@ ripper

I know I am. It's a personality defect, but everyone has some, right?

Listen, I'm not too sure Microsoft's on their way to making money any time soon. Sure they posted a profitable quarter, but how many more Halos do they have on the back burner? The thing is while they made >300 million sales in the first week of Halo3 (a large portion of which I'm sure turns directly into profit), they still only posted quarterly profits of 150 million. As in to say that without Halo (which will be the norm for almost all forthcoming quarters) they would have conservatively lost 150 million dollars. After 2 years and 3 billion dollars (1 billion of which was due to a combination of design flaws), they're still not at a level of sustainable profitability on 360.

Even if they were wildly profitable going forward, I think they could only hope to break even on 360 under the most positive scenario. That still leaves them 4 billion in the hole due to the first machine after 10 years on the market. If they don't make massive market penetration with the time 360 has left (and it seems moderately clear that won't happen in Japan or EU territories) then any investor/analyst/shareholder in their right mind would say further spending is probably good money after bad. Don't forget, they posted their first quarterly on the division after the Halo2. It didn't help their financial situation in the slightest.

I'd also suggest they're probably reconsidering their illusions of dominating the living room media space. 360 clearly isn't penetrating beyond the traditional markets, Nintendo (whom they ignored) seems to be doing a better job of being accepted in new markets, and their ultimate objective of at least blocking Sony (if not displacing them) has been achieved. They could drop out now at least happy in the knowledge PS3 won't encroach on the PC space.

As for Sony, well, they've basically inverted. Playstation used to buoy the rest of the loss making divisions up, but now it's the other way around. Their momentum is lost and their economics are built on domination which is built on sustained momentum. They're no Microsoft and certainly can't sustain 2 billion yearly losses for more than a year or two. Not conscionably anyway. And that becomes a legal issue. The board of a company has a legal obligation to do what's in the best financial interests of their shareholders. If it looks like there's no way something of the best possible value is going to be gained then there's a legal obligation to discontinue that negative business. Sony can look to the possibility of strategic advantages and future profits on PS3 for the moment, but not for much longer if this state continues.

@ elendar They have failed over and over. It doesn't matter if the industry sees 13 billion dollars annually if the collective development cost is 20 billion. Of course you're right about the merging of the markets. They'll keep trying, but I think video games have failed for them too badly to remain their avenue of choice much longer.

Like I always say, if microsoft never came in sony would be dominating. Microsoft is evil. I hate windows. And I use it.

The losses that Microsoft is incurring mean nothing. Microsoft wants one thing in its industries it serves - TOTAL DOMINATION and MONOPOLY. Sony is the first enemy in this process, and for people that think Nintendo and MS are friends (Notice how Nintendo never comments on the "Wii60" relationship), think again.

With the Wii60 thing, Microsoft is manipulating the fanboys to take out their first enemy - Sony. If they are successful in that, they WILL go after Nintendo. Microsoft has acted like friends before with other companies (eg. Apple), and betrayed them.

For all the people following the "Wii60" thing, be ready for major betrayal.

Once Microsoft has monopoly, the losses will be passed to the consumer, and very effectively. Expect $1200 consoles and $120 games (in 2007 dollars). If you think I'm wrong, look at other products like Windows and Office.

Call me crazy now, but come back in 10 years and see the truth.

Here is an old article from 1999

http://www.xboxperu.com/foro/new/lod1.jpg



Oh yeah, Apple will eventually lose to the Zune.

leo-j, I don't think you really want Sony to dominate the marketplace. I don't want any company to dominate the marketplace, it just so happens to work out better for us that way.

Not sure if it was that usable with only 32MB and rather slow CPU though.

Yeah, it definitely wouldn't be anything to brag about, but I still defend Sony's claim.

Not really if sony keep dominating and basicly gets 100 million playstation sales( in the future) vs 10 million nintendo and only 5 million xbox. They become third party like sega and atari!!

Then we get 1 console with, mario, mgs, halo, gears, kz2,LBP, zelda, and KH.

Consoles are much less threatening than a PC. And I believe we'll see more and more devices have the 'Power of a PC' in them, not less. MS doesn't want to be left behind as this convergence happens, so they're trying to make sure they have software for almost all of these kinds of devices.

Will there be an Xbox 720? Assuming that the 360 doesn't totally tank in the next two years, absolutely. But it will be something that is much more focused on delivering the 'total home entertainment' experience that MS and Sony has been promising over the past few years.

microsoft = world domination. lol

Thankfully the best game makers on PC are pretty independent. id has always been about creativity and the the freedom to pursue it by encouraging people to mod and fiddle with code--and Carmack is a programming genius capable sidestepping whatever he has to to maintain that freedom; valve has steam, which is rabidly independent and getting more people on board.

This whole games for windows thing so far has been met with hostility from the PC crowd. They're trying to throw down a bunch of rules and restrictions and charge people to do what they've been doing for free all this time, Halo 2 and Halo bombed on the PC and the competitive crowd won't touch them because they're not even close to being competition ready.

The beauty of the PC is that the alternative doesn't have to come from a multi-billion dollar corporation (like coming up with a new console) but instead can come from a small group of determined programmers.

If push comes to absolute shove someone will come up with a more user friendly version of linux or adopt mac and just abandon Windows all together. With the backlash Windows and GFW is getting it wouldn't surprise me one bit.

They've already figured out how to get DX10 to work on XP with no restrictions (no "dumbed down" version of DX10).

The beauty of the PC is that is has always played by a completely different set of rules.