Why the Xbox isn't doomed (it really isn't)

James at GigaOm has written a post today in which he predicts that Microsoft's Xbox is doomed, mainly as a result of the Wii's success and the various 'red ring of death' issues which have affected many of the consoles.

However, we reckon James is being a little hasty in his judgement, and is not seeing the bigger picture.

While the failure rate of Xbox consoles - as much as 33% by some estimates - is hardly a great advert for the Xbox, it hasn't been enough to dent the console's popularity beyond repair, and Microsoft has built up an enviable position, both in terms of market share and in securing an installed base of millions for future multmedia plays.

By announcing that the company will cover the costs of repairs to all faulty Xbox consoles, as well as extending the warranty to three years, Microsoft has managed to turn around a potential PR disaster into a bona fide PR win.

We think that relationships between brands and consumers can be strengthened when problems are straightened out like this. It will also alleviate the concerns of would-be Xbox customers.

Microsoft has such deep pockets that it can easily afford to absorb the estimated £1bn repair bill, as well as the losses associated with launching the console.

These losses would surely be anticipated for a relatively new product that has established significant market share in a short time. They said it couldn't be done. MS priced the Xbox sensibly and has spent countless millions on advertising the console to achieve critical mass. It reminds us a little of the mobile phone operators (does anyone know how much they've lost since the disastrous spending on 3G licenses?)

At any rate, from a zero position a few years ago, Microsoft has amassed a huge slice of the gaming market, eclipsing the PS3 in the process. Sony must be kicking itself... but maybe it became too confident in the legions of Playstation fanboys (I was a true Sony man until very recently...). It also failed to implement an online strategy that made any kind of sense.

Back in January, Bill Gates said that the company had shipped over 10m Xbox consoles since its launch, while users of Xbox Live had downloaded more than 100m films, games and TV shows through the service. Read that again...

Yep... Xbox Live users can also watch movies and TV shows, and this is why Microsoft's Xbox losses can be discounted - it hasn't just launched one product, but two: a games device and a set-top box with on-demand downloads for movie fans.

In establishing the Xbox as an online-enabled set-top box, Microsoft is looking at multiple revenue streams and a stake in The Battle For The Living Room. Those online DVD rental companies had better watch out.

Once consumers ramp up the speed of their broadband connections there will be a lot more download action, and the fact is that people want to watch movies on the TV, not on their laptop, and Microsoft is far better placed than, for example, a Joost, to profit from this rising trend. And of course, it has an installed base of 10m, providing immediate reach for anything it does here on in.

Meanwhile, there's no denying the success that Nintendo has enjoyed with the Wii, but that console is aimed principally at the children's and family market (James: do you what Nintendo's current loss position is on rolling out the Wii?), while the Xbox has taken the place of the PS2/PS3 for serious gamers.

We believe that the Xbox will dominate in the years to come, with Nintendo expanding the gaming market. What Sony does is anybody's guess, but we're starting to think that the tide has fully turned against the Playstation.

Further reading:
Xbox Live, Major Nelson, and the Twitter epiphany


Add your own

Reader comments (39)

  1. Avatar-blank-50x50 mikeferro

    5:52PM on 24th July 2007

    I think the author is missing the point! Its not a matter of the deep pockets or the game library or the relationship with third party developers...
    its a matter of Microsoft being run by smart MBA Business men and making the smart business move.
    Yes Microsoft makes billions of dollars a year, but a perceived bad investment with no return on 5-6 years with over 6-7 billion dollars in losses in the corporate office with the power points showing 60% sales decline, and continued losses, and only a measly 200k more units sold than the failed Xbox 1 sure fuels the conservative execute business men that have objected from the beginning that getting to the "home centric media center" via game console is not the best way.
    the other camp at Microsoft wants to push the Windows Media Center via a "media specific" home theater computer is banging at the doors at Microsoft right now.

    Peter Moore convinced all the top executives that pioneered windows and Vista that the gaming division is the fastest path to get windows media center in every home is quickly failing especially with Peter Moore the main proponent out of the picture.

    A bad investment on paper is a bad investment to those top executives that once said games are childish many years ago.

  2. Avatar-blank-50x50 Thierry Wall

    5:53PM on 24th July 2007

    Good article, and I do agree with most of it.
    There is one thing that Bothers me that was said, near the end:

    " the Wii, but that console is aimed principally at the children's and family market , while the Xbox has taken the place of the PS2/PS3 for serious gamers. "

    I do not agree with the fact that it's implied the Wii is not for serious gamers. It is for Serious gamers PLUS non serious gamers, Nintendo has managed to enlarge the Market with the Wii, but it has also captured quite a few "Serious gamers" myself included, who last generation had the PS2 and Xbox but NOT the game Cube. (This Generation I only have the Wii - and possibly the 360 soon)

  3. Avatar-blank-50x50 Joe

    6:02PM on 24th July 2007

    I have not purchased a 360 at this time, but I plan to closer to the release of Halo 3. In September when Halo 3 is released you will see that the Xbox is definetly not dead. Microsoft has screwed up though, that's why I don't own one today. I know more than one person who has had problems, I'm just hoping it's fixed by the time I buy one in the next month or so. Bottom line, you can't count the Xbox out until the game that put it on the map is released later this year. It's like picking the superbowl winner now when the football season hasn't even started.

  4. Avatar-blank-50x50 ill

    6:16PM on 24th July 2007

    hm i don't see how anyone can say that the xbox is "dead". how is it dead? the wii is clearly dominating in sales. but the xbox still outsells the ps3. out of a large group of friends, i know several with the wii,s everal with the 360, and one with a ps3. as for the wii only being marketed to children and the elderly, when did you write this article?!?! that's what they were saying about it 3 years ago before it was released. stores can't keep the wii on the shelves, i've had a buddy trying to get one since it came out and he still can't find one. who is buying all these wiis? grandmas and 8 year olds? no, EVERYONE is rushing out to get them. get with the times, man. the wii is a huge hit among all ages and all gamer types.

  5. Avatar-blank-50x50 LOl.

    6:29PM on 24th July 2007

    The xbox 360 is not outselling the PS3/PS2. Infact the PS2 is still outselling the xbox 360...as well as PS3. Check current market sales and you'll see that the x360 has easily been outsold by PS3..and PS2.

    m$ game division has been a gigantic disaster..and a bad investement. It's pathetic to think xbox has taken Sony's place...that's just pahetic. Nothing of that nature has happened..x1 failed, and xbox 360 is being eclipsed by the PS3.

    This is an interesting article, only due to the fact that pre posters are all xbox loving fanboys...I pitty you guys, being held down to m$'s pathetic games..all of which are featured on PC.

    I'll stick to Sony's massive exclusive portfolio...you guys deal with your constant red rings of death, along with sucking Peter Moore's Ass.

    ..."Hey, things break."

  6. Avatar-blank-50x50 Matt

    6:30PM on 24th July 2007

    What a bunch of hogwash. A PR win? Are you kidding yourself?

    ""Here, buy our 360! It will fail eventually because we manufactured a very poor product without product testing but hey! We’ll give you a 3-year warranty! And cover the costs of you not having your box for 6 weeks due to it being shipped to Prague! Yes that’s right folks! We are still selling a product that should have been recalled! Get on board! Before we REALLY address the issues!""

    Wow! Downloadable T.V content and movies! This should surely make Microsoft the winner in the console race! I never have to watch free T.V again! All I need to do is fork over 50 bucks a year! With an additional cost of cable internet! Well at least if I download all my movies onto a HDD I won’t have to worry about my discs being scratched to the max....

    The tide hasn’t even come in for the PS3 but when it does you can bet that it will wash away any last chance the 360 had at being the top dog.

  7. Avatar-blank-50x50 kingofgrills

    6:44PM on 24th July 2007

    The XBox 360 may not be dead - yet - but it's definitely wounded. How can anyone be satisfied with or willing to invest in a console with a reported 33% failure rate? Would anyone buy a car or a computer with that sort of track record?

    I almost bought a brand new XBox 360 a year and a half ago, but the "Red Ring of Death" reports and number of DOA consoles on Ebay stopped me in my tracks. I waited to see how the PS3 shaped up, and I'm glad I waited. The PS3 is better equipped than the 360, and its build quality is unparalleled. I've got a first class Blu-ray player and media hub as well, so it was a much better deal for me.

    Microsoft gambled for the early lead by not including a built in hard drive or HD DVD player in every 360 console. Unfortunately, the gamble didn't pay off, and the 360 failed build up a big enough lead over the Wii and PS3. Now , the 360's market share is eroding. Leaving out the HD-DVD drive capacity and hard drive from every 360 console limits what game developers can do to maximize the potential of the system. If you saw any of the upcoming games from E3, you know the second generation PS3 offerings are notably better than the 360 titles that were shown.

    Now, buyers are faced with buying shoddy $479 360 Elite plus $199 HD DVD drive to come close to what's offered by a $499 PS3 with built in Blu-ray and games optimized for a hard drive. It's really no contest for an informed gamer.

  8. Avatar-blank-50x50 Jehanzeb

    6:50PM on 24th July 2007

    Can you tell me just a single sensible game on the Wii!!

  9. Avatar-blank-50x50 Ivan

    7:03PM on 24th July 2007

    I'm waiting on the 65 nm version which should be smaller, cooler, cheaper and more stable, and not as prone to the RoD issues. Should be out by the end of the year just in time for GTAIV and Halo 3.

  10. Avatar-blank-50x50 See ya

    7:10PM on 24th July 2007

    My younger brother's Xbox 360 died on him about a month ago, called Microsoft, Microsoft paid for all the shipping; and got his Xbox back within 2 weeks.

    I think the 3 yr warranty is a win win for the consumer, who cares if Microsoft looses money (except the shareholder).

  11. Avatar-blank-50x50 Kevin

    7:21PM on 24th July 2007

    What this article fails to mention is that the PS2 is still outselling the 360.

    To be perfectly honest, I still use my PS2 regularly, when I don't want to fight with my Red-Ring-of-DeathBox or set up the WeightStation 3.

  12. Avatar-blank-50x50 roflcakes

    7:27PM on 24th July 2007

    You people take this too seriously.

    Wii != serious gamer console!
    360 & PS3 have almost the same library

    Stop complaining about "who wins" just play whichever your parents can afford. LOLOLOLOL

  13. Avatar-blank-50x50 James Cody

    7:29PM on 24th July 2007

    The author misses many key points when it comes to long term success in the console market. First of all, the 360 came out of the gate handicapped.

    It is not capable of full hi def, unlike the PS3. It has about half the potential graphical power of the PS3. It has a smaller capacity hard drive. It only supports the next generation of media with an add on drive (And I think it is pretty clear that the HD-DVD will go the way of the beta). Also, MS does not keep the console up to date like Sony does.

    Sony is predicting that they will have the dominate position by March (or it might have been May) of 08. With another price drop rumored by Xmas time and the next generation of games and software coming, look for a major shift in the sales figures.

    The biggest obstacle for MS is how many people hate the company as a whole. There are too many people that you can never convert, even if MS makes the best console.

  14. Avatar-blank-50x50 Mark

    7:34PM on 24th July 2007

    Microsoft should buy Tivo. If the home media center was their target all along, a combination device of the XBOX360 and a Tivo HD DVR would be a very attractive device.

  15. Avatar-blank-50x50 mikeferro

    7:37PM on 24th July 2007

    Kevin, your right read my first post at the beginning.
    Xbox is doomed because for about 6 years the gaming division has incurred more than $7 billion dollars in losses. Its about the executives and shareholders rethinking this was a bad investment they dont care about the people that already own one. Remeber the Dreamcast? It sold millions and people who owned it loved it and I know people still play them to this day, but they were not able to turn a profit in a given amount of time and had to call it quits and admit it was a bad investment.

    Microsoft game studios have turned a profit from software for years from Sim Flight, to Gears of War, but their Microsoft Xbox division has had billions and billions ($7 billion) in losses they may go the route of Dreamcast and software development only.

    Sony on the other hand has their gaming division "Playstation" which turns a profit even to this day from day 1. As a gaming division they have several products:
    - PS2, (Geared towards casual gamers)
    - PSP, (handheld front)
    - PS3, (hardcore front)
    - SOE(Sony online Entertainment - dev. Starwars Galaxies, Everquest franchise)

    As a division "Playstation" made a profit this past year and that is what the big dogs at Sony look at as a good or bad investment.
    Right now the PS3 is needed more than ever to battle the Xbox 360 on the hardcore front.

  16. Avatar-blank-50x50 Mark Hastings

    7:54PM on 24th July 2007

    Of the three companies, which one is already breaking even and which other two consoles are so expensive that they will be loosing money for years to come?

    Of the three consoles, which one has more players spending more time than either of the high definition ones?

    I have four sons in their late teens to early twenties and all three systems. Guess what low definition system is used more than the other two combined?

    360 is on life support, (read "cash transfusion from parent company"), and the PS3 was stillborn. We will have to wait another 4 years for their next try.

  17. Avatar-blank-50x50 mikeferro

    7:58PM on 24th July 2007

    Mark Hastings,

    I would have to say Sony is not only breaking even but making profit in the Playstation division. PS2 outsells 360+PS3 combined. PSP sold 40 million units for a $200 piece of handheld(now $169) thats spectacular and they are turning a profit on the it also. SOE making profit also. PS3 is the only money loosing platform in the Playstation division but that was a given.

  18. Avatar-blank-50x50 Old School Gamin'

    8:04PM on 24th July 2007

    First off: "8. Can you tell me just a single sensible game on the Wii!!
    Posted 18:50 24 Jul 2007 by Jehanzeb"

    Zelda. Mario. Everything I've played so far. I've played games on all the systems, and the ones for the Wii are just more fun. Such as Need for Speed Carbon. I played the whole game on my friend's PS3. Later, I saw it for the Wii, and bought it again to play it with the Wii. Much more fun actually steering than pushing the joystick around. It's also more challenging, which is good, 'cause there wasn't much of a challenge in the PS3 version.

    Being a hardcore gamer, I own a Wii. Not a 360, not a ps3, a Wii. It's more affordable, and usually more fun. before I got it, I'd play games, but not my wife or friends. Now that I have the Wii, we all play together.

    Second: I think the problem is that the definition of "hardcore gamer" nowadays translates into "I play every FPS out there, and nothing else. But I play all the time, and kick a lot of a$$ at it, so therefore I'm 'hardcore'." That's not what it used to mean to be "hardcore gamers." I consider myself a hardcore gamer 'cause I play everything. Racing, RPG, FPS, strategy, puzzle etc. Not just on the consoles either. I'm into board games, card games, and paper & dice RPG's, like D&D, too. I play it all. Hell, I play kids' games. That's oldschool gaming. I do it all as well. I learn all the secrets for all the games. I play, I run campaigns, I even paint all the mini figurines I use in D&D.

    So don't say you're 'hardcore' because you can kick my a$$ at CoD3 or Halo. Of course you can, 'cause that's all you do all day. Go get a life, a tan, a girlfriend, some friends you didn't meet online, and expand your gaming repertoire, then you can say you're 'hardcore' if you like.

    Last: I might get a PS3 now that the price has dropped. Not any time in the near future, but maybe. I won't get a 360 though. those are like treadmills. Fine to use someone else's, but I wouldn't want one of my own.


  19. Avatar-blank-50x50 Vizion

    8:34PM on 24th July 2007

    The gaming market is larger than ever before and most of the gamers are not hardcore gamers who fawn over violent FPS games. It was a wise business decision on Nintendo's part to recognize the changing demographics.

    The Xbox sold about 24 million. I predict the PS3 and Xbox will not surpass that number in sales because most of the buyers will be hardcore gamers just as most of the buyers of the Xbox were. They are both competing for same limited market and I doubt the hardcore gamer demographic has grown. The 360 and PS3 are going to be massive failures from a business standpoint (I don't care what you delusional fanboys say). At this point they haven't made a single dollar off those consoles. If Microsoft and Sony did make a new console (I doubt Microsoft will), it would focus on the casual gaming market first and foremost (and it will have Wii-like controllers of course). I think since Microsoft has lost tons of money with the Xbox and tons of money with the 360, Microsoft will give up on the console business. There are not enough hardcore gamers in the world to help Microsoft gain a profit.

    Yeah, hardcore gamers once did sustain the gaming industry but they are not the focus anymore. I think console business won't cater as much to the hardcore market.Times are changing. I'm sorry. But don't worry, hardcore gamers still have PC games.

    I predicted the Wii would be a massive success while most hardcore gamers in forums scoffed and I was right. I am 99% certain I will be right again.

  20. Avatar-blank-50x50 Ratch

    8:43PM on 24th July 2007

    You guys who are ragging on the xbox being a "piece of junk" and the 3-year plan being worthless are idiots. The game console life averages 5 years, and we're in Year 2. Microsoft's guarantee basically ensures you never pay a dime for maintaining your system for the entire console cycle! Plus, the failure rate is for original models. The ones that have been fixed run cooler and don't break. I'd rather buy a consumer electronics product with a free 3 year service plan than one with 1/10 the failure rate and only one year. And the complaints by Matt about "cover the costs of you not having your box for 6 weeks due to it being shipped to Prague! Yes that’s right folks! We are still selling a product that should have been recalled! Get on board! Before we REALLY address the issues!"

    Jesus, you can't live without Viva Pinata for 6 weeks? For a box that is brushed up and in better shape? Once they "fix" something, the failure rate drops.

    Also, full hi-def complaints - shut up. Over 80% of next-generation TVs can't even broadcast in "full hi-def". So your complaints, de facto, make you one of the minority and thus can't discuss how MSFT is "blowing it."

    Whoever is saying "Sony is predicting to be the market leader in x months" obviously puts too much faith in Sony's predictions. I wonder if you were waiting at GameStop last fall, or March, for your PS3.

  21. Avatar-blank-50x50 mikeferro

    8:45PM on 24th July 2007


    I think you are in part wrong. Hardcore gamer centric consoles transition into casual centric consumer. PS2 was $300 when it first came out did not do extremely well and yet to this day sold over 140 million units, and still sell extremely well to the causual market alittle shy of what the Wii is selling, but selling more than 360 and PS3 combined. Jack Trenton have said their buisness model is always use last gen console for casual (PS2) and Current gen for hardcore (PS3). That is why there is still 150 games in development for PS2 but won't have the hardcore games like: God of War, Final Fantasy, Killzone etc...
    You will get more sports titles like Pro evolution, NFL, puzzle games, etc...

    Just like the PS2 transitioned casual gamers from PS1 to PS2 they are hoping in the years to come PS2 will migrate to PS3.
    Xbox like ive said lost too much $7 billion in the game business, I dont care how much money Microsoft has a bad investment is a bad investment and they are not stupid.

  22. Avatar-blank-50x50 Eric

    8:47PM on 24th July 2007

    The author missed several points with this analysis.

    1) The XBox 360 has not taken over from the PS2 because the PS2 still outsells the XBox 360.

    2) The XBox division has lost so much money that it brought the earnings of Microsoft down. This is not a small loss.

    3) The Wii is outselling the XBox and shows no signs of letting up.

    4) Take a look at the the top 10 games (that's where Microsoft makes it's money). 6 of the top 7 are Nintendo.

    5) People still equate Microsoft with the "blue screen of death." The "red ring of death" just tarnishes the brand more and gives people more reason not to trust their products. Extending the warranty for three years didn't send the message that they stand behind their products. It sent the message that they don't know what's causing the problem and won't any time soon.

    Even Microsoft can only hemorrhage money for so long. The XBox 360 is a loser all around.

  23. Avatar-blank-50x50 Crump

    9:38PM on 24th July 2007

    I think the new definition of hardcore gamer is . . . Whichever spotty 13 yr old Microsoft has fooled into thinking that the XBox brand is somehow "hardcore", or appealing to a "alternative" Marilyn Manson / Hot Topic corporate lifestyle. If you will all remember a few years back, I think it was at E3, when that Microsoft guy was sporting a suit jacket with a hooded sweatshirt underneath for "street cred". That was the definition of a "hardcore gamer". Those corporate fat cats at MS are sooooooooo "hardcore" with their neon green and replacing the S at the end of words with a Z. It really takes one of the wealthiest corporations in the world to define to the youth what "hardcore" is. It is sad that MS has fooled several million idiots into buying their "hardcore" XBox 2 system (remember, it was named 360 to draw attention away from the fact that it was only MS 2nd console while SONY was on its 3rd). Rushed to market a year early with inferior technology, XBox 2 will eventually fade away like the Dreamcast (not a bad system) when the PS2 came out. And yeah, everyone seems to miss that the PS2 still outsells the Wii consistantly. The XBox 2 is not enough of a tech jump to be considered a "next-gen" machine, especially now that most PC games coming out are going to put it to shame. It is still to be seen if the PS3 can achieve this. I doubt a true Mountain Dew Code-X drinkin', Cheetos Xtreme eatin' "dcore gamer" last years crappy system, unless it was to play "Gearz" or "Haloz 3" or maybe "Vivaz Pinataz XXX Xtreem".

  24. Avatar-blank-50x50 Vizion

    9:38PM on 24th July 2007


    What you say won't happen this time around. The PS3 and 360 are just too pricey to appeal to the casual market. Casual gamers such as soccer moms will not fork over $250 for a console. PS2 have sold well and still selling well because of its affordable price point for most of its life cycle. Sony will not be able to bring down the price of the PS3 to at least $250, at least not until about 4 years from now.

    Moreover, casual gamers just seem to be enamored by the Wii with its host of party and non-complex games, low price point and simplified, intuitive, innovative interface. The Wii has their undivided attention.

    I stick by the prediction that the 360 and PS3 will not sell more than what the Xbox did (24 million). I also doubt that Sony and Microsoft will ever make a dime in profit from their next gen consoles.

  25. Avatar-blank-50x50 Vizion

    9:40PM on 24th July 2007

    Crump, the PS2 doesn't consistently outsell the Wii. The Wii has been the best selling console (if you don't consider the DS a console) for the past several months. The Wii sales would be even much more higher if there were more Wiis produced.

  26. Avatar-blank-50x50 mikeferro

    9:55PM on 24th July 2007


    Actually I think $250 is sweet spot for casual gamers thats why the Wii is selling like hot cakes, and thats why PS2 was able to sell 140 million after its price drop from $300 to $200.
    Playstations business model is $100 price drop per year till they hit the sweet spot.
    Wii was able to amass gamers who never even played a single video game in their life, now with the Wii Fit people that want to work out are getting in on it. PS2 still sell almost as much as the Wii, so are you speculating those owners will migrate to the Wii in the next couple years? I think a good % of ps2 owners (ex: addicted to Go!Sudoku) will migrate to the PS3 just because (Go!Sudoku HD) many extension/ or sequels will only be available on the PS3. It will be years but it will happen.

  27. Avatar-blank-50x50 Vizion

    10:49PM on 24th July 2007


    I doubt Sony can afford to sell the PS3 at a low price point considering they are already losing several hundred dollars on every console sold. It's going to take years for the production of the console to go down.

    I don't see PS2 owners transitioning to the PS3 especially for the games you've mentioned. Many 3rd part developers have reduced their resources to produce games for the PS3 and 360 to concentrate more on making games for the Wii (Beautiful Katamari is no longer PS3 bound). Many of the best developers such as Square/Enix (they announced they won't make any more games for PS3), Capcom, Konami, Namco, EA, Sega, have announced their extra support for the Wii.

    The Wii will be the default console of choice much like the NES, PS1, and PS2 was. It's going to be so popular and become such a prevalent cultural icon that video games are going to be almost synonymous with Wii. In other words, the Wii will be to video games what the Ipod is to MP3 players. I think the Wii would be selling 3x as more than it does now if there were more produced. Till this day people still wait in lines in front of stores in the early morning to pick up a Wii. One worker at Target told me that it had about 100 in stock and it was sold out within about a hour.

  28. Avatar-blank-50x50 Crump

    10:59PM on 24th July 2007


    You are totally right! That was a dumb statement. The PS2 is still outselling the XBox 360 (or really close to) I think. Heck, I think it's sold like 40,000,000 units or something. I was just trying to point out that SONY isn't really in as much dire trouble as everyone always states. Remember that the original XBox was a total flop. Just because MS had a year head start doesn't mean jack!! Don't believe the HYPE!!!

  29. Avatar-blank-50x50 TAS

    11:33PM on 24th July 2007

    You fanboys are silly. Check your stats people.

    For June 2007, according to NPD - which is the source that every reputable news agency references - sales figures were as follows:

    562,000 - Nintendo DS (+25%)
    381,800 - Nintendo Wii (+13%)
    290,100 - Playstation Portable (+24%)
    198,400 - Xbox 360 (+28%)
    98,500 - Playstation 3 (+20%)
    (PS2 and GBA numbers weren't released)

    These numbers, along with the PS3 surge in July due to its price cut suggest that really, for most consumers, it really comes down to price (cheaper handhelds do better than expensive consoles). That bodes well for Nintendo. However, the console with biggest gains for June was the 360 - which shows that it's still popular despite its RRD - which really shouldn't scare consumers anymore with MS's warranty AND with newer hardware coming out. Waiting 3 1/2 weeks isn't terrible. What's your alternative?? You can buy a PS3 and have no games to play, or you can get a Wii and play Zelda or Paper Mario. OR you can get a 360 and have a TON of games to choose from. Not only that, but with Live Arcade - which none can match, and Halo3 - which none else have, the 360 definately isn't dead - only fanboys of Sony and Nintendo would say otherwise.

    Bottom line - Sony fanboys should stop saying the PS3 is doing so great by lumping it in with the PS2 - until the PS3's price is lower PERMANTLY, it won't consistantly do as well as lower cost systems.

  30. Avatar-blank-50x50 Chuck

    12:19AM on 25th July 2007

    Oh Come on, why does one console have to be !!1!DYING!!!!11oneone!! and one have to be the survivor?

    They each have their markets, they each have their adherents.

    All you guys saying the PS3 price cant come down that far... I remember paying $1300 for my first DVD player, and a $29 model from walmart has more features and is more reliable now. Yes that price can come down incredibly fast, incredibly far, when a manufacturer buys in those huge quantities. The Bluray drive wont be ridiculously expensive forever. This console can come down to a casual consumer price level in a year or two.

    From a business perspective though, XBOX division IS a loser, while both Sony and Nintendo are winners.

    If they can figure out how to turn that large installed online user base into a revenue stream and cut their overhead costs... they can come out long term winners as well. I would love to take a peek at their books.

  31. Avatar-blank-50x50 Chuck

    12:22AM on 25th July 2007

    Ya know I have a BR drive for my PC. Cost $1000. I opened it up and compared it to a regular CD drive. Amazingly similar. WTH jumps the cost up 50X?

    That price on Blu-ray equipment will plummet in the near future.

  32. Avatar-blank-50x50 Billy

    4:13AM on 25th July 2007

    Face the facts, the wii is outselling the 360, but the 360 has a crap load more games for the hardcore gamer, and online gamer in High Def like the ps3. Ps3 is an overpriced piece of shat that the programming community has flat out said it's too complicated to program for, and that's why you see most games not on the level of the 360.

    Nintendo knows gaming, and it's buyers... Microsoft knows online gaming, and has pretty much every exclusive game that sony had last generation. Sony is DOA, and Microsoft knows it. Microsoft is winning the war in the US, and Nintendo is winning the war in Japan, and both are cheaper to game with!

    As for some 360's crapping out? Who cares!? They extended the warranty to 3 years, and not only that, I've had mine since release day one, and have never had any problems!

    I own both a 360, and Wii. There is no need for a crapstation 3, it only has Metal gear solid, and that's the last domino to fall for sony...OOOOHHHHH, guess what, it's probably coming to the 360 as a timed exclusive.

    360 owns sony, and so does Nintendo nuff said.

  33. Avatar-blank-50x50 Barry F

    4:36AM on 25th July 2007

    "Ps3 is an overpriced piece of shat that the programming community has flat out said it's too complicated to program for" - If a company is full of shitty programmers, that isn't sony's fault, Epic Games know what they are doing and have repeatedly said that Unreal Tournament 3's physics, particle systems, and other calculation heavy things work extremely well with stream processing.

    Remember earlier this year when the M$ fanboys said the PS3 couldn't handle games with graphics like Gears of War, I'm sure UT3 will prove them wrong.

    Funny how the only way that the 360 can "beat" the PS3 in a "comparison" is when the game is some crappy port that the developers couldn't have been bothered to optimize on the PS3.

  34. Avatar-blank-50x50 mikeferro

    6:02AM on 25th July 2007

    You guys are so silly, especially Billy.
    Majority of 3rd party software with an exception of a few on 360 and PS3 side are similar.
    You will not see any first party games from Sony on any other platform including the PC.

    However you will see many first party games from Microsoft on the PC, such as Halo, Gears of War, Viva Piniata, Shadow Run, talks of Mass Effect comming to PC in a year as well.
    If most of the great Xbox 360 first party games come out on the PC a year later, I see absolutely no reason to have a 360 when all I have to do is wait a year to play the game on the PC.
    Its more logical to get the PS3 because you will not be able to play Lair, Heavenly Sword, Drake Untold Fortune, Killzone 2, infamous on any other platform besides the PS3.

    Logically from a maximum game exposure standpoint buying a PS3 makes more sense.

  35. Avatar-blank-50x50 Manny

    8:05AM on 25th July 2007

    I got one for billy's dumbass.

    firts of all, i dont know why you have to say "he 360 has a crap load more games for the hardcore gamer" as if the 360 fanboys were that tough... read your crap before you post it little billy.. do you even know what a hardcore gamer is?? and no its not a 360 fanboy.. if i called somebody a hardcore football player, that doesnt make him good in every other sport or games, BUT if i said that someone is a hardcore athlete, then that would mean that the person is very good a various sports and games.. i consider a hardcore gamre as someond who plays lots of games and different games and are good at it. whats with this 360 hardcore gamer crap, just because its a shooting game and has lots of blood and gore, thats just hardcore stupidity. you act as if the 360 is all that, typical ignorant fool if you ask me..im not a fanboy or nothin, i believe in competition.. as long as they're putting 0ut good games out there i am happy..2..i wouldnt be happy if i bought a 360 (which i almost did) and it ended breaking down, and microsoft comes out with this 3 year warranty. yes, it's good, but i dont wanna be waiting like a moron till my new 360 comes because microsoft doesn't know how to hook s*** up right.. i want to be playin my 360 not waiting for repairs.. your just another fool buying into their crap... after 2 years of being out, they finally decide on the warranty after it started to become big news.. they were treating you like a moron cus they know your gonna spend more money on a new system or to get it repaired.. in the bright side.. they do have good games.. Halo 3 looks cool, but better not be short as it's previous games.. microsoft only makes short but fun games, Ex. gears of war.. without xbox live these games would be forgotten like yesterdays newspaper.. your just another ignorant 360 fanboy billy boy..

    p.s read what your trying to say. 360...hardcore gamers.. pshhh.. idiot

  36. Avatar-blank-50x50 MWatcher

    4:52PM on 25th July 2007

    Your counter statement to James' article is flawed. In the end, is the Xbox business a profitable business? NO. In the past 6 or 7 years since the Xbox was introduced to the masses, the Xbox division has not made any money from it (read the financial statements). Yet the promise of profitability lingers with promises, but how can that be trusted? Yes the games are there, but does the profitability equate with the popularity? No, apparently they don't.

    From the very start, the Wii makes a profit on each system...no automatic losses like the 360. And looking at the current quarter's financial report from Nintendo, they are making serious dough. The Wii is considered a success, pure and simple. I also have to disagree with how you label the Wii gamers. They are not just in the children or family market, it encompasses EVERYONE. That is the target market Nintendo has set out. And look at what Microsoft is now doing, they want to target the casual market as well, what does that say?

  37. Avatar-blank-50x50 odreamarc

    5:18PM on 25th July 2007

    Wii is for everyone indeed. I was skeptical at first but I'm now a believer.
    I think Wii is a nice second console for a hardcore gamer like me. I got it for Zelda, and I still play wii sports when my casual friends come around. Brain academy is a hit in my family. It makes me smile to play agaisnt my mom at her request. You'd have to be cynical not to reckon Nintendo did something right here.

    The best is certainly coming, now the console established itself a big userbase. E3 got me interested in Mario Galaxy and Metroïd Prime. And Mario Kart online with a wheel is a no brainer, everyone will certainly have fun playing this game.

  38. Chris Lake Chris Lake Staff

    Director of Content at Econsultancy

    5:18PM on 25th July 2007

    MWatcher - I don't think the Wii is a heavyweight contender for the top spot. It is innovative and appeals to new gamers and some existing ones, although I personally don't want one.

    You say Wii is profitable? Good for Nintendo. Sony's PS3 losses per unit are much higher than the Xbox 360, with some industry watchers predicting it will lose $3bn on sales of 6m units.

    Sony sold half a million less than the six million it anticipated, so if these analysts are right it has accrued almost half of Microsoft's Xbox losses in less than a year.

    Puts a different spin on it all, though as Graham says, this is about a long-term multimedia strategy, not just making a few dollars on hardware sales.

  39. Avatar-blank-50x50 Matt

    12:06AM on 26th August 2007

    As a nintendo "fanboy" (for life) i must say i find it funny to watch the sony and microsoft "fanboys" argue. While you both go after the same market, the nintendo is going for everyone.
    I'll be honest, i liked the PS2, but HATED the Xbox, but now the tables are turned, the price of a PS3 is rediculus. It's a GAME CONSOLE! it should not be extreamly expensive, a argument i put against sony and microsoft, they are so ambitious to bring as much tech as pissibly into one console (dvd, blue ray, cd player etc) that it really dose away with the idea of game console, it should be like all the nintendo consoles, PURE GAME, thus lower costs.
    I am dissapointed though with Xbox 360, i love Gears of War, and i did think it was a good console, until the 33% failure rate, which is not exceptable by any stretch of the imagination. I don't care if they replace it, it should work fine. And one guy saying, a average life of a console is 5 years... my snes and nes are working great, and my gameboy (which as a handheld has the most risk of getting damaged.)
    The nintendo is cheap, is for all gamers and new gamers, and frankly deserves it's success. And the fact it's the only console that makes profit when a console is sold is stupid. Why make something if it makes a loss when sold. In this respect microsoft and sony have failed.
    And to reply to the article, is the xbox dead, no, it's on life support, the losses have been covered by the company, if this as a different company the xbox 360 would have not even been released.
    And i'm a hardcore gamer, sure i only have a PS, and all the nintendo console,s but i play it so much, and am so into computer games, i class myseld as "hardcore" so you play halo an hour a night, i play Zelda hours at a time.
    Well done nintendo, Go xbox 360, i don't care who wins as long as sony comes last... though i would prefer Nintendo to win, they deserve it!!!

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