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Forums - Sales Discussion - Why this generation has already been decided

If Nintendo became the monopoly console it would be bad for everyone including Nintendo fans who seem to be dreaming of this.

It ain't happening.



Thanks to Blacksaber for the sig!

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ckmlb said:
If Nintendo became the monopoly console it would be bad for everyone including Nintendo fans who seem to be dreaming of this.

It ain't happening.

 Any company in monopoly situation is nothing but trouble. Look where Sony is now after the case with PS2 (It WAS monopoly people). I am a gamer who dislikes no company and/or product nor do I want anyone to dominate. It should be the same with everyone. Sony and Nintendo fanboys are nothing but. Microsoft fanboys are a little less zealous.



ArtofAngels said:
mrstickball said:
They aren't the only company based on simple economics. Microsoft and Sony are in the video game markets for reasons far bigger than just videogames, therefor just using "they are losing money" as an excuse is dumb.

For Sony, they've almost always made a profit until they decided to push more online functions and Blu-Ray technology. As I've said, and will say again, Sony is pushing a machine to push Blu-Ray, therefore the actual benefit of the PS3 to Sony (as a corporation) isn't entirely in gaming. Therefore, their true profits off of videogames isn't entirely disclosed in mere P&L statements for the PS3, nor console losses. So what if the PS3 looses $200? The PS2 lost $120 per system @ launch (give or take), and ended up making Sony billions of dollars.

For Microsoft, they are taking the route of pushing alot of DLC, addons, content upgrades, and such. Consoles aren't their bread and butter, which is why they lose so much. However, their bread and butter are from vista/office sales, and software. Secondarily, they make lots off of servers, to which MS is using their servers for XBL content. For all we know, profits for the H&E division are less because sales of MS Points and XBL Gold subscripts. aren't included.

Nintendo is the only game company because thats all they are. For them, if Nintendo ever lost money, they'd go bankrupt. Sony and MS have the advantage of being able to lose money, and being able to recoup it.

You can extrapolate "oh, if Sony/MS were just videogame companies, they'd be bankrupt" thats just faulty logic. Your assuming that if both companies just made videogame systems, they'd pursue the same stratagies, but they wouldn't. They wouldn't have the massive bits of cash to invest in things that Nintendo can't even invest in. Theres a reason the Wii uses rehashed GC technology - it's cheap. Theres a reason Nintendo can't invest in a fully functioning online network - it costs money Nintendo is unwilling to pony up for quickly, as its alot of money. This is a plus and minus.

For consumers though, the Sony/MS is better in the fact that we gain where they lose. We get systems that are far more powerful for the dollar than the Wii. Which might mean, or not mean anything to various gamers (to me it does though).

Ultimately, your trying to make a hypothetical point thats totally invalid. MS and Sony aren't video game companies. Thats why they sell systems, and what they do works for them.

Pink: Your Display pic typically matches the content in your post.

Red: Make's no sense as is, however makes a little sense if you take Microsoft out.

Blue: Makes even lese sense then the red zone, If I lost $5 in a poker machine do I declare bankruptcy?

Green: I agree, but don't believe it will pay off.

Purple: It's not really working for them at the moment now is it?

 

Their Bread and Butter is elsewhere, fair enough that's true, but you've gone and said that if video games was all they had they would take different strategies, okay, so basically they don't care if they lose money, "Hey we have so much money lets make a supreme console just for shits and giggles"

I think your wording was just a tad off.

They want to win this War as much as Nintendo are, Profit wise.


#1. That pic is old and I haven't had the chance to change/update it. I chose it because theres no other next-gen system to have such a yoy increase outside of DS in 05-06, but I like the smaller numbers.

 #2. Microsoft and Sony are in the video game market to make cash via video games, yes, but their presence in the market allows them to make money not in just video games. Sony makes cash via BR-DVD sales, and helps promote the format making them cash. Microsoft makes money via live anywhere, and their other intenet-based solutions, these are 2 areas both MS and Sony are focusing on that are very important to them outside of just hardware and software sales. Nintendo has nothing of the sorts. If their video game sales were in the red, the company would be doing very bad.

#3. Sony and MS lose money in the video game business. If Nintendo lost $4b dollars like Xbox did, would Nintendo go bankrupt? Answer that question for me. Don't give me the "they'd never lose that much". Just answer me. Would they go bankrupt if the posted $4b in losses over 2-3 years? The advantage that MS and Sony have, as major corporations, they have their eggs spread in many baskets, therefore the gaming divisions can lose money here and there if they are serving the corporation in way(s) that help them out overall.

 #4. We have 5-6 years to go before we see if it pays off. Your and my views are just opinions, but we'll see if BR sells billions of disks, or not. I bet it will, however.

#5. From a profit-wise? Not as far as their gaming divisions go. But, if they were truely doing poorly for the corporations, they'd ax their gaming divisions without thinking. As a gamer, I do enjoy MS and Sony's videogames, so their losses still work for me, as I get higher quality gaming at the same price :)



Back from the dead, I'm afraid.

RolStoppable said:
mrstickball said:
1) They aren't the only company based on simple economics. Microsoft and Sony are in the video game markets for reasons far bigger than just videogames, therefor just using "they are losing money" as an excuse is dumb.

2) For Sony, they've almost always made a profit until they decided to push more online functions and Blu-Ray technology. As I've said, and will say again, Sony is pushing a machine to push Blu-Ray, therefore the actual benefit of the PS3 to Sony (as a corporation) isn't entirely in gaming. Therefore, their true profits off of videogames isn't entirely disclosed in mere P&L statements for the PS3, nor console losses. So what if the PS3 looses $200? The PS2 lost $120 per system @ launch (give or take), and ended up making Sony billions of dollars.

3) For Microsoft, they are taking the route of pushing alot of DLC, addons, content upgrades, and such. Consoles aren't their bread and butter, which is why they lose so much. However, their bread and butter are from vista/office sales, and software. Secondarily, they make lots off of servers, to which MS is using their servers for XBL content. For all we know, profits for the H&E division are less because sales of MS Points and XBL Gold subscripts. aren't included.

4) Nintendo is the only game company because thats all they are. For them, if Nintendo ever lost money, they'd go bankrupt. Sony and MS have the advantage of being able to lose money, and being able to recoup it.

5) You can extrapolate "oh, if Sony/MS were just videogame companies, they'd be bankrupt" thats just faulty logic. Your assuming that if both companies just made videogame systems, they'd pursue the same stratagies, but they wouldn't. They wouldn't have the massive bits of cash to invest in things that Nintendo can't even invest in. Theres a reason the Wii uses rehashed GC technology - it's cheap. Theres a reason Nintendo can't invest in a fully functioning online network - it costs money Nintendo is unwilling to pony up for quickly, as its alot of money. This is a plus and minus.

6) For consumers though, the Sony/MS is better in the fact that we gain where they lose. We get systems that are far more powerful for the dollar than the Wii. Which might mean, or not mean anything to various gamers (to me it does though).

7) Ultimately, your trying to make a hypothetical point thats totally invalid. MS and Sony aren't video game companies. Thats why they sell systems, and what they do works for them.

1) Yes, Sony and Microsoft are in the videogame business for more reasons than just making money from videogames, but they have to understand that the primarly selling point for a console are videogames. It doesn't look like that they will be making money from videogames this generation and they will probably also fail to make profits off of the other things they offer for their consoles (Bluray, DLC), because first and foremost you have to sell your machine as videogame system to reach massmarket penetration.

2) The PS2 made a cumulative profit of $2.3 billion for Sony's game division. The PS3 lost close to $2 billion in its first year and Sony projects another $500 million loss for this fiscal year. Everything the PS2 made in profits is already lost. The PS3 is a huge gamble, if Bluray doesn't become the successor of the DVD, Sony will not only have lost their reputation in the videogames business, they will also lose money on yet another failed new format they wanted to push in people's homes (Betamax, MiniDisc, UMD).

3) As of now, Microsoft's H&E division hasn't made a single cent of profit. In fact, they lost about $5.5 billion on the Xbox line. The Xbox exists to stop the Playstation line from becoming a convergence box for the living room which would cut into Microsoft's main business, Windows.

4) Nintendo has about $5-7 billion cash reserves, they could afford to make an Xbox like failure and would still be in the business. The Wii clearly shows that it isn't necessary to sell hardware at a loss in this business if you have a great product. Lossleading is a risky business, if you don't become dominant, you will lose billions (see Xbox, 360, PS3). Nintendo knows how to make money in this business, Sony and Microsoft obviously don't know.

5) Whether a company can or cannot afford to lose money isn't relevant. The strategies of Sony and Microsoft are stupid, they are betting the farm on their current consoles and therefore become desperate to have a huge hit. There's a reason why Nintendo invested in rehashed (but clearly improved) GC technology - graphics are perceived as good enough already by the majority of consumers. There's a reason why Nintendo didn't invest in an online network like Live - it simply can't be a profitable business (Microsoft is charging a fee and still losing money on it).

6) Stop believing that Microsoft and Sony are running their videogames divisions at a loss because they care for their customers. They are not charity companies. In fact they care far less about the videogame market as Nintendo. Nintendo has to care, because it's their only business. Microsoft and Sony give a rats ass.

7) If Sony won't be able to make money in this business anymore (which is likely seeing how the PS3 and PSP are doing) and doesn't see a possibility to make money in the future they will leave the market. If Sony leaves, Microsoft's primary reason to enter the market has gone. If the Xbox line hasn't become a profitable business (which was their secondary reason to enter the market) by then, Microsoft will leave to. Business is about money.

 

1. I agree, and thats exactly why the X360 and PS3 are failing. I've stated, and advocated a X360 pricedrop since November last year for Gears of War, because the X360 is failing vs. the Wii due to mass market pricing. For the PS3, it's the same thing as the 360, but at a much higher level, as it's pricetag keeps only the most hardcore and wealthiest gamers to buy the systems. However, to maintain profitability, MS/Sony have realized that in order to continue being loss leaders @ launch, they need ways to get more cash via DLC and other online ventures.

2. Again, I agree that Sony has made just about the biggest gamble in gaming history. I never said what they've done was smart or right, as like you've said, they've nearly lost their entire PS2 profits by blundering the PS3 design. IMO, Sony would be FAR better off of they'd of lowered Cell/RSX specs and launched the PS3 at $500 w/o such a huge cost for the mobo (the mobo alone is $300 as of isuppli's estimations, whereas the BR-DVD is less than half of that, and has rapidly reduced in price). Again, Sony could make billions via BR licensing, and justify the PS3 strategy, but for me, that was too risky with the uber-specs of the PS3.

3. H&E is still in the red, but they have actually made profits before. When H2 launched, H&E posted a $100m profit. I agree that the H&E is a stop-gap to prevent PS3 from dominating a set-top box (which is what Sony is trying to do, as MS forsaw). Eventually though, H&E will become profitable.

4. During the PS1/2 dominance, Nintendo did end up doing very poorly vs. their current and former years. During GC launch and such, profits were only around $200m yearly (versus around 500+ now). Nintendo knows how to make money, because games are their business - just like Sony knows how to make cash on TVs, and MS on OSes.

5. Prove to me that MS is actually losing cash on just XBL. If Nintendo was all about the gaming experience, why not give a better online system?

6. I know that they aren't being loss leaders for any reason outside of selling more units. But as a consumer, I don't mind getting better systems for cheaper :)

7. If Sony left (which I doubt they will), then MS will force their gaming division to become profitable, and fight head to head with Nintendo. Even if they aren't in the market still to fight Sony, they will find another viable reason to fight.

 



Back from the dead, I'm afraid.

About the monopoly issue, I don't think many people actually want that situation to arise, but it is a fact that the losses by both companies are unsustainable if they continue without borrowing money from unrelated divisions (a luxury Nintendo doesn't have) and they will quit eventually Sega-style if they don't think they'll ever make a profit.

If Nintendo were to suddenly find themselves the sole major company in the console market, there would always be new players: remember, Microsoft and Sony were never in the console market until 2001 and 1994 respectively so there would always be suprise entrants. 



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catprog2 said:

routsounmanman said:
Totally agree with vizunary. Monopoly on Nintendo is clearly a wrong thing. Look at the arrogant N64 days. That's what cost them the 1st place to Sony 

  The other side is to play all the games you need to buy all 3 consoles vs 1 console


  

 


No, the other side to this is you'd have to buy a high-end($4000) PC to play the latest and geatest games(by which I mean physics , AI, and graphics) If this happens, I for one will cease to be a console gamer.



What is with all these people saying Monopoly would be bad for Nintendo? I personally remember playing that on my NES and loving every minute of it. :-p



twesterm said:
What is with all these people saying Monopoly would be bad for Nintendo? I personally remember playing that on my NES and loving every minute of it. :-p

 

You mean when Nintendo was railroading third parties, muscling around retailers, banning developers from the system, and overall screwing over everybody in the business to pad their own profits?

Yeah, those were the days. I can't wait for them to return.

*begins pounding head against wall*



Or check out my new webcomic: http://selfcentent.com/

twesterm said:
What is with all these people saying Monopoly would be bad for Nintendo? I personally remember playing that on my NES and loving every minute of it. :-p

uhhh, Sega?

btw, no one said bad for nintendo, ANY monopoly is bad for the consumer, just look at the crap Vista OS that MS just dumped on the market.



Yup. Too much power means the company gets arrogant. That is what happened to Nintendo on their third console, and that is what is happening to Sony on their third console.