Well, knowing you need to localise better and actually achieving it are poles apart.  MS overall remain a US centric company with regards to Xbox brand and its model.  I think MS have shown some solid improvement in Europe but I think they underestimated the overall effort required - and more importably time required - to localise the message.  I think MS also continues to underestimate how the PS3 "total offer" remains more attractive than the 360 "total offer" in Europe outside of UK (which I supose seems less and less part of Europe, but I digress).

I still think MS has challenges in perception in the following three areas:

1 - total cost of ownerhsip - in Europe the costs of Live definately seem to be a block vs free PSN.  It's important to remember critical mass is vital here.  In the US Live is dominant and if you want to play with friends that's the way to go.  The minimal cost is nothing.  In Europe PSN is larger than Live, particularly as in Europe everyone online can play vs the subset of Gold subscribers.  Why pay to shift when your friends are already on PSN and there are likly more players on PSN?  I'd note that when I play online on PSN lots of European users have headsets, so its clear that in Europe people seem more ready to simply buy a headset for PSN and use text chat, etc. than feel they need to shift to 360 where its all bundled.  In short, critical mass is now a barrier for Live in Europe IMO.  The appeal of Live due to costs is therefore diminished vs PSN which in turn diminishes the appeal of 360 vs PS3.  This is not easy to change and marketing makes little difference to actual live playcounts.  I think MS need to really consider how to advertise Live/360 and make it seem the better choice.

2 - online vs offline - in Europe I believe there is still a stronger focus on offline vs online and more interest in SP orientated titles.  This puts the PS3 in a better position than 360 IMO.  Sure you don't need Gold to play offline, but I think the PS3 library, if you're not going online, immediately looks stronger than 360, particularly with regard to retail exclusives.  Again, advertising could help here - but so would more exclusives.  I don't mean XBLA I mean at retail.

3 - Brand image - in Europe, I believe the 360 still has two issues.  One, the original Xbox was very much seen as a poor man's PC.  IF you wanted to play FPS online you played on PC.  While this has diminished to an extent I still think an element of this remains in place.  A lot of Europe still focuses on PC for gaming - look at Germany for example - and the 360 does best where people are moving from PC to console.  This doesn't affect PS3 as much due to brand perception of Playstation even though on paper the PS3 is mighty similar to the 360 here - but market perception outweighs relaity by miles.  In addition I also believe 360 is still seen as orientated to more violent games and not for families.  Again, while PS3 could be viewed the same brand perception let's it off the hook and the Playstation brand is seen as more family friendly.  Again, suitable advertising would help here.

IMHO to really localise MS is going to have to consider how to present the 360 in a different light, and to overcome certain negative perceptions of its "total offer" to the consumer - it's not as simple as price or advertising more or offreing some decent bundles.  The basic message needs adjusting - and that takes time to get right and time to execute.

Not that 360 has done badly in Europe - it's vastly improved on the Xbox.  But brand wise it still lags behind outside of UK.  Al IMHO of course.

Other than financials showing one company in healthy profit and the other not then no.  The fact they have cut the price recently on the PS3 is suggestive though as Sony traditionally have sold the PS3 at a loss or tight margin this gen in an effort to keep pace with Nintendo and Microsoft.

Sony has Europe because of its ps3 adds on major soccer games.

Don't get me wrong, I was disagreeing only about Sony losing, I'm sure MS is profiting on XB360 more than Sony on PS3, except maybe on the craziest time limited offers, it's just that I think both are actually profiting. If Sony were willing to lose money again, it would have made a more aggressive price cut than just $50. Or PS3 could be in a limit situation, losing a little in USA, particularly with the current offers, and profiting a little in Europe, BTW this could nicely explain why Sony is happy with not closing the gap with XB360 in USA.

About true losses and profits, in case a division has a quite large profit, we can easily assume the division's most successful products profit too, and this is the case of XB360, but we know both Sony and MS include a lot of different products in many of their divisions, particularly the electronic entertainment ones, this means that when a division is losing, it's quite difficult to tell whether its most successful products are losing too or if the losses are generated by other products in the division, and this is the case of PS3.

Edit: BTW, Sony announced PS3 broke even in July 2010, this means it did it a few months before in EU and a few months later in USA. More than one year later it should at least break even at $250.

This week.

360: 1,164,416
PS3: 916,724

Week GAP: 247,692 (360 favor)

 Previous GAP: 809,724 (Adjustments put the gap up ~4k in PS3 favor this week)

GAP Now: 562,032

 Sorry but it won't happen even without adjustments.

Look, this is a site that has visitors from all over the world. Like it or not, the US $ still is a currency everyone can relate to, so quoting local prices in US $ rather than local currencies is a simple convenience for all readers. Maybe I am thinking too fast for you (and your alter ego Seece as well), or you are intentionally playing dumb bringing up a straw man "US price cuts".

I am not going to discuss manufacturing prices (again and again and again over the years, particularly with you two). I assume there are readers knowledgable enough in mass manufacturing/electronics to see the simple points I make. There is a peculiar group of readers that apparently are not, and feel the need to divert the discussion (particularly when it comes to manufacturing and production costs of XBoxes, like there is some unexplainable miracle looming behind that particular gadget. So to sum up: For the first group, it would be simple to reproduce the calculation that a $229 shop price XBox360 250G Kinect + Software + Live) price is sold at a loss to MS, while the latter group will simple go "Lalalalala".

I actually think Sony are probably marginally in profit (per console sale) and that was their goal or they would have cut $100 this year if they didn't mind loss leading on hardware sales.  I think it's fair to say that everything in terms of profit is in Microsoft's favour when you look at the currency issues sony/Nintendo face. though.  I think it's fair to say the 360 even with all the deals is probably still raking in cash given the length since the last price cut and the fact it's had the slim revision which will have shaved a lot off the manufacturing cost. 

In summary I guess I'm saying I have no idea for definite if Sony are losing or profitting but I'm confident Microsoft is in profit and making more profit from the 360 than Sony is on the PS3 at present.

Yeah there is no way to be definitive in statements, you have to analyze a lot of data and make your guesstimates from the data available.  Even more confusing now is both divisions spend will start to ramp on next generation hardware.

You really are talking utter rubbish, everything you've said has been completely irrelevent to what Kowen said, which was with a price cut in Europe the X360 could have handily beaten the PS3. It hasn't had a price cut in Europe. Then you go talking about manufacturing costs (and completely guessing X360 is sold a loss despite A) the division making mega profit (and don't use that line about there being other products in there that skew the numbers, if anything they're the ones that are making a loss and the X360 ecosystem is profiting higher than the division is.) and B) it hasn't had a price cut in 3+ years, yet years ago MS announced they were profiting on X360 HW and Kinect is said to cost less than $60 to manufacture. So be quiet unless you know what you're actually talking about rather than sounding off a load of nonsense.

Yup - time is the key.  I feel that MS, perhaps understandably encouraged by US results, felt they would see a quicker response in Europe than I think was likely to happen.

It looks like we actually quite agree. Even about the bolded, I was meaning the profit can be reduced or even nullified just on the single craziest offers, but overall the profit should be huge, even before taking into account 1st party SW, royalties on 3rd party SW, and XBL fees.