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To: Wyätt Gwyön who wrote (48581)	11/5/2001 11:34:55 PM
From: tekboy	Respond to of 54805

Stratfor's not bad. Actually, though, I have to say that since Sept. 11 the mainstream elite media--NYTimes, Washington Post, Wall Street Journal, Newsweek and Time--have been doing a great job in amassing and presenting a vast amount of solid information quickly and accessibly. Anyone reading any couple of those carefully will be extremely well-informed. As for a good comprehensive overview of what is known and thought about the current crisis, the book mentioned in Zakaria's piece is pretty good. (He has an essay in it too, I gather.) It's available here: amazon.com tekboy/Ares@befirstonyourblock.com

To: Wyätt Gwyön who wrote (48581)	11/6/2001 12:05:34 AM
From: Wyätt Gwyön	Read Replies (3) \| Respond to of 54805

re: MSFT and the Xbox i haven't seen much discussion here of the Xbox, which is soon to be unveiled. considering that MSFT is arguably the greatest tech co in history, and certainly the greatest gorilla, i think the Xbox is worth learning about. the gaming market is already $20 billion and growing. one can imagine the folks in Redmond drooling as they watch PowerPoint presentations showing a convergence of television, computer, and game console in 2005-2010 with revenues in the hundreds of billions. naturally, being MSFT, they want to own the space outright. MSFT is going to throw many, many billions of dollars at this project. the console, retailing for $300, will be a $100 loss per unit. with plans to sell 1 to 1.5 million units over the holiday season, plus a $500 million marketing budget, there's $650 million to get things going. not to mention all the development costs up to now. considering that rival Sony has already sold 20 million units worldwide, for MSFT to just catch up they would have to eat $2 billion dollars in COGS. that is some serious dough. of course, the console has long been unprofitable--like in the breakeven sense, with the big money made on game software royalties on the back end. easy to understand razors and blades model. but 2 billion, plus 500 million in marketing, plus X in R&D, is an amazing startup cost. how will this stack up against Sony's PlayStation2? the PS2 has already been out 18 months if you include its debut in Japan. that's important--the 18-month hurdle gives the software developers time to come out with a second generation of games that take full advantage of the console's features. just as important--the PS2 already has 20 million owners (including me). they are going to clean up this holiday season with some stunning releases--the biggy is Metal Gear Solid 2. the anticipation for this game is probably bigger than the Harry Potter flick--at least among male adolescents under 45. i am really trying to get a grip on MSFT's strategy here. it seems like the going will be rough for the first couple years even in the best case, and they may then wind up admitting it's a huge boondoggle that'll cost them $10 billion. or maybe not. near term, it'll be about console availability and game quality. can they really get the top software houses to put their best stuff on the Xbox first? there may be some jockeying back and forth--this game's out first on Xbox, that one on PS2. if that world continues, it won't be very interesting or profitable for MSFT. when i first heard about the Xbox, i thought it was a silly idea. after all, these consoles, unlike earlier generations, are really expensive and the games cost a lot to produce and buy. the economics are different from the PS1 era, when you could buy games for 20 or 30 bucks. now it's more like 50, plus the console costs twice as much. that extra several hundred dollars puts a serious dent in the budget of your average 11-year-old. i didn't see how this model would be profitable, since all the money is made on the software (thus fewer titles sold means less profit). but maybe this is just the Russian marshes in the west that need to be slogged through on the way to conquering Moscow. i.e., perhapts it's just a near-term war of attrition MSFT is committed to slugging out w/Sony. in the long term, maybe there really is a convergence, where they get their tentacles into EVERYTHING--it's a television/computer/console/net connection/ISP/software delivery mechanism/etc.etc. then again, maybe it's just corporate hubris. it's a huge undertaking, and this will be a battle worth paying attention to. if MSFT can pull this off and crush Sony while marginalizing Nintendo, maybe they will be the greatest and most profitable corporation of all time. if it fails, they will lose a ton of money and it will be an excuse for value mavens like Mucho Maas' evil twin to say they shoulda been paying dividends. in any case, it will be fun to watch. nytimes.com thestreet.com