I think we have discussed the XBox previously on this thread, but since the news has been out for so many months I don't know the exact message numbers to send you to read those threads. The Xbox was discussed for quite some time over on the Fool's GG thread over the course of the past year. If you type in Xbox on that message board all the threads related to it will pop up.
Regardless, we are talking about next generation gaming in terms of the market. No need to argue that the gaming market is here to stay and that the generations of equipment and games available over the years continue to draw consumers into the fold - as they will in the future. We see the same type of next generation product technology driving consumer demand in other electronics markets as well (video, personal computer, digital cameras, scanners, printers, cell phones, etc...) which leads to every next generation of hardware allowing the software to be bumped up and move through improved generations as well. Is it a big undertaking for Microsoft? Sure. You better believe it. Can they afford it? Look at their balance sheet.
no, the Xbox is superior--it has a hard drive and Ethernet port for starters, as well as a processor that's like 3 times as fast and a hot graphics chip from Nvidia (part of the reason for the delay). hey, it should be better--they had an extra 18 months to get it to market.
Although I'm sure you are aware of the innards, others can view the particulars of the consoles at these links:
From July 2001 and January 2001 (outdated information) comparing Xbox, PS II and Game Cube:
videogames.about.com
videogames.about.com
Links to all matters Xbox:
howstuffworks.com
Games for Xbox:
videogames.about.com
Sony PS II:
howstuffworks.com
I didn't provide a link for the Game Cube, but plug it into the search at "How Stuff Works" to find any information one needs.
but who cares how good the box is, what matters is the software. will they have hit titles only on the Xbox? maybe, but i doubt it at first. the addressable market will be on the order of 1 or 2 million, instead of 20 million for Sony. MSFT are going to totally miss the holiday season in Japan, a crucial market. plus, it may take time for developers to learn the system. but i suspect MSFT is not looking for an overnight victory.
I imagine a lot of people and companies care about how good the box is because it is only through the next generations of hardware that software can be beefed up to improve and make the most use of the new hardware. One feature rich set leads to the other. That tends to lead to brand new 'hit titles' that surpass previous 'hit titles'. We can't exactly say that Sony's PS II made it out on time either (according to their original release schedule), yet Christmas is not the only time the hardware and the software is purchased. Xbox launch is in 9 days - so it won't "totally" miss this holiday season except as you point out - in Japan. If the gadget is really good and improves gaming enough to create demand, I think it is fair to say that demand will be there in Japan as electronic "hits" tend to do very well in that market. Last holiday season it was difficult (and in some places impossible) to score a PS II in Europe and in America. Considering there are over 150 game makers currently designing games or committed to designing games for the Xbox, I find it hard to imagine they are not learning the system as they design those games. PS II feature rich titles were in short supply at the beginning as well. Not to mention, Microsoft holds a lot of clout and game makers are probably drooling.
howstuffworks.com
i saw that blurb today on Reuters. they're saying a billion in losses by 2004. but that assumes it is a success. if it flops, then the losses could be much much larger.
Probably fruitless to predict the outcome or argue with the reality that launching a new product or business involves risk. It will unfold no matter what one predicts. Flip or flop - it is too early to tell at this point how the console and platform will be accepted and how Microsoft leverages their power with the product.
it doesn't make sense, and if that is their angle, then they're stupid. all i can think is that they're not that stupid, so there must be another angle. like finding a new, massive market where they can have proprietary control over the platform and collect royalties in the multi, multi billions a few years out. besides gaining entre to your living room.
Now you're thinking forward. ;-)
I think it would be difficult to consider such a product taking risk venture without thorough thought process by management. Based on Microsoft's history, we can assume that plenty of study went into the project as to the longer term rewards. As the Internet delivery of content continues to unfold, think of some of the possibilities of delivering software to a platform that doesn't involve going to the store and buying a disc. Or a portal of gaming competitions, leagues, prize money or what have you. Plenty of possibilities for this generation and future generations of Xboxes.
The gaming market has never been a one player market. So I don't see one platform usurping all others to the point that only one platform exists. However, continued study of how the value chain for the game makers plays out over the future as consumer demand for the particular platforms will determine the shape of the game. Time will tell how the Xbox and future gaming on that console unfolds. There will probably be game makers that will remain in the value chain of a Sony or a Nintendo or a Microsoft as well as others that develop for all three. It's a big market and next generation equipment will continue to be unveiled.
If, however, one of the platform companies is able to leverage their power due to the consumer mass adoption or preference for one platform over another - the game could get interesting. I thought of that issue a year ago when my son wanted a Nintendo platform because a particular series of games were only available on that platform. I bought the PS II instead and he never again even mentioned those games that were part of the Nintendo value chain even though he was quite specific as to why he wanted a Nintendo system and only spoke of that system before Christmas morning unveiled the Sony product. There are simply too many good game makers out there in the world that will develop games for any platform. It's a large market and time will tell if one, two or more platforms survive the generations of hardware/software upgrades. How those platforms are accepted and how the game makers play in the value chain will be important for continued study.
What do you personally see using gg criteria, Mucho? A royalty game or a gorilla game?
given the costs, i think it better be a helluva victory for them. who ever heard of a HALF-BILLION-DOLLAR marketing campaign???
Microsoft is a big brand. A household word. Think how many billions they have in cash and cash equivalents alone. And they are still producing additional cash. No debt use is needed to fund the entire venture and launch the product. Not a bad position to be in when entering a venture that has the potential to flip or flop. It doesn't put the company at survival risk. What if it flops and the total write-off ends up being $2 B? Can we talk of other technology companies that purchased other companies in the past few years for a billion or more that have now been written off because they flopped and have been discarded? It happens. Not every business venture is a golden egg. Microsoft still has billions in cash and cash equivalents with zero debt even if the venture flops and becomes a complete write off. How do the balance sheets of Sony and Nintendo look for a competitive longer drawn out game?
Sure, there are tons more of household brands and words. Time will tell if the campaign results in a longer term victory or a shorter term flop. I don't think anyone is banking on the Xbox to be Microsoft's single most important future endeavor as they enter this consumer gaming market with their technology feature rich next generation gaming station. Yes, a lot is on the line in regards to the product launch and how the acceptance of the product unfolds over the next couple of years. It will be fun to watch it all unfold - predictions or not.
BB
(P.S. I use a Mac and a Sony PS II.) |
