Nightz Posted March 22, 2007 Share Posted March 22, 2007 don't shoot the messenger :p long read i know, but i'd like to see how neowinians will defend their beloved 360 :) Loot: Redmond, We Have a Problem, Or, What's Wrong With the Xbox 360"You're not the champ until you beat the champ." The entire staff of Level Up is seated in the Manhattan speakeasy Little Branch, opposite two Microsofties--one former, one current. Several drinks into a conversation about the console wars, Former has just asked us, at what point in the cycle do you think you're going to declare Microsoft the winner? Which prompts the rejoinder that opened this post. We proceed to inform him that back in 2001, as we were in edits on our story about the launch of the first Xbox, there was a line that had been cut from our piece that we wished had remained, because it would have been a very prescient quote to have on the record. The quote? "Xbox will be Microsoft's Vietnam." At this point, Former becomes impassioned. That's not fair, he says; we always saw this as a long-term venture. To which we reply that we were talking about the original Xbox, and while other divisions of the company throw off more profits in a single quarter than the entire $5 billion or so lost in the home and entertainment division to date, the fact remains that, as we take-our-word-for-it predicted, the Xbox group has been spectacularly unprofitable for Microsoft. Hence, our heretofore unpublished Vietnam analogy. The rest of the night is a blur, but we digress. Here at Level Up, we pride ourselves on giving good quote when asked, and our quote in yesterday's issue of USA Today that "the PS3 is sucking wind right now," seems to have delivered the goods, as evidenced by its coverage on the Internet and the emails coming across our transom. We've known USA Today's Mike Snider for several years, and have tremendous respect for his work. However, we also try to be holistic in our analysis, and there were some opinions that we shared about Sony's competitors that didn't end up in the finished copy. There's nothing sinister in Snider's decision; we completely understand that the focus of his published story was the PS3's woes, which we ourselves addressed yesterday. But we thought we'd take this opportunity to provide a more comprehensive look at the February NPD numbers for the U.S. market, and explain to Former why we don't expect to proclaim a Microsoft victory at the end of this console cycle. Microsoft entered the month of February with many advantages. The Xbox 360 had a 12 month head start on its rivals. There's plenty of stock on store shelves. It has far more games available than either PS3 or Wii, and several of those games are available for $20 to $30. And perhaps most importantly, it has a $299 SKU that's priced $200 cheaper than the least expensive PS3, just $50 more than the Wii, and at exactly the same price point the PS2 occupied when it obliterated its competition in 2001. Yet despite those considerable advantages--and even though five of February's top ten 10 best-selling SKUs were on Xbox 360--the best Microsoft could do was outsell the higher-priced PS3 by 101,000 units, while succumbing to the supply-constrained Wii by 107,000 units. That's not the kind of performance that portends market dominance. Nor is cutting your shipment forecast through June 2007 from 13-15 million to 12 million. But Microsoft has done that too. The reason that we spent much of last fall discussing the sluggish Xbox 360 sales with our interview subjects is because we were genuinely mystified as to why it wasn't doing better, and, more importantly, why wasn't the steadily growing number of hit titles causing a commensurate growth in the installed base? The signs of this weakness have been apparent for months, yet it went largely undiscussed--a notable exception was the forum-dwellers at NeoGAF--and when we queried industry veterans about it, they seemed genuinely mystified and would struggle to offer explanations. In this vacuum of analysis, statements like the following went pretty much unchallenged. At this year's Consumer Electronics Show, Microsoft general manager Chris Satchell told GamesIndustry.biz, "We've sold 10.4 million [Xbox 360s], but the stat you may not have heard is that over half of those sales are from people that didn't own an Xbox 1." That statement sounds impressive--until you realize that at that point in time, Xbox 360 sell-through was still trailing that of the original Xbox. If Microsoft is getting all of these new customers--and we have no reason to doubt the veracity of Satchell's statement--shouldn't their installed base have been 1.5x that of the original, as opposed to lagging behind? (Please don't use pricing as an excuse; as we pointed out above, there' a $299 SKU that's been available since launch, and if PS2 was able to become a runaway success at the same point in its lifespan at that price point, price alone can't explain the sales gap.) In other words, if you look at the half-empty part of the glass Satchell raised, there are clearly a large number of Xbox 1 owners who haven't yet bought an Xbox 360. Why? Part of the problem is that in the absence of a new Halo game, there's been a slower-than-expected conversion of Xbox owners to Xbox 360. As of last fall, half of the people playing Halo 2 were doing so on the original Xbox, not the Xbox 360. That's why the upcoming Halo 2 map pack will only work on Xbox 360--Microsoft needs to force recalcitrant Halo-lovers to buy their new machine. Another challenge for Microsoft may be that most Xbox 1 units sold at $199 or less; in fact, when Halo 2 shipped in November of 2004, the price of the Xbox had been set at $149 for seven months. By contrast, PS2 held price at $299 for its first two Christmases, and $199 for the subsequent holiday. So despite the hardcore nature of many Xbox aficionados--i.e. they love shooters and they buy a lot of games--many of the gamers that made Halo 2 a phenomenon could conceivably be even more price-sensitive on the hardware side than their PS2 counterparts, and thus perceive even the $299 Core as either too expensive and/or too lacking in value compared to the $399 model. Microsoft is no slouch when it comes to market research, and if our above hunch is correct, it could finally explain why the company opted for a two-SKU strategy even though hardcore gamers loudly derided it. The final reason why we don't expect to crown Xbox 360 the champ when all is said and done is somewhat tautological: until we see the evidence that it's capable of reaching the true mass market the way that the PS1 and PS2 did, we won't believe that it can. What the original Xbox proved, and the Xbox 360 is proving even moreso, is that Microsoft has learned how to strip-mine the hardcore gamer. (The evidence? Gears of War is one of the biggest console hits in recent history, yet the Wii is kicking the 360's ass and taking its name. And as we stated earlier, even before the Wii and PS3 launched, the 360 was steadily producing one or two hits a month, yet monthly hardware sales were consistently below 300,000 units, and were often closer to 200,000 units.) Based on the concentric circle theory of product dispersal--at the center are a smaller number of hardcore gamers who buy lots of games; on the outside are a larger number of ultra casuals who buy fewer games, with a number of audience segments in between going from more hardcore to less hardcore--the further away you get from the hardcore center, the less evidence we've seen of Microsoft's ability to reach those broader, more casual audiences. The generals at Microsoft Game Studios have sent into the fray soldiers as varied as Fusion Frenzy, Voodoo Vince, Grabbed by the Ghoulies, Kameo and Viva Pinata. None of them got the job done. By contrast, Sony has brands developed in each of three major territories--North America (Jak, Ratchet & Clank, Sly Cooper, ATV Offroad Fury), Europe (SingStar, Buzz!, EyeToy) and Japan (Gran Turismo, Hot Shots Golf, Ape Escape)--with demonstrated appeal to broader audiences: children, women, casual gamers. That's why the Game Developers Conference introductions of Home and LittleBigPlanet were so important: they show that Sony continues to develop products that can appeal to the parts of the market that are necessary to drive hardware sales past 26 million (Xbox 1) to well over 100 million (PS1 and PS2) once they get within striking range on the pricing. The burden of proof is on Microsoft to prove that it can deliver products with that kind of appeal, and in the seven years since it stepped into the ring, it has yet to do so. The folks at Microsoft would like to believe that, their worse-than-ever performance in Japan notwithstanding, the only ceiling that existed on the Xbox 1's sales stemmed from their late entry to the market. They may well be right. But while Microsoft has taken advantage of its first-mover advantage--most notably the establishing of Xbox 360 as third party developers' base platform; much-improved third party support from Japanese developers; the peeling away of Sony's historic timed exclusivity on the Grand Theft Auto franchise; and the positioning of Xbox Live and Xbox Live Arcade in a way that for now neutralizes the PR value of Sony's free but less-feature-rich online service--we suspect that there are a number of other challenges that will keep prevent the 360 from breaking into the mass market in the way that the PS2 did. And the numbers thus far back us up very clearly on this point. The worst case scenario for Microsoft, then, is one in which the Xbox 360's bid for the mass market is blocked by the Wii for the next two to three years, at which point the aging and underpowered Wii gives way to a cheaper-than-it-is-now PS3 with a selection of AAA titles that's far wider than what the PS3 has at the moment; new installments of Playstation's own popular and casual-leaning games; and a slew of new franchises from Sony's much-larger studio operation. The best case scenario won't manifest itself until Xbox 720, but there is an interim scenario that we've been trying out for size on a few people in the industry--it contains a theory that we think best explains the the current overall state of the industry--and once we have it nailed down, you, Dear Reader, will be the first to know. http://ncroal.talk.newsweek.com/default.asp?item=533168 Link to comment Share on other sites More sharing options...
+dnast Subscriber² Posted March 22, 2007 Subscriber² Share Posted March 22, 2007 The 360 isn't reaching the mass market because it doesn't have a mass market price. Most people don't seem to be interested in the Core, and even though the $400 price tag is understandable, there are just a lot of people that just aren't willing to spend that much on a "toy" - especially parents. I think we'll see some impressive sales in Q4 2007 if there's a $100 price drop by the time the big guns like GTA4 and Halo 3 come out. The large number of potentially AAA games coming out this year will also make people feel more secure about their purchase. Link to comment Share on other sites More sharing options...
slickice11 Posted March 22, 2007 Share Posted March 22, 2007 Agreed, without a price drop or more more AAA games the 360 is really only worth the price tag if you get full use out of it by using it to game and as a MCE extender. Link to comment Share on other sites More sharing options...
SonComet Posted March 23, 2007 Share Posted March 23, 2007 I dunno. In my case the 360 was less than interesting until Gear of War came out. But I am not a fan of first person shooters at all so that might explain it. I like platform games, rpgs, racing games, and action games. So far the games that have interested me on the 360 but failed to push me over the edge to buy one are Gears of War and maybe Blue Dragon and Lost Odyssey, and that's all I can think of right now. Ever since Blue Dragon was announced I knew I was going to want to get a 360 if the reviews were good enough. And still, that would make only two games that are seriously interesting to me. And all the rumors and rumblings about an hdmi enabled console, which I would very much prefer, don't help in making me pull the trigger either. I think if I was a huge fps and war game fan that the 360 would be a lot more interesting to me. As it is right now I only own and actively play a Wii, PS2, and GCN. However, I plan on buying a PS3 (before april so that I can have the ps2 hardware for backwards compatibility) for all of Sony's 1st and 2nd party properties and all the 3rd party games I want. I just wish microsoft would release a substantial number of first and second party titles that were truly interesting to me. I think Rare was a big win for them, that is once Rare actually releases something people recognize. If the new Banjo Kazooie turns out to be great I think that Gears of War, Blue Dragon, Banjo Kazooie, and maybe Lost Odyssey will finally be enough to make me bite. Until then I can get all the 3rd party games I want on other consoles that have first party games that I simply can't go without. Link to comment Share on other sites More sharing options...
DrCheese Posted March 23, 2007 Share Posted March 23, 2007 Talking about the 360 not taking more market share... I think the days of a single console dominating the market is over, at least for this generation at the moment. I remember Spartan_X saying that they had predicted a 30/30/40 or a 35/35/30 split of the market in the long term. This is good in that more competition is usually a good thing, bad that we have to buy all 3 consoles to play. Link to comment Share on other sites More sharing options...
Shadrack Posted March 23, 2007 Share Posted March 23, 2007 I think that Microsoft's best possible angle with the 360 is in tight integration with Windows PCs which is already a global domination of theirs. Link to comment Share on other sites More sharing options...
Ruciz Posted March 23, 2007 Share Posted March 23, 2007 Its not about the platform, its about the content and longevity of it.. Sony made an amazing PS3 machine technically - but in reality its nothing as theres no decent content for it. Microsoft is doing decent, but live subscription will ruin them in the future, and nintendo needs to re-define its controls and incorporate other useful features like movie playback and take advantage of what their system can do visually. Microsoft MCE computer + 360 + 100mbps router/crossover cable = amazing PVR setup.. least for those who don't have a computer for their TV. Link to comment Share on other sites More sharing options...
Spielo Posted March 23, 2007 Share Posted March 23, 2007 I think that Microsoft's best possible angle with the 360 is in tight integration with Windows PCs which is already a global domination of theirs. Personally, that doesn't suit me at all. I'm planning to buy a 360 soon, but I'd like it to be able to talk to my MacBook, playing the music in my iTunes library in games. I don't think the games console I own should have any say in what operating system I use on my computer. Link to comment Share on other sites More sharing options...
Hupp Posted March 23, 2007 Share Posted March 23, 2007 my friends that have 360s are into sports games or FPS. The ones who don't have one yet are into RPGs and are just sitting on the fence until blue dragon and two worlds Link to comment Share on other sites More sharing options...
Brandon Live Veteran Posted March 23, 2007 Veteran Share Posted March 23, 2007 Personally, that doesn't suit me at all. I'm planning to buy a 360 soon, but I'd like it to be able to talk to my MacBook, playing the music in my iTunes library in games.I don't think the games console I own should have any say in what operating system I use on my computer. The 360 uses the open standard UPNP to stream content from your computer - and it works fine with a Mac (with the right UPNP sharing software). The only limitation you'll hit is the inability to stream DRM'd iTunes content, but that's Apple's problem, not Microsoft's. Link to comment Share on other sites More sharing options...
Sethos Posted March 23, 2007 Share Posted March 23, 2007 "What's wrong with the 360" The noise >.< Link to comment Share on other sites More sharing options...
Nightz Posted March 23, 2007 Author Share Posted March 23, 2007 "What's wrong with the 360" The noise >.< lol +1 :laugh: Link to comment Share on other sites More sharing options...
BajiRav Posted March 23, 2007 Share Posted March 23, 2007 One word : Zephyr Two Words : Halo 3 I would hazard a guess that many people are holding back right now expecting a hardware revision. And Halo3 will open flood gates, if there ever was a doubt. :p Link to comment Share on other sites More sharing options...
Spider_Man Posted March 24, 2007 Share Posted March 24, 2007 This is good in that more competition is usually a good thing, bad that we have to buy all 3 consoles to play. You don't have to buy all 3. Most devs are being smart these days and we're putting our games on all 3 consoles. Why? Because it's better to allow everyone to play rathjer than the only few select people who own a certain console. Granted, if you want to play certain Wii games you have to own a Wii and a very small few PS3 require that you own a PS3 and some 360 games require that you own a 360, but the fact is that most of the games people want to play are on all 3 or at least 2 of the consoles. I think Nin was smart about releasing the kind of console they did, it allows them to gain more market share because the other copnsoles do not have the abilities the Wii has. Link to comment Share on other sites More sharing options...
Ryne Posted March 24, 2007 Share Posted March 24, 2007 For me, there are only 2 things wrong with the 360. 1. The noise. 2. The one I constantly bitch about (:p): The variety of games, or lack thereof. If I ever criticize the 360, it's about one of these two. The system itself (except the sound), Xbox Live, the services are all great. The variety of games is just not there yet. Great system for shooters and sports games (Xbox Live makes this system a better choice for sports games, and rumble IMO). Everything else? Not so much. Link to comment Share on other sites More sharing options...
GuJu Posted March 24, 2007 Share Posted March 24, 2007 I think Live is messed up its just me... I hate the multi player in all the games i don't want match making i want to pick the servers and chatting with freinds and contacting them is frustrating because of the NAT thing...took forever to get it to open and still cant chat with my friends Link to comment Share on other sites More sharing options...
Shadrack Posted March 24, 2007 Share Posted March 24, 2007 Personally, that doesn't suit me at all. I'm planning to buy a 360 soon, but I'd like it to be able to talk to my MacBook, playing the music in my iTunes library in games.I don't think the games console I own should have any say in what operating system I use on my computer. I have a Mac and it works just fine with m XBox 360 once I got a cool little program called Connect 360 up and running ;). iTunes library works flawlessly (except for DRM'd songs from ITMS). Anyway, your comments don't degrade mine as it is hard to refute that Windows is the dominant OS worldwide. Link to comment Share on other sites More sharing options...
TokyoKiller Posted March 24, 2007 Share Posted March 24, 2007 Personally, that doesn't suit me at all. I'm planning to buy a 360 soon, but I'd like it to be able to talk to my MacBook, playing the music in my iTunes library in games.I don't think the games console I own should have any say in what operating system I use on my computer. Every company does this, making their products connect and work together to provide an even better experience for example the PSP and PS3. Microsoft uses its Windows platform to create more uses for the Xbox 360 which is a great multimedia device as it is. Link to comment Share on other sites More sharing options...
skase Posted March 25, 2007 Share Posted March 25, 2007 I cant believe no one has ever complained about the GUI. Its microsoft all over. Everything is everywhere!! I love the blades, but there is massive waste of space EVERYWHERE. Common tasks are hidden away... Am I the only one? Link to comment Share on other sites More sharing options...
Huleboeren Posted March 25, 2007 Share Posted March 25, 2007 I cant believe no one has ever complained about the GUI. Its microsoft all over. Everything is everywhere!! I love the blades, but there is massive waste of space EVERYWHERE. Common tasks are hidden away...Am I the only one? EXACTLY! and the marketplace does not give you enough info about what you going to download. and there are too many categories - it seems like a content-rich place but its just duplicates all over :p It all seems too optimized for SDTVs - GIANT letters all over :( all in all - Id like a seperate GUI for SDTVs and HDTVs Link to comment Share on other sites More sharing options...
+dnast Subscriber² Posted March 25, 2007 Subscriber² Share Posted March 25, 2007 ^ I don't mind the GUI, personally. Having the option to choose my text size would be good enough for me. Link to comment Share on other sites More sharing options...
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