Well, there's no way you could say the 360 (or MS effort) is sinking. I'd say right now MS is in a mixed position but still has good prospects based on the following:

Good

1) while it is seeing smallest growth overall it is still growing (which is good as the 'oldest' of the 3 consoles on the market

2) its SW sales remain strong and in US it has made a big impression

3) On a quarterly basis (i.e. not LTD) MS is profitable with their videogame efforts

4) Money still available to buy exclusives and get games that would probably otherwise be cross-platform - for example if I was creating LO you can bet I'd get it on PS3 looking at AC sales

Average

1) Its much touted attach rate is not amazing next to PS3 anymore (although the difference in base is contributing to that)

2) PS3 is definately looking to be a nose ahead in Others now (although price cuts and aggresive advertising is keeping MS in shouting distance) and is holding steady in US rather than collapsing

3) Recent sales of multi-platform sales will ensure PS3 gets good support now vs weaker support a year ago (COD4, AC, DMC4, GTA, etc) whereas MS must have been hoping that the cost of PS3 development coupled with initially much better sales for 360 would cause some developers to focus purely on 360

Bad

1) The Wii came out of left field and overtook it WW - from this angle I could see the arguement its lead was squandered, although you could argue MS did not so much squander it as find themselves totally unable to compete with the Wii offering and its catching of the cultural zeitgeist

2) PS3 now looks to have a chance of getting equal sales globally if not more based on current trends and current market (i.e. analysts, etc) expectations for this year

3) Persistant recurance of RROD fears

4) LTD still in red even with fancy accounting offsetting $1 B for RROD, etc.

5) Japan still apparently 'dead' for them.


So, getting to market first did not 'kill' Sony nor did it give them a very long time in front before being overtaken by Wii, but they are doing better than Xbox and have got a firm foothold in industry now (particularly online with Live and the massive focus on owners on MP Halo, GoW, etc).

So 'Sinking'... no. Crusing ahead as the clear winner as a result of getting to market first and spending a lot of money on exclusives... no. Still in the game and successful in their own right... yes'ish (depending upon your criteria for success I guess).

the difference for sony and ms is if 360 reaches 50 mill by end of this gen they have doubled their base. on the other hand if ps3 reaches 70 mill by end of this gen their base will have shrunk by at least half. either way sony have the most to lose. they let ms get a head start and on current trends they hav,nt the time left in this gen to regain it. thats also taking into account there will be no more banana skins along the way for them. as i said earlier in this thread the wii imo is hurting ps more than 360. also remember as every week and month passes it is losing the advantage of been the new kid on the block. ms have had serious problems with their rrod but as current sales show they have got through that patch.

Just to quench the flames with a pinch of benevolent common sense : "sinking" could be an elegant, and original too, solution for "overheating"

I never really cared enough for any one console to support.
During the GC era, not that I was all for it but it would have been nice to see some nintendo characters on either Xbox or PlayStation.

For example: Metroid or Zelda series
Either one of these would have been great, I thought, on PlayStation or Xbox.

Oh, well.

And having another console to compete with keeps other consoles to monopolize the gaming industry (like in NES/SNES era).

Besides, competition keeps them on their toes.

Basically,
If Xbox dies: oh, well..
If Nintendo dies: they are still an excellent, excellent developer.
If PlayStation dies: not much to say except 3rd-party games will finally be played somewhere else. (As if that is not happening now)

Yes, but don't forget that MS calculates, totally or in part, some expenses like “broad-based sales and marketing, product support services, human resources, legal, finance, information technology, corporate development and procurement activities, research and development and other costs, and legal settlements and contingencies” for some divisions, including Entertainment and Devices, in another mishmash report item that years ago was named "Other" and now, judging by where losses are reported, should be "Corporate-Level Activity".

Putting lots of differents losses together makes more difficult for external observers to distinguish clearly what produces profits and what not, except for divisions that despite the accounting trick report losses anyway or for division like those of Windows and Office, that undoubtedly are cash cows that produce gargantuan profits. 

In this case, I'm going to have to say that may not be our business, in terms of such specifics. Nintendo and Sony don't give us that much information anyway. And besides Microsoft can't fudge too much, or else they risk getting audited by the IRS.

Basically, this seems to be just sifting around to try to make it look as though the 360 is in trouble.

 Hehe, true.

Seriously, this is more of an increased demand for the PS3 since its price drop than the X360 "sinking." The author's sleight of hand with "statistically speaking, the PS3 will catch up!" is also pretty fail. Since it will take years at this rate to catch up. In a momentum-driven industry like this, a big lead is better than a gradual catchup.

This reminds of a line I read on a newssite: "Journalists talk about conflict. If there is none, they create conflict. " The author wants to fuel the flames of war, so he claimed the X360 "IZ SINKING LOL LOL LOL!"

The part inside quotation marks is as MS itself summarizes the "Other" report item.  And I can bet too that the accounting is formally perfect and that this is a field where MS wouldn't ever push itself outside the law.

About XBox 360, we only know that production costs are lower than XBox 1's, but project and development should have been higher, as XBox 1 was really a  modified x86 PC, while the 360 is a real console designed from scratch, with an expressly made PowerPC tri-core CPU, for example, and this alone could have easily cost hundreds of millions, even billions, particularly to pay the foundries' plants and start production. And this seems to be confirmed by 2004 and 2005 reports, when "Other" losses skyrocketed. But unless we are expert accountants, we'll never know precisely.

Slimebeast, the replacement for starcraft while he is banned lol. 360 had the biggest titles and the smallest increase in sales, yea it is a sinking ship.

Well they did admit R&D was much bigger this time, so we don't need to look for that. Yet that was already a while ago. The general profits for the company already took care of those costs.