Turkish said:
So what if you're a Sony fan? Do you think MS really can undercut Sony on price and not lose money? Do you expect them the money they lost on RROD to lose on undercutting the ps4 this time? Their xbox adventure still hasn't been profitable and I think MS is getting fed up with that. The 360 had a year headstart and was way cheaper than PS3. It was the reason 360 was so popular. People buy whats cheaper. MS was not a newcomer anymore when the 360 launched, its their 2nd console, Sony's 2nd console was the PS2. And lol, if those rumors about Kinect 2 being bundled with every 720 is true you can forget dreaming of MS putting a comparable console at the same price, it just won't happen. |
First bolded: That's not the point.
1) Microsoft can afford a loss leading model. Sony not so much
2) Microsoft's gaming division is making more profit than Sony's
You say Microsoft can't undercut Sony because they want profits. But Sony needs the profit more desperately while Microsoft's plan is to make the Xbox the center of your living room and spreading Windows. Microsoft doesn't care if they lose money at first - they have a long term goal (a long term goal I don't like and don't want to support but they have one). Sony on the other hand lost money on the PS3, is just about breaking even right now, is losing money on the Vita (or at least not making a lot of money on it) and can't afford to subsidize the PS4 for the first 3 years.
Second bolded: You just proved my point. 
The bigger company can outspend the smaller one. Sony could outspend Nintendo with the PSX and the PS2. Microsoft could outspend Nintendo with the first Xbox. Nintendo could outspend Sega with the SNES. The Wii is a perfect example for what I said because it was a disruptive product and disruptive products do not compete in a head to head fight so the bigger company doesn't win. The PSP was outsold by the DS because it was a blue ocean product - blue ocean strategy says: "The bigger company wins. Don't compete for that red ocean, go look for new customers because you won't win head to head". Why did analysts expect the PSP to sell better than the DS? Because Sony is the bigger company and could outspend Nintendo in a head to head fight. Again, proving my point (Nintendo adopted new strategies for Wii and DS because they knew what I just said is right - in direct competition the bigger company wins). And why did analysts expect the PS3 to outsell the Wii? Because analysts didn't get the disruptive nature of the Wii and Sony was the bigger company. In fact there were even analyses back then saying "Sony and Microsoft can outspend Nintendo, therefore Nintendo should go third party as they have no chance in competition".
What I said is: Sony can't compete in a head to head battle with Microsoft. They can compete (and will win against) Nintendo which is why the Wii U was such a braindead idea to begin with - Nintendo wants it to compete with Microsoft and Sony for the hardcore gamers. That means direct competition --> Microsoft and Sony have an advantage because they are bigger.
My point is: Microsoft has more money. Microsoft is willing to lose more money because they can afford it and want to spread Windows and its services. You said: People buy what's cheaper. Exactly. And Microsft can and is willing to offer the same product for a cheaper price because of the things I just mentioned. Just to be clear: I don't like that and I don't want Microsoft to try to take over the living room. In fact, I think there is a reasonable chance Microsoft will fail with the next Xbox because instead of pushing it as a games machine they'll push it as a multimedia center that also plays games which will lead them to lose the fight. But in direct competition Microsoft has an advantage over Sony because it is bigger.
