Is X-Box 1 on track to fail? (1 Viewer)

[Chris]

Ok, we've somewhat beat around the bush. There isn't a huge amount of doubt that on a technological side, the X-Box is a superior product. But superior product does not always become the dominate product (ask Coleco vs. Atari; Dreamcast vs. PS1, etc.)..
Microsoft's first venture into the game systems (The Dreamcast, which ran with WinCE and bundled IE) even though it was a superior product, failed to get a large enough installed user base. The X-Box seems to be facing this as a challenge..
The X-Box is being outsold even by the Dreamcast and Playstation1 in Japan (taken from other threads: http://www.gamers.com/news/1132721 )
And the sales in the US is seen as flagging:
http://www.theregister.co.uk/content/54/24789.html
In other markets, the results are similar.. as in Australia, the PS2 is outselling the Xbox 2:1.
http://www.itnews.com.au/story.cfm?ID=9512
The estimated installed user base is less then 1/6 of the worldwide playstation installed base, and the GameCube is also leading the Xbox when combined with international sales (especially Japan and Europe)
In raw terms, developers are looking at the superior product of the Xbox and maybe saying "yeah, but with only 5 million of these in homes, vs. almost 30M sold PS2 units.. I have a much better chance of selling more games on the PS2" part of it is the time that the PS2 is around.. but part of it seems to be a horrible marketing strategy; the PS2 was able to build up strength in Japan before dropping in the US; whereas the Xbox went to japan late and is having trouble getting a foothold (if you're being outsold by the dreamcast, it's hard for developers to push a lot of money into Japanese converted games)
We've been talking about how good the XBox is (which is not in question) but good doesn't mean success; if it did, the Dreamcast would have wailed on the PS1, the Sega Genisis would have pummeled the Super Nintendo, and so on..
The question is, how much $$ is MS going to keep at it? Word is, through tech magazines, they are contemplating no Nvidia for the XBox2 in favor of a complete Via or inhouse chipset to lower cost, as Nvidia is unwilling to lower their chipset cost any more to help MS.

 

[BrianB]

(The Dreamcast, which ran with WinCE and bundled IE)

Certain games used WinCE as a base library, but most didn't. There was no IE on the Dreamcast.

 

[Dean Cooper]

Your comparing consoles with different time frames. The PS2 is at or has already past its peak in its life cycle, so it only makes sense that its still leading the pack and will do for a few months to go I'm sure. The game cube launched in Japan before the Xbox was released even in the US, so even a comparison of cube to box really isn't fair, especially when the box has been out in Japan what, not even a month yet. Give it time, MS has a shit load of money and understands that its going to take a lot to make a lot.

MS has to earn the respect in Japan, so we aren't going to see it take off as one would expect a local console to. Once they get some good RPGs and the online service launched, we'll see the Xbox start to sell a lot more over there. The UK can be blamed solely on the price. Once it comes down the numbers sold will come up.

Its way too early to start declaring the begging of the end for the Xbox. Next year you'll be wondering how you ever had any doubts, just you wait and see.

Dean

 

[Daniel Swartz]

I also wouldn't discount the power of Microsoft. When they set their guns on something, they rarely fail. It may cost them billions, but they usually succeed in overtaking the marketplace eventually. And, Microsoft currently has Sony in their crosshairs (albeit a much larger target than usual) and has tens of billions of pure cash in the bank. XBox 1 might not overtake Sony...but by R2 or R3, I would put money on MS owning 50+% of the market.

 

[Andrew Grall]

Highly unlikely, I would think. Microsoft has staying power.

And in my opinion, having owned both the PS2 and X-Box near launch times of both consoles, I think the X-Box is doing better game-wise right now than the PS2 was 5 months post-launch...

 

[Jeff Kleist]

Yep and X-Box 2

MS is making amature mistakes, mistakes I KNEW they'd make. If they really wanted to succeed in Japan they would have followed the plan I outlined in previous posts

I think by XB3, they'll have learned enough, and by then Nintendo will have bowed out of the console hardware arena. The market has really proven there's only room for 2 to be really profitable

 

[Chris]

I also wouldn't discount the power of Microsoft. When they set their guns on something, they rarely fail. It may cost them billions, but they usually succeed in overtaking the marketplace eventually. And, Microsoft currently has Sony in their crosshairs (albeit a much larger target than usual) and has tens of billions of pure cash in the bank. XBox 1 might not overtake Sony...but by R2 or R3, I would put money on MS owning 50+% of the market.

I'd argue that Microsoft fails almost as much as it succeeds.. it just does it in so many ways that you don't notice all the failures..
Some examples:

• Microsoft Bob
• Microsoft Reader Wheels
• Microsoft Set-Top Box (which they sold out of)
• Hailstorm
• NovaNet
• etc.

Microsoft has a tendency to get into fields at best by trying to buy up someone.. it doesn't really lead in any set field (outside of OS) because it has to buy up the competitors to get the product.. MS Bought AutoMap to outdistance Delorme after their product started to die; it tried to buy Quicken (but couldn't, and Money is still not #1 in it's field), it merged together outside help to do Encarta, etc.
MS is making a lot of mistakes with the XBox.. but to put this into perspective: at this time into Sony's PS2 marketing, they had sold THREE TIMES as many units, and even with an older system, they are still outselling everyone.
At the time that Sony introduced the PS2, the PS2 outsold all other units.. which the exception of the PS1. MS is selling in 3rd place in several markets.. I won't write it off, I think they have to stick with it.. but I'll bet money with the XBox 2 they go with the cheaper solution because they can't afford to take this kind of loss on the equipment (which most companies do to sell games) if they can't do it and beat everyone else in sales.. if you're losing money to make a sale and you're still 3rd out of 3, it's not a good thing.

 

[Chris]

And I will say: if MS does as is planned, and they use Via, not Nvidia, for a systems integrator and graphics (Via is in the midst of buying Kyro) then they will be delivering a product that can not be deemed as a giant step up from the Xbox1, and will be an interesting sell.

 

[Morgan Jolley]

I think there is no way to get around it: the X-Box is failing right now. Its VERY early in the game, and it could all change, but after (lets say it) horrible sales outside the US (compared to the GameCube and PS2) there is a definite problem.

The PS2 has been out longer, so of course it will have more units in homes, but the strange thing is that it outsold the "newer" X-Box during the holidays at the same over-a-year-old price. The GameCube had a little advantage over the X-Box in Japan, but does anyone remember the slow, quiet release of the GCN in Japan? They X-Box did worse than the GCN at its launch, and it didn't even have a staple game or series to get people to buy it (like Mario or Zelda).

Right now, MS is losing, plain and simple. They can make some decisions that will change that, but they haven't yet.

 

[Gary King]

How are losing and failing the same thing?

Sony could sell snake oil in Japan and everyone would buy 7 of them, as long as Square and Enix continue to issue press releases. Without a XenoPokeDragon Fantasy Turismo XVII on the Xbox, it doesn't stand a chance against the PS2. And that's really what it comes down to -- the Japanese public ignores great games to buy the next sequel in an established franchise. Even established Japanese giants have difficulties creating new franchises -- Vagrant Story barely sold 300,000 units in Japan (FWIR), despite the Square name and a perfect score in Famitsu. Chrono Trigger is more popular in the United States than it is in Japan, despite the fact that it had many revered Japanese game and anime creators working on it.

but the strange thing is that it outsold the "newer" X-Box during the holidays at the same over-a-year-old price

Not really -- every Xbox (and Gamecube) unit that was shipped was sold. There was more PS2 stock to go around.

All MS really needs to do is to stay the course and survive until the first 2nd and 3rd generation Xbox titles are released (which should also result in a price drop or two). Some of these titles have already been announced (e.g., Mech Assault), and there is a clear difference between them and first-generation titles. It will be very hard to go into a store and not be bedazzled by Xbox's graphical and sonic splendor this winter.

You've been anxious to declare the death of Xbox since before it was launched. Xbox isn't a run-away success worldwide; however, I don't think any (rational) person really expected it to be. There are still quite a few years left in this console generation, and the battles for on-line supremacy haven't even started yet.

 

[Dave Falasco]

Well said, Gary. The anti-MS rhetoric that was swirling around before November 15th was (thankfully) dampened quite a bit by a better-than-expected American launch, but with the less successful international launches it seems to have gained new life. Some people are just dead set against MS succeeding in this market, and they will always take every opportunity to grandly predict the "failure" of the Xbox. The truth is, no one knows what the future holds for any of the consoles. It's five months into a five year race and already people are calling it over. Seems to me that the Xbox is still doing quite well in this country, and is a price drop away from doing respectable numbers in Europe as well. Japan is and probably always will be a struggle, but sooner or later MS will find a title that is a hit with the Japanese public (can't believe Nezmix didn't do the trick! )
The console I would be nervous about is the Gamecube, to tell the truth. 5 months later I still don't see a must-have title, and I hope for their sake that the long-promised Mario and Zelda titles are enough to carry the franshise. Rumors of Rare defecting aren't helping, either. Nothing seems to be able to stop Sony, but if the market proves to bear only two consoles, I'm not so sure it's a given that it will be the big black box that knuckles under...

 

[Masood Ali]

Do you guys think ANY console will be able to overtake Sony's majority share of the videogame market without beating them to a console release? Right now, their PS2 is one year ahead in its life-cycle than its competitors.

EDIT: As for Nintendo dropping out of the console race after this generation, I doubt that simply for the reason that they've met their previous goal for units shipped (4 million), they're set to meet 12 million units shipped by the end of this year, and because they continue to post huge profits (I understand MS does also, but not through their Xbox division).

And one more thing; don't we already have enough threads about the Xbox failing. These arguments are getting a little tired.

 

[Greg Black]

, and so on..

The SNES was superior to the Genesis in every aspect, except for the clock speed of the main CPU, which was proven to be irrelevant.
The Genesis did however have quite a commanding lead in the beginning of the 16-bit era, which later shrank slowly over the next several years. It was not until around the end of '94 to the middle of '95 that the SNES finally outsold the Genesis in North America.
Sorry if I sidetracked the discussion, I just couldn't let that one slip

 

[Eric Nees]

The console I would be nervous about is the Gamecube, to tell the truth. 5 months later I still don't see a must-have title, and I hope for their sake that the long-promised Mario and Zelda titles are enough to carry the franshise. Rumors of Rare defecting aren't helping, either. Nothing seems to be able to stop Sony, but if the market proves to bear only two consoles, I'm not so sure it's a given that it will be the big black box that knuckles under...

You say this as the Gamecube has kept pace with the Xbox (in the US) for the last 5 months without a killer title? What's going to happen when Resident Evil(s), Mario, Metroid, etc. are released in the upcoming months? If the past is any indication, they'll sell millions of copies and millions of Gamecubes.

Considering the Cube is already outselling Xbox world wide and it hasn't even launched in Europe yet, I don't think Nintendo is sweating.

 

[Brandon_H]

I'm not quite sure I want to enter this debate, but I'm going to anyway. For the record, let me state that I own all three consoles (plus a PC, Dreamcast, an N64 and a PS1) and love them all.

I don't think Xbox is failing. I also don't think it's going to beat Sony. And I'm not sure that it will survive to see a sequel in future generations.

Quite simply, Sony has too much market share, and too much brand awareness among consumers, for Microsoft to win this round.

Yes, the Xbox is a superior machine. But it's not so superior that the masses (those who don't "get" Sega games, and who still use composite video or even - gasp! - RF adapters) notice much.

And regardless of how powerful the machine is, or how easy it is to develop for, most developers are not going to develop exclusively for Xbox if they can sell three times as many units on PS2. That's not good business sense. They'll develop for PS2 first, then port to the black box if they believe they can sell enough units to warrant the effort.

At one time, none of this would have mattered in terms of Xbox's survival. Microsoft would never admit defeat, and would throw money at generation after generation of Xbox until it got it right. But this is not the same Microsoft.

Witness the recent Wall Street Journal article detailing the trouble the company has had in attempts to alter its corporate philosophy. Witness the fact that it effectively folded UltimateTV within months of launching the product. Microsoft has operated for years as if it were the world's largest startup. But now, it has to start acting like the corporate giant it is, which is one beholden to stockholders who won't smile on losing millions of dollars on a video-game machine.

If Microsoft isn't making a tidy profit on XBox within a year or two, I wouldn't hold my breath for Xbox2. It's a shame. Sony needs the competition. But I just don't see Microsoft sticking by the division if things continue as they are.

 

[Sean Oneil]

Geez, if Gates would just reach into his wallet and PAY to bring Final Fantasy, Dragon Warrior, Resident Evil/Biohazzard, and every other well established franchise to the X-Box, then we would not even be talking about the X-Box as a failure.

The only failure will be if Bill Gates does not see what it will take to make his console a success. He can start by spending what's left of his $500,000,000 in ad campaign money on paying developers to bring the popular games exclusively to his console.

If X-Box had Final Fantasy, Dragon Warrior, Xenosaga, Virtua Fighter, Tekken and Resident Evil franchises, then Microsoft would not even need to advertise to sell systems, the buzz on the internet would do it for them.

They really need some games that people can identify with.

HELLO MICROSOFT!!!

 

[Jeffrey_Jones]

Does anyone else find this thread is a little funny? Everyone is speculating whether or not Microsoft will continue to compete in the console gaming market, but nobody has any real information. I have no idea how Microsoft "really" feels the Xbox is selling or what their expectations are. I have no idea how much money they are willing to invest in this very new business or when they expect to see a return. I know that they have a lot of cash and enough profitable software products to weather this storm for some time...if they choose to. I hope they will.

I don't understand why anyone would want the Xbox to fail. As gamers we should all want the same thing...constant innovation in gaming technology and the release of ever improving games. More competition in the marketplace can only help to speed this process. The Xbox is a technical leap for the console market and games will be released that take advantage of this leap. I hope this is a trend that continues. I hope the PS 3 is better then the Xbox and that the Xbox 2 is better then the PS 3 and I hope the Gamecube 2 blows them all out of the water.

For the record, I own an Xbox but I really enjoy the PS2 as well. I haven't played with a Gamecube but some of the games seem very interesting. I hope there is room in the console market for all three competitors.

Thanks,

Jeff

 

[Eric Nees]

Sean, it's not that easy. Companies know that Microsoft is in a bad position and they would drive a very hard bargain. Do you have any idea how much it would cost Microsoft to pay for all those games? They'd have to pay for the all development costs, millions of dollars, and then they'd have to pay even more to cover the fact that Final Fantasy 37 might not sell as many copies on Xbox compared to PS2. We're talking tens, possibly hundreds of millions of dollars, just for one game! At some point it just doesn't make sense for them to spend all that money if they won't get a sizable amount back.

 

[Romier S]

I don't understand why anyone would want the Xbox to fail. As gamers we should all want the same thing...constant innovation in gaming technology and the release of ever improving games. More competition in the marketplace can only help to speed this process. The Xbox is a technical leap for the console market and games will be released that take advantage of this leap. I hope this is a trend that continues. I hope the PS 3 is better then the Xbox and that the Xbox 2 is better then the PS 3 and I hope the Gamecube 2 blows them all out of the water.

My thoughts exactly. Why anyone would want any console to fail is beyond me.

Guy walks into his local video game outlet:

Guy: "Yeah, hey, I played that game over there, I think its called XXX, at a friends house the other day. It was really damn good. I was having a blast.

Clerk: Really? We have a bunch of copies left.

Guy: "Well can you go ahead and take that game off the shelves please. Who needs a quality title from YYY when we already have this system to play ZZZ. Im so tired of these good quality titles being released. I hope this other system goes away.

Clerk: "uh...ok there buddy"

...its amazing that at times some people can actually sound like that. I for one would never want only one console on the market. No competition equals a stale market IMO. Price drops would take ages to happen. Nothing to give that particular one console a good kick in the butt to get in gear. Nope...no thank you.

 

[Chris]

I'm not saying "hey, I want the X-Box to fail" hell, I OWN one! The last thing I want is for the sucker to up and fail. But then again, I owned a Dreamcast, and it went nowhere (and I have the DreamCast WebBrowser, and when it access my webserver, webtrends tells me it is IE4.0/Compat)..

The thing I'm seeing with the X-Box is that it is failing at Microsoft's vision. I attended an X-Box conference at COMDEX in the fall, and played them on the floor before they were released. Microsoft told developers at meetings that by this summer they would be "significantly outselling" all other competitors and that Microsoft expected to sell "2 to 1" in comparison to the GameCube and PS2 -COMBINED- by this fall. Right now, that isn't happening. I'm betting a lot of developers have looked at the numbers as they come out, as comparison to what MS expected, and wondering if MS is rethinking it's strategy.

Already, word is leaking through websites that Via is actively bidding to do the X-Box2, and Nvidia is somewhat out of favor, because MS cannot get a negotiated chip pricing from them (and Nvidia's PC release cycle is so fast that it's hard to say it's their "top of the line" for long)

X-Box is a "failure" in the sense that it is not living up to the promises made to developers. Microsoft has been through this road before (Bob, UltimateTV)

I don't view X-Box as a failure (technologically) and I don't want it to be a failure as a station.. competition is good. But X-Box is a failure in the sense that it hasn't force the PS2 to drop price (which if Sony wanted it could drop prices much faster then MS can since it has recouped it's R&D) and it isn't outselling other products.

Microsoft gets very finicky about products that don't dominate the market.. they'll ditch theirs and buy someone elses (as I gave the example with Automap, Visio, etc.)

Microsoft has the pockets to stick into it, but their stockholders may look at the continual loss without significant inroads into market percentages and wonder what the end accomplishment is.

The idea at COMDEX was that the X-Box would become as common as a VCR, and that people would use it as a primary DVD, and WebTV type access, and blah blah blah..

Failure isn't a matter of "oh, they won't have a system in 6 months" they will, and the games will be better. Failure is that they won't live up to promises made to developers, stockholders. Failure is that they will not lead the market share percentages. Failure is that right now, Sony is in the cycle where they are making bank off the PS2 and liscencing rights and Microsoft is still losing money on every units sold in hopes of getting to the point where software liscence rights pay them back.

And in that sense, unless there is a huge upswing by summer, and the X-Box changes those rations, it fails on all of those initial promises.