270°

Bach Makes Ready for Price War

Robbie Bach, president of Entertainment and Devices at Microsoft, believes a future hardware price battle will decide the outcome of Xbox 360's struggle with PlayStation 3.

In an interview with San Joe Mercury News, he said that the company is seeking to bring down Xbox 360's costs in preparation for a price initiative that he believes Sony will be unable to follow.

Responding to a question on the hardware wars, he said, "You have look at the economics. You have to ask the question, over the life cycle, who has the cost advantage? Who can price most effectively? Who can reach the price points quicker? That has a huge impact on what gets driven."

He added, "Because we were out there first, we have a bigger installed base of consoles. We can drive down the manufacturing curve sooner and faster. And because we designed a box that was fundamentally easier to manage on costs, we're going to have that advantage."

Asked about engineering work going into a new Xbox, he said, "Right now we are thinking about how to cost reduce the Xbox 360. That seems to be the first order of business."

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next-gen.biz
Captain Tuttle6360d ago

are ALWAYS a good thing for consumers. It's why I want to see all three console makers do well. Competition spurs innovation and cheaper prices. The question is which company can weather the storm the longest.

calderra6360d ago

360 - Has already cut manufacturing costs, may already be making a profit per console. The console opened that less than $100 loss, and probably less than $50.

PS3 - Costs $200 more, and that $200 difference is mimicked by a nearly $200 loss per system.

Wii - Costs even less, and was making a profit at laucnh.

What price war? Looks like there are two clear winners and one clear loser to me.

MicroGamer6360d ago (Edited 6360d ago )

Has already cut costs 40% since launch day and Nintendo is making a profit on each Wii sold. Both are in a much better position to reach the price points that drive additional sales. The components in the PS3 are just too expensive for Sony to contemplate any price cuts for at least 18 months. They made a small concession on price in Japan, but only after a meeting with several of their major developers who expressed concerns about there not being enough consoles on the ground for their games to be profitable. I would imagine quite a few hints or even outright threats were made by the devs to take their games elsewhere or else Sony would never have agreed to take an even bigger loss than they already were on the hardware. As long as supplies of both Wii and PS3 remain dependent on the latest shipment coming in rather than units stored in domestic warehouses, there won't be a price war. MS can continue to charge a premium price simply because there are no other alternatives. As soon as Nintendo and Sony begin to build stockpiles, then you are going to see it start to get ugly.

Captain Tuttle6360d ago (Edited 6360d ago )

I think MS is going to try to capture the casual gamer market that Nintendo is aiming for. They're not going to cut the price because of the PS3, they're going to do it because of the Wii.

MicroGamer6360d ago

The lower starting price of the Wii, has to be a matter of concern for both Sony and Microsoft. They are going to grab a lot of sales, but the 360 core is currently only $50 higher than Wii and it is a much more powerful system, even without the hard drive or the XBox Live goodies. Like Sony, though, Nintendo's supply chain currently stretches all the way back to Japan. A disruption in production or delivery now would be devastating for either of them. Once they establish a stockpile of units in all major markets, though, the situation changes and Microsoft will no longer be able to take advantage of supply shortages to drive sales. That is when the price wars will really start. A $50 price drop on 360 Core will force Nintendo into making a similar price drop, possibly before they are ready to, and a $100 price drop on 360 Premium is going to be a really hard pill for Sony to swallow. So MS is really ideally positioned in the mid range in terms of pricing to compete effectively with both Nintendo and Sony.

JustCallMeDaddy6360d ago

What i think is that ms doesn't have to worry about sony because sony is digging its own tomb, just think about it, sony losing around $250 per console, ms and sony MAKING money for every console they sell. The "War" won't be between Sony, Microsoft and Nintendo, but maybe between Microsoft and Nintendo.

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60°

Pacific Rim Pinball comes to Pinball FX

This could be fun as they make great tables. Go big or go extinct. Prime your senses for a neural handshake and step into the cockpit of a Jaeger. It is on you to cancel the apocalypse when Pacific Rim Pinball comes to Pinball FX on May 16.

280°

Microsoft’s Surface and Xbox hardware revenues take a big hit in Q3

Microsoft just posted the third quarter of its 2024 fiscal financial results. The software maker made $61.9 billion in revenue and a net income of $21.9 billion during Q3. Revenue is up 17 percent, and net income has increased by 20 percent.

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theverge.com
darthv721d 7h ago

Xbox content + services up 62% while hardware down 31%... seems about right with the way they tout you don't need the hardware to play. People can play on their phones or smart tv or other means. I don't hardly play on my consoles directly since getting devices like the logitech g-cloud and ps portal. Which is to also say I have been playing more digital than physical because of these devices.

solideagle18h ago

you should apply in MS PR team buddy, I think you will do a great job in my humble opinion :)

Sonic188115h ago

I thought darthv72 and Obscure_Observer already work for Microsoft 🤔

dveio15h ago

MS: "Xbox services and content without AB up 1%, with AB up 62%. Hardware down 31%. In total a loss of 350 mill."

darthv72: "Seems about right."

MS: "Excuse m ..."

darthv72: "I don't hardly play on my consoles directly."

MS:

Lightning7710h ago

What he said was facts. How he plays games is no concern of you. Don't get too mad about it.

Cacabunga17h ago

I can tell people like you are an absolute minority..

If service is up means their fans and fanboys accepted this model and subscribed to it. The near future you will see a big decline because the service is saturated.

darthv724h ago

to you it may seem like the minority... but your bubble is shrinking because more and more are following suit. convenience is a hell of a drug and its also why physical sales only amount to 30% of overall game sales. times are changing, you either get with them or you get left behind.

shinoff218317h ago

But that's been ms for years. When things aren't going their way they try to change the way things are said. For instance console sales are down, they stop telling how many sold instead telling us how many hours spent in halo or headshots. So it makes sense console sales down just say people are playing on more devices then previous. What they won't say is how many xbox players jumped ship to ps5.

Cacabunga16h ago

Hardware sales are so bad that Sony and Nintendo are blowing the sales off the water with their hardware.

If Xbox are losers, others aren’t..
Xbox already tried everything with Xbox live then subscriptions went down so much that they had to find something else. Their fans subscribed then reached saturation rather quickly.

Hardware and exclusive games is where it’s at! Keep gamers excited, announce decent software and people will support you

itsmebryan11h ago

@shin
Well keep it simple Sony 's operating income is down 26% and Microsoft's is up 32%. No MS spin there, just facts. 😉
Cheers

S2Killinit4h ago

MS is after diminishing consoles as a medium. They want to destroy this market because they couldnt win. MS’s vision is to dissolve console gaming.

romulus2310h ago

Odd that a company that touts you dont need the hardware to play is already touting another console in the works.

darthv7210h ago

They are not reliant on the HW but still want to maintain a presence (no matter how small) is a good thing. It shows commitment to the craft. It reminds me of SNK and how they made games for their own hardware (Neo Geo) while also making them for others because they knew there was a market to do so. They knew they would sell more to others but also sell to their own niche fan base.

TheEroica4h ago(Edited 4h ago)

Perfectly reasonable post down voted by insecure corporation friendly folk.... But not gamers. Real gamer want accessibility and ease of acquisition for all.... Company shills are the only ones still telling us that hardware locking people from games is good for us.

+ Show (3) more repliesLast reply 4h ago
purple10120h ago

Xbox hardware revenue tanks to lowest point of Xbox Series generation

Profchaos20h ago

I'm not surprised surface is struggling they aren't relevant anymore

DOMination-9h ago

In the last two years they've started exiting the consumer market altogether. All of the newest Surface products are business models only. They can't seem to work out what they want to do with it.

XBManiac19h ago

Too expensive hardware when others offer the same or more for less? Good work, Green Team.

SimpleDad19h ago(Edited 19h ago)

"Despite some early successes for Xbox games on rival platforms, Xbox hardware is down by a massive 31 percent this quarter."
"Without Activision Blizzard, Microsoft’s overall gaming revenue would have actually declined this quarter."
"Xbox content and services would have only been up a single percent without Activision Blizzard..."
"It looks like next quarter is going to be a similar story for gaming at Microsoft, too."

That is crazy... so A/B/K is carrying the whole Xbox gaming.
Oh and Microsoft will be fine. Windows, Office and Cloud are growing with each pc purchase.

purple10118h ago

Activision: "we gonna need a bigger rucksack/backpack please"

Microsoft: "why's that"

Activision: "to carry yo' weak ass'

Profchaos18h ago(Edited 18h ago)

Top brass have also wanted to start seeing returns on the 100 billion they have put into various Xbox related moves so seeing more multiplatform games is highly likely especially from abk

It's basically saying that PlayStation is the reason Xbox is afloat right now thinks to Ps5 versions of COD

Kornholic17h ago

So basically PS and PC gamers' money is keeping Xbox on life support.

MrDead10h ago

The only growth MS will get out of the console industry is if it supports it's rivals platforms. Xbox is a pointless machine now. I can see them on a big push for live next, and they won't give up on trying to buy Steam.

+ Show (1) more replyLast reply 10h ago
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140°

Why Monopolies In Gaming Must Not Be Allowed

As of right now, there are no monopolies in the games industry, and for the sake of the medium as a whole, they never should either.

thorstein1d 6h ago

Shouldn't be allowed in any field.

Inverno1d 2h ago

And yet the biggest tech companies in America are essentially that. They buy up all the small comps only to kill them off and steal what they have, and if they can't buy em they bleed them to death.

jwillj2k41d 1h ago

Eventually they’ll realize the value is with the employee not the company. Buying an IP means nothing if the people who contributed are let go. They’ll get it one day.

MrCrimson1d ago

tech is different because they buy threats and then kill them. Twitter bought Vine and did nothing with it. Despite people seemingly liking it. Could've had tiktok a decade before bytedance. go figure.

Zenzuu1d 1h ago

Monopolies shouldn't be allowed regardless. Not just for gaming.

MrCrimson1d ago

They buy IPs not talent. That's why these buyouts never work and the IPs die. Right now it's too expensive to develop games - but I expect that to shift maybe as AI tools can make it easier. The best games have been indie games for awhile as big developers fuck their ips to death with "games as a service" -