Analyst: Xbox Business a 'Disastrous Endeavor' for Microsoft

[Erik Aston]

John, All of that starts from a little thing you might call the Game and Watch Standard. Some G&W titles featured the first modern cross-shaped 4-way directional pad on the left, with the action button(s) on the right. The NES and Game Boy were basically exact copies of this design. And everything since, INCLUDING the DS and Wii, are merely further evolutions. Even beyond controller design though, Nintendo has remained the most influential hardware AND software company, even at its lowest point. Imagine how much money Sony could have made if they understood Yokoi's ideas about hardware design. Sony focused on making a powerful system with both PS1 and PS2, yet failed and had a less powerful system than Nintendo, and still Nintendo was able to charge less. And for example, what if Sony had followed the same price-cuts they did with PS2 after designing a system like Gamecube. It would have made profit at launch, would have been making nearly $100 a unit 12 months later, and today could be making 50 bucks a unit at a $130 price tag. Sony won two generations based around a better strategy, yes, but people refer to this as a "loss leading" strategy, when they merely took a loss on hardware because Nintendo was always looming with cheaper, more powerful hardware. Nintendo have always excluded elements from their consoles which cost a disproportionate amount compared to their value to gamers. And in turn, they're able to keep cost down and offer a majority audience the best value. (Of course this falls apart when they alienate developers...) This requires designing a console to be efficient in the first place, however. A console which isn't a huge loss-leader, requiring the company to sell music or movie downloads, or which can load software efficiently, so it doesn't need to do partial game installs, doesn't need a giant, expensive, worthless-to-most-gamers harddrive (just as one example.)