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Microsoft in "best position" to launch next-gen hardware

Joshua Seed   on 24 August 2009 - 23:39 · 32 comments & 7664 views

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Speaking with VG247, Todd Hollenshead, co-owner and CEO of id Software said that Microsoft is in the "best position" to release the first next-gen hardware.

"Somebody's going to do it, and – to me – probably the player who's in the best position to do so is Microsoft, because I do think they've recouped a lot of the costs of their console," said the exec, speaking at QuakeCon earlier this month.

"Maybe they'll push the [Xbox 360] to year six – maybe seven – but I've got to believe that they're already planning the transition now, and they have their eye on the ball as to what it is, because I think they see that there are some weaknesses that they can exploit with what's going on at Sony."

Hollenshead continued to say that current machines still have a long way to go.

"I think that how the industry handles this next console transition is crucial. Because the PS3 install base is still a problem for Sony and for PS3 developers; the 360 and PS3 are still at price points that are well above what you'd consider to be mainstream or mass market. We still have very large titles that sell a lot of units across the different platforms. So, as we see that unfold, I think that is going to be the key thing to watch," he said.

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#1 IceBreakerG on 25 Aug 2009 - 01:26
I'm personally happy that we aren't seeing anything about a new console right now. I've had my 360 for about 2yrs. I'd like to enjoy it for a few more years before a new console comes out. Hopefully the next xbox will have full backwards compatibility too. If so, that will ease the transition for a lot of people. I could give my current 360 to my sister and get the new one. But I agree with the article. I doube we'll see a new xbox until 2011 or 2012.
#2 Rolith on 25 Aug 2009 - 01:26
Really? because as crappy as it sounds, wouldn't it be the company with BOATLOADS OF CAPITAL in it's hardware division?
(3 replies) #3 jasondefaoite on 25 Aug 2009 - 01:33
Firstly, I doubt microsoft have recouped the money on the 360 given the financial hit they took with the RRoD 3 year warranty. Nintendo is probably in the best shape to launch a new console, but it would be debatable if that would be 'next-gen' or just catch up to the 360/PS3.
#3.1 vetneufuse on 25 Aug 2009 - 13:07
jasondefaoite said,
Firstly, I doubt microsoft have recouped the money on the 360 given the financial hit they took with the RRoD 3 year warranty. Nintendo is probably in the best shape to launch a new console, but it would be debatable if that would be 'next-gen' or just catch up to the 360/PS3.


Acording to MS, they at least broke even with hardware... MS is selling quite well and hardware costs for it have drastically declined over the past few years
#3.2 Magallanes on 25 Aug 2009 - 18:28
But MS earn about $20-$30 x console (10%-15%) and lose over $50 for every RROD. Since the RROD ratio is near to 50% then they are losing a big money cause it.

The business model of MS is to sell license (for developer / publisher), to sell service (microsoft points, live service and such) and to sell games.

Microsoft earn almost the same to sell a whole console rather a game (such Halo), the profit margin for every game is over 50%.
#3.3 M_Lyons10 on 25 Aug 2009 - 22:15
Magallanes said,
But MS earn about $20-$30 x console (10%-15%) and lose over $50 for every RROD. Since the RROD ratio is near to 50% then they are losing a big money cause it.

The business model of MS is to sell license (for developer / publisher), to sell service (microsoft points, live service and such) and to sell games.

Microsoft earn almost the same to sell a whole console rather a game (such Halo), the profit margin for every game is over 50%.


I don't know where you got that the RRoD was close to 50%... I've seen nothing close to that (The figure I saw was 10%) and the figure you posted sounds quite ridiculous.

Microsoft is doing pretty well financially, in fact their games division has posted profit the last couple of years, whereas Sony as a whole is posting huge losses...
(2 replies) #4 Vakerorokero on 25 Aug 2009 - 01:43
I think the hardware inside the xbox360 and the PS3 are at the right level in hardware now, in fact, the are still kind of expensive to think about the next console, which could end up being a $600 console again. Microsoft was already trying to control the living room so they will spend anything they need to do that. Look at the Netflix exclusive deal they got a few weeks ago blocking the Ps3 and Wii versions.

Nintendo won't release anything before the other 2 as they know they will be copied a couple years later. In fact Microsoft and Sony are just about to release their own Wii competitor controllers.

Microsoft did say they will be launching the Natal camera with a "new console" marketing plan.
#4.1 Quigley Guy on 25 Aug 2009 - 10:16
new "console marketing plan".
#4.2 yardman on 26 Aug 2009 - 17:40
Vakerorokero said,
I think the hardware inside the xbox360 and the PS3 are at the right level in hardware now, in fact, the are still kind of expensive to think about the next console, which could end up being a $600 console again. Microsoft was already trying to control the living room so they will spend anything they need to do that. Look at the Netflix exclusive deal they got a few weeks ago blocking the Ps3 and Wii versions.

Nintendo won't release anything before the other 2 as they know they will be copied a couple years later. In fact Microsoft and Sony are just about to release their own Wii competitor controllers.

Microsoft did say they will be launching the Natal camera with a "new console" marketing plan.


How is Natal a wii copy....? it's there is not damn remote/wand...Netflix CEO sits on Microsoft board..so am guessing he wants the xbox to do good...
(1 reply) #5 The Teej on 25 Aug 2009 - 01:49
Next-gen *at least* in 2012-2013, anything sooner is just stupid. While the 360 has been around 5 years in 2010 (and even then, that's late 2010), the Wii has only been out 4 years, and the PS3 would only be 3 and a half years in the UK, which is nowhere near a long enough time for a whole generation. All 3 consoles have a lot of selling power left, enough to take them into 2012 for sure.

With games taking so long, and it taking companies so long to get into profitable hardware, doing next gen in 2011 just doesn't seem right.
#5.1 Magallanes on 25 Aug 2009 - 18:31
Is plausible if you sell a backward compatible console (xbox360 and wii for example). Otherwise, its just a way to screw the developers and customers.

(4 replies) #6 Gotenks98 on 25 Aug 2009 - 01:52
It wont happen till the next dvd format comes out.
#6.1 virtorio on 25 Aug 2009 - 02:13
Gotenks98 said,
It wont happen till the next dvd format comes out.

I wouldn't be shocked is Microsoft relied totally on downloads for their next console.
#6.2 dagamer34 on 25 Aug 2009 - 02:17
Pfft, because of bandwidth caps, that's not going to happen. And Gamestop would throw a crazy fit.
#6.3 kl33per on 25 Aug 2009 - 03:20
I also think it will be download based. To alleviate reatailers, they'll do a steam like system where the retail copies of games include a disc that includes the downloaded data and a key to add the game to your account. This will also get around the issue of bandwidth caps.

And to Gotenks98, the next DVD format is already out, it's called Blu-Ray.
#6.4 Steffan on 25 Aug 2009 - 12:50
kl33per said,
I also think it will be download based. To alleviate reatailers, they'll do a steam like system where the retail copies of games include a disc that includes the downloaded data and a key to add the game to your account. This will also get around the issue of bandwidth caps.


They could also allow you to purchase the key at their stores and download the game when you got home, like what you can do with CDs on iTunes.
(2 replies) #7 Quikboy on 25 Aug 2009 - 04:06
It's too soon. Nobody want to buy a new video game console to keep up every time the company feels like it, only to see yet another next gen console pop up.
#7.1 cakesy on 25 Aug 2009 - 04:40
Quikboy said,
It's too soon. Nobody want to buy a new video game console to keep up every time the company feels like it, only to see yet another next gen console pop up.

Really? So you are still playing your NES then?

People want the latest and greatest... OK, maybe not now, since we have been in a recession, but things are getting better. If you don't think all 3 companies haven't been working on a new console for the last few years, then you are a dreamer. It is all about when.

And re-iterating a point above, I doubt Microsoft have made money on this division yet, but that is no trouble for them. They can keep plying billions in, until everybody else is out.
#7.2 Eddo89 on 25 Aug 2009 - 08:15
cakesy said,
Really? So you are still playing your NES then?

People want the latest and greatest... OK, maybe not now, since we have been in a recession, but things are getting better. If you don't think all 3 companies haven't been working on a new console for the last few years, then you are a dreamer. It is all about when.

And re-iterating a point above, I doubt Microsoft have made money on this division yet, but that is no trouble for them. They can keep plying billions in, until everybody else is out.


People don't stick with their NES. Nor do they want to jump buy a new console every other year either. Then that would be a waste on the console maker's part.
(2 replies) #8 scrimpy32 on 25 Aug 2009 - 05:31
As many hardware revisions microsoft has put into the 360 to stop it from overheating they still cant get this Generation hardware working .

The worst thing microsoft can do is build another console really ask yourself are you going to rush out and buy a new console from microsoft and get the RRODv2.0

Microsoft has a lot to learn
#8.1 E.Fahd on 25 Aug 2009 - 10:20
I thought the Jasper chip considerably reduced the problem
#8.2 jasondefaoite on 25 Aug 2009 - 12:10
E.Fahd said,
I thought the Jasper chip considerably reduced the problem

I believe that was the point. Jasper was the 4th(?) version of the 360. So it took 4 attempts to resolve the issue. So ... if we are back to revA for a next gen Xbox ... back to RRoD v2?

I would hope MS learned their lesson from the 360 though
#9 ufis on 25 Aug 2009 - 07:42
They will redesign or add on to the 360 before the next transition. Make this one better.
#10 ZeroHour on 25 Aug 2009 - 07:48
I think next gen wont really happen until 3d TV gets sorted out. Once a standard starts to appear I can see that being the major feature (along with Natal) for the next gen stuff but 3D is early days yet.
#11 pc_tool on 25 Aug 2009 - 12:35
IMO, Nintendo is in the best position to launch a new console. they have clearly won this generation and are sitting on mountains of cash. The jump to a HD console will be huge for them in much the same way as it was for Microsoft and Sony this generation. Moves from Microsoft and Sony will not be as noticable as the resolution is not going up (already at HD).

The thing i really do not get about Nintendo is how lazy they have been with an online strategy. They basically got a free pass this generation in regards to online and have been doing nothing; they have a lot of ground to cover to catch Sony and Microsoft in the online world.
#12 LaP on 25 Aug 2009 - 13:52
Just hope "they have their eye on" better hardware reliabilty too. No more RRoD please
(1 reply) #13 spacer on 25 Aug 2009 - 14:46
All I want is for the new xbox to: not RROD, run quieter, get rid of the power brick, use Blu-ray (or something better than DVD), and use standard HDMI outputs.

I don't care if it's "more powerful", just give me those things and I'll buy a new one.
#13.1 LaP on 25 Aug 2009 - 16:35
spacer said,
All I want is for the new xbox to: not RROD, run quieter, get rid of the power brick, use Blu-ray (or something better than DVD), and use standard HDMI outputs.

I don't care if it's "more powerful", just give me those things and I'll buy a new one.


Quieter is something they have addressed imo. The last model makes less noise and with the large HD you can install all the games you play a lot on it (except if you are a hardcore gamer of course).

But the RRoD is still around. Not as prominent as it used to be but even with the last model your chance to encounter a RRoD are rather high. I personally got it once only. I consider myself lucky. Some of my friends got 2 and even 3 RRoD.
#14 HalcyonX12 on 25 Aug 2009 - 17:27
If anyone should not be launching hardware early, it's Microsoft. Make sure you iron out all the bugs this time!
(1 reply) #15 toadeater on 25 Aug 2009 - 18:36
Next gen hardware... it's called a PC.
#15.1 Quigley Guy on 25 Aug 2009 - 22:47
fail
#16 Senlis on 27 Aug 2009 - 02:04
"Next gen hardware... it's called a PC."
It's not 'fail'. I have heard various analysts predicting that very soon 'console' systems will be specialized PCs. If you look at them now they already seem like specialized PCs.

"If Nintendo released a new system, they would have to catch up with XBOX360/PS3 in graphics/online"
The capabilities of their current system does not have any impact on the capabilities of a new system. It is their decisions that make a difference. They decided that HD (I really hate that term) gaming and expensive online was not beneficial to them. It seemed to work for them.
What I am trying to say is that it is not a foot-race. If Nintendo wanted to, they could acquire the greatest and latest graphics technology and put it in a new system. So could Microsoft and Sony.

Another thing to think about when it comes to new systems is how long we have been in 3D gaming. Nintendo, Sony and Sega re-invigorated the interest in their audience when they changed from 2D to 3D gaming (N64/PS/Dreamcast). That was after about 2 generations of Nintendo and Genesis 2D gaming. We are now in the third generation of 3D gaming, and I don't think a prettier new system is enough to capture the gaming audience's attention anymore. It has all been done before. That is why I think Nintendo is going the right direction with motion controls. It is not perfect, but it is also a new realm developers have to work in.

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