People have the belief that the 360 is profiting and recouping the billion of losses that MS made on R&D , Hardware Isssues , Advertising/Promotion , Price Cuts , Games exclusivivity etc. MS to date have never made a penny from their games division , their losses currently are around 3X's that of Sony's gaming divison. Except in that last FY. If Microsoft can have another profitable FY they'll be on track and everything else can be written off as a sunk cost.
- Releasing new consoles requires alot of R&D (which cost alot of money), you can't just assemble PC components together under a case in 2 months and pass it off as a console. Duh. It's not like Microsoft doesn't have the budget to do this. And with the xbox/360, MS has proved they know how to make a console (more or less).
- Releasing a new console takes months if not years of strategic planning recruitment , development , production , getting developers to make new games. All of which cost alot of money. Again, nothing the competition doesn't face. Microsoft is starting to build its market value and the 360 is showing a lot more potential not only as a platform of gaming choice but as a competitor than the xbox did.
- Promtions / Advertising proberly run into hundreds of millions I'm glad you have solid numbers. And no, not every game has to be a Halo 3 but Microsoft very much did get quite a return on all that promotion.
- MS may have to pay for game exclusivity if the PS3 fares better than it this generation(POSSIBILITY) MS already does pay for titles and because of that the system is looking better and better with every game.
- If HD downloads doesn't take of due to lack of popularity or competition then this is another reason for MS to drop out of the games division. This is almost completely unrelated. Microsoft released a HD add-on for the 360, but that's the extent that their games division impacts the format rumbles.
- MS really shoudln't try to diversify too much , they're loosing ground in their core markets , if they don't choose to drop gaming competition will force them into it. On the contrary, by diversifying especially into the RPG market, they're gaining a lot of people's interest. Their best interest is not to further narrow their market but to expand it and gain as many consumers as possible. Stealing customers from Sony and attempting to gain all those "casual" turning "hardcore" gamers Nintendo is likely creating is a road to succes for them.
- If MS rush into the market first with their 720 they'll be scared whith RROD and other hardware issues that XBOX consoles have been famous for (even if they came in last it would still be a concern amongst customers) They'll face the RRoD stigma regardless of when they would enter the market. Entering the market early doesn't mean rushing, it simply means planning earlier.
Sony has effectivley wiped out all the profit they made with the PS1 & PS2 combined with the release of the PS3 , however it's highly unlikely that they could have won the format war without out. The success of Blu Ray & Sony's HD TV's (which success will largley be attributed to the PS3) will determine whether the PS3 was a success or not.I'm pretty sure Sony will release the PS4 , but I dought they'll put as much emphasis on technological advancement and all in "one'ness" due to the success of the Wii. Whatever Sony's gain as a company has been, they've sacrificed their games division to get it.
The games industry is experiencing incredible growth so I wouldn't be suprised if MS released the 720 I just don't think it's a smart move for them to do so , they have their core businesses which are generating a profit for them (software) so I think diversifying into to the games industry may not be a smart move. Luckily for Microsoft, they haven't hired you to think on their behalf.
