Xoj said:
lulz microsoft and nintendo arent arrogant xO.
it's PR, i heard microsoft and nintendo said worse, though this is just his opinion, and it's true that even with year headstart ps3 isn't trailing much behind.
but it was microsoft rushing that got them into RROD.
and nintendo wasn't much angel either SNES and n64 era.
that's ignore PR, when the console speaks for itself, the work 180,000 employees.
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In the context that all launch consoles from either company are doomed then RROD doesn't look as bad.
http://forum.beyond3d.com/showpost.php?p=1388522&postcount=137
I think the best way to get a feel for the console failure rate is at dev studios actually ... PS3's broke rarely early on (the test kits that look like retail PS3's), but they have continued to break at a relatively steady rate to where given enough time eventually they all broke (the early models). As far as I could tell, all launch models of both machines are doomed to eventual failure, it just takes PS3's much longer before failure. I presume this has all been fixed now since anytime there were kit failures at the last place I was at they were usually older models.
On topic:
It really depends on the motivations of the different participants as much as their abilities. If Microsoft values the PR/Marketing advantage of coming into the next generation from second place once again more than any profit they would forgo in the short term then they will be more aggressive in terms of pricing.
Its really quite simple mathematics. They are trending towards 1B/Y profit for this and future financial years in the EDD. If they need 12M/Y consoles to stay in the lead, they can cut the price/increase costs by between $50-$100 per console in order to do so. Its extremely likely they could cut the price down to say $169/$249 and bundle Natal at the same time. If you take say $169 + Natal @ $40 (cost) and assume thats the only SKU then strictly on hardware costs alone assuming no further reduction in hardware cost they would still be marginally profitable as a division over 12M consoles sold.