Steve Case resigns as AOL Chairman

[Drake Tungsten]

So what you're saying is there are many variables and it doesn't make sense to assume a console can continue on a "monopoly"?

I don't know why you keep harping on this, like you think you have some sort of advantage here. I've plainly stated that MS doesn't need a monopoly; they don't even need to be #1 in market share. They just need to reach a critical mass of software sales that will make the Xbox 2 profitable. That certainly seems like an achievable goal to me, especially when you consider the vast resources at Microsoft's disposal.

[Asher]

Originally posted by Drake Tungsten
First of all, why would the Xbox 2 have to outperfrom the PS3. They could be exactly equaly in power and MS would still come out on top if they attracted the better games to their system.

Wow, you really don't get MS' philosophy behind the Xbox.

MS' gameplan is to always have the most powerful console in the market. They can afford to do it. By offering the most powerful console and the best value, they can gain more marketshare and attract more developers.

It was easier for the original Xbox since it could use technology 1.5 years newer than the PS2, but for the next generation the Xbox2 is going to come out before or at the same time as the PS3, and it still needs to be faster...

Secondly, you know damn well that all the profits in the game industry are made off of software sales, not hardware. If MS sells enough Xbox 2 software, they can afford a big hit on the hardware.

Of course. The problem is, the average tie-in for hardware ends up being about 7 by the end of the console's lifespan. When you lose, say, $150 per console in hardware, not to mention marketing budgets (which are huge, $500M for the launch of the original Xbox), the R&D cost it took to make it (hundreds of millions, again), and then an average royalty of $10 per game -- you can see the problem, right?

[Asher]

Originally posted by Drake Tungsten
I don't know why you keep harping on this, like you think you have some sort of advantage here. I've plainly stated that MS doesn't need a monopoly; they don't even need to be #1 in market share. They just need to reach a critical mass of software sales that will make the Xbox 2 profitable. That certainly seems like an achievable goal to me, especially when you consider the vast resources at Microsoft's disposal.

You originally asserted that the Xbox2 will be easier because the original Xbox was paving the way for Xbox2's profitability.

Historically just because the predecessor was successful (even a monopoly in some cases) doesn't mean the successor will be as well. Which is why it doesn't make sense for you to assert that the Xbox is paving the way for profitability with the Xbox2.

The Xbox is here to prove MS is serious about staying in the market and start to build a brand. Just because the Xbox is a brand by the time Xbox2 comes out doesn't mean it's more profitable...

[Drake Tungsten]

MS' gameplan is to always have the most powerful console in the market. They can afford to do it. By offering the most powerful console and the best value, they can gain more marketshare and attract more developers.

You're contradicting yourself. You say that MS can afford to field the most powerful console on the market, yet you're sure that they can't turn a profit on the Xbox 2. Does MS know what it's doing are not? I think they do, but I can't tell what you think about it...

The problem is, the average tie-in for hardware ends up being about 7 by the end of the console's lifespan.

The industry is growing quite rapidly, so I would expect the tie-in ratio to go up in the future. Plus, hardware costs always drop as a console ages. MS is only going to be losing $150 per Xbox for a couple years at most.

[Imran Siddiqui]

Because of a flawed cartridge format and an arrogant attitude towards developers by Nintendo. Pretty obvious to anyone who knows anything about console history...

If they actually were a monopoly, this wouldn't matter. Monopolies can make inferior products and still turn up #1.

[Asher]

Originally posted by Drake Tungsten
You're contradicting yourself. You say that MS can afford to field the most powerful console on the market, yet you're sure that they can't turn a profit on the Xbox 2. Does MS know what it's doing are not? I think they do, but I can't tell what you think about it...

In what way is this contradictory?
I should clarify: I'm pretty sure they can turn a profit eventually, maybe to the point of breaking even overall, but the way MS plays the game it should be obvious that profit is secondary to marketshare.

They want to ensure Sony doesn't have a monopoly. That's really all it's about. They would LOVE to make a profit in the process, and maybe they will make a small one, but it's a far cry from the money that would make them get into it solely for the profit.

There are MANY business markets they'd make much stronger profits off of. They choose not to enter them right now, because this one threatens them in their eyes (and mine).

[Drake Tungsten]

Historically just because the predecessor was successful (even a monopoly in some cases) doesn't mean the successor will be as well.

"Historically"? Ignoring for a minute the complete idiocy involved in looking for historical trends in an industry that is only twenty-odd years old, where do you get the idea that a successful predecessor doesn't mean the successor will do well? There are as many examples that go against this statment as there are that go for it. NES led to a successful SNES. Playstation led to a successful PS2. There's the four market leader of the last four generations right there. What unsuccessful succesors are you talking about? The N64? That's only one and I can't think of any others. You can't say Atari because the entire industry died out after Atari. The NES brought console gaming back to life. So what are these other unsuccessful succesor consoles? Care to back this statement up with some examples?

[Drake Tungsten]

If they actually were a monopoly, this wouldn't matter. Monopolies can make inferior products and still turn up #1.

Don't push Asher's "monopoly" rhetoric on me...

[Asher]

Originally posted by Drake Tungsten
"Historically"? Ignoring for a minute the complete idiocy involved in looking for historical trends in an industry that is only twenty-odd years old

You're the one who tried to assert having a successful predecessor is going to help the successor. And used the NES, SNES example... And PS->PS2 example...

where do you get the idea that a successful predecessor doesn't mean the successor will do well?

My assertion is it can easily go either way, to the point where it'd be a stupid business move and a stupid idea in general to assume it does mean the successor will do well.

There are as many examples that go against this statment as there are that go for it.

Precisely?

What unsuccessful succesors are you talking about? The N64? That's only one and I can't think of any others.

Atari vs Nintendo --> Nintendo market leader
Nintendo vs Sony --> Sony market leader

You can't say Atari because the entire industry died out after Atari. The NES brought console gaming back to life.

Nah, the Atari still had game releases and was still popular in the early 80s. The NES was its successor.

Then what about Atari Jaguar, etc?

Care to back this statement up with some examples?

You're really confused.
I'm not saying a successful predecessor will mean the successor will fail, I'm saying it's not an indictator and can go either way. Simple stuff....

[Imran Siddiqui]

Don't push Asher's "monopoly" rhetoric on me...

Asher's Rhetoric? Is there any reason for your paranoia or is it just ingrained into you?

The main question is 'what monopoly'? As far as I'm concerned there hasn't been a console monopoly since the whole shebang began.

And no a successful predessor does not mean the successor will be as well. Look at Sega again. Genesis did not mean that Sega CD and Dreamcast were going to be successful.

Atari, once again. The whole industry dying out, doesn't mean a damned thing! Atari was never again successful in the console arena.

Nintendo is on the way out. If it truely was a monopoly one misfire would not doom it. You could not assert monopoly if that was the case.

[Drake Tungsten]

I think the fact that there has only been two market leaders in the history of console gaming shows the stability of the market and the fact that industry leaders can build off of previously successful consoles to create successful followups. After all it took a huge screw-up by Nintendo to let Sony gain control of the market...

Also, you might want to check your dates on the Atari Jaguar. It was hardly a follow-up to the 70's Ataris...

[Asher]

I know, but it's just another example that a successful predecessor doesn't mean anything...

[Drake Tungsten]

Nintendo is on the way out. If it truely was a monopoly one misfire would not doom it. You could not assert monopoly if that was the case.

My point was that I never asserted that Nintendo was a monopoly (although that case can be made). Why you brought it up, I have no idea.

And one misfire can bring down a monopoly, if it is a massive as the misfire Nintendo made with the N64.

[Imran Siddiqui]

I think the fact that there has only been two market leaders in the history of console gaming shows the stability of the market and the fact that industry leaders can build off of previously successful consoles to create successful followups.

A. The market is VERY young. 20 years at best?

B. 2 market leaders? What about Atari? Colico? And the Commodore 64 was for all intents and purposes a gaming machine.

After all it took a huge screw-up by Nintendo to let Sony gain control of the market...

Check you dates on this. Sony ALREADY had control of the market before Nintendo's "screwup". The screwup was in response to Sega and Sony. They believe NES fans would come back to cartriges after CD loading times. They overestimated the successful 2nd console effect.

[Imran Siddiqui]

And one misfire can bring down a monopoly, if it is a massive as the misfire Nintendo made with the N64.

What happens if the 'monopoly' was already brought down before the misfire?