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Forums - Sales Discussion - Another price-cut for Microsoft? How much money are they losing with Xbox One?

method114 on 28 October 2014
d21lewis said:
This is really Bizarro world! I'm sure of it. I know this is an Xbox One thread but do I got a PS3 with a free copy of MGS4, and free download for PAIN for about $100 less than MSRP AND a free $100 gift card. That console was being sold at a loss of about $200 (according to sources at the time) AT LAUNCH!! Was it embarrassing, then? Because I certainly wasn't embarrassed when I walked out of the store at midnight with my new 80GB PS3!


uuuhh yes it was emabarassing then. Have you been living under a rock? The PS3's issues have been well documented and stated several times over the last 7-8 years.

Of course you didn't feel embarassed why would you? You don't run Sony so why would you feel embarassed about thier screw ups? From your post I can understand why the reality we live in would seem bizare to you.



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Soundwave on 28 October 2014
iTechHeads said:
Soundwave said:
iTechHeads said:
Soundwave said:

Anyone else find these threads funny?

It's like a homeless guy worried about Brad Pitt losing money on a restaurant venture. Brad and Angelina are going to OK, don't worry, lol.

MS makes *billions* in profit every year, and will make *billions* in profit next year no matter what the XBox division does. MS can afford to take a temporary loss on the XB1 if they want to. This is the same company that spent like $7 billion buying Skype. 

Sony is the one that hasn't made even a dime in the last 7 years and is bleeding money like it's going out of style overall. Worry about them.

Why so defensive? No one is accusing Microsoft of going bankrupt. This is strictly about Xbox One and how much of a loss Microsoft is willing to take in trying to play catch-up to the PS4.(emphasis on trying)


MS can take a very large loss if they really cared to. If they really wanted to they could take a giant dump on Sony and buy out several key third party games and win this generation. If they *really* wanted to. This cut is maybe giving them a $20-$30 loss per unit in the USA ... that's nothing but peanuts for MS. 

In fact I called this price cut way beforehand. They were always going to go for it simply because they can afford to. 

No, they really can't. If they could do that they would have done it years ago. The best they can do is maketing deals with key 3rd party games, which they're already doing.

The only 3rd party games they can "buy-out" are startups like Titanfall or those which need more exposure like Tomb Raider. Microsoft cant buy Call Of Duty if they wanted to. It's not that simple.

I can guarantee you that Microsoft will never buy any "key" 3rd party games this gen. Yes, they have deep pockets but that really doesn't matter. Money doesn't buy you success. Just look at Zune and Microsoft Surface or Windows Phone. Why aren't these selling well? Microsoft has the money so what happened with these products? Why isn't the Xbox One outselling the PS4 with multiple price drops, free games, retailer promotions, Call Of Duty partnership, FIFA partnership, Assassin's Creed partnership, Titanfall exclusive, Sunset Overdrive exclusive and all those other launch exclusives? How come all of this isn't enough to outsell the PS4? It seems like Microsoft is doing everything they can to try to sell Xbox Ones. They keep pouring money into the Xbox One but it's just not working. You need more than deep pockets to sell a product. 


They bought Minecraft. If the heads of Microsoft really wanted to unleash war and made winning the game industry a huge priority they could start throwing money around like crazy. 

Don't confuse the two, MS is a legit high roller, they are playing at the big boys table in Vegas staying in the penthouse suite, Sony is not that class of company anymore, Sony is the guy in a cheap knock-off suit at the regular blackjack table who really needs the next hand to work for him or he could be hurting. 

For MS the game industry is just a fun little diversion like a billionaire who buys a pro sports team, it's not really a core part of his business, it's more of "well what can I buy that's bigger than a car, boat, hotel, etc. to keep me occupied". 



Playstation_prophet on 28 October 2014

It looked like Sony responded with the $125.00 off Gamestop deal. It will be interesting to see what happens. Sony also has GTA 5 bundle that most likely move some units.



Ljink96 on 28 October 2014

Microsoft knows that PS4 is well on its way to PS2 type sales and they don't want to repeat that era... nobody wants to repeat that era(company wise) but Sony. They're desperate. Getting more consoles into the hands of consumers is more important than a loss to them. The same tactic used for the Sega Genesis... nice. Let's just hope it works Microsoft... Bwahahah! - cough.



Sentient_Nebula on 28 October 2014
Ljink96 said:
Microsoft knows that PS4 is well on its way to PS2 type sales and they don't want to repeat that era... nobody wants to repeat that era(company wise) but Sony. They're desperate. Getting more consoles into the hands of consumers is more important than a loss to them. The same tactic used for the Sega Genesis... nice. Let's just hope it works Microsoft... Bwahahah! - cough.

Honestly, I don't think so. Best-sellers like the PS2 and Wii had mainstream appeal (PS2 was a DVD player, Wii had family-friendly motion controls).

The PS4 doesn't have this mainstream appeal, and is targeted squarely at gamers. I can see it doing about 80M lifetime, tops. The PS4 is currently tracking behind the Wii.



"Never argue with stupid people. They will drag you down to their level and then beat you with experience."

-Samuel Clemens

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Ljink96 on 28 October 2014
Sentient_Nebula said:
Ljink96 said:
Microsoft knows that PS4 is well on its way to PS2 type sales and they don't want to repeat that era... nobody wants to repeat that era(company wise) but Sony. They're desperate. Getting more consoles into the hands of consumers is more important than a loss to them. The same tactic used for the Sega Genesis... nice. Let's just hope it works Microsoft... Bwahahah! - cough.

Honestly, I don't think so. Best-sellers like the PS2 and Wii had mainstream appeal (PS2 was a DVD player, Wii had family-friendly motion controls).

The PS4 doesn't have this mainstream appeal, and is targeted squarely at gamers. I can see it doing about 80M lifetime, tops. The PS4 is currently tracking behind the Wii.

I should have clarified as I thought someone would bring this up. I mean around the 70-80M mark that you mentioned. I was just too lazy to write it. By no means do I think it'll get past 100M but if things don't turn around, it will definitely be this gen's top selling home console.



d21lewis on 28 October 2014
method114 said:
d21lewis said:
This is really Bizarro world! I'm sure of it. I know this is an Xbox One thread but do I got a PS3 with a free copy of MGS4, and free download for PAIN for about $100 less than MSRP AND a free $100 gift card. That console was being sold at a loss of about $200 (according to sources at the time) AT LAUNCH!! Was it embarrassing, then? Because I certainly wasn't embarrassed when I walked out of the store at midnight with my new 80GB PS3!


uuuhh yes it was emabarassing then. Have you been living under a rock? The PS3's issues have been well documented and stated several times over the last 7-8 years.

Of course you didn't feel embarassed why would you? You don't run Sony so why would you feel embarassed about thier screw ups? From your post I can understand why the reality we live in would seem bizare to you.

I hope you're happy.  You made me cry. :(

Anyway,here's the OP I was replying to:

I don't want to use the word "embarrassing" but didn't they just bundle a game with the system last month. I don't understand. Why not give it time? How much are they losing per console sold? Are they losing money per console sold? What do investors think about this?

 

What was the original price of WiiU? Price-cuts?

What was the original price of Dreamcast? How many price-cuts?

He used the word "embarrassing" and made it seem as if the Xbox One's price cut for the holidays was something unusual.  He made it seem like losing money on each console was something abnormal.  And how many bundles did the PS3 have?  They bundled the thing with everything!!  It happens.  Sony/PS3 fans should know this.  How soon, they forget.


ExplodingBlock on 28 October 2014
Playstation_prophet said:

I don't want to use the word "embarrassing" but didn't they just bundle a game with the system last month. I don't understand. Why not give it time? How much are they losing per console sold? Are they losing money per console sold? What do investors think about this?

 

What was the original price of WiiU? Price-cuts?

What was the original price of Dreamcast? How many price-cuts?


Wii U was originally 350$ for a deluxe set but they did one price cut so now it is 300$ for a deluxe set making the basic set obsolete



d21lewis on 29 October 2014
Playstation_prophet said:

I don't want to use the word "embarrassing" but didn't they just bundle a game with the system last month. I don't understand. Why not give it time? How much are they losing per console sold? Are they losing money per console sold? What do investors think about this?

 

What was the original price of WiiU? Price-cuts?

What was the original price of Dreamcast? How many price-cuts?


Hey, look what I found!  A history of video game console price cuts!!

http://vgsales.wikia.com/wiki/Price_cuts

Pretty awesome, eh?



iTechHeads on 29 October 2014
Soundwave said:

No, they really can't. If they could do that they would have done it years ago. The best they can do is maketing deals with key 3rd party games, which they're already doing.

The only 3rd party games they can "buy-out" are startups like Titanfall or those which need more exposure like Tomb Raider. Microsoft cant buy Call Of Duty if they wanted to. It's not that simple.

I can guarantee you that Microsoft will never buy any "key" 3rd party games this gen. Yes, they have deep pockets but that really doesn't matter. Money doesn't buy you success. Just look at Zune and Microsoft Surface or Windows Phone. Why aren't these selling well? Microsoft has the money so what happened with these products? Why isn't the Xbox One outselling the PS4 with multiple price drops, free games, retailer promotions, Call Of Duty partnership, FIFA partnership, Assassin's Creed partnership, Titanfall exclusive, Sunset Overdrive exclusive and all those other launch exclusives? How come all of this isn't enough to outsell the PS4? It seems like Microsoft is doing everything they can to try to sell Xbox Ones. They keep pouring money into the Xbox One but it's just not working. You need more than deep pockets to sell a product. 


They bought Minecraft. If the heads of Microsoft really wanted to unleash war and made winning the game industry a huge priority they could start throwing money around like crazy. 

Don't confuse the two, MS is a legit high roller, they are playing at the big boys table in Vegas staying in the penthouse suite, Sony is not that class of company anymore, Sony is the guy in a cheap knock-off suit at the regular blackjack table who really needs the next hand to work for him or he could be hurting. 

For MS the game industry is just a fun little diversion like a billionaire who buys a pro sports team, it's not really a core part of his business, it's more of "well what can I buy that's bigger than a car, boat, hotel, etc. to keep me occupied". 

The bolded is vey much true. So why would Microsoft spend billions on "a little diversion"? They can afford to lose the console war so might as well maximize profits as the 2nd best selling console. You need to remember that Xbox is a business. Microsoft wants the Xbox business to make them money. There's going to be a point where they just have to accept that 2nd place is as high as they will get. They can't give away free games and do price promotions forever.(NOT SAYING THEY COULDN'T AFFORD IT, JUST SAYING IT WOULDN'T MAKE ANY BUSINESS SENSE)