Alot of forums say that xbox 360 failed in japan..yeah it did but at the same time it still has users and micorsoft is still trying there best to bring some software out there for the japanese gamers..i just believe that the gamecube was in the third place in america and alot of people didnt say that it was a failure...but with the xbox 360 in japan...people would say "yeah the xbox 360 sold only 350,000 units in japan"...thats not a failure....a failure is when the system doesnt sell at all in a country.

Its just public perception - it doesn't actually mean anything.

Did the Gamecube "fail"? It made more money than the Xbox? Did the Xbox fail? How about the Dreamcast?

The term is just thrown around these days too often - although compared to 'expectations', sometimes a console can fail (expects to see 10m, and only sells 1m).

yeah....ur right i just believe that if a console is in the business and gets users its a profitable console..but if its not alot it doesnt mean it failed it just means that it doesnt have that much hype like console A would have...

Failure is a complicated term.

The REAL and MOST IMPORTANT factor in success or failure of a system is its ability to make money. Profit.

All businesses go into business to make money. And not just a little or enough to get by. They make products to make as much as they can from that product in order to build as a company and create more and different products.

Another factor of success and failure is how many and the percentage of units are accepted and used by the buyers in comparison to the competition. Sales. Marketshare. This is what MOST gamers get caught up on when calling something success or failure. And on the surface having the most sales seems successful. But this is only TRULY successful if that first factor I mentioned goes along with it. If you spend $200 to make then sell $100 worth of product then while you may sell out and the buyers have and use your product you've actually failed.

A lemonade stand example. The total cost of the ingredients (lemons, sugar, water also styrofoam cups, serving pitcher, mixing spoon and little table to sell them on, maybe magic marker and cardboard sign to advertise "shop") that go into your selection of lemonade drinks comes up to let's say $10.00 and you can produce 50 drinks with that $10. You sell each of your drinks for a dime, 10 cents. All 50 drinks sell out and you made $5! YAY! (50 X .10 = 5.00) Oops! You had to spend 10 of your original dollars just to be able to make the 50 drinks and only got $5 back in return. You actually lost $5 selling your goods! Sure you sell out everytime with those cheap prices but it actually costs you to stay in business. What's the point of this unless you like being charitable? If so, then just GIVE the drinks away. That's TRUE charity, right? No need for money exchange then.

So as you can see having the most sales doesn't necessarily reflect success and true victory. It WILL endear you in the hearts of your loyal buyers but financially you'll be hurting if all this effort doesn't produce reasonable profits. And say if the kid sold the lemonade for 20 cents...he'd STILL be just breaking even. No progress. He paid back all of his R & D, his costs of production, his overhead. That's better than losing money but you're exactly where you started before you made the drinks. You might as well have just given it away and be done with it. Woulda been a lot simpler and quicker.

If the kid sold his 50 drinks for a quarter each and sold 'em all he would have made $12.50...that's $2.50 profit! Eventually the kid could save and build on that and maybe set himself up a chain of lemonade drinkstands in the future or go into ice cream and cookie sales to diversify! Maybe set up a little candy business on the side for extra profit pull in.

Another measure of success is respect and reputation. This tends to go along with the last measure because of humanity's love of a winner. How you are perceived by your public. This is how you keep buyerbases continuing to want to buy from you. It means nothing immediate for the pocketbook but it's important to be respected by your customers and have a good reputation. Doing this will keep customers by your side in a slump. Think of sports teams who historically lose year after year yet still have loyal fanbases waiting for them to win. Decades and centuries even. They pass on their loyalty to their descendants. Now THAT'S dedication! And then when they finally win the loyals rejoice like no tomorrow. If your customers see something good in you that customer is more apt to stick by you when times are tough.

One more is leadership. Ability to dictate or change the pace of the field you're in. This one can bring in respect & reputation as well though not necessarily profits or sales bases. Those visionaries who see a missing element in their field of business and work to rectify it for their own good. Often it ends up rectifying it for the field-at-large as a good idea is usually incorporated by the competition so they won't look old hat or get usurped. This CAN bring in profits and salesbases but that depends on how hard it was for the competition to copycat or modify the idea.

You can also say employee satisfaction. If you do well in this aspect you will have a workforce willing to put their best effort on the line to make your company grow & evolve. A workforce that isn't happy will most likely not be as willing or wanting to make the company powerful. They'll use the job for their own personal gain knowing the company is using them for theirs. The problems comes from the topdown. Waterfalls drop from the cliffs.

There are many ways to count success but the only ones on the charts tend to be Profit & Marketshare since they are probably the easiest to measure.

3rd place in a contest of 10 isn't that bad. Olympics say 3rd best gets a bronze and gets to stand up on the 3-level stage to revel in his/her glory. 3rd place in a contest of 3 can be bad because 3rd also means last. 3rd in 1,000? Exceptionally good! 3rd in 3? You got work to do, my friend.

In win or lose scenarios there can be only one. In contests of the mosaic it matters less but you can't ALMOST get away from the police or ALMOST win Bingo or ALMOST jump over that bottomless gorge. Some contests make it binary and it's either gain or fail.

Luckily in gaming like some parts of life it's not so binary. There CAN be a big winner and a little winner. Or a big winner, a medium winner, and a little winner.

The reason in gaming 3rd place can be seen as bad often times is because of the current state of the industry. It's STILL quite small in comparison to other industries. The talent is limited and the competition is few. The audience's resources are finite and the buyers are fickle. The industry as it currently stands usually cannot decently support more than 2 competitors at a time. At most people are willing to buy only 2 different systems. There are those who buy 'em all but they are either an intense devotee (collector), have their priorites skewed only to gaming at the expense of other things, or just have money and room to spare. In the pyramid of life most people are at the base and the base says most people are poor, working class, middle class with priorities not totally focused on gaming tending not to be an extreme devotee.

Gamesystems are investments that accumulatively take up a lot of money over time and a lot of space with the libraries built and accessories gathered. Also a lot of time to delve into each title and there are only 24 hours in a day and 7 days in a week. Most people don't have much of none of the three. Not enough money. Not enough space. Not enough time. One or more or all will be the case for the "pyramid's base".

So they become selective and pick the best choice for their needs. We all have different tastes and pick a variety of choices based on our unique tastes. But as varied as our tastes are there are not enough companies able to cater to each one. There would be Madden system for those who only like playing Madden & a Final Fantasy system for those who like playing Final Fantasy and other RPGs. There are only so many developers to go around and only so much funding to support development. So we have companies who select a broad swath of outlooks to entice the relatively small base to come over to their system. So it comes from both ends. Lack of resources and manpower on producer-end and user-end. This is why the industry has limits and why it can only reasonably support 2 companies at best as it currently stands.

Since this thing is limited developers/publishers/sellers try to make as much as they can looking for the greatest populational audiences they can find. OR influencing that audience to try out a new idea so to BECOME that developer's audience. Once one platform that holds the developer's offerings gathers enough audience it entices developers to want to perform there. A bond is created between developer and user and user follows developer whereever it goes. The user tries to influence other users to join the bond since humans are a social species that have to interact and share connection with one another. The more the bond complexifies and strengthens the better base the platform has entrenched and if the platform provides enough different developers to provide for each of the user's needs, whims, & moods the user has little inclination to go elsewhere. They have found their personal gaming nirvana and the platform & developers gets all the tribute paid by their locked-in base of users.

The opposing platforms have to fill a need that the other platform does not and similarly make it attractive for developers to bring their user bonds and create new user bonds on their platform. If the original platform fills most of these needs the other platform will be the alternative and loved by that few but little else. Tributes will similarly be proportionally small due to less base gathered. If both platforms fill a relatively equal set of needs then both platforms will be market winners with only negligible #1 & #2 status applied.

Since users are few and platforms can provide wide sets of needs it makes it hard for a 3rd platform to find its draw. It either is too similar to another which won't sway the already locked-in or not fulfilling a need for a decent amount of users.
Its tributes will be smaller than the last one.

There will be a clear hierarchy in marketshare. That's purely based on user-to-developer/platform bond. It's the people marker.

If the platform maker spent a certain amount and the user tribute exceeded it then that maker is also successful profitwise. If not then while the maker has the people it won't have the funding

Without funding it will be harder to keep up the platform and you risk losing your audience. When it turns to Walter Reed Hospital and mildew is on the ceiling the bond will slowly be broken. When the Colliseum goes into disrepair the crowd won't wanna watch lion matches against the gladiators anymore. Financial momentum is most important to keep up. It takes marketshare momentum to empower financial momentum due to amount of user tribute.

Rep & Respect momentum holds user bonds even when Walter Reed effect is going on.

Leadership momentum gives you the ability to jumpstart new momentum in marketshare, rep/respect, financial.

Employee satisfaction momentum gives you the manpower to energize your leadership momentum since company will work as one to achieve set goals.

In the 6th generation this is how it went down in the console-only success charts (3 competitors out of 3).

Financials: 1st- Nintendo, 2nd- Sony, 3rd- Microsoft

Marketshare: 1st- Sony, 2nd- Microsoft, 3rd Nintendo

Rep & Respect: 1st- Sony, 2nd- Microsoft, 3rd- Nintendo

Leadership: 1st- Microsoft, 2nd- Nintendo, 3rd- Sony

Employee Satisfaction (speculative): 1st- Nintendo, 2nd- Microsoft, 3rd- Sony (the first 2 exceeded content Sony because the employees had drive to overcome the marketshare/respect leader and worked together to make it happen)

In the limited field of gaming being 3rd out of 3 can be fatal since 3 consoles are in danger of becoming like 5th wheels. Look at my stats:

•Microsoft was financially terrible. Only because they were the monopoly of Operating Systems were they able to recover from that. 4 Billion Dollars LOST? On gaming? Unheard of!

•Nintendo was losing marketshare with each generation which would eventually erode their financial success if they didn't do anything to stop it.

•Nintendo was ALSO the least respected of the 3 not long ago. People talking about them going 3rd party and leaving the console business. Talk about next-gen without even mentioning Nintendo's name in the conversation. Kiddie, old hat, anti-Mario, anti-Nintendo in general. Nintendo had to do something to change this because only Nintendo loyals stuck to them in this time and more and more began to slip as time went on. This means eventually less marketshare and less financials obviously.

•Sony never really led the way with much during their 12-year Playstation success. They coasted by on their market leadership not ushering in much new wanted change. Their decisions didn't affect the business policies of the competition like the competition did to theirs. In other words in terms of leadership the competition's bold directions and implementations had a greater effect on Sony than Sony's directions and implementations had on them. (it definitely showed in the PS3 that's for sure)

•Sony's employees were probably for the most part satisfied being on the top of the heap in market and rep. But it was complacency compared to the energized satisfaction of the competition who brainstormed and configured ways of coming up with new ideas to upset the others. Obviously Nintendo's employees were most energized and the results showed in the Wii and DS.

In Japan XBox 360 is a failure Financially, Marketsharewise, Respectfully, Leadershipwise, and in Employee Satisfaction. It is an outright failure in all of those respects in Japan. They are trying but they are failing. They may not fail forever if their employee power rises and it builds a little leadership maybe a little respect but you can pretty much say the 360 is toast in Nihonville.

I think this essay has spelled it out. This is a mosaic contest where #1 & #2 don't necessarily have to mean winner and loser but there ARE hierarchies and if you use my 5 points of comparison you can call out the stats to see how much a system failed and succeeded. The only ones market charts read is finance and mostly sales figures but this only tells part of the story.

John Lucas

@johnlucas

it is amazing how long and interesting posts you can write.

Since I have to run off to work, I won't actually explain much of my answer. But if we go in terms of sales. I'm going to say so far the least successful non failure was the Gamecube at 24 million and the and the highest selling failure was the Dreamcast at 12 million. So far no console has sold between those numbers. So somewhere around 20 million is probably the mark of success or failure.

And so far, and most likely forever, the 360 has failed in Japan. Monumentally failed. 

i dont think the console failed.  but more like maybe a 'business strategy' failed.  for example, ps3 was priced so high and sony thought the ps2 userbase would definitely buy it even if it was 600.  they expected sales to be high and to help win the format war, they bundled the console with bluray.  that way, they expected to win bluray and the next gen wars. but they miscalculated the reaction of the consumers assuming all are willing to dishout 600+.  that's why it's the 'strategy' that failed if it doesn't meet their objective.  but it can't be said that a console failed, unless the release of the console was to bring a company back from bankrupcy, but instead sped up the process for chapter 11.  then i would say the console failed the company.

I still believe that Sony's main goal was to leverage the PS3 to put Blu-Ray ahead of HD-DVD, and it looks like that has succeeded.  It's pretty obvious that if PS3 had no Blu-Ray and $300/$400 models instead they'd be destroying 360 and possibly Wii as well, software or no software.  They're cashing on in the PS1/PS2 success, and the gaming success of the PS3 was only a secondary goal to that - if they had to sacrifice their gaming market share to gain the HD movie one, I think that's a sacrifice they were willing to make.  Not one *I'm* willing to make right now, though. ;>

That said I think PS3 will eventually overtake 360 worldwide and much later in NA as well, but probably won't catch the Wii.  It might not profit much this gen with the hardware losses they're taking but if they succeed with Blu-Ray that'd offset it.

John lucas... Long and insightful post... There is one ma-hey-jor factual error in there though. At least if all you're looking at is PS2 and GC, Sony was more successful profits-wise than Nintendo last-gen.

Nintendo made more money during the era, but its safe to assume most of that came as a result of GBA. GBA sold 4 times as much, it sold a good deal more software, and it thrived on remakes of NES and SNES games (8 million sellers, 3 of them 5-million sellers) which probably had extremely high profit margins.

There were even some pretty rumors of internal pressure at Nintendo to begin focusing entirely on handhelds.

And I think Sony was pretty pissed that after 10 years of dominating what they thought was the main ball game, that Nintendo was still more profitable than them. That has to hurt. Enter PSP.

Delusional: You wrote: that's why it's the 'strategy' that failed if it doesn't meet their objective.  but it can't be said that a console failed,

This is true... But the console is the result of the business strategy. Despite a lot of individual brains and talent, Sony collectively failed to understand the very market they were dominating. They set the wrong tone in developing PS3... When people say "the business plan rests on the console (hardware)" (which is what the "wiimote gimmick will fade" and "HD will matter in two years" theories are actually saying), they've got it completely backwards. And its because the strategy succeeds or fails before the console even goes on sale that people could so confidently pick Wii to dominate this generation back in September. Of 2005.

And in the end, the strategy they lay out years before launching a console CAN dictate whether or not a company succeeds or fails in all of the areas John laid out.

And when a company has had just a brilliant stroke of genius in their business plan, due to a great visionary like Bushnell or Yamauchi or Kutaragi, it has led to a period where the company leads in nearly every single area. And every time, that visionary has failed in glorious fashion when given too much leeway in dictating the strategy behind future consoles, specifically the third console. (Well, Bushnell WOULD have uttery failed going against NES, had he not sold the company... He still talks about how he would have acclerated the arrival of the internet by ten years.)

To answer the original question... Using the parameters John laid out... It is extremely difficult for a console to come in third or even second place in terms of marketshare and not lose out big-time in other areas... Nintendo is the only company which has ever even survived after coming in third place in marketshare, and MS is so far the only company which has ever survived coming in second place, though obviously they've got some massive issues.

The simplest answer for why a 3rd place console "failed" is that its the 3rd place console.  If the ultimate goal is to have the number 1 console then 3rd place constitutes a failure.  There are so many ways to define failure that unless the console failed in every possible way (TG-16, 3DO, Jaguar) it's pointless to just say a console was a failure.   The two key ways a company looks at a console, I think, are profit and if it can spawn a profitable successor.  In both of those regards the GameCube was a success while the 2nd place Xbox was a failure (at least for the time being).  On the other hand MS may have been more interested in using the Xbox in a negative manner, not to make them proft but to cause Sony to lose more money than they could afford thus giving MS an advantage in other fields.  In that regard the Xbox has been a success (for the time being).  Similarly with Sony, the PS3 in either 3rd or 2nd place won't make a profit and could doom the PS4, classic business definitions of failure, but if it gives blu-ray any boost early and Sony wins that struggle it could be considered a success.  Although it's way to early and the sales are way too low to tell if that is happening at them moment.

Back to the main topic, the GameCube was a failure by other definitions of the term.  It sold below expectations, it sold less than the N64, it failed to capture the hearts of the hardcore crowd which is why they consider the marginally higher selling financial sinkhole of the Xbox to be more successful (and they are they people in the video game media creating notions and trends), and it failed to have any effect on its rivals.  Again though I think the main reason its considered a failure is that it didn't come in 1st.