How do you think Xbox live will survive when... (1 Viewer)

[Romier S]

X-Box isn't their only thing they are trying to make money from

Even better you answered your own question above. You are absolutely right that the Xbox is not the only thing they make money from. If that were the case then MS would not have been able to deal financially with dropping the price a full 100 dollars, or throwing that 2 billion into Xbox live. The software/OS/OEM business is lucrative indeed.

 

[BrianB]

Romier, that oft quoted 2 billion on XBox live is incorrect. Go check the original statements - I believe it was a figure quoted for the entire Xbox project for the next five years. It's misquoted as being "purely" for XBox Live.
For example: ZDNet story on Xbox Live & $2 billion.
Just like the advertising budget that was thrown around by the press & on the web back at launch - it was a worldwide 18 month spend being compared to regional 12 months spends by its rivals. Comparing like for like, Sony & Microsoft spent about the same

 

[ChristopherS]

Does anyone actually know how many users Microsoft needs for XBOX Live to be profitable? Realistically what does it cost to set up server hubs across North America plus centralized technical support and billing? I really don't know but I suspect it is not as much as people think. If Microsoft actually uses 10,000 people to do the beta test, how many others did they turn down (but will sign up when it goes live in November)? I am thinking Microsoft will start XBOX Live with over 100,000 clients. If those people are impressed they should be able to create a lot of Internet buzz (and if it sucks gaming forums will be filled with complaints!) I think 400,000 clients by January/February is attainable but is 400,000 clients profitable? Then what kind of sustainable growth can Microsoft hope for?
Microsoft is going to use XBOX Live to get more money out of its existing client base. That is why Microsoft is so profitable. This is one company that knows how to expand and exploit its existing client base. This is also why so many people have Microsoft in their investment portfolio.
I am looking forward to XBOX Live in November. Worst case scenario I waste $75 CDN and get zero amusement out of it. What are the odds of that happening? To put this in perspective I golfed at Silver Lakes Friday (public course north of Toronto) and paid $85 green fees. I also bought a sand-which, couple beers, and split a cart. I had one of the worst rounds of my life. Any regrets? No. It was still better than working. How many XBOX owners are willing to risk $50 a year or $10/month to have some fun? I am. Are there 400,000 other XBOX owners out there like me? I don't know but I bet Microsoft has a pretty good idea.
Chris

 

[Romier S]

Romier, that oft quoted 2 billion on XBox live is incorrect. Go check the original statements - I believe it was a figure quoted for the entire Xbox project for the next five years. It's misquoted as being "purely" for XBox Live.

Then I was wrong and I stand corrected. Nonethless it still answers the original question stated by Morgan. The question was how much money is Microsoft willing to "drop" into the Xbox? The answer is 2 billion dollars.(and more if you take into account the losses they are taking for each system sold so forth so on....)

 

[Masood Ali]

$2B will buy MS the networking infrastructure to host Xbox Live! and any future projects they have in the gaming business (both console and PC). It's a sound investment if they want to go anywhere in the console business for this or next generation. One of the key complaints about Sony's online service in Japan are server issues and lag. If the same thing happens in the US when FFOnline and other games using centralized servers are launched, people may realize where that $2B went.

 

[Morgan Jolley]

One question I have is if XBox games support both system link and online, what's to stop people from playing online with gamespy for free instead of investing in XBL

I think some games will start to limit how many can play via system link.

 

[AaronNWilson]

I don't even own an XBOX but I have broadband so if XBOX gaming online looks like fun I might just have to pick up an XBOX.
I currently only play computer games right now but there is a lot of cheaters out there in the PC world :frowning:.

 

[Calvin Watts III]

First off, XBL will be $50 for the 1st year. Then MS's plan is to charge $10 per month (at least that is what I last heard). So,yes,there is cost with that.

But, the PS2 has no hard drive. So there goes your storage info. The HD is gonna cost some dough to get.

Plus future PS2 online games like FFXI & Everquest will have to be hosted onto servers, & mark my words, you'll be charged to play. Sony & Square won't eat all that overhead cost, & it'll be passed onto us. Not every game will cost,sure - but look at PC Everquest now...$10 per game per month will add up quick...

Peer to peer connections can be great,but you can run into slowdown & lag problems if you have someone with a slower connection.

I'm not knocking either solution,because I haven't tried either of them yet. And I will (c'mon,who doesn't want to blow each other to bits???)

I just think that MS's strategy is more sound. Risker in the shortterm,yes. And if it were almost any other company, then I'd be a bit worried.

But this is Microsoft we are talking about. They play to win. Period. And they have the resources to go on fighting.

Remember,this PS2/GC/Xbox battle is just the latest in a very long line of battles in the videogame war. The war isn't over. This battle might be, but the war will go on.

Calvin

 

[MikeAlletto]

$2B will buy MS the networking infrastructure to host Xbox Live! and any future projects they have in the gaming business (both console and PC).

Thats a good point. The things MS are doing now, helps when for xbox version 2 and 3, etc. They can afford to drop loads of cash initially on the Xbox because their other operations are so profitable it doesn't make the books look as bad in the end.

 

[Morgan Jolley]

Peer to peer connections can be great,but you can run into slowdown & lag problems if you have someone with a slower connection

In the latest issue of EGM, they constantly mention that gamers using DSL/cable can have more people per game than 56k users. This would suggest to me that you can choose who to play with based on their connection speed. Also, some games (like SOCOM) require a BB connection to play them online anyway.

 

[Willy burz]

Hey I only bring it up because out of all three systems, xbox is losing the most money wise on each piece of hardware they sell.

If it is profitable online, it WON'T be right away. Bill Gates is a trillionare, but he isn't stupid with his money. He will only tolerate so much.

 

[JoshF]

I'd say the MS investors will be the first to want to pull the plug on the Xbox project, especially in this economy. "Just focus on PC software," they'll say.

 

[BryanK]

Im looking at it as MS isnt worried about the profit as much as the control.
But hey, If it works and its fun Im there!

 

[Scott Burke]

I was told by my local Babbages that XBOX was losing Japanese support by the end of the year. Is this true? If it is does this mean the death of the system?

 

[JoshF]

Scott: Xbox is doing horribly in Japan, and it's been postulated pretty plausibly that a console needs Japanese support to really thrive. Just look at who develops most of the good games and franchises. Microsoft is doing what it can to gain Japanese developer support, but they'll drop like flies if the market isn't there.

 

[Masood Ali]

Well a date has been set; November 15th, at the 1 year anniversery, Xbox Live! will launch.
$49.99 will get you a communicator headset, a "demo" disc, and 12 months of service.
The seven titles to be available at launch will be NFL Fever 2003 (out now), Whacked!, MechAssault, Unreal Championship, Ghost Recon, NFL 2K3 (out now), and NBA 2K3.
You can read the full story on Gamespot here.

 

[Willy burz]

That is true, all systems need to survive in the Japanese market. Otherwise it's a slow death, and right now microsoft isn't doing well at all in Japan.

 

[ChristopherJ]

Before the launch of Xbox, an article stated that MS was losing $199 per unit. With the recent $100 price drop that is $299 a unit loss for MS. Microsoft has always planned on losing money on the actual Xbox console, they have planned on making money on all other related Xbox merchandise. Anything that relates to the Xbox like games, contrllers, carrying bags, magazines, etc. either MS makes themselves or gets a percentage of what is sold. This is how MS plans on making money with the Xbox.

In terms of winning in Japan, MS can simply follow the path they have for years. If they aren't getting what they want when they want it from other companies (software companies) then simply buy them. Have you ever checked to see how many game development companies MS either owns outright or is invested in? Don't think they haven't been planning this for many, many years.

 

[Dave E H]

With the recent $100 price drop that is $299 a unit loss for MS.

I wonder if they are still losing that much per console - as time goes on, manufacturing becomes more efficient & price of parts drops usually.

 

[Sean Oneil]

I agree with Dave. In fact it would not supprise me if MS was losing less money per system after the price drop then they were losing at the system's launch last year.