One more time.... When the PS3 and Wii launched, MS had 100% of the market, Sony and Nintendo 0%. That's why MS is the only one to be losing market share.

1. Such promotion costs an inordinate amount of money. MS has no other exclusive VG property that would justify that sort of expenditure.

2. It remains to be seen whether all that promotion really was worthwhile. Yes, MS sold oodles of Halo 3's in record time, but the market quickly dropped too. If anything, it appears the promotion just got people to buy it on the first day when they may have been willing to wait a week or two. It's debatable whether the overall number of Halo customers actually increased substantially, let alone increased enough to justify the cost of promotion.

You
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Nazntips.

I was about to post something similar, but you pretty much covered it here. The problem MS is going to encounter in '08 is the stigma that they're hardcore-only.

This is a case of "be careful what you wish for, it might come true."

For all the gum-flapping around here and on other messageboards about what's hardcore, what's casual, etc., the fundamental force that drives the market is diversity. The PS1 and PS2 didn't break 100M units because they had hardcore titles. They broke 100M because they had 2000 games to choose from that covered pretty much everything under the sun, and for the majority of their marketable life they cost $200 or less and sold to casual buyers, not the hardcore.

Hardcore gamers don't decide console wars. 

Microsoft threw down the gauntlet to challenge Sony and steal the hardcore. Well, they did it. Congratulations. Look where that got Sega.

As an aside, I think whether or not the RROD is fixed now is a non-issue. Buyers can't "un-remember" what they read in 2007, and most people have a preconceived notion now (whether it's correct or not) that 360's fail, and are only good for shooters and sports games. The damage on that front has been done.

Personally, I wonder where is MS's Mario, Sonic, Crash Bandicoot, or Ratchet & Clank? Where is the good old fashioned platformer?

Heck, at least even 3DO tried by throwing buckets of money at Crystal Dynamics with Gex (which was actually a decent title).

I mean, come'on MS! Is Earthworm Jim busy this year?

Guys 3rd parties dont make much money of the wii.. only nintendo does, and ninty doesnt seem to care with there online either.

A few games are luring casual gamers - Scene It!, Rock Band (also on the PS3 and PS2), Viva Pinata (for the kiddies) and luring RPG types (Blue Dragon, Eternal Sonata and even Mass Effect). Expect more in 2008 from MS.

I suspect that they are profitable at the moment, especially if you ignore the RROD warrantee issue (which most believe is why there was no significant price drop this year).

We know that improvements in technology and economy of scale allows the costs of consoles to drop the longer they are manufactured. We can be pretty sure that the 360 didn't sell at nearly the same loss margin as the PS3 (business week put it at $125 http://www.businessweek.com/technology/content/nov2005/tc20051122_410710.htm) , and as I recall, Sony claimed that they had roughly halved that loss by the middle of the year, probably more when you introduce the new models, and that allowed them to drop their prices.

The 360 has now been on shelves for over 2 years, and has shifted to a newer, cheaper model, with only a marginal price cut, the odds are very good that at least some of their models are profitable, or at least breaking even. Now this may change if MS brings in a substantial cut, but not so long as the price remains at current levels.

As to the extent of the cut, remember that even though the XBox launched with a similar deficit, MS was willing to drop the price $100 just 7 months after its US launch in order to match the PS2. It's now been over 24 months since the 360 launched, and likely another 2-4 months will pass before a price cut is announced. At this point, the XBox was down to just $180. If it were me, and I were trying to do an agressive push to keep Sony back on it's heels, I'd strongly consider a new pricing scheme of Arcade for $199, Premium for $249-275, and Elite for $350 (though personally I'd consider scrapping the Arcade price point all together). That would put the 360 in the Wii's price range, and well under the PS3s. While this would not force the Wii to cut price (which they could do painlessly), it could force Sony's hand and severely hurt their bottom line.

I couldn't agree more. MS has Rare in their stable. Why the **** are they wasting their time with Perfect Dark games and the like? MS already has Halo, that's all the shooters they need in their first party catalog. Third parties more than make up for the rest and MS' publishing and exclusive system should work well in the shooter world. Shooters are almost always on PC; MS has excellent tools to convert PC games to 360. It's a no-brainer that those shooters will come to the 360 anyway (while not necessarily to the PS3) because they're easy to port and they sell.

Take advantage of Rare, MS. We need more Viva Pinatas, Banjos, Kameos, and Conkers. Unfortunately, two of those IP are new and MS has yet to take advantage of one of Rare's classic franchises outside of the Conker remake.

Who cares if they sell well right off the bat? You'll never get diversity if you don't try to use your talent in the best way possible (and Rare's best talent is obviously no longer in FPS games; PDZ was shit while Viva Pinata was an extremely solid and underrated game).

On the other hand, I do have to give MS kudos for their acquisition of Sakaguchi for the JRPG world. While it might not turn the tide immediately, over the long run it has to help. If you keep producing good games in a genre, sooner or later fans of that genre will be forced to pay attention and buy your system.