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Why the Xbox Brand is About More Than Money

Back in April of 2006, Roger Ehrenberg over at Yahoo Finance wrote an interesting article on Microsoft's continuing losses in the gaming industry, and still champions some interesting points. After $5.4 billion lost on their Home and Entertainment division between 2001 and 2006, Ehrenberg asks, why is Microsoft still in the gaming business? No matter how you look at it, even if the H&E division saw a tremendous increase in profitability in 2007, meaning they reverse their billion dollar a year loss, it'd still take several years to recoup what they've already spent. Several years just to bring them back to where they were before the original Xbox released.

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Boink3745d ago

and exactly what I pointed out after that other doofus wrote about how bad MS is financially in the gaming industry.

shotty3745d ago

Its not about money, its about expanding beyond windows.

DG3745d ago

Its about taking your money in the long run and still having a firm grip on a monopoly without breaking anti trust laws. Smart thinking MS.

kewlkat0073745d ago

it's an Expansion of Windows and gaming.
Well this is a good reason, which couldn't be said any better

"What people forget to realize is Microsoft is first and foremost a PC Software producer/maker .. a huge majority of their money comes from PC software sales of windows/office and other applications. Now if people were to stop PC gaming completely and switch over to consoles and that meant there was no XBOX as an option, not only would MS lose all the revenues associated with selling the new gamer PC and it's software (comes preloaded if not then you still are paying for windows) they would also lose out on the chance of them going to the Xbox.

The first reason MS dipped into the console market was to make sure they protect PC gaming from going under as it provides a big chunk of change to them. For instance look at the successful 360 games and original xbox games as they are also ported to the PC. Also with the announcement of compatibility and interaction of Vista Live gamers with Xbox Live gamers this shows that MS will push PC gaming through its console.

The second reason is because the console gaming market is ever increasing and getting into the market and making themselves a dominant player no matter what the current cost is will eventually lead to large profits. For instance the gaming market is more lucrative then the movie business now .. who would have thought that 10years ago.

There is lots of money in the gaming market and MS realizes that is why they took such losses in stride with the original Xbox. With the 360 however they have created a successful and popular system which will definately make them profits no matter what this writer of this article wants to say."

Make Cents don't it, now make Dollars..

Moostache3745d ago (Edited 3745d ago )

M$ is ALL ABOUT THE MONEY....
I have officially been informed by Microsoft that 9 months is now greater than 12 months!

And people wonder why Bill Gates has BILLIONS! Sh1t, if I could get away with redefining mathematics too I would have Gate's bankroll too! Unbelievable.

I swear to Christ, it feels like being a character in "Goodfellas" by being a 360 owner:

"So now I got Billy (Gates) as a partner. Trouble with finding good games, online service, multimedia options, I can go to Billy. But problem is that now I have to come up with Billy's money every month....'Oh, problems with your 360? fvck you, pay me'....'Oh, 3 rings of death again? fvck you, pay me'...'Oh, someone figured out a way to hack into LIVE accounts and steal information? fvck you, pay me"....'Oh, we redefined the fundementals of mathematics and screwed you out of your warranty? FVCK YOU PAY ME!!!'"

I spent 49 minutes on their customer service lines with "Nick" (the clueless and hopelessly useless account rep) and "Michael" (the worthless and impotent supervisor; who apparently can type about 1,000 words a minute - judging by the constant barrage of keystrokes during our call - but only speak one word per minute; the damn corksucker was probably playing a game while waiting me out!). The long and the short of it was that the best they would offer was a $104 repair bill for my second 360 and then a 12 month repair warranty on the repaired unit.

I kept asking them to explain how a 12 month manufacturer's warranty on the 360 I currently have (manufactured on 7/31/2006 but sent to me in place of my original 360 - which also died and was sent off in the Redmond-bound Coffin for resurrection, err.."repair") could be "exceeded" in 9 months (as of 4/19/2007). They could not provide any answers beyond the "our warranty policy on repairs is for 90 days or the balance of the original warranty only".

What really threw me for a loop was the fact they would not budge from that position even as I broke it down for them by the relevant dates:

First 360 manufactured on 1/5/2006.
First 360 purchased on 3/5/2006.
First 360 malfunctioned on 9/10/2006 and sent for repairs on 9/14/2006.
First 360 replaced with a different unit, instead of repaired, then returned to me on 9/21/2006.
Second 360 manufactured on 7/31/2006.
Second 360 received on 9/21/2006.
Second 360 malfunctioned on 4/19/2007.

Now, I have no idea what the legality of the situation is, but I fail to understand how a manufacturer can offer a 12 month warranty on a product; then instead of repairing a unit under warranty, send out a separate, newer but refurbished unit; and then later claim that the warranty does not apply to the replacement unit because it is beyond the original unit's 12 month period! That kind of assinine logic would hold up perfectly fine - if I had been returned my original XBox 360 when I sent it in for repairs in Sept. 2006. But seeing as they chose to, instead of repairing the original unit, provide a "new" REFURBED unit with a different manufacturing date (but same fundemental design flaw), I don't see how that decision by Microsoft alleviates their responsibility to honor the manufacturer's warranty on their product. I am sure the attonery general for Missouri with have to help me figure that math out because for the life of me I can't do it...

By the end of the call I had had more than enough "I'm sorry's" and "Let me see what I can do's" and just went off. Micheal, the witless mute, got to be the ear on the other end of the line for most of it. (I figured "fvck it"...if they are going to extort another $100 from me to fix something they should fix for free, then one of their poorly paid slaves will just have to take one for the team today.)

Basically told him that there would not be a fourth 360 in my future. If the one they send me next breaks that I would be more than happy to just get by with a PS3 only; and that while I actually like working 360's, it is a shame they (MS) are hell bent on destroying the brand with inept Quality Control practices and piss-poor rationalizations to customers.

Despite all the good things, MS is well on their way to blowing any chances of "winning" their battle with Sony for console market share and that the 360 is quickly becoming synonymous with "Worst. Reliability. Ever." And in addition to MS's already legendary reputation as "GREEDY" they can now add "MALFESCENT" to the list.

The really sad thing is that I KNOW what is causing the problems (design flaw that causes excessive heat-related flexing of the motherboard, in turn causing the solder that holds the heat sink for the CPU and GPU to weaken over time and usage and eventually to crack completely); and that if people on the internet can figure out the problem faster than the MS engineers or accountants, then maybe its time for MS to actually FIRE these dumb azzes.

uxo223745d ago

Man,

Just from listening to your tyraid, it's pretty obvious that you are not over your bad experience with MS tech support. I had a terrible time dealing with sony's computer support division, but I'm not going to sound off like someone looking to recruit members for an anti-sony militia group. I just won't buy a computer from sony again. (Own a PS3) You have that same option about your xbox360. Let me make a suggestion to you if I may. Sell your Xbox360, buy a wii, pc or PS3 and never speak to microsoft again. I'm sure they will miss you.

I agree, you have a valid point on the warranty situation. However I beleive they have fixed that issue now. But man, you probably busted 50 blood vessels in your head during your last post commenting on a past experience that you obviously need therapy for.

Also please realize, that the tech people you talked to are trained monkey that come in a 12 pack case. (it's cheaper to get them that way) They can't think outside the box, their scripts won't allow them to. I can almost guarantee you that had you gotten to speak with a quality management person he/she would have rather given you wanted, rather than spend two hours on the phone fighting you over it. At any rate, sorry you have the problem, but whining on this site is not going to fix it.

Moostache3744d ago

I already have a PS3 and publicizing MS' slack of concern for customer service IS therapy....

I just like to vent rather get binged up about anything....keeps me quite happy.

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