XB360: AN INCONVENIENT TRUTH / Finance Analyst Ehrenberg: XB = "disastrous endeavor"

[Digital-Nitrate]

Side Note: Because that's how you, and perhaps a small group of 360 supporters have chosen to look at it, which I can't control.

What I am often doing is addressing a lot of the hyperbolic misinformation that get's spread around about both these consoles and some of the games, and discussing actual objective facts and opinions, rather than just post brief comments with mostly just personal subjective opinions.

If I showed the many posts where people have said that the PS3 sales have been lackluster compared to the 360, would you be surprised? How about the many posts that claimed the 360 was not having any reliability problems?

I understand you and I have some history, but don't confuse that with some kind of hatred I have for the 360 or even Microsoft, because you couldn't be further from the truth. What I hate is misinformation and while I don't personally hate those that spread it, I try and make it a point to address it.

If the facts make you feel that the 360 is being discredited, then so be it, but don't shoot the messenger.

 

[V1P3R]

If the facts make you feel that the 360 is being discredited, then so be it, but don't shoot the messenger.

Wow... you really are a fanboy. Messenger? More like PS3 sales rep.

 

[YSSMAN]

What I hate is misinformation and while I don't personally hate those that spread it, I try and make it a point to address it.

"Misinformation" or not, I don't think we're all goosestepping through here giving the "sieg heil!" to Bill Gates and Microsoft. If anything, this has been a moderately negative zone by comparison to some 360-oriented places I've been before.

Don't get me wrong, its good to see the facts and figures on occasion... But anyone who spends time reading gaming or technology blogs has a pretty good idea of whats going on... So I guess the question is, what are you trying to prove to us? What we read, see, hear and feel ourselves (if anything) should be good enough for us to formulate and utilize our own opinions. We don't need a bar graph to tell us that 360 console sales are down, or that Blu-Ray performs better, or that Pete Moore was a sellout.

We get it. We're idiots for buying 360s and using them. Sorry we didn't drink the Sony kool-aide.

 

[Digital-Nitrate]

"Misinformation" or not, I don't think we're all goosestepping through here giving the "sieg heil!" to Bill Gates and Microsoft.

Who said anyone was? Can we please stick to the facts and leave the hyperbole out of the discussion?

Don't get me wrong, its good to see the facts and figures on occasion... But anyone who spends time reading gaming or technology blogs has a pretty good idea of whats going on...

So are you saying everyone that has read this thread or participated on GTP has a pretty good idea what's going on? So does this mean you also have never seen anyone post information on GTP that is contrary to the actual facts?

So I guess the question is, what are you trying to prove to us?

I'm not trying to prove anything, I'm sharing and discussing information and facts and responding to others regarding this topic. Perhaps the question should be why are you even reading this thread and responding if you already are well aware of all these facts and figures, and have no interest in discussing them, and why would you assume everyone is like you, and already is well aware of these issues? What possible harm can it be to share and discuss these facts?

What we I read, see, hear and feel ourselves myself (if anything) should be good enough for us me to formulate and utilize our my own opinions. We I don't need a bar graph to tell us me that 360 console sales are down, or that Blu-Ray performs better, or that Pete Moore was a sellout.

Then don't bother to read or look at them - problem solved. The time it takes you to keep responding to a topic you are apparently already well aware of could have been spent on reading about or participating in something you do care about. The fact that you do respond and would just as well none of this information be posted leads me to believe you have some other motive for responding.

We get it. We're idiots for buying 360s and using them. Sorry we didn't drink the Sony kool-aide.

Who ever said anyone was an idiot for buying a 360... and why do you regularly bring up this "Sony kool-aide" thing as if to insinuate that in order to appreciate the benefits of a PS3 one must drink some kind of Sony loving drink? Did it ever occur to you that just like many people who bought the 360, that there are those that bought the PS3 based on objective analysis rather than a blind bias?

Please, you are just proving my point about people who exaggerate, make things up, and or resort to name calling instead of simply having a reasonable, objective, and civil discussion.


If you don't want to discuss the topic of this thread, and instead want to shift attention away from the topic, facts and discussion by making personal comments directed at me, please feel free to send me a PM. Thanks. 👍

 

[YSSMAN]

Well, all bad blood aside, Microsoft has had its first profitable year on the 360.

Huzzah?

Sad that it took this long, but nevertheless, its happened. We'll see how long it will continue...

 

[Tornado]

Microsoft has often cited the importance of being the first current gen console released, and the first to sell 10 million units, and based that on why the PS2 succeeded while the Xbox failed.

Which just means that Microsoft excelled at following my predictions to the letter and copy pasted the Dreamcast and Saturn life cycles and management decisions as closely as physically possible.

 

[Digital-Nitrate]

Microsoft has had its first profitable year on the 360.

Huzzah?

Sad that it took this long, but nevertheless, its happened. We'll see how long it will continue...

That is great news, but unfortunately, even if they are able to maintain those profit levels, it would still take them nearly twenty years to recover all their losses they have had from that department over the last seven years.

Not that Microsoft is hurting financially, but having a profitable division is certainly going to ease a lot of the concerns from investors. 👍

I for one hope they do even better next year, because at the end of the day, this market needs stiff competition, and deep pocket investors... two things Microsoft is quite accomplished at.

 

[YSSMAN]

My guess is that we're going to see everyone suffer. While Microsoft has lowered the price of the box for some time, its well known that the general buying public is running out of cash. Between gas and food, my guess is that purchases for Wii, PS3 and 360 are often going to be the last things on people's minds. We'll see what the future holds, but I'm not expecting groundbreaking sales achievements in the immediate future.

 

[Digital-Nitrate]

Despite excellent console sales this last month, unfortunately most of the news regarding the 360 has not been very good; including the lack of any 360 presentations at most of the world's largest gaming conventions; sparse announcements for upcoming exclusive titles for 2009; numerous reports following the dashboard update that resulted in connection freezes, slow downs, lock ups, and more.

The latest news is especially bad for those that thought that maybe the 360's RRoD issues had been somehow resolved.

Not only that, but despite three years of denial, Microsoft has now, thanks to a major class action lawsuit, been forced to admit that indeed they not only are aware of the disc scratching problems with the 360, but that there is apparently evidence that shows they knew about it before production, and refused to fix the problem, despite being given multiple possible solutions:


Report: MS knew about disc-scratching problems with the 360
Published on Dec 15, 2008 by Michael Thompson at Ars Technica

Even though a vast number of gamers own and love their Xbox 360 systems, they are often imperfect machines prone to a multitude of problems like the oft-encountered Red Ring of Death. A problem that has received less media attention is the issue of game discs being scratched by the console when moved or reoriented while in use. According to a motion that seeks to establish class action status for owners of 360s with defective disc drives, Microsoft knew about this problem before the console was launched in 2005.

The motion contains testimony from program manager Hiroo Umeno, which claims that the manufacturer was well aware of the damage that could be caused to discs when players repositioned their consoles. "This is ... information that we as a team, optical disc drive team, knew about. When we first discovered the problem in September or October, when we got a first report of disc movement, we knew this is what’s causing the problem."

There are also allegations that the company considered and rejected three possible solutions to this issue before the console was released: the first solution would have increased the magnetic force of the disc holder was rejected because, "it would allegedly interfere with the mechanism that opened and closed the disc tray,"; the second would have required slowing disc rotation speed to 8x, but was ruled against because it would have apparently increased loading times; the final solution would have involved installing soft patches called "bumpers" (routinely used in other consumer optical disc drives), but was deemed too costly to implement at $0.50 per console.

According to the documentation within the motion, Microsoft had registered roughly 55,000 complaints from consumers about this issue as of April 30, 2008. Subsequently, the company has instituted a replacement plan, but it only replaces Microsoft games and requires a $20 fee to do so.

And here are just a small sample of recent reports of continual RRoD issues, even from MSNBC, PlanetXbox360, TeamXbox, and many other dedicated 360 fan sites.


Red Ringed Xbox 360s Still Dog Microsoft
Published on Dec. 17, 2008 by Kristin Kalning, Games editor for MSNBC

Gamers grow frustrated when consoles break over and over again

Since its release in November 2005, the Xbox 360 has been plagued with general hardware failures, otherwise known as the "Red Ring of Death." Some users have received not one, but several of these failures.

Travis Williams drove around Louisville, Ky. for a week with a busted Xbox 360 in his trunk. It was his third console stricken by the dreaded "Red Ring of Death" - known as "general hardware failure" in the halls of Microsoft.

If you look online, you'll find lots of people like Travis. Really angry people. Every game enthusiast site has multiple forums dedicated to the Red Ring problem – home remedies on how to solve it, condolences for people who've just experienced it, and gamers claiming to be on their fourth, sixth or ninth Xbox 360.

It's been almost a year and a half since Microsoft issued a big "I'm sorry" to consumers, extending the warranty on their Xbox 360s to three years and taking a $1 billion charge against earnings to pay for repairs and beefed-up customer service. But still, the Red Ring of Death dogs the company.

Getting Red Ringed is almost a badge of honor now, like a crushing hangover after an epic night out. Everyone I know — myself included — has gotten at least one. But after three Xboxes in two years, Williams was sick of the tell-tale red lights on the front of his console — and the refurbished consoles Microsoft sent him as replacements.

“If I had any other type of appliance that went out this quick and this often, I’d be upset,” he says. “You wouldn’t expect to get a new refrigerator and have it go out on a regular basis.”

Many industry watchers, including Dean Takahashi, a writer for VentureBeat, have speculated that Microsoft, in its haste to beat Sony and Nintendo to market, pushed the Xbox 360 out too early.

Takahashi has written two books about Microsoft, including “The Xbox 360 Uncloaked: The Real Story Behind Microsoft’s Next-Generation Video Game Console.” In it, he references internal sources and documents that show Microsoft knew the console had problems — but launched it anyway.

“Microsoft had experience with this before, with the first Xbox where they showed improvement over time,” he told me. “They sort of assumed they could do the same thing (with the 360), and it hasn’t happened.”

The Red Ring problem isn’t the only one Microsoft faces with the Xbox 360. Jason Johnson, of Madison County, Ill., has filed suit against the company alleging that his 360 has destroyed three games by scratching the discs.

A deposition of Microsoft program manager Hiroo Umeno, revealed this week in an unsealed court document, indicates that the company was aware of the problem before its November 2005 launch, and following the launch, determined that tilting the console to the left or forward would cause discs to scratch. Umeno declined to comment on the lawsuit or his deposition.

On the subject of the Red Rings, Microsoft is a bit more forthcoming. Company spokesperson David Dennis told me, via an e-mailed statement, that the company has “improved (its) manufacturing processes to improve reliability and our repair process to accelerate turn-around time for repairs.”

However, Microsoft still can’t (or won’t) identify the reasons the Red Rings happen in the first place. Takahashi says the root cause is usually a graphics chip that is overheating inside the machine. Dennis declined to get specific, saying only that “we identified a complex set of various factors and interactions that can cause the three flashing red lights error message on the console.”

It is true that Microsoft has gotten better about keeping gamers informed about the whereabouts of their busted consoles. Williams, from Louisville, got an e-mail from customer support just this week confirming the receipt of his console — complete with an apology – from “Caleb.” And from here on out, he can check the status of his repair at support.xbox.com — something Microsoft instituted in August 2007 to help earn back some of the goodwill it lost from gamers.

Chad Lawhon, from St. Joseph, Mo., is one of those gamers. He’s had six Xbox 360s Red Ring on him — and he’s plenty steamed about it. He says he and his friends, who he keeps in touch with via Xbox Live, think Microsoft is lucky that their console is “really where the games are at, and that’s where the best online experience comes from.”

“With any other consumer electronic device, there’s no way I would get another one, or even come back to that product again,” he says.

Lawhon is no fair-weather fan. He owned the first Xbox, and participated in the Xbox Live beta. He stood in line on launch day to get the Xbox 360. And he’s the owner of — get this — four of them, one for each of his family members. He loves the games for the system —it’s the hardware that’s let him down, over and over again.

“If the 360 hardware was as reliable as the PS3, I’d be a happy camper all the way around,” he says.

New Xbox Experience brings RRoD
Published on Nov 19, 2008 by Gino D. at Xbox360.QJ

Oy vey... Looks like the New Xbox Experience dashboard update is experiencing some not-so-new Xbox woes. November 19: launch day for the NXE update. Not 24 hours after it went live, complaints are already piling up.

Various forums online have threads and threads of people reporting anything from connection freezes, slow downs, lock ups, broken TV connections, and so many other different numerical errors that, if all of them were strung together, could potentially measure all the way from Earth to the moon (and back).

No, but seriously though.

There are even reports of brickage - yes, the famed red ring of death is back. Some say it's limited to modded consoles only (no surprise there) but other untainted units seem to be affected by the same problem too.

We've yet to hear any official response from Major Nelson or any of the Microsoft staff. Some say the slow downs are caused by the simple fact of surging traffic accessing XBL, but the other problems are still unaccounted for.

If you are experiencing any problems with the NXE update, you might want to contact customer service (good luuuuuck!) or check out the forums (see Via link below) to ask around if anyone's getting the same problem as you.

Tech TV Star Leo Laporte Gets His Second and Final RRoD
Posted on Dec 7, 2008 by Eric Bush from PlanetXbox360

This is a bad day for Microsoft, someone with this much credibility with the tech world giving the Xbox 360 the shun is going to sting. Tech TV personality Leo Laporte, most famously known as co-host of The Screen Savers, posted today on his personal blog that he has had it with his Xbox 360 and is moving on to gaming on the Playstation 3; he received his second "and final" red ring of death today. It's really sad that Microsoft made a major mistake and created a launch product that has suffered from so many technical malfunctions;

Attention Leo: if you read this please do not switch to the "dark side". We will be thinking about you during this tough time in your life.

"Second Red Ring of Death on my Xbox360. Definitely not heat this time - it's freezing. What junk.” - Leo Laporte

From the Rage Dept: Our Second Xbox 360 Replacement Red Rings
Posted 11/26/2008 on GamingShogun

Over the last month and a half, we have been fighting a losing battle. A battle against Murphy, his laws, and these dreaded red lights which keep greeting us every time we turn on an Xbox 360 console.

It started with our long-time running first-gen system. It died in its sleep, peacefully, after many of its brethren had met their ends. Microsoft sent us a new system and it immediately flashed three red rings straight out of the box. Using the support system again we sent it in and, once again, they sent us a completely new console. And again, it is DOA as well, flashing three red rings upon boot.

What kind of quality control is (or is not) going on at the Xbox 360 manufacturing plant if two new consoles are both DOA? Microsoft has a huge problem on their hands if this is the kind of craftsmanship they are utilizing.

You can read the whole bloody ordeal at my personal blog here.

Is Xbox 360 doomed in 2009?
Posted Dec 8, 2008 on by David Sheets of the St. Louis Post-Dispatch

When Microsoft announced it was revamping the Xbox 360 dashboard, concern, not congratulations, was the first thing I thought of voicing to Microsoft.

The update promised better graphics, avatars, easier access to movie and TV downloads — in short, a more robust interface than the “blades” presentation that greeted gamers when they started up their consoles.

Something more robust implied a need for more processing power, more work for Xbox. And that meant more worries that my console would crash and display the “red ring of death” yet again. (The consoles tend to run hot and warp the circuit boards.)

I am on my fourth Xbox — this time, one of the black-box Elites sporting a large hard drive, HDTV compatibility and an alleged resistance to crashes. Twenty months have passed and … well, so far, so good.

Of the three that died, the longest surviving one lasted a grand total of nine months. After the third died, Microsoft decided on its own to replace it with an Elite, without question and without my request. Meanwhile, my first PlayStation 3 and first Wii are humming along. Both were among the first ones sold in the United States. Both have performed flawlessly.

Both sit in a warmer room.

Perhaps Microsoft thought it looked bad that a gaming reporter couldn’t write about Xbox games any more after the third crash, and that he might have better luck with a console upgrade.

It’s unnerving to think though that my latest luck could run out anyway, even though the console is dusted regularly and has an extra cooling fan attached, even though as an added precaution the Elite sits in the coolest room of my house — which during winter turns downright cold.

Now I’m tentative about turning on my Xbox. It might survive my next bold move toward the galaxy’s fringe with “Star Trek,” or my next diplomatic overture with “Civilization”; it might not. Microsoft supposedly made the Elite systems more heat-resistant, but they are not impervious to crashing.

Microsoft might worry about my Elite, too, given my track record. However, I believe the company has more pressing concerns:

* None of the Xbox titles announced for 2009 has “Halo”-like market appeal. Microsoft enjoyed substantial media attention and a subsequent increase in Xbox 360 sales when “Halo 3″ arrived in September 2007. So, what’s next? A “Halo” prequel. By a show of hands, how many of you who aren’t “Halo” fans have heard of it?

* Casual gaming has made a huge leap forward due to the graying of the gaming population. However, Xbox 360 is not a console for casual games; it was designed to become the hub of home entertainment — the place everyone would go to see movies, listen to music and surf the Internet, perhaps all at once, in addition to playing richly designed games in high definition and with surround sound.

But for reasons already explained, it’s probably not be wise to try multiple tasks on Xbox.

* The swooning economy will get worse before it gets better. Just ask President-elect Obama. In the coming months, more jobs will disappear and disposable income will reduce to a trickle (if it hasn’t already), thus making even a $199 Xbox 360 Arcade — still the lowest priced system around — sound unappealing after Christmas.

Microsoft needs console sales to remain strong through the first quarter of 2009. Otherwise, it will have to raise prices on Arcades to cover the cost of a recent hardware upgrade. Or raise game prices.

Or, maybe Microsoft will get in line to ask Washington for a bailout.

So, now I look at my Xbox 360 with concern that it won’t last and that I cannot afford a replacement. And Microsoft probably won’t be as generous next time.

And I probably won’t care.

Here are just a few others, among many that can be easily found doing a news serach on the internet:

• Big RRoD Warranty Worries
  
  
• Microsoft's New RRoD Dramas
  
  
• Xbox 360 Red RRoD At PLAY.COM LIVE
  
  
• RRoD: An Unhappy Ending
  
  
• Microsoft Not Fixing Xbox 360 RRoD Problems

 

[ROAD_DOGG33J]

A problem that has received less media attention is the issue of game discs being scratched by the console when moved or reoriented while in use.

Why do people move their consoles while they're playing anyway?

 

[Vasco]

Actually the Jasper revision of the 360 has just come out, I'll be looking for one post Christmas seeing as they're only $230 now. Maybe you should double check your info next time?

I also like how that final article says that having a low price is terrible for the Xbox.

 

[Digital-Nitrate]

Actually the Jasper revision of the 360 has just come out, I'll be looking for one post Christmas seeing as they're only $230 now. Maybe you should double check your info next time?

Excuse me, but maybe you should read posts more carefully. None of the news was about the "Jasper revision", nor did I post anything that was incorrect based on the articles posted and those easily found else where.

Besides. What proof do you have that the "Jasper revision" is going to solve all these issues, and more importantly, please explain how a newly released 360 is going to help the millions who already have 360's, and may very well be stuck with a broken 360 outside of the warranty period?

Is your solution to this problem for everyone to buy the new 360 and hope it's failure rate is considerably lower?

On top of that, seeing as you have decided to tell me to double check my info, even when it had nothing to do with the article I posted, please explain how the "Jasper revision" has anything to do with the following:

Despite excellent console sales this last month, unfortunately most of the news regarding the 360 has not been very good; including the lack of any 360 presentations at most of the world's largest gaming conventions; sparse announcements for upcoming exclusive titles for 2009; numerous reports following the dashboard update that resulted in connection freezes, slow downs, lock ups, and more.

The latest news is especially bad for those that thought that maybe the 360's RRoD issues had been somehow resolved.

Not only that, but despite three years of denial, Microsoft has now, thanks to a major class action lawsuit, been forced to admit that indeed they not only are aware of the disc scratching problems with the 360, but that there is apparently evidence that shows they knew about it before production, and refused to fix the problem, despite being given multiple possible solutions

Of all those issues, the only ones that it might help, are the RRoD and scratching issues... but ONLY for people replacing or buying a 360 - not the millions of users who's 360s are currently working properly... and we don't have enough data that proves that this Jasper revision is going to fix these issues.

 

[Joey D]

The Xbox Doomed in 2009 article is a load of crap and I'm not even sure why you quoted it.

* None of the Xbox titles announced for 2009 has “Halo”-like market appeal. Microsoft enjoyed substantial media attention and a subsequent increase in Xbox 360 sales when “Halo 3″ arrived in September 2007. So, what’s next? A “Halo” prequel. By a show of hands, how many of you who aren’t “Halo” fans have heard of it?

Just because nothing has been announced as of 8 Dec 2008 doesn't mean there won't be big news coming from some game. There is still stuff floating under the radar and there are rumours of Crackdown 2 coming out next year, which should be quite good considering the first one was pretty good. Also Forza 3 has rumours floating around as well. This guy needs to understand that just because he doesn't like what's been announced or care for the rumours of games being announced it doesn't mean they are bad games.

* Casual gaming has made a huge leap forward due to the graying of the gaming population. However, Xbox 360 is not a console for casual games; it was designed to become the hub of home entertainment — the place everyone would go to see movies, listen to music and surf the Internet, perhaps all at once, in addition to playing richly designed games in high definition and with surround sound.

Uhhhhh what? I thought everyone always goes on about how the 360 is for casual gamers, seriously people need to make up their minds. I think it's far more for causal gamers then the PS3 is. Not to mention the PS3 is far better at being a home media centre then the 360 is.

* The swooning economy will get worse before it gets better. Just ask President-elect Obama. In the coming months, more jobs will disappear and disposable income will reduce to a trickle (if it hasn’t already), thus making even a $199 Xbox 360 Arcade — still the lowest priced system around — sound unappealing after Christmas.

Annnnnnnndddddd Swing and a Miss.

Video game industry expects to thrive
Video game sales are expected to be strong this year and in 2009, despite the economic troubles that have hurt some retail stores that sell the games, industry executives said on Thursday.

Speaking at the BMO Capital Markets interactive entertainment conference in New York, they said their optimism is fueled by solid sales of advanced game consoles made by Nintendo, Sony and Microsoft.

"I think it's going to hold up a lot better than other industries," said Mindy Mount, CFO of Microsoft's entertainment and devices division. "We remain cautiously optimistic."

Reggie Fils-Aime, president of Nintendo of America, said its Wii console continues to sell out, while sales of the pocket-sized DS game machine have risen almost 20% year-over-year. For that reason, Nintendo has no plans to cut the price of the $250 Wii, he said.

Microsoft in September cut the entry level price for its Xbox 360 to $200, and Sony last year lowered U.S. prices of the PlayStation 3, which comes with an 80 GB hard drive and a Blu-ray video disc player, to about $400.

"If I look at this from an industry perspective I think cautiously optimistic is quite appropriate," Fils-Aime said in an interview. "If I look at it from a Nintendo perspective, I would say very optimistic.

The outlook for video games is rosy in contrast to many other industries that are suffering from the global financial meltdown and rising unemployment, which has prompted shoppers to curb spending.

This week, Best Buy, the No. 1 U.S. electronics chain, slashed its profit forecast, and Circuit City Stores filed for bankruptcy.

Yves Guillemot, CEO of France's Ubisoft Entertainment -- maker of the hit "Splinter Cell" franchise -- said video games are selling well at low-cost retailer Wal-Mart and game seller GameStop.

"In general, there's a lot of competition (from other publishers), but we see that software is selling well, just due to the fact there are a lot of machine owners who need software," Guillemot said.

He said he still expects 2008 North American and European video game industry software sales to grow by more than 20%, and added that 2009 "will also be a great year."

Ubisoft's shares jumped 9.55% to 38.07 euros in Paris.

BMO analyst Edward Williams estimated that there are 50% more video game consoles installed now than a year ago, and that will spur robust sales as their owners shop for games during the holiday season.

But the challenge for future growth is to draw in consumers unfamiliar with video game systems, who may already be too concerned about their wallets to buy into games.

"The question is the person who is a little more marginal, the person who is new to gaming and is not as interested in video gaming," he said. "That's where I think there is greater potential for risk."

The slump in consumer spending will hurt some game makers, particularly those lacking major hits, analysts have said.

For example, THQ posted a dismal third-quarter earnings report last week and cut jobs, canceled some games and said it plans to retool.

Strauss Zelnick, executive chairman of Take-Two Interactive Software, maker of the blockbuster "Grand Theft Auto" series, said overall holiday shopping "doesn't look very promising" for those who do not have huge hits on the shelves.

"I'm concerned that it's going to be a pretty rough holiday season," he said. "Everyone's going to be shopping less. First you are going to see less foot traffic and then less inventory on the shelves."

Peter Moore, president of Electronic Arts' EA Sports unit, which makes the popular title "Madden NFL," also voiced "cautious optimism."

"We are entering uncharted water from an economic standpoint," he said. "We are holding our breath and hoping the consumer comes out to play."

On Nasdaq, EA rose 7.08% to close at $22.22, while Take-Two fell 1.02% to $10.69.

There are several of these articles all over the internet. One industry that is not taking a hit is the gaming industry. And if you were going to buy a video game console the $199 Xbox Arcade sounds far more appealing then a $399.99 80GB PS3 ($349.99 Refurb 40 GB) system especially if you are hurting financially. Although I still say save the money for a PC since in the long run it will benefit you more if you are hurting for cash.

 

[Digital-Nitrate]

Following the cancellation of the untitled Halo MMO game and the subsequent upcoming closure of Micorosoft's Ensemble Studios (Halo Wars, Age of Empires) Microsoft has now also announced the shutdown of yet another first party developer, ACES, developer of their Flight Simulator series.

In addition to that, Microsoft has also closed down their Gamerscore Blog.

It also appears that the majority of the recent lay offs at Microsoft are from it's Entertainment and Devices Division (Zune, PC gaming and Xbox division) including 30 percent of their internal video game testers.

In addition, it also appears Microsoft's game division will receive a massive management restructuring next week:


Massive Layoff at Xbox Division - Closes Studio
(source)

Microsoft recently announced that the company would be laying-off 5,000 employees due to a drop in profits. This is the first mass layoff in the history of Microsoft. However, news has trickled out that the Xbox division will be suffering the brunt of the job cuts.

Word has been trickling out that the Entertainment and Devices Division (EDD) will receive the brunt of the mass layoff. The EDD division consists of the Zune, PC gaming and the massive Xbox division. The EDD is headed up by the well known faces: Shane Kim, Don Matttrick, Phil Spencer and the friendly Aaron Greenberg.

Word has come out that Microsoft owned site, Gamerscore Blog has ceased operation. Many of the former employees have revealed that all of the writers have been laid off.

Also, notorious VentureBeat writer Dean Takahashi, revealed that approximately 30 percent of Microsoft’s internal video game testers have been laid off. What in the world is Microsoft thinking by laying off quality assurance testers for the video game division?

The journalist also stated that the game division will receive a massive management restructuring next week. In the corporate world, management restructuring usually means firing and consolidating. Could this be the end of Aaron Greenberg? I sure hope not.

Microsoft also announced today that the company will be shutting down one of its longest running game studio, ACES. The studio has been responsible for various franchises such as long time veteran, Flight Simulator.

According to Microsoft the decision to shut down the studio was made in order “to align our[Microsoft's] people against our[Microsoft's] highest priorities.” Obviously the highest priority for Microsoft is Windows.

I have talked about Microsoft’s shift towards the casual market and these events seem to indicate that the change will not be gradual but possibly abrupt. There is also some indication from Microsoft that the company wants to focus more on its core business such as Windows. This is in contrast to Sony who is laying-off employees in its core businesses and leaving the gaming division alone (for now). Could we see a leaner Xbox division by next month?

Much of the speculation on Wall Street is that this is another sign that Microsoft realizes they have a serious problem on their hands and that's the failure of Vista and the need to focus the company's primary resources on Windows 7 and their bread & butter legacy software product lines.

 

[Tornado]

Copy-Paste:

I think this may have two possible ramifications:

• Its getting rather close to time to start developing a 360 successor. What are the odds the Microsoft delay it for a while?
• After the partial failure of Vista (as well as the total failure of unifying PC gaming with the Games for Windows Program and XBox Live on PC), will we see Microsoft start to ignore the gaming division entirely to instead worry about making Windows 7 a success (remember, that is the part of Microsoft that actually makes money)?

While I doubt that the second will actually occur, one musn't forget the mess that Microsoft shareholders started making around August last year surrounding the gaming division's money making potential. And that was when Microsoft wasn't particularly woried about its finances despite losing billions of dollars on the XBox.

Overall, I think it will be an interesting year for the 360; especially when you look at Microsoft's approach compared to Sony's. I'm curious to see what approach pans out.

 

[Robin]

In a way im sad to see the flight sim dev's go, they have been around an awfully long time and have done some spectacular work. However some good could come of this in the form of a multiplatform flight sim no longer tied to MS.

Its like when Microsoft dumped the partnership with Angel Studio's (midtown madness) Rockstar picked them up, they then became Rockstar San Diego and have given us great games like the midnight club series. Im sure someone wont let such talent go to waste and will setup the Aces studio as an independant opperation.

As for Windows 7 I would be happy that MS are focusing all their energy on it because it looks like it really could be a winner after the disaster of Vista.

Robin.

 

[Tornado]

Aces will be picked up probably before March, I'd suspect. When FASA Studio (another Microsoft 2nd party group. They did Crimson Skies) folded a couple of years ago, the team reformed as Smith and Tinker something like 30 days later, so I wouldn't put too much worry into it.

 

[Mark T]

Sony, the Japanese consumer electronics group, said on Thursday that it would plunge to a Y260bn ($2.9bn) operating loss in the year to March 2009 as the global downturn and strong yen wreaked havoc on sales.

The group was expecting an operating profit of Y200bn only last October but Sony made an operating loss during the peak Christmas trading period and slashed its sales forecast by 14 per cent to Y7,700bn.

Sony said that Y340bn of the fall in operating profit was due to its electronics division, with Y250bn of that due to price competition and the weak economy. There will be further losses of Y65bn on securities held by the company’s insurance arm.

Every business was hit by the strength of the yen and Sony announced additional restructuring provisions in the electronics, music and movie divisions as it gears up to announce the end of production at one of its most famous Japanese factories later on Thursday.

Sony confirmed that it may move all TV production in Japan to one plant, which would mean the closure of either its Ichinomiya or Inazawa factory, as the company seeks to stem losses in its electronics business by cutting 16,000 jobs

The two neighbouring plants, from which Sony exported Trinitron TVs to the world in the 1970s and 1980s, are icons within the company and a closure would show that Sony is willing to tackle its high costs in Japan.

Sony’s shares closed down 2.6 per cent at Y1,938 in the run-up to the announcement on restructuring by Sir Howard Stringer, chief executive, which is scheduled to take place in Tokyo on Thursday evening.

“It depends on whether this is the package or this is the start of the sacred cows being dismantled,” said Pelham Smithers, an analyst at Pali International in Singapore.

The Ichinomiya factory is considered most at risk because staff there say Sony was already planning to move the manufacture of projectors to another plant.

Sony declined to comment on a report in the Nikkei business newspaper that more than 2,000 full-time jobs will go in Japan through natural attrition and incentives for early retirement.

If that were the full extent of job losses in Japan, however, it would imply deeper cuts abroad.

Sony has said it will cut 8,000 full time jobs in total and shut five or six factories. So far it has announced the closure of one factory in France, with the loss of 312 jobs, and one in the US, with the loss of 560 jobs.

Sacking staff in Japan is sensitive, because many were implicitly promised a ‘job for life’, but sparing them would risk angering Sony’s foreign employees.

Managers in the company have told the Financial Times that the restructuring plans have met resistance from executives in Sony’s traditional manufacturing business.

But the extent of the downturn means that most analysts, and a number of Sony managers, say that there will have to be further cuts even after the current plan is completed.

It looks like the electronics side is causing Sony problems with losses announced in the last quarter. It's not as bad as Microsoft as the gaming division seems to be holding its own at the moment. It's worrying times for both manufacturers though and no one really wants to see either the PS3 or the 360 to be withdrawn (I'm sure it would never come to that anyway).

In difficult times it makes sense for people to stay at home and entertain themselves rather than spending money going out. A £20-£40 investment in game could keep you occupied for many months where as one night on the town is usually around £45 (for me it is anyway, don't know where the money goes). The only problem is selling the console the in the first place, especially for Sony as it is priced higher at the moment and the used consoles seem to be holding there value.

 

[Jay]

In a way im sad to see the flight sim dev's go, they have been around an awfully long time and have done some spectacular work. However some good could come of this in the form of a multiplatform flight sim no longer tied to MS.

MS had some big plans for the next flightsim, it's sad they are have been put on hold (not thrown away), even worse MS train sim2 which was well into production has been cancelled completely.

MS flightsim will be back not doubts, it is MS's most profitable PC title.

 

[Obli]

MS seem to be laying off gaming related staff (360 firsty party devs, QA and Gaming for Windows staff). Even the head of Gaming for Windows has been sacked, so it's not just those at the bottom of hierachy.

I think MS will refocus on their core business - OS and desktop applications. With the threat of Google potentially introducing a cheap (or free?) OS and alternative 'desktop apps' that maybe also be free, which are run from 'the cloud'. There are already free, simple alternatives to Office applications that are run in a web browser, with documents being stored online. So, the applications and your data can be accessed by any computer with a web browser.

 

[Moglet]

Was this topic ever intended to do anything apart from stir up trouble, really? The tone it was posted in, the one sided argument put forward, it all reeks of wanting to annoy XBox owners.

 

[nk4e]

Was this topic ever intended to do anything apart from stir up trouble, really? The tone it was posted in, the one sided argument put forward, it all reeks of wanting to annoy XBox owners.

[sarcasm]I am so mad that I have to pay for something that could get me a few books or even make a car payment. [/sarcasm]
I have been looking into this thread and wonder why. Why all the trouble to decided which is better? Give or take that there are a few exclusives that I want to play on the PS3 that are not on the 360. Though if the 360 dies, somehow and in some way. Microsoft will make more money on the next-gen console. It could be a virtual reality headset.

 

[Digital-Nitrate]

To be clear, while some have attempted to turn it into a console debate, it is not. It's a thread for those like me who own stock or have an interest in Microsoft from a business stand point, and want to discuss the merits of their Xbox division and how it affects the value of the company and based on facts, try and predict as best we can what Microsoft has planned for their Xbox division and how that might impact the company down the road.

In this thread you'll find lots of information and accurate facts that pertain precisely to that topic.

There are plenty of reasons why people love their 360's, and their PS3s, but that is clearly not the topic of this thread.

If one is offended by the facts that they might read, and more importantly have no interest in the topic, I suggest they not read this thread, and certainly not post in it in an attempt to make it out as something it is not.

 

[ChadSpeed]

Actually if you do a little search you'll find that the PS3 sold more units in Europe in two days than the XB360 sold in a whole month after it was released in Europe.

Yes, XB360 has significantly more units than both the PS3 and the Wii, but it has also had a full year head start, and more to the point, despite having 10 million users, they are not only still losing money, but because they effectively cut all support of the Xbox, they ONLY have that 10 million user base, while Sony has sold over 100 million PS2 of which not only is it still supported, but PS2 hardware and software have continued to outsell XB360's and its software.

So in terms of the actual console market, Sony has a 10 to 1 advantage over Microsoft, and because the PS2 sales have a much higher proft margin, Sony is able to generate a great deal of profit from it.

So while Sony is still a long way away from seeing PS3 profits, the money they are getting from PS2 software sales more than makes up for it, and will keep that division in the black until revenue from PS3 software sales generate operating profits.

Adding to Sony's advantage is that they already have a console that is capable of playing games over 7GB all the way up to 49GB. Considering developers have already released and are making games well over twice the capacity of any XB360 game, with some games like MGS4 and GT5 that may even require a 50GB BD-ROM disc - the writing is on the wall and MS will have little choice but to release a competitive product... Which will cost them several billion dollars to design, build, distribute, and market... and will alienate many angry XB360 users, of which some were already upset that Microsoft abandoned support of the original Xbox so quickly.


Basically MS is damned if they do, and damned if they don't.

If they try to continue to charge for XBL and high prices for add-ons and additional content, they risk upsetting enough of their customers that they decide to stop supporting XB all together.

If they don't though, they will continue to lose money at a very alarming rate.

If they release a new Xbox that supports high capacity games, it will cost billions to launch, and will alienate many of their current loyal XB360 owners, and risk the chance that they might also stop supporting XB all together.

If they don't though, then again they risk losing more of their customers who want to play these games and will have no choice but to shift their support to other formats.

Basically, as many industry and financial analysts will agree, Microsoft is in a very bad spot. Their Xbox division continues to lose money, and as pointed out above, any change they make in their business strategy could potentially put their financial position and market growth at even more of a serious risk... and yet they cannot afford to continue on the same path they are on now.

Dn you are so dang PS biased, its not needed here on the 360 forums. Do you own a 360? Do you have an XBL Gold membership?

I just read in my Game Informer that for the month of December domestic sales of the PS3 were around 300,000, while the 360 was at 800,000, and the Wii at over 2 million. I really don't care who's selling better, but whos got the glitch free, great online(with Voice chat), and great HD picture with great Dolby Digital sound. Sony is also having troubles in this economic climate of doom and gloom, no one is immune.

There were a couple other pieces in the GI that you may find interesting.

One was relates to above citing that the PS3 domestic numbers were at 466,000 for Nov. of 07', but 378,000 for Nov. 08'. While the 360 received %124 increase in European sales for the month, compared to PS3's %3 and the Wii's %43 increase. Sony is laying off 8,000 employees by 2010, the article also states that " with the Playstation 3 performing this poorly, it can't be immune.

Now on a lighter note, something more your style, in the same issue it list the 360 as still having the RROD, even Elite models, as the #1 disappointment of 2008.

 

[nk4e]

Does it really matter if you have a 360 or have xbl? Wouldn't owning Stock in MS would be better?
edit: owning a Share of the company of MS would be better?

 

[ChadSpeed]

Does it really matter if you have a 360 or have xbl? Wouldn't owning Stock in MS would be better?
edit: owning a Share of the company of MS would be better?

If your going to criticize something as much as DN does the 360, yes you should own one.

 

[nk4e]

Are you sure that he owns one? He could be just worried about the market like everyone else. Plus,not all Share holders own a 360 though could be in it for the general side of Microsoft.

 

[Digital-Nitrate]

Dn you are so dang PS biased

First of all, I know for a fact I am not, and no matter how many times you try and convince me and everyone else I am it won't make it true.

What I care about are facts, of which you apparently not only do not care about if they cast the 360 in any sort of bad light, and rather than discuss the topic or the facts that have been posted, you only take issue with me personally, although you are way off the mark with your assumptions there as well.

I have posted facts that are both negative and positive for both consoles as well as disagreed with those that have posted false facts about the 360 that were not only untrue but unfavorable and instead posted accurate facts that were favorable towards the 360, and unlike some people I know I don't go around making ridiculous exaggerations and fabrications in a poor attempt to make my opinion appear more valid or to purposefully mislead others into thinking something is true that simply is not.

In fact, I rarely express my own personal subjective opinions, as too many people can't distinguish between a subjective and an objective opinion, and like now, instead of posting something interesting and participating in a discussion in a civil manor, instead they just attack them personally and call them names.

If you would like to participate in the topic (the viability and future of MS's Xbox division, and not a console vs console debate) great, but if all you have to offer this thread are personal attacks, then that says so much more about who you are then it does about the person you are personally attacking.

 

[ChadSpeed]

First of all, I know for a fact I am not, and no matter how many times you try and convince me and everyone else I am it won't make it true.

What I care about are facts, of which you apparently not only do not care about if they cast the 360 in any sort of bad light, and rather than discuss the topic or the facts that have been posted, you only take issue with me personally, although you are way off the mark with your assumptions there as well.

I have posted facts that are both negative and positive for both consoles as well as disagreed with those that have posted false facts about the 360 that were not only untrue but unfavorable and instead posted accurate facts that were favorable towards the 360, and unlike some people I know I don't go around making ridiculous exaggerations and fabrications in a poor attempt to make my opinion appear more valid or to purposefully mislead others into thinking something is true that simply is not.

In fact, I rarely express my own personal subjective opinions, as too many people can't distinguish between a subjective and an objective opinion, and like now, instead of posting something interesting and participating in a discussion in a civil manor, instead they just attack them personally and call them names.

If you would like to participate in the topic (the viability and future of MS's Xbox division, and not a console vs console debate) great, but if all you have to offer this thread are personal attacks, then that says so much more about who you are then it does about the person you are personally attacking.

My bad DN, not trying to personally attack you. This just seems like PS propaganda, although it is legit info if you are a M$ stockholder. I understand what the thread is for now, just got sidetracked in my head. I believe, however, that I was civil and did post good info. The 360 had %124 increase in sales in Europe in Nov 08' compared to Nov. 07'. Domestically it sold 800,000 units in the same month here in the US. Microsoft has saturated the global market with TV ads that apparently have worked well.

I am a bit surprised that this division at M$ has lost so much money, but don't most console manufacturers lose money until the software brings it in? How are M$'s losses related to Sony's? Hopefully M$ can make money at some point in this division, don't want another Sega Dreamcast, it did well in Japan but still failed, huh?

The "Inconvenient Truth" has some very good points about changes to XBL Gold. I agree with every single one of them. I would love to see any or all of those changes implemented this gen or next.

The article about failing in Japan is, I think a bit unrealistic. I am not sure but isn't there more 360 out there right now than any other console. With the Wii's sales I'm sure that it will catch it, but should only widen its gap with the PS3. We all know the Dreamcast failed, although I'm not 100% sure it was big in Japan, I was a teen and not up on that kind info back then. Also "360" in that article could be replaced by a "PS3", as far as marketing strategy goes compared to the Wii. The PS3 and 360 are for hardcore gamers, and multimedia lovers. I know the point of the article is to show M$ has only recover 75% of its operating losses, but it really doesn't show the marketing doing anything wrong, also as stated above it is clearly working well. Maybe they can get the profit sooner than we all expect. Especially if they stop having to give away a ton of 360 due to the RROD.

 

[Digital-Nitrate]

My bad DN, not trying to personally attack you. This just seems like PS propaganda, although it is legit info if you are a M$ stockholder. I understand what the thread is for now, just got sidetracked in my head.

No worries, and thanks for the understanding response. To be fair, my reaction is largely based on recent situations involving others, and not you, so I apologize for taking some of that anger out on you.

Here's to having a civil discussion...

I am a bit surprised that this division at M$ has lost so much money, but don't most console manufacturers lose money until the software brings it in?

That is the traditional model, at least when a console is first released, although it is my understanding that the Wii sells for a profit as does the PS2, and perhaps the 360, certainly in terms of hardware cost... but the real cost of course is development, marketing, distribution, and administration costs. To make up for that, they must count on software sales, and ideally first party software sales, as that is where they can make a decent profit. Otherwise they are just getting license fees leaving the publisher, developer and retailer getting the largest chunk of the sales revenue.

The article about failing in Japan is, I think a bit unrealistic. I am not sure but isn't there more 360 out there right now than any other console. With the Wii's sales I'm sure that it will catch it, but should only widen its gap with the PS3.

Actually the Wii surpassed the 360 a long time ago in regards to world wide sales.

Which is truly remarkable consider, like the PS3, it came out a year after the 360. The only question now is whether or not the Wii can sustain this pace and eventually pass the PS2 in terms of world wide hardware sales… although unlike the PS2, the Wii’s software sales have not matched the PS2’s historical software sales rates.

More importantly, the Wii is really it's own unique product, and doesn't necessarily compete directly with the 360 and PS3 in terms of it's target market... although I'm sure both Sony and Microsoft wish they had released and marketed a similar product to the Wii based on it's success in that market.

In fact last year, most of the multi-platform games that were released for all four current consoles (PS2, PS3, 360, Wii), the PS2 version sold the best.

Also, world wide sales only tells one part of the story, as the PS2 has over 125 million units sold... but it's also been out a long time.

A more accurate figure to follow in terms of predicting the success of a product compared to other products is to compare sales rates over both the same period of time, as well as day-to-date sales rates.

For instance, while the 360 has sold more units than the PS3, it also came out a full year earlier than the PS3. If you compare actual sales rates, you can see why Sony is not nearly as concerned about PS3 sales as others appear to be:

And outside of America, the PS3 has been selling much faster than the 360:

European Sales Rates

Japanese Sales Rates



Although this topic (sales rates between consoles) has been discussed in far greater detail here.