Writing off the 360

Forums - Sales Discussion - Writing off the 360

iberz said:

Why is it that everyone these day's seems to think the 360 has just run out of steam and will collapse next year. Everyone has the 360 finishing last on their prediction's. Most people seem to forget that after 2 years Microsoft has been able to sustain the 360's price quite remarkably. Honestly I think the 360 will have a much better year in 2008.

1. The new 360's reliability is excellent in comparison to the old motherboards.

2. Microsoft will probably drop it's price next year quite significantly

3. Believe it or not Microsft has some great games coming out next year, Splinter Cell Conviction, Ninja Gaiden2, Fable 2, Killer Instinct 3, Dark Messiah, Too Human etc.

Also don't forget, 360 software sales mean 3rd parties are loving Microsoft right now. I'm not saying here the 360 will have record-breaking sales and outsell the Wii and PS3 together but stop making silly assumptions like the PS3 overtaking the 360 in 2008 or early 2009 because it just isn't going to happen.


1. I know many gamers who were unaware of the RROD, and even fewer who know of the new Falcon chipset (the members of these boards are an atypical sample).

2. We said the same thing in 2006, and a substantial cut never came. Until we know how much they cut, when they cut it, and what Sony does to match it, there's no way to know what the effect of a cut will be. I would say they should drop by at least $75 within 30 days of GTA4 launching, and that Sony has already cut to the bone in 2007, so it is unlikely to match until next November, but that's just guesswork on my part.

3. Every console is expecting great games this year, but until the games actually arrive, no one knows how good they will be, or if they will impact sales. Certainly no one anticipated GTA3 being such a prime mover for the PS2, nor did anyone anticipate such a luke warm reception for Metroid Prime 3 last year. And who would have expected titles such as Nintendogs and Brain Age to sport the sort of legs that they have?

In my predictions post, I expected a good year for all the systems, but a slightly better one for PS3 than 360. Why?

First, the 360 could shave $200 off it's price and still not be able to sell consoles in Japan, while Sony has a prove record in all 3 markets. Even if MS pulls away a bit in US and EU, I suspect it will not be enough to overcome the Asian differential.

Secondly, if my math is right, there were roughly 165 million consoles sold last gen, and only 45 million this. Granted that many of those were replacements of failed consoles, but we can also expect the market to grow this gen as well. So we can safely assume that there's at least another 120million consoles to be sold this generation. So the question is, who will buy them?

Though I have no direct data to back this up, I am assuming that many XBOx and GameCube owners have made the jump. Why?

1. MS dropped support of the XB almost 3 years ago. There's been no reason for them to hang on. When you consider the strong sales of Halo3, it is clear many fans of that franchise have already upgraded, meaning a large portion of 360 owners are former XB owners. This in turn means that relatively few XBox boosters remain among this gen's "undecideds".

2. The GameCube was arguably on life support longer than the original XBox. No matter how big a Nintendo fan one may be, it is hard to deny the system was a colossal disappointment from a marketing perspective. However, Nintendo fans are loyal, and are likely to stick with the Big N this gen (though many may also get a second console). As is, the Wii has nearly equaled GCN sales, and traditional Nintendo titles (ie anything Mario) have done great business. Add in the relatively low price of the Wii, and tendecies for bandwagon jumping, and odds are good a huge portion of the Nintendo crowd has also transitioned (if they could even find a Wii).

3. Even if we assume every single Wii and 360 sold went to former PS2 fans who have abandoned any hope of owning a PS3, that would still leave well over 70 million PS2 owners out there, more than half of whom never owned a GCN or XBox.

So, no matter how you slice it, a large number of those unsold consoles will end up being sold to people who have purchased Sony systems in the past, and only Sony systems last gen. It is not unreasonable to assume these people were happy with the PS2, and given the choice, many of them would choose to support the Sony name. The barrier to this of course remains the high price of the PS3 - most PS2 sales occured after they dropped below $200. However, neither the 360 nor the Wii have gone into that price range either (and the Wii, while closest to that mark, remains a bitch to find), so most of those current PS2 owners have little or no reason to commit to any of the three consoles right now, let alone a "rival" console for a company they have little familiarity with (if not outright hostility, as is often the case with MS; at least Nintendo has a long standing gaming rep behind them, and likely many PS2 owners have owned some form of Nintendo console in the past, even if it was a GameBoy)? Therefore, I suspect MS will likely have to take dramatic measures to lure these gamers away from Sony (which I would suggest being a steep price cut in concert with the release of GTA4.)

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chriscox1121 said:
I only own Nintendo consoles and would buy a 360 over a PS3. But, to be honest I do believe the PS3 will outsell 360 WW by early to mid 2009. The only one losing market share is MS. Not Nintendo and Not Sony. Really, it's just a matter of time. MS fans only see things at a NA view point. With Sony's best software beginning to hit they will capture a big chunk of the market. Although, I'm not real sure if they will carve into Nintendo's. I think it could go either way, but I definately see MS losing alot of ground this year in respects to WW sales.

One more time.... When the PS3 and Wii launched, MS had 100% of the market, Sony and Nintendo 0%. That's why MS is the only one to be losing market share.

SeriousWB said:
I think MS need to generate hype on the scale of the Halo hype for one or a few more games. If they can get that same hype for just another or two more series other than the Halo series they could float through the year. However it may be a bit late for that plan for 2008, if they began on it now they could get a nice position for 2009.

1. Such promotion costs an inordinate amount of money. MS has no other exclusive VG property that would justify that sort of expenditure.

2. It remains to be seen whether all that promotion really was worthwhile. Yes, MS sold oodles of Halo 3's in record time, but the market quickly dropped too. If anything, it appears the promotion just got people to buy it on the first day when they may have been willing to wait a week or two. It's debatable whether the overall number of Halo customers actually increased substantially, let alone increased enough to justify the cost of promotion.

TurdFergusonMcGee said:
Nobody is writing off microsoft even though PS3 is doing better than 360 was at this point in its life, despite it costing $600.

Heres a stupid link back to this site to show you:


It just shows how after 59 weeks (the lenght ps3 has been out), it has more sales than 360 after 59 weeks.

I don't know where you live, but as stated earlier, the 360 suffered a 6-month drought in the U.S. - it would sell out as soon as it was put on the shelf. I know several places where you couldn't find a 360 until May-June. The PS3 only had a 2-week drought and they were spotted on shelves. So, if you have systems on the shelves two weeks after release - and no 360s on shelves for 6 months, do you understand what that means? You couldn't buy a 360! And if you can't buy one, guess what ... you can't sell it either! The PS3 sales are reflective of one thing - it has readily been available since launch.



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naznatips said:

If we go through the 360's 29 million sellers we get:

12 shooters, 4 racing games, 4 action games, 4 sports games, 2 WRPGs, 2 music games, and 1 fighting game. in 29 million sellers the 360 covers 7 genres, and favors shooters even more than the Wii favors party games.

I was about to post something similar, but you pretty much covered it here. The problem MS is going to encounter in '08 is the stigma that they're hardcore-only.

This is a case of "be careful what you wish for, it might come true."

For all the gum-flapping around here and on other messageboards about what's hardcore, what's casual, etc., the fundamental force that drives the market is diversity. The PS1 and PS2 didn't break 100M units because they had hardcore titles. They broke 100M because they had 2000 games to choose from that covered pretty much everything under the sun, and for the majority of their marketable life they cost $200 or less and sold to casual buyers, not the hardcore.

Hardcore gamers don't decide console wars. 

Microsoft threw down the gauntlet to challenge Sony and steal the hardcore. Well, they did it. Congratulations. Look where that got Sega.

As an aside, I think whether or not the RROD is fixed now is a non-issue. Buyers can't "un-remember" what they read in 2007, and most people have a preconceived notion now (whether it's correct or not) that 360's fail, and are only good for shooters and sports games. The damage on that front has been done.

Personally, I wonder where is MS's Mario, Sonic, Crash Bandicoot, or Ratchet & Clank? Where is the good old fashioned platformer?

Heck, at least even 3DO tried by throwing buckets of money at Crystal Dynamics with Gex (which was actually a decent title).

I mean, come'on MS! Is Earthworm Jim busy this year?

thx1138 said:
Untamoi said:
thx1138 said:
SlorgNet said:

1. 360 Hard disk is more joe consumer friendly to replace than PS3. Sure the PS3 HD can be replaced, but if it was so easy to put any HDD in then the best thing Sony could have done was not have all these SKU's. Just offer a SKU without HDD, but make purchasing 1 mandatory. Then people could choose any off the shelf HDD.


360 HDD's are horribly overpriced right now. 20 Gb HDD costs around 100€ while 120 Gb costs 150-200€. With the price of the 20 Gb HDD I could find external 500 Gb HDD for my PC. PS3 uses standard HDD's which are a lot cheaper and you also have more options.

You dont understand my point. With the 360 Joe consumer (Someone that isnt interested in opening the console up to replace a HDD) the 360 is more consumer friendly. Im not talking about cost or flexibility I am talking what the average consumer would want to do.

The average consumer knows when he's getting raped on the price when it's as bad as it is with the 360 HDD. He doesn't want that.

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Guys 3rd parties dont make much money of the wii.. only nintendo does, and ninty doesnt seem to care with there online either.



A few games are luring casual gamers - Scene It!, Rock Band (also on the PS3 and PS2), Viva Pinata (for the kiddies) and luring RPG types (Blue Dragon, Eternal Sonata and even Mass Effect). Expect more in 2008 from MS.

Jandre02 said:
They are turning profit in the gaming department (think Halo 3, XBL) but I doubt their console is profitable. They can't drop each console $100, which is the only price drop I would deem significant.

They will drop the Premium to 250-299, eliminate the core, and drop the elite to 350-399. I highly doubt that it costs them less than $300 to make each Xbox360.

They won't drop too far below the Wii, which won't have a price drop for a long time. That will make it seem like the Wii is worth more than the 360. They may add games or controllers, but they won't drop the price of the core.

I suspect that they are profitable at the moment, especially if you ignore the RROD warrantee issue (which most believe is why there was no significant price drop this year).

We know that improvements in technology and economy of scale allows the costs of consoles to drop the longer they are manufactured. We can be pretty sure that the 360 didn't sell at nearly the same loss margin as the PS3 (business week put it at $125 http://www.businessweek.com/technology/content/nov2005/tc20051122_410710.htm) , and as I recall, Sony claimed that they had roughly halved that loss by the middle of the year, probably more when you introduce the new models, and that allowed them to drop their prices.

The 360 has now been on shelves for over 2 years, and has shifted to a newer, cheaper model, with only a marginal price cut, the odds are very good that at least some of their models are profitable, or at least breaking even. Now this may change if MS brings in a substantial cut, but not so long as the price remains at current levels.

As to the extent of the cut, remember that even though the XBox launched with a similar deficit, MS was willing to drop the price $100 just 7 months after its US launch in order to match the PS2. It's now been over 24 months since the 360 launched, and likely another 2-4 months will pass before a price cut is announced. At this point, the XBox was down to just $180. If it were me, and I were trying to do an agressive push to keep Sony back on it's heels, I'd strongly consider a new pricing scheme of Arcade for $199, Premium for $249-275, and Elite for $350 (though personally I'd consider scrapping the Arcade price point all together). That would put the 360 in the Wii's price range, and well under the PS3s. While this would not force the Wii to cut price (which they could do painlessly), it could force Sony's hand and severely hurt their bottom line.