Yep, it seems like the 7th generation of console gaming has been all about the cheapest products. Numbers shipped compared to original pricetag.

1. DS -86 million/ $149.99

2. PSP -40 million/ $249.99

3. Wii -37million/ $249.99

4. Xbox360 -23 million/ $299.99 - $399.99

5. PS3 -17 million/ $499.99 - $599.99

It has just been the market trend. Even when you take in to account the Wii launch taking place a year later it still overtook the 360 in part because of the cheaper price tag.  Now that the tables have turned I expect the Xbox360 will gain ground on the Wii and distance itself from the PS3.

If you notice, the cheapest hardware also typically generates the most revenue through software (barring the PSP).

In the cast of MS, even if they were still taking a small hit on consoles by underpricing, they could easily take up the slack through sales of licensed peripherals as well as through volume of game sales.

If nothing else, the 360 as a platform does sell games.

Saying Microsoft was the benefactor of luck utterly ignores that of all three players Sony enjoyed the greatest undeserved success. Imagine if these events had unfolded just a year earlier. How would have Sony fared. What if they had happened two years ago would the PS3 have even been able to survive its first six months on the market. The market meandered here for years. The market was highly susceptible not only was it a matter of time, but the longer a correction was deferred the greater the effect.

Microsoft was a benefactor of its own conservative generalist strategy. Which gave it the adaptive edge for margin. The Sony model for their console only works well given certain conditions are met. The Microsoft model works well regardless of what the economic conditions happens to be at any given moment. Microsoft colonized early, incorporated many revenue streams, exploited each price market to its fullness, and most importantly conserved resources.

I see many posters griping that Microsoft just got lucky. How is it lucky to have a merit of your strategy pay out. For Sony the reckless spending that precipitated much of this economic crisis paid out for them. The spending was not realistic. Many consumers were spending far more then they should have for a console it was terribly foolish for many of them. Now reality has come crashing down, and your saying Microsoft got lucky, because everyone screwed their heads on straight. Something tells me a few people still haven't screwed their heads on straight. Microsoft simply roped a dope.

They had a strategy, and they had the confidence to stick with that strategy. They followed through even when it was costing them market share. That is not luck in my book. Luck is not something you earn. Microsoft earned this, and they will deserve all the advantage it gives them, and all the damage it does to Sony.

Well said everyone loves to rank on MS they did well this generation.  They have many smart buisness moves everyone called the latest price cut deperation I called it smart buisness move.  They have focused on several different fronts and is solidy in second.

Microsoft is doing very well.

1st goal: Grow Beyond Xbox1 Install Base. (DONE)

2nd goal: Destroy Playstation Brand. (IN PROCESS)

3nd goal: Who knows when they'll stop... (Nintendo Buyout? MS launching separate console for Casual and Mass Market?)


Things are looking good for Microsoft.

And your Dad is now a multi-millionaire by using this knowledge to invest to take advantage of the crash he saw coming?

As MS, and Sony, and every other large multi-national company is raking in millions because their accountants saw this crash coming and prepared the company accordingly?

And Bill Gates happened to be looking the other way which is why his foundation (along with almost every company) has seen massive delvaluation of its assets?

Get out of here!

Sure the signs were there but are you actually reading the news, etc?  Every major company, bank, etc. has been caught completely short here and is suffering.  Do you actually know how much money globally is being put in by countries to bail out all this mess?

MS were as ready and prepared for this as anyone else - which is to say not at all.

I'm not knocking what they've done, but the lift the 360 is going to see due to the economy is pure, blind luck.  Nothing more.  Doesn't invalidate it.  But that's what it is.

I suggest more people review the excellent review by The Source on 100 week trends to see that, until the economic crisis, 360 was tracking just ahead of Xbox and overall MS had barely improved over previous generation, whereas Nintendo have almost exactly swapped position with Sony for sales, and the gain in marketshare of Nintendo almost exactly matches the loss by Sony.

I'm astonished people are actually posting that of course companies like MS knew all about the impending implosing of the global economy, the destructive of current investment and banking institutions and the impact it would have on consumer spending because they have such amazing accountants, etc. etc..  Do you realise how foolish that assertion looks?  Particularly as its glaringly obvious that as a company (I mean in total, not just Entertainment Divsion) MS made absoloutely no move to provision against the crisis or take advantage of it?

Love your 360 if you must, I certainly don't object nor have anything against the console or the company itself, but please don't let it cloud your understanding to this degree.  Seriously.  It's just plain silly.

Hand it to Microsoft for multiple price cuts and spending millions for games?

Microsoft is able to do all those things because they are a huge (monopoly in many eyes) size company. Not because their gaming division is doing incredible, they could waste billions (and have) without any bumps in the road while still doing price cuts, advertising everywhere, getting games.

You think if Sony and Nintendo had to issue a 1bil warranty, any of them would have been able to do multiple price cuts, etc... Sony isn't doing a price cut still, 1bil loss like that would have destroyed them. Xbox will win in the end because Microsoft will just keep spending billions on it, copy the competition and make a better copy with their billions.

Sony has also been spending large, the difference is they did it above their means (IMO).

You almost act like Sony hasn't spent(or lost, however you want to look at it) billions of dollars on their gaming division. And Microsoft is making a profit off of the 360 now.

Conservative strategy? Please.

Microsoft's business model isn't anywhere near as flawless as you're trying to make it out to be. Microsoft has done plently of reckless spending. Forgotten all the money they've thrown at developers which cuts into the royalties that they receive, especially in the Japanese market(Blue Dragon, TOV, Eternal Sonata, etc) only to get a negative return? MS went with a loss leader business model for this generation and it hasn't paid off. With that kind of business model, MS would need mass exclusive third-party support, and in order to achieve that, they'd need the market share of the PS2, which is something they aren't to acquire any time soon. Since their console doesn't have enough appeal to warrant that kind of exclusive support, they've had to resort to paying for it en masse, which is why they can't post a consistent profit despite rather volumnous software sales.

Had this happened a year ago, then MS would be facing similar misfortunes as Sony considering that their console would have been more expensive and the Wii would have looked even more appealing at $250.

If you look at the big picture, this is the holiday season, and 360 sales after the holidays will fall back to 50-70K/wk in NA and EU and 6K/wk in Japan. Despite MS's recent gains, it's still a distant, unprofitable second, which is exactly where it was last generation. That being said, the real beneficiary of Sony's blunders and misfortunes has been Nintendo as it's entirely switched places with Sony from last generation.

MS should be focusing more on turning a consistent profit, because by concentrating all of their efforts on securing useless market share from the PS3 and pretending that the Wii doesn't exist, they're really just celebrating mediocrity.