| NJ5 said: Those days of MS winning at any cost are over. Look at the job cuts among other things. Actually what MS's job cuts show is that it's a much more cautious company than Sony. Instead of waiting for major losses, they preemptively reduced costs. It may look bad on a social level, but as far as the corporation goes it could be a wise measure. If you think MS can just throw money away by continually cutting cost of their console to please their fans and get a second place finish you have no idea how business works. The important point is that MS's ability to cut prices is not smaller than Sony's. That's pretty obvious when you look at all the combined facts: 1- MS's entertainment division is still profitable even after all its price cuts. 2- MS didn't cut prices as fast as Sony did (they're probably on target to halve 360's price 4 years after launch which hardly looks radical compared to what people are asking from Sony). 3- Sony is much more affected by the recession than MS. In fact a bankruptcy is not impossible if the recession lasts long enough and Sony can't restructure fast enough (they started too late).
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Yes, all good points, There is nothing I wrote that is contrary to anything you said.
1) The MS entertainment division comprises of a lot of things, including PC games and apparently some versions of office. This can be use to cover 360 loses.
Cutting prices means you are losing money on console sales. Depending on who you listen to there are still making a lost on consoles sold, I read this is the case last month (also about the afore mentioned entertainment divison covering xbox loses) in a US financial paper online, but live and games are making enough to cover this.
I find it hard to believe that the "bleeding edge" 360 can be cheaper to produce than the wii which some call a modified lastgen gamecube.
(Let's not argue about this because it's inconclusive.)
As it becomes cheaper to produce the 360, automatic price cuts negates profit.
All this also applies to sony.
Compared to nintendo this makes sony and MS look like amateur businesses. I am sure the wii is a lot less cheaper to produce now than at its launch but not the remotest talk of price cuts, and why should there be?
This can be a bit harsh on sony and MS as wii's current position gives them that option, but they had the foresight to be there in the first place, something 360 and sony lacked.
You are right about the 4year plan and it should be cheaper to produce by then, but also cheaper to buy, again eating at profits.
2) Sony is losing money but no one thinks they will go under. All reports I have read from the financial press didn't give that impression but anything is possible if this recession gets worse.
From films and music to memory cards, sony has it's hands in many a pot, if this will turn out to be good or bad we will all know soon enough.
MS is considered to be the modern day titanic by many, but the original met its iceburg.
As for the recession, as it deepens no one knows what will happen. Even the greatest and mightiest can fall. All this investment in the gaming industry can be in vain if things get really, really bad.
3) Any talk of expensive all singing, all dancing, home entertainment next gen consoles in the next couple years could be laid to rest due to the recession.
