And bam, it comes out. The article was about Microsoft’s gaming division, including hardware and software sales. XBL has been profitable since nearly day 1, and the recent upgrade has gotten a bunch more people to sign up, due to Netflix and other VOD content.
The best part is, you are bitching about how consoles, as opposed to the PC are for the hardcore gamers with lots of time and money who need to buy the latest hardware and tweak their systems and not suited for people who just want to buy a box and play some games…
Every 360 with a hard drive comes with the headset (and you can even use those cheap cellphone headsets). You can rent games to try before you buy.
Sounds to me like you have some sort of crazy axe to grind, maybe you got laid off at MS or your boss was a dick, or you’re pissed at the world cause Vista has flaws and got jumped on, or whatever, but now you’re just being silly.
I’m sorry Halo 3 didn’t live up to your expectations, but I have a feeling that you are demanding a lot for something that costs so little.
The point I’m trying to make is that the Xbox 360 and the XBL service is one of the things that Microsoft has done absolutely. They’ve built it up by the sweat of their brow, without muscling out the competition. It’s a hit because they’ve done things right with the 360 and XBL.
XBL cannot be a failure (especially in light of the PS3 and Wii online services) and the system as a whole can’t be faulted for losing money (while Vista makes money) because it is making money hand over fist now.
Tomayto, tomahto. My point is simply that they need to improve the XBL experience, and making excuses for it ignores the flaws. I believe I’ve made my point.
MSN Groups won a bunch of best-of-breed awards back in 2000 or 2001, before Yahoo really had their momentum going. I don’t remember the details, but I do remember the parties they threw. It must have been 2001, because I remember it was right around the time that Jackson handed down the consent decree.
I hope you’re right. Believe it or not, Microsoft is my favorite software company and I want them to succeed.
Ha! Yes, XBL was profitable, as long as you ignore the amazing losses incurred by all its dependant partners (like the rest of the XBox division.) That’s like selling a car that won’t run by pointing out how awesome the radio is.
So first I’m a liar for having to wait five minutes for matchmaking, and now you can read my mind and tell me I have a crazy axe to grind because I hated my boss? Well, all my previous bosses are still good friends, and I’m still proud of Vista the way I would still love an ugly child, so none of those. But you’re right that I have an axe to grind. You know what my axe is? I hat software that doesn’t live up to expectations. I hate software that doesn’t improve the existing experience. They could solve all of this by adding a browser to the XBox, let people surf the net and find their own games and groups. There are developers who could do this over the weekend.
Oh, and: Costs so little? What planet are you on?
High speed connection: $50/month
XBox: $200 (mine was $400 when I got it two years ago, but I’ll concede the point)
Wireless headset: $50
Halo 3: $40. ($80 when it first came out, right?)
XBL subscription: $50/year
So at current prices, $490 to get started playing Halo 3. Plus a book to read while waiting for matchmaking to time out. Yeesh. Cheap? Do you pay the bills in your household?
Okay, I’m having fun with that one, although when they debuted their antispyware in beta, it was quickly reviewed as better than all the other antispyware providers on the market. The guys I know who worked there were sure proud of Onecare, and felt like they were giving their competitors a good run for their money, especially given how late to market they were. Sorry to see them closed down. I was a user.
“Hand over fist” is a BIG exaggeration. Look at their costs compared to their profits. At the rate they’re making money it will be years before the investment pays for itself, especially if profit turns flat, as it appears is currently happening. The risks they are running with these numbers are monumental. Think about it - they need to bring in 8 Billion a year to be profitable. How many businesses do you know that consistently bring in 8 Billion a year? For XBox to make the kind of money it would need to pay for itself and justify the risk, it would need to make more like $12b a year. At that, it would still be bringing in a tiny fraction of what products like Windows Client, Server, Office, SQL and Exchange bring in. And those products require a lot less overhead and a lot less risk. No, XBox needs to do much, much better to be really worth it by Microsoft standards.
And to be clear: I would very much like to see it happen. But it won’t unless they improve the experience. That last upgrade they did was a big step in the right direction.
well, if you want to talk about the cost just to get going, a headset can be bought for $20 new or about $6 used on amazon. halo 3 can be found in the same place used for under $30 and a 360 will run you $100. you must be kidding with the first one. Are you suggesting that anyone maintains a highspeed internet connection solely for their xbox? thats like factoring your phone bill into the cost of ordering pizza.
I used strictly new prices, which I think is fair. As for high speed 'net, well, I originally went high speed for PC gaming, so I factored it in as a gaming cost. Now that I’m on XBL I think it’s fair too. YMMV.
Of course I pay bills, don’t be a jerk. One of those bills is a yearly subscription to XBL. But you lose credibility when you inflate the prices like that.
You can’t count a high speed connection as a cost of XBL because no one gets an Internet connection just to play games. And if they do, it doesn’t matter what system they use. So it’s an irrelevant addition to the list.
$200 for an Xbox 360. OK. But a headset is included in the package. Making it wireless is your preference and is not required to go online.
Halo 3 costs $30 (less used, which is a valid option to console gamers) and never cost more than $60. (Please don’t come back with the Limited Edition price, because a lifesize Spartan helmet is not a requirement either).
XBL subscriptions can be easily had for $30/year. Amazon and other large retailers run specials several times a year and someone who’s counting every penny like you are would not pay $50 for XBL when you didn’t have to.
Xbox 360 profits are not flat. It’s general flucuations between major releases. Capcom lost money in 2008 because they did not have any major games scheduled for the year. But already in 2009 they have two of the biggest sellers of the year.
Secondly, $8 billion for the industry #2 is chump change. They easily hit that in 2008 (I think, I can’t find full year figures) and two new Halo games in 2009 will ensure they go over it in 2009.
And Nintendo, the #1 player in the game industry, routinely makes over $12 billion a year. It’s not unheard of and in the growing game industry it won’t look that impressive for long.
You don’t know as much about this industry as you think you know. 8 billion dollars is not chump change for anybody. Further, with XBox’s cost, 8 billion is the baseline they need to make. It’s the starting point. Think about that.
That may be what they cost at Amazon right this very second, but no one actually spends that much. And no one in their right mind would say a wireless headset is required. A wired headset isn’t even required for online gaming for that matter, it’s perfectly acceptable to play in silence.
I may not know everything, but I know a lot about the business side of the game industry. And one thing I know for sure is that one of the industry leaders will easily sell $8 billion worth of consoles/games/developer licenses/etc in 2009. Especially considering the fact that Halo Wars has already sold over a million copies and the Xbox 360 version of Resident Evil 5 is closing in on 3 million.
I agree with you about the headset, but you came late to the conversation. Upthread, you will see that **ivn1188 **made several statements to the effect that a headset is a requirement. If you’re going to take over his response, you really ought to take over his position, too.
As far as ‘no one paying that much’, well maybe not in your circle. Most people I know bought them at Best Buy, and ended up paying a lot more than the Amazon price. When you work twelve hours a day six days a week, you don’t have the time to shop around, you get it where it is most convenient.
Well, let me help you out. The industry may well bring in revenues of 8b or more, but it might also cost them 9b to get them. That means a loss. This is not unusual for them - they sold XBoxes at a huge loss for years. Estimates are that Microsoft lost $125 for every XBox they sold, and that was when they cost $400. They have had to drop prices to stay competitive with Sony and Nintendo before, and at any time they could have to do that again. Add that the XBox has a history of hardware problems (cost Microsoft an extra 1b in 2007) and the fact that they are way behind their competitors when it comes to market saturation (look at the lifetime-to-date total hardware sales here.)
Look at the numbers in that last link. Sony can ship a new game to the Playstation 2 and they have 41 million potential customers. XBox has a fraction of that.
So yes, XBox is currently making money, slightly more than it costs to sell the darn things. At any point, another hardware failure or competitive pricing change can wipe this profit out, and even if they don’t, it will take years just to pay back the billions Microsoft has already lost on the venture. But that’s okay, right? Because they are going to stay on a positive trajectory from here on out, manufacturing costs will continue to drop, and eventually they will be able to sell the consoles for practically nothing and still make a profit? Right? Right?
Wrong. Here’s why: XBox 720. In order to keep their competition from killing them, Microsoft will need a newer, more powerful generation of XBox. And in order to convince people like you and me to upgrade, they will need to make it a lot better than the 360, and make it cost efficient. See where this is going? They will have to sell the things at a loss again. Bye bye, Xbox profit margin! If this model continues, over a 15 year period XBox will have a couple years of small but respectable profits, and many more years of multibillion dollar losses. Does that sound like success to you?
The only way to get the kind of continued profit over the long term is to get a lot more subscribers. In order to get the kind of numbers they need to approach the install base of Sony, XBox needs new customers, above and beyond their existing install base. Halo 3 had the effect of bringing in a bunch of much-needed new customers. Do you really think Halo Wars or Resident Evil is going to do that? Or will they just keep existing customers?
By the way, the profit margin we keep talking about includes sales of Halo titles. Microsoft used to be able to claim that as profit, since Bungie was part of Microsoft. Since Halo 3 was released, Bungie is now its own entity, so Microsoft doesn’t get to claim their profits. Microsoft will still get a cut from the Halo titles - I don’t know how much, but something - but they won’t be able to claim the gross revenues are part of their own.
Yawn. I don’t give a shit about your assertion that the console model is DOOMED. I don’t even give a shit if Microsoft goes bankrupt.
All I am pointing out is that you, sir, are one of those crazy fruitcakes who is always right on the edge of going on some crusade against the latest wrong he has suffered.
Let me boil it down for you:
“ZOMG, I like totally spent nearly a thousand dollars just to play Halo 3, but I didn’t want to get used stuff because I work 90 hours a week! Then I played Halo 3 and got my ass kicked and this matchmaking sucks, because I just want a fucking PC. Xbox Live sucks ass and MS is going to DIE DIE DIE A THOUSAND TIMES DIES AARRRGHJRHRGHGhgH.”
Fine, you don’t like Halo’s matchmaking system. Cool. I pointed out that there are OTHER GAMES THAT HAVE YOUR PC STYLE MATCHMAKING SYSTEM. The problem isn’t with XBL, it’s with Halo 3. They ARE NOT THE SAME THING.
You’ve basically ignored everything everyone else has said and gone on a one-man posting rant about how you were wronged by an 18 month old game and this is why MS will curl up and die. Get the fuck over it already. Sell your xbox, cancel XBL, turn off your internet, and buy a gaming PC. If you haven’t done these things yet, then I submit you must be getting some value out of the damned console. Rent some other fucking games already, because your whole argument is based on one 360 title.
And yes, you are a douchebag if you play team games online without laying out the vast amounts of cash that a $10 headset will require. Whining about it just makes you even more of a ranting lunatic.
Typical response to having your crazy pointed out. Go ahead and explain how you’re smarter, older, have a bigger penis, a better job, drive a fancy car, and have connections with a puissant millennia-old society of assassins who are trying to recruit you into their ranks.
And I don’t need to play outside, I know how to use my XBL subscription.
