Daily Archives: November 17, 2006

Webshots adds video to photosharing service

Thomas Hawk reports that two services added video to their service offerings (Vizrea and Webshots). I talked with Webshots execs today and it sounds very cool. I’m off to check it out.

Stewart Butterfield, co-founder of Flickr, told me they are working on video too. So, it’ll be interesting to see which service really gets this right.

Why does this matter?

Because most digital still cameras now also do video. So, as people figure that out they’ll be looking for places to put their videos. Most probably have heard of YouTube so it’ll be interesting to see if these services can get people to post videos there instead of on YouTube or other video services.

Danger of blog rumors

The rumor game can mislead a lot of people. All day long I was hearing about MyBlogLog being acquired by Yahoo. Turns out it’s not true (the original TechCrunch article has now been updated).

Lately I’ve been telling people that I start out very skeptical about what I read in blogs and my skepticism goes down after 24-hours. I find that if something untrue is reported on blogs that the company usually lets the blogosphere know (and they should!)

But, if something is true? They stay quiet.

One other thing? Never expect bloggers to do fact checking or original reporting. Even me. But if a blog survives 24-hours without anyone refuting the facts? That’s when rumors turn to belief.

$50 + blender + YouTube = huge marketing success

Brad Baldwin of Rocky Mountain Voices was hanging out with me today and told me about this story. Actually, you can check it out for yourself on PodTech, or over on the Rocky Mountain Voices blog. (They got interviews with the people involved).

But, here’s the short version of the story.




Why Gates wouldn’t trade places with Sony in console wars

Two years ago I was over talking with the Xbox team and some of the folks over there explained the facts of life to me, which came back to me after reading that Bill Gates is very happy where he is right now. They were explaining why they were in a race with Sony to get the Xbox 360 done before Sony could ship its unit. At that time they expected Sony to ship at the same time as the 360.

They told me how console business works and why you need a console on the market for four years to make money.


1) Cost for the unit declines over time and you need that fourth year for Moore’s law to really kick in.
2) Attach rate (er, games sold per console) goes way up in fourth year.

They told me that’s why Xbox 1 lost so many billions of dollars.

The two graphs:

First year, you’ll lose $200 per machine (Sony is supposedly losing $300 on PlayStation 3).
Second year, you’ll lose $150.
Third year, you’ll lose $100 (although price will probably drop too).
Fourth year, you’ll lose $25 to $50, or if market conditions are good, you might even break even.

That’ll be offset by what the industry calls attach rate.

First year attach rate? Xbox is seeing something around eight games, if I remember right, and a pretty good run rate on Xbox Live, too (I’ve bought eight Live games, for instance, in addition to the seven games I have sitting at home).
Second year will see an additional three to four games. Each game is worth somewhere around $10 to $20 worth of revenue (out of a $60 game, I’d guess $20 goes to retailer, $4 goes to distributor, $20 goes to game manufacturer, and rest goes to Microsoft for licensing fees). So, to recoup that $200 lost on each console Microsoft needs to sell something like 15 games.
Third year, another three to four games (maybe more, cause by then there’ll be a huge market of consoles and game manufacturers will have built efficiencies so can kick out new games faster.)


The Sony Playstation 2 is on its fourth/fifth year right now, which is why that’s a cash-generating machine. Xbox 1 never got more than three years, which is why that lost billions.


So, why did Microsoft make this bet? To keep Microsoft’s foot in your livingroom. As more and more people get HDTVs that foot is going to be mighty important.

What do you think?