http://thewiikly.zogdog.com/article.php?article=65&ed=7

The article's too long to post here so I just put up the link. I think people need more views of this guy's writings. I've written to him on occassion last year congratulating him on his insight on this business. He's been around I can tell. Probably seen this whole industry grow from its birth. And he seems to know the business end very well which brings him to conclusions you may not reach if only you look at it purely from the customer's viewpoint.

I didn't quite believe him on this when I first read it and I still have my doubts but lately I've been getting a sinking feeling both Sony AND Microsoft will end up leaving videogaming eventually leaving the whole industry to Nintendo. New competitors would fill their shoes of course (I'm wondering about Wal-Mart and maybe some 3rd party developers combining trying to make a go at it, maybe even Apple, General Electric???) but that would be a shocking blow if that was to come to pass.

I know ONE of these guys is leaving after this generation and somehow I think that guy is sadly Sony. Some think it could be Microsoft who drops out and since they are still the outsiders this is not a far-fetched idea. It doesn't seem so now but things NEVER seem so until they come to pass. In 1982 no one saw a videogame market crash coming but when 1984 was here you knew it was in full effect.

Read Sean Malstrom's piece & let's discuss what we think about it.

John Lucas 

Here is another article, focusing on the financials of MS/Xbox. 21bn spent in 6 years... wish I had 0.1% of that ;)

http://ce.seekingalpha.com/article/32642 

Scary thing, is that the last year has been the most expensive - with 5.5bn spent - and a 1.2bn loss.

...

I personally think MS will try 1 (maybe 2) more generations, and if things don't improve - then give up. I believe the main impact of the 360 (to date) is to hurt the performance of the PS3. MS may not mind this too much.

great article.

favorite quote "would of been cheaper and easier to buy everyone Wii's"

Bunch of fanboy nonsense...PS3 will prevail!

 either you didn't read the article, or you have a compulsive disorder to post non-sensical replies...  unless your intention is comic relief.  ah.

If u think both sony and microsoft will leave then ill say a definate no, sony will more then likely continue the handhelds since the psp although not as much as ds is having success, and i would say both sony and microsoft are waiting for the other to drop out, highly unlikely they both will leave and i dont think microsoft will end the 360 with a loss, probably close to break even, as for sony i think they will loose money on ps3 but they will cost cuts as necesary and sell fewer consoles then last gen just to stay in the biz

great post! malstrom is so thorough...

the 3 reasons malstrom gave for xbox's existence are all flimsy... the way i see it, it's 1) home hub (which is a little like defending against sony, but more proactive) and 2) Diversification, and then there's one that i think Malstroms hints at with the Gates hands together picture but didn't explicitly say-- Gates' flawed vision.

well, bill gates is gone as CEO. his passion doesn't appear to be in managing the company anymore (he's not that type anyway... IBM basically gave him the contract to develop MS DOS).

$21 bln has been invested in the project. would MS just throw it out? money spent is spent, so the question is, going forward, with whatever that has been developed, how should MS proceed? XBox simply won't be profitable (or as profitable as they'd like) in its current form. malstrom basically responds to this question, and he says: Xbox should be scrapped.

however, if MS is smart, the story doesn't end here. Ballmer is more capable a CEO than Gates, and the more removed Gates is from MS operations (Wikipedia: On June 15, 2006, Gates announced that he would transition out of his day-to-day role over the next two years to dedicate more time to philanthropy.), the more free rein the next generation has.

the rest of my post is speculation: MS does have enough technology and expertise developed from it $21bln project, moves to collaborate closer with hardware makers, and start to genuinely pursue the MS Home Hub. Ask yourself: were it not for MS past failures, would you bet against MS? No way. its position is still utterly dominant. if only someone half as capable as Steve Jobs takes over, MSFT will indeed be a formiable opponent. in my mind, the faster Gates leave, the better off MSFT is.

yeah I believe MS is more proactive with their system then defensive too. You have too realize Microsoft owns the OS and Office software markets, they are done there and needs avenues to grow. They looked at every expanding market and pretty much jumped into them all. PDA software and the Zune is there segway into portables and the Xbox is there segway into the living room. And personally I see Microsoft's vision is to unify some of these concepts, and the Xbox is going to do that for them, that's why you can use Media Center of your xbox and stream stuff off your PC, you can rent HD movies off the internet on your xbox they have the Live service I believe they want to expand that with all kinds of other services. I believed from the get go it was never their intention to simply create a video game console, but a hub for all these services as was mentioned. But the reason isn't only because they tapped out the other markets, it's because they missed a large boat. That would be the internet. They owned the biggest web browswer in town, give that web browser away for free and for what? As far as I can tell nothing. They get nothing in turn, why? because owning the gateway should mean you get first dibs and steering and guiding these customers in the direction you want, and they lost that, they didn't invent google, Yahoo, ebay, MySpace, Youtube, and the few other brandnames to the web. They jumped on the boat so late with Live search, Live Space and such that they're tailing so far behind. But that's what Microsoft does, they take someone elses product interegrate it into their services and use their power to force it on the world. It's not always bad, for all intents and purposes having unified OS and office software made things easier, of course now the idea of opensource is even better. But nonetheless to end this post my point is Microsoft in my opinion believes it needs xbox brand, that it will in the generations to come play an important role in the future, and it's paving that road. already a few people in the industry say they see an end to consoles and see more of a living room pc setup for the future, well it's obvious MS is trying to create that. They want to be our web browser/tivo/download service/game machine. And unless they fail horribly they won't stop until they get it. They never have with anything else and there is no reason for them to now.

A very interesting read. Now let's see if it comes true.

Oh the suspense is  killing me...

In the first sentence of the first page, I had my doubts about this article, seeing as Sony's not the one that killed Sega. I ended up making it through the next few pages and did manage to find one worthwhile point: Microsoft does have an image problem with consumers that it needs to fix (and apparently the author is suggesting the way to do this is to not deal with them at all).