising is that the xbox 1 hasn't been manufactured in over a year yet is still being sold. It shows that MS has a really poorly managed manufacting arm. Keeping inventory around for such a long period of time is a huge money loser. Whoever's responsible for that should be fired.

Microsoft isn't stupid. More than likely, they built up a nice inventory so they could convert the factories over to XBOX 360s. Probably cheaper to have XXXX number of XBOX 1 units on a shelf than it is to run two concurrent manufacturing lines. I'm sure dozens of accountants were responsible for that decision.

Mark

 

[mugs]

Originally posted by: theNEOone

Originally posted by: junkerman123
Nickels and dimes for MS, and overall I think their strategy to get into the market has been excellent. 5 years ago they weren't even in the market, now they have over 40% market share. Not too bad.

What's 3 billion for M$?

yup. i think the real success lies in how much of the market they've captured since their inception. they may not be extremely profitable right now, but they're sure as heck setting themselves up to be in the future.


=|

You think? Looks like Nintendo and Sony are fighting it out for the top spot now, Microsoft looks to come in last this time around.

And to all the people saying those losses do not include the money they made from games, yes they do. Microsoft lost billions overall including all things relating to the XBox. I believe Nintendo actually made money (quite a bit) on the GameCube. Same with Sony.

For starters, I don't think people bought nearly as many games as Microsoft was anticipating per system.

 

[wyvrn]

Originally posted by: Devistater

Originally posted by: dethman
they made money on games.

Yeah, but not much profit. Check the quartery financials from that division. They lost money almost every quarter.

Profit is what counts, not how much money you take in.

Wrong. Go take economics. They are growing a business and taking market share. Profit will come later.

 

[Devistater]

Originally posted by: wyvrn

Originally posted by: Devistater

Originally posted by: dethman
they made money on games.

Yeah, but not much profit. Check the quartery financials from that division. They lost money almost every quarter.

Profit is what counts, not how much money you take in.

Wrong. Go take economics. They are growing a business and taking market share. Profit will come later.

Well duh, thats what MS's strategy is.
The guy I was responding to is claiming that MS made money from games, I'm saying they may have raked in millions (like that $300 million from halo 2) from games, but the xbox division as a whole LOST money. Lots of it.
Of course MS is made of money so they can afford to toss $3 billion away in hopes of gaining profit later on.

Originally posted by: Injury
You lose money on the consoles.

You make money on $30 controllers, cables, microphones and monthly online subscriptions.

You are in the black with game sales.

You gain a strong customer base with lower prices.

You weaken the competition. XBox has more or less caused Sony to f' themselves over this time around. In an effort to out do Microsoft, they put a hefty price tag on a console with features that are unnecessarry.

Originally posted by: Skold
Prolly doesn't include royalties and licensing profits from 3rd party developers, etc.

Originally posted by: guoziming
One of the main points of selling an xbox for less than it cost to manufacture it was to get market penetration. MS makes the most money on licensing and games, and because they got the xbox out to people, people bought games (over-priced games, at that), making MS lots of money.

Sorry guys, the Division in question includes ALL xbox sales (including all ancillary hardware like controllers) and ALL game software sales (including xbox games, liscensing, etc) and even all PC games (and I doubt they lost any money on any recent PC games, else they wouldn't have made sequels to them recently, so that means profits from the PC games are lost under the weight of the larger losses from the xboxes).

And yes, MS is doing this for market penetration, but not for the xbox 1 sake, they plan to start making money with xbox 360 (or if not that, then the generation after that). To MS, $3 billion lost in getting market share and name recognization over 3 or 4 years is a drop in the bucket. Peanuts.

 

[MisterJackson]

Why didn't they just give them away free of charge then? 😛

 

[BoberFett]

Originally posted by: MisterJackson
Why didn't they just give them away free of charge then? 😛

Perception of value. Things given away are worthless.

 

[mugs]

Originally posted by: Devistater

Sorry guys, the Division in question includes ALL xbox sales (including all ancillary hardware like controllers) and ALL game software sales (including xbox games, liscensing, etc) and even all PC games (and I doubt they lost any money on any recent PC games, else they wouldn't have made sequels to them recently, so that means profits from the PC games are lost under the weight of the larger losses from the xboxes).

And yes, MS is doing this for market penetration, but not for the xbox 1 sake, they plan to start making money with xbox 360 (or if not that, then the generation after that). To MS, $3 billion lost in getting market share and name recognization over 3 or 4 years is a drop in the bucket. Peanuts.

I kind of hope they do well this time... I'd much rather see the "rankings" be Nintendo -> Microsoft -> Sony than Sony -> Microsoft -> Nintendo. From what I've played on the Xbox 360 I really like it, especially the controller. I've never been a fan of the DualShock controller style, the analog sticks just don't feel right to me.

 

[neutralizer]

Originally posted by: mugs

Originally posted by: Devistater

Sorry guys, the Division in question includes ALL xbox sales (including all ancillary hardware like controllers) and ALL game software sales (including xbox games, liscensing, etc) and even all PC games (and I doubt they lost any money on any recent PC games, else they wouldn't have made sequels to them recently, so that means profits from the PC games are lost under the weight of the larger losses from the xboxes).

And yes, MS is doing this for market penetration, but not for the xbox 1 sake, they plan to start making money with xbox 360 (or if not that, then the generation after that). To MS, $3 billion lost in getting market share and name recognization over 3 or 4 years is a drop in the bucket. Peanuts.

I kind of hope they do well this time... I'd much rather see the "rankings" be Nintendo -> Microsoft -> Sony than Sony -> Microsoft -> Nintendo. From what I've played on the Xbox 360 I really like it, especially the controller. I've never been a fan of the DualShock controller style, the analog sticks just don't feel right to me.

Agreed. I've always like the Xbox controllers over the PS controllers. They're more comfortable and fit better.

 

[sygyzy]

Are you a part time analyst in addition to your full time job as a rocket scientist? This is no secret. Guess what? Sony lost money on every PS2 made too. The amount of work you went through to prove what they have publicly admitted over and over, is impressive, yet sad at the same time.

 

[mugs]

Originally posted by: sygyzy
Are you a part time analyst in addition to your full time job as a rocket scientist? This is no secret. Guess what? Sony lost money on every PS2 made too. The amount of work you went through to prove what they have publicly admitted over and over, is impressive, yet sad at the same time.

*sigh*... Many people knew Microsoft lost money on the systems, what many people clearly did NOT know is that the games were not enough to offset the loss on the systems. Your mentioning the PS2 indicates that you also missed that distinction.

 

[daniel1113]

MS also went from 0% market share to approx. 25% market share, and this number is steadily rising. From a business perspective, MS is in a fantastic position within the gaming/entertainment market. If you understand basic economics, you will know why.

 

[SlitheryDee]

Gotta spend money to make money. 😉

Seems brand recognition was the best they could hope for with the 1st gen console when going up against such deeply entrenched competitors. In that goal the xbox was a runaway success. It is a fact after all that the xbox is now a household name.

 

[darkswordsman17]

Where are you pulling the $3 billion from? Microsoft themselves have stated that they lost close to $1 billion total with the original Xbox.

 

[mugs]

Originally posted by: daniel1113
MS also went from 0% market share to approx. 25% market share, and this number is steadily rising. From a business perspective, MS is in a fantastic position within the gaming/entertainment market. If you understand basic economics, you will know why.

According to all of the polls I've seen, Microsoft is looking to come in third this time around (by a pretty large margin) in a market that has historically only supported two main competitors. So... I wouldn't call their position "fantastic."

 

[FallenHero]

Originally posted by: mugs

Originally posted by: daniel1113
MS also went from 0% market share to approx. 25% market share, and this number is steadily rising. From a business perspective, MS is in a fantastic position within the gaming/entertainment market. If you understand basic economics, you will know why.

According to all of the polls I've seen, Microsoft is looking to come in third this time around (by a pretty large margin) in a market that has historically only supported two main competitors. So... I wouldn't call their position "fantastic."

You really think a ton of people are gonna buy a 700 dollar PS3? I'd like to see your evidence for your assertion good sir.

 

[swtethan]

Originally posted by: FallenHero

Originally posted by: mugs

Originally posted by: daniel1113
MS also went from 0% market share to approx. 25% market share, and this number is steadily rising. From a business perspective, MS is in a fantastic position within the gaming/entertainment market. If you understand basic economics, you will know why.

According to all of the polls I've seen, Microsoft is looking to come in third this time around (by a pretty large margin) in a market that has historically only supported two main competitors. So... I wouldn't call their position "fantastic."

You really think a ton of people are gonna buy a 700 dollar PS3? I'd like to see your evidence for your assertion good sir.

im buying the ps3


😀

 

[mugs]

Originally posted by: FallenHero

Originally posted by: mugs

Originally posted by: daniel1113
MS also went from 0% market share to approx. 25% market share, and this number is steadily rising. From a business perspective, MS is in a fantastic position within the gaming/entertainment market. If you understand basic economics, you will know why.

According to all of the polls I've seen, Microsoft is looking to come in third this time around (by a pretty large margin) in a market that has historically only supported two main competitors. So... I wouldn't call their position "fantastic."

You really think a ton of people are gonna buy a 700 dollar PS3? I'd like to see your evidence for your assertion good sir.

I think they'd be crazy to, but people paid more than that for a 360. 😉

One poll in particular from a popular gaming website had 65% saying they'd buy a Wii, 45% buying a PS3 and 30% buying a 360. Now, I think all of those numbers are a little high, and obviously they don't represent the general populace.

360 software sales dropped substantially last month.

 

[91TTZ]

Microsoft bought their way into the console market. They went from zero to having a major presence.

Their plan worked.

They said from the beginning that the first 2 consoles aren't going to be profitable. They're looking towards the future for the profit, they're thinking long term.

 

[ballmode]

i wonder how nintendo did

 

[ShadowBlade]

why does anyone care? at least theyre keeping their price for consumers down

 

[preslove]

Originally posted by: sygyzy
Are you a part time analyst in addition to your full time job as a rocket scientist? This is no secret. Guess what? Sony lost money on every PS2 made too. The amount of work you went through to prove what they have publicly admitted over and over, is impressive, yet sad at the same time.

The ps2 became profitable per system by the 12 generation or so.

That said, I don't believe what unscientific polls on gaming websites tell me about large scale market behavior.

 

[eelw]

Originally posted by: FallenHero

Originally posted by: mugs

Originally posted by: daniel1113
MS also went from 0% market share to approx. 25% market share, and this number is steadily rising. From a business perspective, MS is in a fantastic position within the gaming/entertainment market. If you understand basic economics, you will know why.

According to all of the polls I've seen, Microsoft is looking to come in third this time around (by a pretty large margin) in a market that has historically only supported two main competitors. So... I wouldn't call their position "fantastic."

You really think a ton of people are gonna buy a 700 dollar PS3? I'd like to see your evidence for your assertion good sir.

Unfortunately, tons of people will still buy the PS3. But Sony will loose huge market share this next gen. No way in hell are they selling 90+ million consoles this time around. I wouldn't be surprised to see all 3 consoles selling each in the 35-45 million mark.

 

[jlmadyson]

Originally posted by: mugs

Originally posted by: daniel1113
MS also went from 0% market share to approx. 25% market share, and this number is steadily rising. From a business perspective, MS is in a fantastic position within the gaming/entertainment market. If you understand basic economics, you will know why.

According to all of the polls I've seen, Microsoft is looking to come in third this time around (by a pretty large margin) in a market that has historically only supported two main competitors. So... I wouldn't call their position "fantastic."

I've seen almost nothing of the sort, almost every major analyst I have read lately has MS on the top at least until 2008. Beyond that pegging them in 2nd but a very close second to Sony. The latest Merryl Lynch report actually has them on top this next round. Time will tell, the only polls I have seen as of late have been the Japanese lending a lot of support to Nintendo post E3. As far as game attachment rate per console, the 360 has done very well up to this point 4-4.5 games per console the last time I checked.