Daniel Eran Dilger
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Video Game Consoles 2007: Wii, PS3 and the Death of Microsoft’s Xbox 360

NPD monthly sales Wii PS2 PS3 Xbox 360
Daniel Eran Dilger
Throughout 2007, the media consistently reported leading sales of Microsoft’s Xbox 360, dismal figures for Sony’s struggling PlayStation 3, and celebrated the long shot Nintendo Wii as a possible contender in game consoles. This portrayal of the video game market in 2007 was grossly misleading, and I have the figures to demonstrate why.

En Español: Consolas en el 2007; Wii PS3 y la muerte de 360

Traducción: Marcos Limeres Aguín

Ships and Sales.
I’ve been tracking game console sales throughout the year. There are two major metrics for sales: worldwide production numbers stated by the manufacturers themselves (typically released several months after the quarter ends) and US retail figures tabulated by NPD, which are announced shortly after the end of each month. These two sets of numbers look at different information, and were frequently muddled together to create an inaccurate picture of what was happening in the market. However, both sets of numbers are very useful.

NPD’s monthly retail numbers only count US retail sales, but unlike PC or laptop sales, game consoles are all sold at retail. That makes it easier to track what’s happening in console sales compared to PC sales, and NPD’s quick turnaround gives a pretty immediate view of sales trends.

Manufacturers’ production numbers reflect worldwide sales and can reflect the number produced rather than in use. These can be more flattering for Nintendo and Sony, which have major markets outside the US; Microsoft’s Xbox 360 sales are not very significant outside the US, while its competitors only sell about a third of their consoles in the American market.

However, Microsoft’s console also had a full year head start with the 360 compared to the PS3 and Wii, so its manufacturer production numbers are far more impressive when stated as cumulative shipments to date. In the 2006 holiday season, Microsoft shipped a blowout surge of units to stores just as Sony and Nintendo were struggling to launch their new consoles and suffering through the inventory and production problems common to any new rollout. This was no accident.

Stuffing the Channel.
Microsoft, Sony, and Nintendo are all manufacturers that rely almost exclusively on independent retailers to sell their products. That means all three will willingly push as many units into channel inventory as possible, because once sold to stores the consoles are no longer their problem. In contrast, Apple sells a significant number of its Macs and iPods and the majority of its iPhones in its own retail stores or through its direct online store, making it pointless for the company to perform channel stuffing.

Nintendo simply couldn’t stuff the channel because it couldn’t make Wii units fast enough to even meet demand. Sony worked hard to stuff the channel, but also suffered some production problems. At the same time, the high initial price of the new PlayStation 3 helped accumulate channel inventory as many buyers were wary of throwing down $600 for an unproven new game console that was clearly going to fall in price.

Microsoft took the cake and ate it too in terms of channel stuffing. As I presented in the middle of last year, the company met two key goals in its first year, not by selling units to users, but merely by pushing huge inventories into stores. Microsoft announced it would sell five million units by mid 2006 and ten million units by the end of 2006. Both targets were designed to suggest that the company would overwhelm the market with 360s leaving little remaining interest in the new offerings introduced by Nintendo and Sony for the 2006 holiday season.

Sure enough, Microsoft hit its targets. However, after hitting each, subsequent channel shipments trailed off dramatically. That indicated that stores were stuffed with units they could not sell. After supposedly selling eleven million units by the end of 2006 (which required shipping 4.4 million units to stores in just three months), Microsoft then only shipped another 1.2 million over the next six months. It had initially planned to ship out 5 million new units in the first half of 2007, but there just wasn’t room. The channel was stuffed.

Ten Myths of the Apple TV: Xbox and Hardware

Ten Myths of the Apple TV: Xbox and Hardware

The Death of Xbox 360.
Throughout all of 2007, Microsoft could only push out 7.3 million units, a huge drop of 33.6% in unit shipments year over year from 2006’s 11 million units. The Xbox 360 peaked in 2006 and is now in decline, and the channel is still stuffed. This untold story is particularly interesting when compared to the sturm und drang sung about the supposedly “shrinking iPod market” that Apple faces.

Pundits ripped their garments apart and scraped themselves with pottery shards in lamentation over the fact that Apple increased iPod shipments by a mere 5% year over year in the winter quarter. Not only did they ignore the fact that Apple boosted iPod revenues by 17% that quarter, but they also failed to look at sales over the entire year in perspective. Despite the bewailing of the iPod as a product that has plateaued and can’t find new buyers, Apple actually increased iPod sales year over year by 13.5%, from 46.4 million in calendar year 2006 to 51.6 million in calendar year 2007.

Why was this modest increase of 5.2 million new iPods jumped upon by the media while the major drop in Xbox 360 sales by 3.7 million units year over year was conspicuously ignored? Apple has consistently been able to sell replacement iPods to existing users and market improved and expanded models that offer more mobility or new features; how many users will buy another Xbox 360 just to get an HDMI port or a different color or a different bundled game?

The other two differences between the Xbox 360 and the iPod are that Apple sold the iPods at a sustainable profit and that it is finding healthy growth internationally. The Xbox has lost Microsoft billions of dollars and has not been able to penetrate markets outside the US. The iPod is also acting as a launching board for the iPhone and, Apple hopes, the new Apple TV. The Xbox has not only done nothing to help establish related products like Microsoft’s Zune, as many analyst suggested it would, but has also squandered its brief lead in offering video rentals through the company’s online Xbox Live service.

 Wp-Content Uploads 2008 01 7-248-2041-1374-Store.Apple.Com-Catalog-Regional-Amr-Appletv-Img-Product-Hero

Apple TV Promises to Take 2008
Analysts, Investors Take Apple to Task For its Best Quarter Ever

The Sealed Fate of Microsoft Media Downloads.
After its peak year of Xbox 360 sales in 2006, Microsoft was still failing to sell any significant number of digital downloads through the Xbox, while Apple was selling 99% of online TV programs and 40% of movie downloads through iTunes. At this years’ Macworld, Steve Jobs announced Apple had sold 7 million movies, 125 million TV shows, and 4 billion songs, and noted that Apple’s share of the movie market had increased to over 50%.

Microsoft doesn’t release its media sales figures, but according to NPD, it doesn’t even figure as a full percentage point in the TV downloads market, and in terms of movie sales it fights over the tiny 7% slice of “other” vendors outside the top four led by iTunes. Apple had left Microsoft’s online media business in the dirt even before matching its Xbox Live features, including HD content and movie rentals. As Apple’s far larger iTunes media platform expands and the growth of Xbox 360 sales shrinks dramatically, will anything stop or reverse this trend?

In addition to just being smaller, Microsoft’s dying efforts in media attached to its gaming platform are also less attractive due to its requirement that would-be buyers trade their money for a points currency that must be used to buy or rent media from its Xbox Live service. Apple allows its customers to make micro-payments whenever they want, so buying one 99 cent track actually costs 99 cents, and doesn’t require a minimum points purchase or leave an odd balance of points remaining to be used or forfeited. In Microsoft’s points system, you have to buy at least 400 points for $5 online, and then use 79 points to buy the same 99 cent track, leaving you 321 odd points to spend or forget about.

 Wp-Content Uploads 2007 12 200712101801-1

Apple TV Digital Disruption at Work: iTunes Takes 91% of Video Download Market

The Real Story in 2007 Console Sales.
If the dramatic year over year decline in sales of Microsoft’s Xbox 360 and its futureless prospects as a media center device come as a surprise, wait till you see the plain numbers from NPD’s monthly sales reports. They simply unravel the entire sweater story Microsoft has worked so hard to knit. According to media reports throughout the year, the Xbox 360 seemed to consistently lead despite brisk sales of the hard to find Wii and much to the embarrassment of Sony, which couldn’t even seem to sell any of the consoles it managed to build.

But things were not as they seemed. Microsoft’s lead was only ever based on its channel stuffing from 2006. Throughout 2007, the Wii outsold the Xbox 360 every month outside of September despite being nearly impossible to find, and even when only considering US retail figures. Including sales outside the US, the Wii outsold the 360 by more than 200% (15.4 Wii units vs 7.3 million 360s), again despite severely constrained supplies of the Wii and abundant stockpiles of the 360.

Of course, the Wii and the 360 aren’t entirely direct competitors; many gamers who own the 360 bought a Wii in addition to their existing console, and use it to play different kinds of games or in group settings. The 360 directly positioned itself against the new Sony PlayStation 3, and fewer gamers are likely to buy and play both consoles. Still, the main competitor to Sony’s PS3 wasn’t the 360 but actually the PS2, which Sony continued to sell throughout 2007.

NPD monthly sales Wii PS2 PS3 Xbox 360

Sony vs Sony.
Microsoft couldn’t continue to sell its original Xbox because once the 360 was released, nobody would want it and its availability would severely detract from Microsoft’s new console were it priced competitively. In 2006, Sony sold its PS2 against the new Xbox 360 and easily outsold Microsoft’s new console, all the while making profits on the PS2 while Microsoft lost money on the 360. In 2007, Sony continued selling the PS2, and priced it to compete against the Wii.

The result was that the cheap PS2 nearly matched sales of the 360 in the US (4 million PS2s vs 4.6 million 360s) and blew past it internationally (12.7 million PS2s vs. 7.3 million 360s). The PS2 even approached sales of the Wii, and in doing so helped mitigate the deep losses Sony suffered on the new and far more expensive to build PS3. Nobody ever talked about PS2 sales despite its being the second most popular console of 2007 by a wide margin.

What also went entirely unsaid in media reports was that the struggling PS3 actually sold in decent numbers next to the 360 despite competing against its own cheaper PS2 cousin while the Xbox 360 had no cannibalizing competition of its own at all. While selling only a little more than half as many PS3s in the US as the Xbox 360 sold in 2007 (2.6 million PS3s vs 4.6 million 360s), Sony sold 6.5 million PS3s worldwide, a stone’s throw from the 360’s total of 7.3 million. Suddenly the PS3 doesn’t look like the dog Microsoft worked so hard to make it out to be.

2007 Wii Playstation and Xbox 360 market share

Sony’s Big Risks.
And now a different picture emerges: Sony was competing aggressively against itself and still won. Adding all PlayStation sales together (which will no doubt cause Xbox fans to spin into an apoplectic fit), Sony sold 6.5 million consoles in the US and 19.2 million worldwide. Again, Microsoft’s console sales were just 4.6 million and 7.3 million respectively.

Anyone talking about PC market share would collectively consider Windows XP and Vista both as Windows, and not exclude XP’s numbers just because it came out in 2001. Similarly considering Sony’s total consoles sales collectively drops the Xbox 360 into third place in the US (above right), and a very distant third place worldwide (above left).

Sony’s overall profitability certainly didn’t match Nintendo, which sold all of its 15.4 million Wii consoles at a decent profit. However, Sony achieved two things: it maintained its dominance of the console market while also establishing its next generation HD console and its Blu-Ray HD disc format. It certainly paid dearly to do this, but so did Microsoft. The difference was that Sony had the ability to continue selling a profitable Wii-class product in volume while also introducing a risky new venture in the PS3 that bet on big future payoffs in both gaming and media.

Microsoft not only ended up blocked from expanding outside the US, but also had its HD-DVD format and its related VC-1 and HDi initiatives skewered by Sony’s PS3 strategy of bundling Blu-Ray with the new console. Just as Sony risked drawing attention away from the PS3 by continuing to sell the PS2 on the cheap, it also took a big risk in including an expensive blue laser optical drive with its console.

Origins of the Blu-ray vs HD-DVD War

Microsoft’s Cheap Strategy.
In contrast, Microsoft hoped to strip the 360 of features and hit a cheap price point against the PS3; it only offered an HD-DVD drive as an option, left WiFi an $99 accessory, scratched the hard disk from its base model, and even left HDMI output off of a device being sold as an HD system for media and games.

All those stripped accessories ended up costing buyers more in the long run. Microsoft claimed this year that US consumers spent more on the Xbox 360 platform in 2007 than on any other gaming platform, not because they bought more Xbox consoles, but because they had to spend more on higher margin options that were missing out of the box.

Microsoft has consistently worked to set up false price competition to suggest that its products are cheaper when in reality they typically cost far more than rivals when configured as they would actually be used. Throughout 2007, Xbox fans couldn’t stop talking about how much cheaper the 360 was compared to the new PS3, but after matching its basic features, the 360 was actually more expensive. Sony’s big risk in delivering a fully equipped console with an expensive Blu-Ray drive, hard disk, wireless, and HDMI ended up providing its 6.5 million customers with a system they’ll be happier with and with fewer reasons to immediately pay for missing upgrades.

Microsoft’s corner cutting to create an illusion of savings means the majority of Xbox users–who bought the first 11 million consoles in 2006–have no HDMI outputs. Many also went without a hard drive, which is required to use Xbox Live media downloads. Microsoft’s cheap strategy therefore gave its users fewer reasons to try HD media rentals in Xbox Live, sacrificing its future plans in media and the value of the console in order to create the temporary appearance of domination back in 2006. That leaves the company’s gaming and media ventures wide open to competition from the increasingly affordable PS3, the increasingly available Wii, and media downloads through Apple TV and iTunes.

In addition, the rushed to market 360 has suffered more than its fair share of problems, with retailers complaining about a 30% return rate and Microsoft being forced to set aside a billion dollars to service warranty work for machines that overheat, scratch optical media, and make lots of noise.

Xbox 360: cheaper is more expensive

There Is One More Thing.
If all those numbers sound really bad, consider why they’re actually worse than they seem. Recall that I’m comparing two sets of numbers in parallel: manufacturer’s total worldwide shipments and NPD’s US retail numbers. These numbers overlap. When Microsoft stuffs the channel, it counts millions of units as shipped. When stores actually sell those units, NPD counts them again as having sold at retail. If Microsoft is indeed stuffing the channel unmercifully, NPD’s retail sales should demonstrate that. They do.

While I stated that Xbox 360 sales were 4.6 million for the US and 7.3 million internationally, I really meant that NPD counted up sales of 4.6 million units in the US and Microsoft managed to stuff another 7.3 million into stores. Microsoft did not neatly sell the difference of 2.7 million Xbox 360s overseas; whatever number the company actually sold internationally is still hidden by the piles of boxes in the channel at the beginning of 2007.

That explains why NPD reported that Microsoft sold 721,000 units in the first quarter of 2007, despite Microsoft only reporting having replaced them with 600,000 new units worldwide. It wasn’t selling a negative number of units outside the US! Instead, Microsoft had run up a huge channel inventory balance worldwide by the end of 2006, and continued to slowly sell those boxes while it was forced to scale back new shipments from 4.4 million to 0.6 million quarter over quarter at the beginning of the year.

In comparison, Nintendo sold over a million units in the first quarter in the US but distributed over 2.6 worldwide, and Sony sold a half million PS3s in the US while shipping out 1.9 million worldwide. From the first quarter on, it was obvious that Microsoft hadn’t actually sold as many units as it was saying it had. For the rest of the year, the Microsoft not only fell into third place in the number of console units sold, but also saw its year over year sales shrink significantly as its rivals expanded their markets rapidly.

NPD and Worldwide Video Console Sales

Where Are the Missing iPhones Xbox 360s?
Pundits have been desperately searching for the 1.3 million iPhones that were sold but not immediately activated, but haven’t demonstrated any interest in finding out why Microsoft has shipped out a total of 17.7 million Xbox 360 units with free Xbox Live subscriptions, only to have only 10 million activated subscribers to announce. Where are the non-activated 7.7 million Xbox 360 units with as yet unclaimed free Xbox Live subscriptions, good for the free game Microsoft threw in as a bonus?

That’s a big number! It’s more units than Microsoft actually produced in 2007. A year’s supply of Xbox 360s have gone missing and nobody in the media has batted an eyelash. That’s on top of a dramatic 33.6% decline in unit shipments for 2007.

To recap:
iPod sales are up 13.5% year over year to 51.6 million units in 2007, and pundits are worried the platform has saturated the market despite strong international growth and new growth of higher margin products branching out into a new WiFi mobile platform.

Xbox 360 sales are down 33.6% year over year to 7.3 million units in 2007, and pundits are congratulating the company despite anemic international sales and having never turned a net profit on an end of the road platform with little prospects for expanding in any new direction.

Strong iPhone sales would further polish Apple’s iPod numbers were they mingled together, but standing alone they represent a major presence in the US smartphone market and dynamic potential for growth internationally, where demand is high enough to prompt hundreds of thousands of users to pay a premium to obtain it unlocked. Pundits worry that unit sales aren’t sustainable and that demand might collapse under the weight of huge unsold inventories, were they to exist, despite few competent competitors in the market.

Weak Xbox 360 sales are not only down precipitously year over year, but the channel is stuffed with enormous inventory. Competitors are both outselling it and out maneuvering it, leaving the Xbox 360 tied to the dead HD-DVD format and an unappealing media store that only an insignificant few are actually using.

Anyone fawning about the Xbox 360, Microsoft’s overall strategy, and the platform’s future prospects can simply have no credibility whatsoever.

Why Low Def is the New HD
Blu-ray vs HD-DVD in Next Generation Game Consoles

What do you think? I really like to hear from readers. Comment in the Forum or email me with your ideas.

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  • jfatz

    An excellent article, as usual. ^_^ Certainly discusses more of the matter than most publications give it.

    Just one point of correction on your chart: The “360 Premium” is called the “360 Pro” right now (a minor matter), but still only has a 20GB hard drive. (Marked as 40GB on the chart.)

    Also: You decided not to give the 160GB AppleTV it’s own dedicated chunk, to serve as comparison?

    Probably going to get confused in a bit anyway, as supposedly the 80GB PS3 is getting phased out, and replaced by a newer premium SKU of… well… whatever they make it out to me.

  • shadash

    Great article.

    Its funny to see the pundits who derided Sony for including the Blu-ray drive eat their words now that the PS3 won the war for Sony. They stand to make huge piles of money just on that, apart from the games and hardware business.

  • Brau

    In a way it seems MicroSoft’s decision to offer HD-DVD as an add-on was one of the factors that has helped kill it. Anyone I know with an Xbox bought it primarily for the games and only a few decided to shell out for the extra HD-DVD capability. By comparison I know two friends who have bought the PS3 solely for the BluRay player while considering the gaming console an added bonus. The salesperson at FutureShop advised them to do this instead of paying more for a dedicated BluRay player. I think this is one of the biggest reasons why BluRay movie titles sold at a 10-1 ratio over HD-DVD despite having roughly the same hardware sales figures (until the Warner defection, that is); the movie buyers bought BluRay players (PS3s) while the game buyers bought Xboxes never intending to watch movies. Once Warner saw the numbers, they moved.

    Great article Daniel. I especially like how you backed it all up so well with the numbers.

    BTW: About those 1,300,000 missing iPhones … I have them

    (I wish) ;)

  • Jon T

    Thankfully it was announced yesterday that Microsoft is going to continue to be under Federal Antitrust scrutiny until 2009…

    Microsoft really is a very nasty business indeed.

  • Urian

    There´s something that a lot of people have forgotten.

    Microsoft licensed IBM 65nm process and this affected in negative form companies like AMD that was slaughtered by Intel only for this.

    The difference between Sony and Microsoft is that Sony has developed their own manufacturation process and when they saw that the could have problems then they sold the fabs to Toshiba and moved Cell and RSX manufacturation process from Sony to TSMC only for reducing costs.

    Another difference is that Sony being an electronics company can redesign the entire motherboard and reduce the cost of the components, in the other case in the case of 360 the only change that Microsoft have done is changing the ANA chip for the HANA one supporting HDMI.

    With manufacturation problems for Microsoft and closed contracts they are trapped, Sony is able to optimize its console and all of us will see how the console will start to go up in sales and down in price because Sony will invest in this like they did with Playstation, Playstation 2 and recently Playstation Portable with the Slim version.

    From Sony we have a PS3 with a Cell of 32nm being developed, from Microsoft we have a joke that is unable to go beyond its current manufacturation process and price making impossible for Microsoft to fix some problems.

    If we analyze the 3 companies we will see how Sony is clearly an electronics company and is competitive, Nintendo is just the same than Sony only in a single market and being smaller but they design and do electronics and Microsoft is the only one who resells the technology of the others.

  • Rich

    “The Xbox has lost Microsoft billions of dollars and has not been able to penetrate markets outside the US.”

    Actually, the Xbox 360 has done incredibly well in all English speaking markets. It’s the predominant console in the UK, Canada and Australia.

    “Microsoft was still failing to sell any significant number of digital downloads through the Xbox”

    The last I heard, their Xbox Live Arcade service was a massive success. It’s incredibly well implemented and everyone I know has bought content from it. Microsoft’s system of “points” is totally retarded from a user’s point of view though.

    “Of course, the Wii and the 360 aren’t entirely direct competitors; many gamers who own the 360 bought a Wii in addition to their existing console, and use it to play different kids of games or in group settings.”

    That’s certainly true. I own both. They’re both good consoles in their own right. The Xbox 360 has a better single player games catalogue and far, far superior online play. The Wii is much more fun with a group of friends and a couple of beers.

    “and even left HDMI output off of a device being sold as an HD system for media and games.”

    The Xbox 360 Premium comes with a component cable capable of delivering HD. In fact, it’s the only console on the market to ship with a HD cable. HDMI doesn’t offer superior image quality so the lack of HDMI output isn’t a huge loss.

    “All those stripped accessories ended up costing buyers more in the long run. Microsoft claimed this year that US consumers spent more on the Xbox 360 platform in 2007 than on any other gaming platform, not because they bought more Xbox consoles, but because they had to spend more on higher margin options that were missing out of the box.”

    Or it could be that Xbox 360 owners are spending their money on games and Xbox Live subscriptions. Despite being outsold by the Wii, Halo 3 was EASILY the biggest selling game of 2007. It outsold Super Mario Galaxy by 2:1. The attach rate for the Xbox 360 is way above the average for consoles. I find it interesting that an article written about games consoles doesn’t mention games once.

    By the way, it’s recently been reported that both the Xbox 360 and Playstation 3 are now generating a profit for their respective companies. I think it’s great that there’s now genuine competition in the console market.

  • Les

    @ Rich

    “The attach rate for the Xbox 360 is way above the average for consoles.”

    This is partly due to not correcting the attach rate for time on the market (2yrs vs. 1 for PS3 and Wii) and partly inherent in 360’s hardcore gamer focus.

    “By the way, it’s recently been reported that both the Xbox 360 and Playstation 3 are now generating a profit for their respective companies.”

    Both companies are now able to sell the hardware for about the same amount as it cost to manufacture. But there’s more costs to a console like distribution, marketing and most important of all R&D. Furthermore, both companies sold their initial consoles at a loss. As it is PS3 and 360 are still way off of generating a positive overall business case.

    “I think it’s great that there’s now genuine competition in the console market.”

    I agree, I’m all for genuine competition. But it’s hard to speak of that when one of the parties in the mix is Microsoft that uses excessive profits in one industry to disrupt the other (e.g. handing out unheard of amounts of cash to buy exclusive third party games & content. The fact that they don’t use that money to actually buy developers might be an indication that they’re primarily operating there to turn it into a PC-like sector).

  • Rich

    “Both companies are now able to sell the hardware for about the same amount as it cost to manufacture. But there’s more costs to a console like distribution, marketing and most important of all R&D.”

    But all the additional costs are balanced out by games sales. The reason why Sony, Microsoft et al can afford to sell the hardware at a loss is because games sales are so lucrative.

    Software, not hardware, is the reason why the Playstation 2 accounted for half of Sony’s revenue only a few years ago. This is the reason why both the Xbox 360 and PS3 are now profitable.

    The revenue from Halo 3 dwarfed all of the Hollywood blockbusters in 2007.

    “The fact that they don’t use that money to actually buy developers might be an indication that they’re primarily operating there to turn it into a PC-like sector”

    In the UK alone, Microsoft have bought both Rare and Lionhead. Peter Molyneux has been very positive about Microsoft’s contribution to his studio. It’s hard to doubt Microsoft’s commitment to gaming when they’re spending record amounts of money buying up studios.

  • NyantaCrusher

    I was in Softmap the other day and I noticed in the used bin there were some NeoGeo’s, and couple Super Fami-Com’s, a Nintendo Cube and about 5 Xbox 360! Maybe two Basic models and the rest were Elites……I had to laugh….
    Nagoya Japan

  • Robb

    Jeez Dan, I don’t know what to say. Sometimes you go so far off the deep end of punditry that not even Captain Nemo can save you.

  • L

    The opening graph shows a strong seasonal trend. What percent of sales of game consoles are just Christmas gifts. I’d infer sales during the Christmas season above other months as Christmas gifts.

  • http://robert.aitchison.org raitchison

    Wow, just wow, I debated with myself whether to even bother commenting, it would be impossible to point out all the errors and bad assumptions in this article in the time alloted so I’ll just pick a few choice ones.

    Background, I’m a gamer, we have in our house a PS2, an Xbox 360 (Elite) and a Wii, I’ve been an avid gamer since the original pong in the 1970s.

    OK so talking about price, and the “extra cost” of the 360:

    Nobody except for Sony fanboys and general Microsoft bashers cares that the Xbox 360 doesn’t include an HD optical drive, we bought our Xbox 360 to play games, not watch movies, including an HD drive would have significantly increased the cost of the console for a feature that only a small portion of the customer base would even use. What was that study last year that showed that almost half of PS3 owners were even aware that the PS3 included a Blu-Ray drive? Gamers just don’t care, we only care about the games.

    As for built in WiFi, again this is a feature that only a minority of people use and personally I’m happy that I didn’t pay extra for a feature that I definitely wouldn’t use. Now I admit that the $99 WiFi adapter from Microsoft is ridiculously overpriced but you can, and most Xbox 360 owners who are forced to use WiFi do solve that problem with a $40 wireless router configured in bridge mode.

    Lack of HDMI in versions prior to the Elite, HDMI is nice (actually it’s evil but it is convenient) but out of the gate the 360 had component and optional VGA so it truly is HD ready.

    OK now the hard drive, now the lack of a hard drive across all models of the 360 is one of the top five mistakes Microsoft made. Not that more than a tiny fraction of people buy a “Core” or now “Arcade” version, but because it requires almost all games to be playable on these few numbers of HDD-less consoles, which results in much increased loading times and optical disc activity.

    One thing you didin’t point out, that IMO is one of the other “top 5” screwups related to the 360 is the use of a proprietary wireless system for controllers, etc. instead of Bluetooth, which both the PS3 and the Wii use. this is the reason that only the Xbox 360 version of Rock Band comes with wired instruments, the cost to license the wireless spec from MS would have cost too much.

    OK so on to other things, it’s just plain silly to lump the PS2 and PS3 together and even pretend they can be counted as a single sales fugure, the reason the PS2 is not only still being made, but that a lot of new games are still being made for the PS2 is because the PS3 doesn’t have enough appeal (for the price) to effectively replace the PS2, and with Sony cutting back on backwards compatibility in the 40Gb (and possibly all future) PS3 models it looks like the PS2 will be sticking around for a while, there are a bajillion games out there for the PS2 and people still want to play those.

    Speaking of games, and how the awesome selection of games made the PS2 so very dominant, the 360 has the greatest variety of games out there, even considering the one year head start the 360 had, games are what makes money, not consoles, this is why “attach rate” is so important, the 360 has more and better games and more games sold per console and this is what makes the 360 the eventual winner for this generation. The Wii’s attach rate is almost as good as the 360’s but those numbers are skewed by the predatory bundles that were one of the only “easy” ways to get a Wii until very recently.

    OK, talking about availability, even with a release date in mid November there was NEVER a widespread shortage of PS3s, not because Sony “pumped” the market but because on release it was not just expensive it was ridiculously expensive, Sony arrogantly thought they could sell their wares at any price and that people would buy it, they were dead wrong.

    OK I’m done, not that I’ve addressed all of the faults in your blog entry, but because I’m out of time.

  • pa


    It should be mentioned that Microsoft aquired Bungie (the creator of Halo) when the latter was developing Halo for the Macintosh. Microsoft then made the game exclusive on the XBox. Last October, Bungie decided to part with Microsoft, in order to gain it’s independence in being able to develop for other platforms.
    Halo’s exclusivity on the XBox has been the key to XBox’s success. Had it been allowed to publish Halo on other platforms, or had it been aquired by Sony, for example, the XBox would not even have gotten off the ground.
    The bottom line is that the drop in sales yoy, the split with Bungie, and the demise of HD-DVD, do not paint a pretty picture for 2008. This article is correct to question the lack of mention in the news, given solid and easy to obtain information about it. Yet we are bombarded with articles speculating on numbers, regarding Apple products, to fit all sorts of ridiculous theories.
    There are no problems with iPhone sales. Apple is not selling them at a loss. And we know a remarkable number of iPhones end up in countries and with carriers that Apple has not yet signed agreements.

  • http://robert.aitchison.org raitchison

    @pa Sure Halo has been and continues to be a dominant “console moving” game in exactly the same way that Gran Turismo moves PlayStation consoles, so what is your point?

  • Les

    “But all the additional costs are balanced out by games sales.”

    That’s the long term strategy in the console business, I know. But MS barely made a profit last year with Halo 3 and all those other million-selling titles as well as lower 360 cost. And don’t forget this profit also includes all revenues made on the Windows games like Age of Empires. The initial losses on 360 were huge (as they are for Sony). Given the time value of money, the future profits must be very, very big in order to get a positive NPV for the whole project. That means even more software sales which requires a vast increase in number of consoles sold. The declining trend of 360 sales in the year with all the big guns out doesn’t make that too likely.

    “In the UK alone, Microsoft have bought both Rare and Lionhead. ”

    Yep, but that’s about it really. Rare has not released a good game since and the output of Lionhead isn’t too impressive either (if you compare it to e.g. Insomniac you would start to question which platform is most difficult to develop for… ;) ). And like pa said, their biggest internal studio Bungie left them (or MS let them leave).

    Only the guys making Forza can be called a successful in-house studio.

  • jfatz


    The console attach rates right now are about what to expect: around 8.8 for the 360, and about 5 for both the PS3 and Wii. Where was the 360 at about a year in…? 5.3

    Where’s the “way above average?” If you mean last generation, then sure… but then this generation as a whole would be above average. Of course there’s also the worries about this as a straight up metric anyway: http://arstechnica.com/news.ars/post/20061122-8273.html

    Not to mention, we’re talking future speculation here. The Wii still has Brawl and a few other speculative “showing up in 2008” titles (like Rock Band, for instance) that can easily push software sales, and while the 360’s year of great gaming is now behind them, the PS3’s is in front of it.

    Talk to me if there’s a real deviation from the timeline, not a discrepancy from being on the market earlier.

  • Rich

    “The declining trend of 360 sales in the year with all the big guns out doesn’t make that too likely.”

    2008 will see Grand Theft Auto IV (inc. exclusive Xbox 360 content), Halo Wars, Alan Wake, Devil May Cry 4, Ninja Gaiden 2, Resident Evil 5, etc.

    The Xbox 360 still has many aces up its sleeve. Certainly as many as the PS3.

    “The console attach rates right now are about what to expect: around 8.8 for the 360, and about 5 for both the PS3 and Wii. Where was the 360 at about a year in…? 5.3”

    I’ve seen figures quoted as low as 2-3 for the Wii. There’s an awful lot of people out there who haven’t looked past Wii Sports. The Wii numbers are also skewed by Wii Play (essentially a very cheap game that comes with a Wiimote purchase). The argument against measuring by attach rate would be a fair one if the Wii was 10 times more popular than the Xbox 360. However, sales at the moment are at most 2:1 in favour of the Wii.

    I know the Xbox 360 is a Microsoft product and therefore evil by default. However, it’s not the Zune. It’s not Windows Vista. It’s not Windows Home Server. It’s a console with a very dedicated following who have been won over on merit. That’s very different from the Zune, whose main audience appears to be Apple/iPod haters.

    Just flick through the pages of a gaming magazine and you’ll see how many incredible games it has and how many will be out in the next few years.

  • pa


    Again, this is about the future – 2008 and beyond. The hard core gamers who wanted Halo have got it by now. Beyond that, titles available for the XBox are no more special than those available for PS3 or Wii. So the main factor becomes the hardware and the features, and the experience. In this respect PS3 offers better hardware and features.

  • jfatz


    There’s plenty of “as high as” or “as low as” and questions as to which games are counted in the “attaching” or not, but my figures come from a recent GameStop management meeting. I figure that they have a reasonable handle on it. And the “5.3” figure for the 360 came from Peter Moore at the beginning of 2007, which makes for a relative timeline parity. As well as the attach rate figures.

  • zdp

    Dan –

    I hate to say this, but please refrain from posting console related articles on RD. While I enjoy your “numbers” take on the console wars, there are too many fanboys that can’t handle any critical views on their god.


  • mmbossman

    zdp- The same thing could be said about windows fanboys, and then there wouldn’t be RDM at all.

  • http://robert.aitchison.org raitchison

    @PA, talking about exclusive games only, lets see we have Mass Effect, Bioshock, Gears of War, Forza 2, not to discount the importance of Halo (which IMO is overrated as a game) but there are a lot of great Games out there for the 360 that aren’t available on other consoles.

  • gus2000

    Dan –

    I hate to say this but please refrain from posting [console|Vista|Zune|politics|religion|urbanism|sex]-related articles on RD. There are too many [fanboys|whackos|fascists|Nazis|morans] that can’t handle [criticism|facts|honesty|statistics|math|reality].


  • lvespa

    Hi Dan,

    I love your articles and your always dead-center, but I think you miss the mark when talking about the Xbox 360.

    Although I don’t own one (nor a PS3), my wife and I do have a PS2 each, as well as one PSP and a Nintendo Wii.

    Good games are what drive console sales, and the Xbox 360 is the console with the most critically-acclaimed games (both exclusive and not). Just take a look at GameSpot’s “Best Of 2007” feature article: http://www.gamespot.com/best-of
    You’ll see that the PS2, PS3 and Wii have almost no games showing up as nominees (although the Wii took the 2007 Game Of The Year award with Super Mario Galaxy). I agree with raitchison on this.

    My tastes in games (as well as my wife’s) are a bit off the mainstream tastes as we don’t like FPS games, racing or sports games, but ask any gamer who owns a 360 and any other console for his opinion.

    Just my $0.02

  • trevor

    Hello Daniel,

    Your “XBox 360: Cheaper is More Expensive” graph contains an error, at least by implication. The XBox 360 Elite/ 120 GB column does not contain a charge for WiFi, implying that the Elite has built-in WiFi. In fact, the Elite does NOT have built-in WiFi, and that column should show the additional charge, making that the most expensive configuration by those standards.


  • nat

    While I will be buying a 360 in a few weeks (income tax) I don’t see much of a future for MS in gaming.

    People are throwing around numbers here that aren’t backed with sources (or legitimate ones), nor are they calculated and researched like Dan’s estimates are. While I appreciate Dan’s figures, if people are confused, try using some logic too.

    The Wii is the best selling console due to its affordable price, fresh and innovative motion-based controls, games that utilize those controls (some better than others), and games that appeal to casual, core, and non-gamers (sometimes all at the same time; ex. Super Smash Bros. Brawl, Super Mario Galaxy, and Zelda). Not only that, it has WiFi and Bluetooth out of the box, built-in storage that can be augmented with SD memory cards for storing Virtual Console titles, free online play, and there’s one, easy to understand SKU. Then there’s the upcoming Wii Fit, which is marketed as a fitness game, but it actually includes a balance board peripheral, which will no doubt see use by skateboard/snowboard/or other games that require balancing. And don’t forget WiiWare, which will provide users with a semi-steady stream of fresh, fun, independent games available at impulse-buy prices. Being the best selling console with no signs of slacking demand, 3rd parties that ignored the Gamecube, leading to its less than stellar game catalog, will now be focusing on Wii.

    The PS3 is kind of on the opposite side of the spectrum. It has Blu-ray, HDMI, Dolby 5.1, an outstanding graphics processor, tons of internal storage, the list goes on. Yet, at the same time, it also offers WiFi and Bluetooth, internal storage out of the box that can be upgraded with almost any standard hard drive, free online play, and two rather similar and logical SKUs. It’s currently lacking in the game department due to two things: poor ports and a simply lack-luster launch line-up. The poor ports are due to game studios obviously not caring enough to really optimize their games for PS3 from Xbox 360. It’s really a pity they haven’t been developing their titles on PS3 and then porting to 360 because then both sides would benefit from better looking, better performing games. As for those launch games, that’s just how some consoles launch. The major games for PS3 will be making their debut in the next few months though. Grand Theft Auto, Devil May Cry, Gran Turismo, Metal Gear Solid, and (possibly) Final Fantasy. All these games have major PS2 followings and all are system serious system sellers for a number of different segments of people. Sure, some are cross-platform, but many will be developed/optimized for PS3 and these games have a larger PS2 following than the 360 has an original Xbox following. Then there are creative, casual games like LittleBigPlanet, which 360 either lacks or doesn’t advertise. While there are also a ton of backwards compatible games, the PS2 had a substantially longer life than the original Xbox, which gave more gamers more time to play more games, rather than many fewer gamers many fewer years to enjoy some of the same games. The 360 needs backwards compatibility more than PS3, not less.

    And then there’s the 360, which I still can’t believe I’m buying after all this reasoning against it. It has the game library I want, but not what the mainstream majority desires. Almost every game is a shooter, or has moderate shooting elements. Their casual games like Viva Pinata look too childish, yet are too difficult for the casual gamer. They’ve got Xbox Live Arcade, but they hardly advertise it. Oh, and then there are the real negatives: $100 extra for WiFi, no HD movie playback built-in ($200 extra), no Bluetooth (not even optional), proprietary over-priced hard drives and memory cards, only 300 original Xbox games backwards compatible, $50/year online play, 4 confusing SKUs, and 30%-40% failure rate!! Yikes! None of this would be a real problem if Wii and PS3 didn’t exist, but they do and they’re very good at what they do.

    In the short-term, this year, 360 still has tons of titles I (but not the mainstream) want to play. That’s about it. They already have too many SKUs to release another, even if they replace one with another. It’s ease of use compared to Wii and technical prowess compared to PS3 is pitiful.

    What that means is MS only really has one option: release a brand new console in 1-2 years, OR be satisfied with 3rd place. The latter is just not realistic.

    They’ll release the Xbox 720 (or whatever) as both the Wii and PS3 hit their stride with developers pushing both to their limits.

    The Wii2 won’t need to come out for 4-5 more years thanks to it playing into Dan’s Low Def is the new HD and the mainstream gamer/non-gamer not caring about HD content.

    The PS4 won’t be out for probably 8-10 years thanks to its use of standards, high-performance components, some original casual games, and major core titles that will move masses of PS2 owners to PS3.

    We aren’t even factoring in Nintendo’s DS and Sony’s PSP, both of which promise more interaction with their home console cousins.

    It’s a sandwich. The Wii is kinda like a cross between Apple (innovation) and Linux (really low-cost) while PS3 is most like Apple in terms of state of the art tech and standards. 360 is trying to compete with both, yet it doesn’t offer hardly anything casual enough, nor a catalog that different from the PS3’s with visual to compete. The Zune doesn’t have the hardware or software to offer games comparable to PSP, DS, or even the iPhone/iPod touch! To top it all off PC game sales are in the toilet thanks to game console popularity, Vista and DX10 not being consumer or wallet friendly.

    Where does MS/Xbox go from here?

  • http://windyroad.org windyroad

    Hi Dan,

    I’m sad to say I think this is one of your poorer articles. Normally I’m a very happy reader, but in this article you are displaying too much bias.

    In an article about games consoles, I don’t see any relevance in mentioning Apple. I understand the link is regarding channel stuffing, but in that case you should have just written an article comparing the allegations against Apple, with what MS is doing with the 360.

    Secondly, I don’t think it’s fair to group the sales of PS2s and PS3s and declare Sony the winner and MS the looser. In the HD game console market the NPD graph shows the 360 is the clear winner.

    The end result is an article in which you appear just as biased as the Apple bashing, MS loving tech reporters you so frequently (and rightly so) decry.

    Sorry Daniel, for this article, I’m nominating you for a Zoon.

  • http://joynerian@mac.com ijoyner

    Interesting you have this today about XBox. Last night Today Tonight, a TV current affairs program in Australia, reported on the XBox woes, but at the same time lumped in the iPod as if it were just as bad. Text of this story is here.


    I have already sent my complaint about this seeming attempt at balanced journalism as being very unbalanced. Someone here might have some failure-rate data they could send them.

  • jfatz


    “@PA, talking about exclusive games only, lets see we have Mass Effect, Bioshock, Gears of War, Forza 2, not to discount the importance of Halo (which IMO is overrated as a game) but there are a lot of great Games out there for the 360 that aren’t available on other consoles.”

    Bioshock being shared and a superior play on the PC, of course. And Gears now on there as well (so may go further multi-platform inthe future). Same with Mass Effect now that it’s an EA property.

    I think much of the point, however–when talking of momentum–was looking at the games down the line, where 2008 is looking much more promising on the other platforms as they’re rolling into the Year 2 stride, whereas the 360’s is now behind them. Not to mention you CAN still pick equivalents on the other platforms, though they’re lighter on the online play. (Not that Gears hasn’t been shunted to sweeping the floors now, and even Halo has lost out to the mammoth that is CoD4.

  • jfatz


    His point is that in 2007, with the much stronger game lineup, the 360 sold 12% more than the PS3 alone worldwide. That is only “clearly winning” if you ignore any and all other factors, and are a big fan of declaring major victories of single-digit margins.

    It ignores that the PS2 sold almost as many consoles in the US, far more worldwide, and is ignoring the PSP altogether. It ignores that the Wii outsold the 360 by a wide margin in the US, that it outsold the 360 and PS3 together in the world by another wide margin, and is similarly ignoring the handheld contribution to gaming.

    Any particular reason you’re a fan of ignoring all other contributions to a company’s bottom line, all potential sales-scavenging that may be going on but will taper off, all contributions to a company’s gaming platform rather than the direct sales of one machine, or the envornment of sales from this past year and what we may project from it into the future…?

  • http://johnsessays.blogspot.com John Muir

    A whole different crowd of commenters on these console articles, eh?

    The last console I bought was a Super Nintendo so I guess I should just keep my peace!

  • gus2000

    all your base are belong to us. pwned

  • jfatz

    My first console was a Jaguar.

    …stop laughing!

  • http://lexx.warpedsystems.skc.a His Shadow

    I thinks it’s hilarious that so many posters feel the need to claim Dan is “biased” in some way but never discuss or try to provide counter points to the numbers.

    Simply put, it doesn’t matter what Dan’s bias actually is: Microsoft inflates it’s numbers and the tech press plays along, and not a one bothers to see if anything Microsoft has said is actually true. Yet the very same tech press that cannot be bothered to find out what’s really going on in console sales doesn’t waste a second creating a rich pantheon of lies about Apple’s success, it’s products and it’s strategies.

    The blinkered can blither about bias all they want, but the real bias displayed by the so called tech press cannot be denied. And if you deny the facts (such as the sales numbers) so that you can complain about Dan’s imagined biases, it’s clear who actually is biased.

    And no, none of the anecdotes about “real gamers” and “we didn’t buy an entertainment center, we just game” matter a wit. The article is about facts and figures, not what a particular gamer is doing with his console.

  • harrywolf

    Lots of people miss the point of this article, which is not about games, but about the remarkable bias of ‘analysts’ out there, a bias which has resulted in Apple losing $40 billion plus in stock value, and might artificially depress sales.
    Its also about an illegal monopoly that relies on subterfuge and tricks rather than innovation to survive. Thats not a good role model, and there is no joy in that approach, no beauty, no truth.

    Microsoft stuff the channel and sell less than reported, but everything is rosy.
    Apple sell record numbers, have minimal inventory, and everything is bad.

    Like it or not, RD is a site that challenges the status quo and is political, although understated and subtle, and perhaps sensibly confined to its authors area of expertise.

    (A side issue is that some of the comments offer ‘facts’ which they seem to be plucking out of thin air.
    Rich, sorry, but you seem to be the main culprit here.)

    Humans search always for happiness, and they link it with honesty, truth, fairness, equality of opportunity and other worthy notions that were once held in high esteem.
    This is derived, for better or worse, from the Judaeo-Christian history of the USA and Europe. It may also come from Islamic tradition, to be fair.

    It is natural for those of us who still believe in these outdated notions to attack dishonesty and untruth, in whatever field we work or play in.

    There is something rotten in the state of reportage about Apple and Microsoft – it is essential to try to find out what and why this is. Essential.
    It is no coincidence that as Apple surge, the attacks increase.

    I believe that with every article, Daniel Eran Dilger adds evidence exposing the obvious corruption in this corner of our world, and I offer my congratulations on another well-researched and thought out article.

    On a personal note, I couldn’t care less if Dan wrote about ‘fish farms and the spread of disease amongst indigenous salmon in the Pacific North-West’ – I would still be an avid reader.

  • http://robert.aitchison.org raitchison

    @jfatz At this time last year people were only vaguely aware of BioShock and Mass Effect, by December they were winning awards and setting sales records.

    When someone is making a sequel to a highly successful game franchise (for example Halo3 or Gran Turismo 5) there is a lot of interest and attention very early on, with new franchises there isn’t so much interest until the game is more or less finished and the industry and gamers get a chance to see what the game is really like that people start paying attention. We don’t know what games people will be talking about 10 months from now.


    @His Shadow unless you read a different blog posting than I did, this one is not “about facts and figures”, sales and shipment numbers were just one of many reasons that the author listed to support his proclamation that the Xbox 360 is “dead”. I’m not familiar enough with the sales numbers to know whether the ones listed are even accurate but of course even if they are I won’t speak about his conclusions based on those numbers, other than to point out the obvious fallacy of combining PS2 and PS3 numbers that reeks of desperate fanboyism.


    I think that in general 2008 will be an exciting year all around and will settle once and for all which console will claim victory for this generation.

    PS3 has, for all intents and purposes won with Blu-Ray, the question is what affect that will have on console sales. The backwards compatibility issue is an interesting factor though, the 40GB PS3 doesn’t play PS2 games and there is talk that Sony is discontinuing the 80Gb meaning that they would have people discard their collections of PS2 games or keep the PS2 alongside a PS3 in already crowded entertainment centers. I know personally that I’d probably have a PS3 by now if the $400 40Gb version could replace my PS2, I don’t have room for another console and am no way ready to stop playing my PS2 games (some of which I’ve purchased in the past 6 months).

    For Nintendo we will see what happens when the shortage evaporates (which has already started to happen) whether they can keep sales momentum up after everyone who has been waiting for a Wii has one. More importantly is seeing whether new 3rd party games come out that make good use of the motion controls rather than last year you saw mostly a whole lot of mediocre games with crude, gimmicky motion controls added on with duct tape and bailing wire. Developers should really “get” the motion controls by now so I’m hopeful that we will see some really great games for the Wii (that don’t feature Mario).

    For Microsoft it’s all about reliability, in the summer of 07 they released some improvements to the 360’s cooling system that appear to have fixed the RRoD issue but 2008 will prove that one way or the other.

    And of course the games will have the biggest impact, With the exception of the Wii up until now people buy consoles to play the games they want to play.

  • Robb

    I guess what disappoints me is that you could swap out “Xbox” for “iPhone”, put Mike Elgan’s name at the top and we’d be hollowing about how unfair the article is.

    If you want numbers, I’d suggest looking at Jostiq.com and GameInformer.com and search on top selling games. If the Xbox is dying, they sure post a lot of Top 10 titles on a consistent basis.

    As for the press, I’m trying to think if they’ve been able to spare time from their praise of the Wii to talk about the Xbox or the PS3 for more than a couple minutes. Yes, I know there was a lot of Halo 3 coverage, but MS had to buy a good piece of that in advertising and when a title get a million pre-orders, it deserves some coverage… or was that faked too?

    Maybe it’s because I’ve gotten older, but I’ve come to realize that there isn’t a conspiracy behind every story, the world isn’t divided into back & white and Apple and Microsoft aren’t in a titanic struggle for the soul of the computing world.

    It’s just business.

  • http://www.roughlydrafted.com danieleran

    @Robb: The difference is that Elgan presents a series of rumors with no credibility and fears about what might fall apart in the future.

    I presented what actually happened in 2007, using actual real sales numbers from NPD and Microsoft. This isn’t a bunch of exaggerated rumors and fear, it’s a factual presentation of the death of the Xbox in 2007 even while the media was writing about it like it was in first place. It remained in third place.

    If the Zune had outsold the iPod in 2007, would Elgan be saying that it didn’t matter because more iPods had been sold 2001-2006? No, and there’s no reason to give Microsoft credit for the machines it shipped 2006 in 2007. However, that’s the only way to massage the numbers to look good for a disposable platform sliding into oblivion.

    That’s not to say the Xbox is no fun to play or that there will suddenly be no games for it. There are still games around for the GameCube.

    When you talk about conspiracy and black and white, remember that I’m only presenting facts. As I pointed out in the Forums replying to a similar “you’re playing the wrong side of the fud attack” comment:

    I never described the 360 as the worst console made, nor even made any real value judgements about it as a console. I’ve only looked at market positioning/strategy, actual sales, and how the media has covered it (which is really a reflection of MS’ core competency as a misinformation machine).

    When I write about Apple, I also rarely gush about how pretty/wonderful a specific product is, and again look at market positioning/strategy, actual sales, and how the media has covered it (which is really a reflection of Apple’s core competency as a secretive engineering lab).

    It’s not me that has the bias toward Apple, it’s just that reality is biased toward Apple.

    And conversely, It’s not me that has is biased against Microsoft, it’s just that reality is biased against Microsoft.

  • Pingback: thebazooka.net » A 360º death spiral()

  • jfatz


    “At this time last year people were only vaguely aware of BioShock and Mass Effect, by December they were winning awards and setting sales records.”

    …are you kidding me? “Vaguely aware?” BioShock and Mass Effect were pulling in TONS of press and were very much desired well before release. BioShock less so if you were only paying attention to the 360 side, but the spiritual successor to System Shock 2–one of the most highly-rated FPSes of all time–delivered by its’ creators…? Mass Effect only if you’re ONLY concerned with the PC side, since Bioware has been poor about its’ PC support since KOTOR, so there’s no real reason to assume they’d be bringing Mass Effect over in a timely or bug-free fasion… But seriously, you’re claiming that people were only vaguely aware of a BIOWARE game? Hell, most people I know were listing Mass Effect as a reason to get the 360 at the platform’s LAUNCH.

    Those are “new franchises” in only the strictest definition of the word. But they are games by well-known studios with well-known track records for quality, and plenty of people paying attention and writing reports about every glimpse of information they got along the way. They were guaranteed successes from basically the moment they were announced, not surprise hits that would make people go “hey…!” People knew exactly what to expect from them well more than a year in advance, and they were projects that could only be “screwed up,” not be “surprise hits.”

    Point is, most platform exclusives and “partials” shared with PC are known entities at least a year if not more in advance. There’s the occasional surprise hit that does better than expected considering how strange the game would be and specific the genre (like Katamari Damacy), but even those don’t hit the scale we knew games like BioShock and Mass Effect would well in advance. A genre-defining, huge-sales game coming out of nowhere like Guitar Hero (and just surprising on volume of sales and “fad” sensationalism–Harmonix is a well-known and well-respected developer, so their releasing a quality game like GH was not an unknown) comes about once in a long time, and usually starts multi-platform or moves so quickly to capitalize on their success.

    We can see which ones will show up in Sony’s camp this year, and while the Wii needs no real help, it’s still getting SSBB in short order. Of the 360? Alan Wake certainly looks good, but is only a partial exclusive, and potentially subject to change. (And the Max Payne guys have a so-so record on the console end.) Fable 2 perhaps, if it shows up. (And a number of people are wary of the “promises vs. execution” discrepancies of the original.) Ninja Gaiden II, if it can show up. (NG suffered from a number of delays.) None top franchises, main sellers, or even known release dates.

    The point is to extrapolate the 360’s hardware performance in 2007 in relation to the hardware performance of their competitors and to their strength of software releases in 2007, then look at those same factors in 2008 and see how it might affect things the other way.

  • Robb

    “And conversely, It’s not me that has is biased against Microsoft, it’s just that reality is biased against Microsoft.”

    How do you even begin to argue with a statement like that? I’m not even sure if we could agree to disagree.

  • nat

    Robb said:
    “How do you even begin to argue with a statement like that? I’m not even sure if we could agree to disagree.”

    No offense, but what are you getting hung up on?

    Daniel can’t change the reality (the fact) that Microsoft is a corrupt, arrogant, anti-consumer company that’s never delivered anything original or that innovative, nor can he do anything about Apple being a progressive, innovative, pro-consumer company that really delivers.

  • Robb

    In going through Daniel’s response to my post, I realized he’s pretty entrenched in his opinion, so there’s no point in further argument. I thought his last point summed up his position perfectly.

    Not sure why you brought Apple into your response since this was an article about the Xbox 360.

  • http://robert.aitchison.org raitchison

    @nat it appears that you and the author are both confusing “opinion” with “reality”.

    Now it’s relatively easy to say that Microsoft is a highly flawed company that frequently doesn’t have it’s customers best interests at heart but to say that it’s “never delivered anything original or that innovative” is just ludicrous, I suspect you could put Larry Ellison, Steve Jobs and Scott McNealy in a room and not get one of them to agree with you.

    For two examples that directly relate to the original blog posting how about the inclusion of a hard drive and network port in the original Xbox, both of which were firsts in a console and both are now standard features. Or Xbox Live which by almost any account has changed the face of video games almost as much as the Wiimote.

    As for Apple (not sure what you even brought that up) being “pro-consumer” I actually can think of few companies that are more “anti-consumer” than Apple (maybe Macrovision), with restricted hardware, a DRM scheme that serves to maintain their effective monopoly or maybe their attitude towards iPhone unlockers?

    Now of course I’m not saying that “Microsoft is Great” or that “Apple Sucks” because these would both be unsupportable statements.

    To be sure Apple out-innovates Microsoft every day of the week. Microsoft has a well earned reputation for standing on the shoulders of others and using dirty tricks to control the market but you can’t spend as much money on R&D as they do and not innovate something every once in a while.

    To make blanket statements such as “Microsoft is a corrupt, arrogant, anti-consumer company that’s never delivered anything original or that innovative, … Apple being a progressive, innovative, pro-consumer company that really delivers.” is just plain ignorant, to apply the label “reality” to such a statement goes beyond ignorant to delusional.

    On that note, I’m done, there appears to be far too much virulence and general denial of logic here for there to be any point in attempting discussion.

    Everyone have a great “reality”.

  • http://ephilei.blogspot.com Ephilei

    I’m glad you included this console article very much. You’ve proven that the pro-MS media expands beyond Windows into XBox as well. However, you’ve mis-titled the article since you never mentioned any connection between your thesis and a demise of the XBox.

    I don’t know what everyone’s upset about. The point of the article is that MS fudged their numbers and that the press either hasn’t noticed or hasn’t cared. It doesn’t mean the XBox isn’t successful financially, since that comes from games anyway. Nor does it mean XBox isn’t a quality system, since consumers’ buying doesn’t demonstrate quality.

  • jfatz


    “As for Apple (not sure what you even brought that up) being “pro-consumer” I actually can think of few companies that are more “anti-consumer” than Apple (maybe Macrovision), with restricted hardware, a DRM scheme that serves to maintain their effective monopoly or maybe their attitude towards iPhone unlockers?”

    Comments like this really just serve to tell us that you’re not paying attention. Certainly not to the website you’re posting it on. ;-)

  • http://lexx.warpedsystems.skc.a His Shadow

    “Nor does it mean XBox isn’t a quality system”

    A 30% failure rate means it isn’t a quality system. Try to keep up.

  • http://www.ecphorizer.com Tod

    And now for something completely different:

    Why has Mutt Romney discarded his given name of Willard for such a silly moniker? Is he hiding something or is it yet another example of flip-flopping?

    Now back to our regularly-scheduled conflict between M$ FANtasy and Apple REALity.

  • nat

    raitchison said:
    “For two examples that directly relate to the original blog posting how about the inclusion of a hard drive and network port in the original Xbox, both of which were firsts in a console and both are now standard features. Or Xbox Live which by almost any account has changed the face of video games almost as much as the Wiimote.”

    While the original Xbox was the only console that had a built-in hard drive, it really wasn’t utilized by most and memory cards were out for years earlier. I’m not saying I didn’t appreciate having the storage and no longer having to worry about memory cards, but it really wasn’t necessary considering the small game-save data and limited Xbox Live DLC offerings.

    The Dreamcast and PS2 both had ethernet ports and online titles.

    While Xbox Live was and is fairly innovative, there were online console games before that and PC gamers had not only free online play for years before that, but also hard drives and ethernet ports. The Xbox has set a precedent in being the only one charging for online play. Bravo.

    raitchison said:
    “As for Apple (not sure what you even brought that up) being “pro-consumer” I actually can think of few companies that are more “anti-consumer” than Apple (maybe Macrovision), with restricted hardware, a DRM scheme that serves to maintain their effective monopoly or maybe their attitude towards iPhone unlockers?”

    Can you list any other false claims about Apple? I’ve heard these about a million times and honestly, it’s not up to me to explain them away. Look into the RoughlyDrafted archives and use some logic of your own rather than referring to sensationalist BS published and recycled by every other “tech” site or “analyst.”

  • nat

    Ok, maybe I will explain those claims. :D

    Apple builds their computers and creates their OS/software to work as cohesive products that are not possible by licensing their OS to work on different 3rd party hardware vendors with countless hardware combinations.

    MS, on the other hand, licenses its OS/software to 3rd party hardware vendors who make rather lackluster PCs, neither side optimizing the hardware or software to the level Apple does.

    Due to MS’s use of anti-competitive, anti-consumer OEM contracts that make their OS the de-facto OS over alternatives like Linux, they are in a monopoly position. Meanwhile, Apple makes computers capable of dual-booting Windows and Linux with ease and thanks to 3rd party developers, can even use those OSs within Mac OS X with Parallels or VMWare. They also promote open standards like AAC as MS promotes its WMV DRM.

    On the topic of DRM, which you also brought up, think about the alternatives and motivations. Apple’s FairPlay DRM can be removed by burning the DRMed tracks to a CD and then importing them back into iTunes. They can be burned to an unlimited number of CDs, saved to an unlimited number of iPods, and transfered to 5 computers. DRM was introduced before Apple introduced FairPlay that was considerably more restrictive. Now that the recording labels are finally realizing people loathe DRM, over 2 million songs and a growing number of music videos are DRM free. Remember Steve Jobs’ open letter about ending DRM last year?

    Also, no one had a gun to their head when they bought that DRMed media. The majority of music on most people’s iPods comes from CDs or P2P, both of which are in non-DRM form.

    Finally, Apple temporarily “bricked” iPhones due to possible security issues and people unlocking phones to use on networks Apple received no return from. They warned the tiny minority of those using jailbroken iPhones that their days were numbered and if that they should return their iPhone to “normal” or face problems. Now, after a recent update, many have noted their disabled iPhones working again. Apple does have to run a business.