| Squilliam said: The PSPs sales are down considerably thats all I was looking at. I didn't compare it to the DS, its doing poorly relative to how its performed in the past. I have my doubts that the games will substantially increase the sales of the device because from the information I have games have sold poorly overall on the system and its getting greater competition from the iPhone and iTouch and their clones for the significant multimedia functions which make up a large proportion of its selling proposition to consumers. The old razor/blades model isn't something im challenging. Where im coming from in relation to the Xbox 360 is this: The Xbox 360 Arcade breaks even with accessories -> quoted from someone in Microsofts senior management. We are going for 2nd place in this generation -> paraphrased again from Microsoft management Looking at the financial statements and reading between the lines I have seen nothing which implies that the Xbox 360 operations are anything but profitable by a healthy margin. So if one took the idea that the Arcade breaks even with accessories it means that the variable costs involved in shipping a single Arcade console to market last year were very close to breaking even. Im not counting advertising, R+D or anything like that, just the cost of the machine from factory to shelf on its own. So if they chose, they could probably cut the prices down quite considerably once more as the difference in cost between the Arcade and the Premium aren't excessive as it is essentially just a HDD unit which seperates the two and that would cost no more than $40 all up. EDD is a slush fund, its got the barely profitable Windows Mobile which may very well be losing money now thanks to the iPhone and increased investment, Zune HD fixed costs, Natal development costs plus related aquisitions of I.P, The Zune is definately losing money, actually the whole thing is one big research and development pit of named and unnamed projects. I doubt that any of this however will dictate their choices in relation to the Xbox 360 hardware platform. They probably have the best revenue model in the industry, they can afford to lose quite a bit on hardware upfront if it means they can recoup an average of $20 per year per console for the next 5 or so years along with any applicable game and download revenue. The EDD dropped into the red on a one off charge of $150M and SCE being in the black by $4M or so was essentially an accounting trick to make the division look better, well that was my take on it anyway. Theres development for a new console, perhaps as there always is, however the really serious outlays are for I.P etc which only gets paid in large quantities close to the release of a new generation console.
You didn't hurt my feelings, I secretly have a passionate relationship with my PS3, I play Flower and it makes me feel so good!
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I have never bought into the "XBox 360 is not the majority of EDD" theory, to explain away the losses, personally. The Zune is peanuts, in comparison to the 360 and its incoming/outgoing revenue, and as you stated, Windows Mobile is a non-factor, since it basically breaks even. All the PC accessories (keyboards, mice, and MS sells a LOT of them at profit) are included in EDD as well, I believe, and that's a pretty hefty chunk of income. So then... without the supporting factor of the accessories (which likely far outweigh the losses incurred by Zune), what is MS doing to put them in the red? Is the X360 incurring losses? As I said, I suspect serious R&D, which doesn't bode well for the X360's lifespan.
I believe Microsoft is continually spending a load of R&D money, not just $150M in one chunk -- I don't understand your basis for that theory at all.
