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Aielyn on 20 February 2011
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d21lewis said:

A couple of things:

  • From what I understand, the $500 million is the entire marketing budget, not the Kinect marketing budget.
  • Selling the console isn't where the bulk of the money is made.  Kinects cost next to nothing to make.  Also, game sales are where consoles make their money.  It's the "Razor blade" model.  You lose money on the "razor" and make money on the "blades".
  • Without the marketing, new re-design, and Kinect, who's to say how bad 360 sales would be?  Certainly not as good as they are, now.   It would probably be like the other consoles on the market--at a decrease for the year.
  • It said in the article that M$'s increase was 1,148,500 consoles over a set period of time where it could have been 1,666,666 if they'd just taken their marketing money and bought 360's with it over the same period of time.  It's not like 360 sales are going to suddenly stop.  With the money spent marketing, I can only assume that more people are aware of 360's and Kinect and more consoles will sell in the future as a result.  Spending a large amount of money now to make more money later--that's how businesses work, right?  I guess Coca Cola shouldn't have advertised at the Superbowl.  Instead, they should have taken their millions of dollars and bought Coca Cola with it.  That way, sales would improve because they bought their own.......no.  That's fucking retarded.

  • Does it matter? The point is, MS spent $500 million, and this is all they got out of it.
  • Kinects cost next to nothing... but we're talking about sales of Xbox 360s. Kinect is just bundled in with it. As for the razor-and-blades argument, I'll just point out that the "blades" still don't make a huge amount of profit in gaming, unless they sell in huge numbers (especially on the 360 and PS3, where dev costs are very high). The 360 still isn't selling as many games a week as the Wii is.
  • So what you're saying is that "hardcore" gaming is dying, with all consoles seeing declines, and the only thing that saved the 360 from the decline was Kinect and its "casual" lineup? It's your choice.
  • Well done, you missed the whole point of the description. It wasn't that MS should have bought 1.7 million of their own systems, but that they could have done so, and seen more from it. When you consider the much, much smaller profit they make from the sales of an Xbox 360 than the full price of it, you're talking not a lot of "profit" at all - the point is that they'd have made more profit off buying their own system, which is to say, the money was wasted, since obviously buying your own product is a bad idea, and doesn't make you any profit.
  • Most importantly, this is only discussing the advertising campaign. Nobody has yet factored in the cost of development.