Xbox 360 vs. PS3 vs. Wii

On Nov 19, 2006, at 11:49 PM, Google Kreme wrote:

On 18-Nov-2006, at 13:04, Marilyn Matty wrote: > MS makes money primarily on the Xbox hardware (as does Apple with > iPod, the profits from the iTunes store are small); its biggest > competitor, Sony, pretty much gives away Playstations so they can > make the big bucks selling games.

Er, I don't think this is true at all. I know for sure that when the XboX came out, MSFT lost money on every unit. I don't think they are losing quite as much with the 360, but they are definitely in it to make money off the games.

Actually, they are loosing money with Zune too. I was referring to the business model - Microsoft's model for Xbox is different from Sony's.

I keep expecting one of the companies to introduce a "10 games, free console" sort of deal...

> In the case of the PS3, they also > want to sell BluRay DVDs and promote the format. And I've read that > even though the PS3 hardware retails at a high price point, Sony is > giving away a very expensive razor to sell the blades.

I believe Sony is losing a little money on the PS3, but their margins will drop as the unit sales move up.

According to last week's Forbes:

"No wonder Sony thinks paying up to $600 for a new PlayStation 3 is a reasonable deal: From the electronic giant's perspective, consumers are getting a bargain. That's because Sony is spending up to $840 to build each machine, according to a report released Thursday from hardware specialist iSuppli. That $240 gap, by the way, is just a few bucks less than the retail price of Nintendo's competing Wii game console."

And

"But in order to eventually earn money from hardware sales, Sony needs to sell PS3s to more than just the most avid gamers. The PS3’s production costs will only go down if demand takes off and keeps on going for years. And getting a $600 machine to appeal to many millions of people is a tough sell." http://www.forbes.com/digitalentertainment/2006/11/16/sony-ps3- playstation-tech-media-cx_rr_116sony.html

The latest issue of Business Week reported Sony spent over $1 billion to develop PS3, and that Sony recently warned investors that "that the games business alone could lose as much as $1.68 billion in the fiscal year through March, 2007."

http://www.businessweek.com/globalbiz/content/nov2006/ gb20061112_045318.htm

Marilyn

On Nov 20, 2006, at 2:10 PM, Jolin M Warren wrote:

At 20:49 on 19-11-2006, Google Kreme wrote: > Er, I don't think this is true at all. I know for sure that when > the > XboX came out, MSFT lost money on every unit. I don't think they > are > losing quite as much with the 360, but they are definitely in it to > make money off the games. > > I believe Sony is losing a little money on the PS3, but their > margins > will drop as the unit sales move up.

It looks like Microsoft is actually now making some profit on the Xbox 360 (initially they did make a loss). But their strategy is certainly to make lots of money on games as opposed to the console itself. And it seems likely that Sony is losing significant money on the PS3 at the moment. But this will come down in the future and possibly even be profitable one day. :-)

<http://arstechnica.com/news.ars/post/20061116-8239.html>

According to this article, MS only shows a profit "before marketing and other costs are figured into the equation." These costs are very high, and from what I've been reading in other business publications, MS isn't predicting any actual profits for Xbox till 2008, should all go as they anticipate:

http://www.forbes.com/digitalentertainment/2006/07/27/xbox-wii- playstation_cx_kt_0727microsoft.html

Marilyn

On 21-Nov-2006, at 07:38, dano wrote:
> Thus the PS3 is inherently all of a game machine, a home computer,
> and a home entertainment system. The Xbox360 is only the first.

Interestingly, the Xbox doesn't even support playing back divx, and
to play back divx off your LAN requires you to run the divx through
some sort of transcoder (which I have to assume is Windows or Windows
Media Center specific).

> It will be interesting to watch whether this has any effect on the
> market and the marketing of the device.

Both the PS3 and the the Xbox are far too expensive for me to even
consider buying them. I am thinking about a Wii, however (though I
would have to see about reinforcing the strap after reading about
broken strap resulting in flying Wii controllers breaking things,
including TVs).

My kids teenage just got a Wii and they think it's great. So it has
the high school stamp of approval. :-)

In this review of the PS3 vs the Xbox 360, the Xbox came out ahead.

http://www.nytimes.com/glogin?URI=http://www.nytimes.com/2006/11/20/arts/20game.html

I read that one reason the Wii is so much cheaper than the PS3 is
that the technology isn't cutting edge. In fact it's not that much
more advanced than what's in the Game Cube. But unless you're a
bleeding edge gamer, it's good enough.
--

David


Equal rights for weirdos - Amanda Walker

On 21-Nov-06, at 3:20 PM, David Shayer wrote:

> My kids teenage just got a Wii and they think it's great. So it has
> the high school stamp of approval. :-)

Hi,

Just wondering how they like that new Wii motion controller ? We
have a WII unit on hold to pick up this weekend and were curious as
to how well it really works. We have been hearing mixed reviews
about the Wii but it looks pretty interesting and has a pretty good
selection of games. It's just the controller that intrigues us more
than anything else.

Wondering how easy it is for the younger kids to use too.

Thanks,

Amber

On Nov 21, 2006, at 9:38 AM, dano wrote:

> [Starting a new thread to extract the game system discussion from
> the Zune thread. -Adam]
>
> A possibly significant difference between Xbox360 and PS3 - in
> addition to the games system - is the supported operating system.
>
> Currently, Microsoft actively discourages use of any other OS by
> use of all of: legal threats, software engineering and hardware
> engineering.
>
> Compare this to the PS3 which is allows and encourages the use of
> Linux (Yellow Dog Linux v.5). <http://arstechnica.com/articles/
> columns/linux/linux-20061018.ars> <http://
> www.terrasoftsolutions.com/products/faq/ps3/models.shtml>
>
> Thus the PS3 is inherently all of a game machine, a home computer,
> and a home entertainment system. The Xbox360 is only the first.
>
> It will be interesting to watch whether this has any effect on the
> market and the marketing of the device.

 From what I've read, this is what Sony is banking on. It's a
strategy similar to what Steve Jobs implemented at Apple, one that's
based also ultimately UNIX based.

Sony is not just trying to sell PS3s, they are using this hardware to
establish Blu Ray as the next generation standard for DVDs, to
leverage the strength it has established in online gaming (one that
has been challenged by Xbox Live), and also to establish a solid
market share in downloaded entertainment (where Apple is to date
unquestionably the dominant force). And though Apple is a newcomer to
living rooms with the announcement of iTV, Sony would like to regain
its once unquestioned stature as the king of the home entertainment
market.

But like iPod Wii is comparatively cheap, very easy to use and learn,
and friendly to non-aficionados. And like Apple, Nintendo was once
dismissed as a looser in its death throes.

Marilyn