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$1200 Cheap!
Posted by
michael
on Sat Aug 18, 2001 11:00 AM
from the playing-hardball dept.
from the playing-hardball dept.
Pinky3 writes: "The LA Times is reporting that Microsoft is encouraging retailers to bundle Microsoft games with each XBox. "Beginning next month, many retailers will be requiring customers to pay from $499 to as much as $1,200 to reserve an Xbox console that, like it or not, will come bundled with games, peripherals and warranties. The reason: Microsoft will provide additional marketing money to merchants that agree to include the software giant's games in their bundles. That's because Microsoft's games carry higher profit margins for the Redmond, Wash., company than those published by third-party companies such as Activision Inc. and Electronic Arts Inc.""
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$1200 Cheap!
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Re:$1200 is everything but cheap (Score:4, Troll)
Either way, it depends on exactly what is provided for that amount of money. $1200 for a 2001 Buick is cheap, $1200 for a can of pop is expensive. Its all relative when it comes to pricing.
I love this quote from Gartner:
"They're overestimating demand," said P.J. NcNealy, senior analyst at Gartner Group Inc. in San Jose. "That could result in a near-fatal first step."
That type of statement is suprisingly bold for anyone, let alone Gartner, to make. MS is the type of company who as of right now probably knows within +/- 5% what the demand is, what the poor/average/rich person will pay for it, what the average 'early' adopter will pay for it, and what the average late adopter will pay for it.
I don't expect MS to make the same low-supply mistakes as Sony, especially since they have been planning this move for years and years.
XBOX is probably going to be huge, and there isn't much Sony, Nintendo, or Sega can do about it except to lower prices, improve technology, and improve games.
Re:$1200 is.....MS omnipotent, Don't Think So (Score:5, Informative)
WHOA! Duude...here are some "ad hoc" "nonofficial" numbers according to a # of my friends up in Rancho Redmond...BEWARE: YMMV...
1. MS' projected demand for W2K is off by around 30%, much/most of this NOT accounted for by the demand inversion
2. MS' projected demand for W/ME was supposedly off by between 30%-40%, and a large factor that (along with a record number of non-projected support problems) led to its being pulled as part of the Official "Upgrade Path"
3. Deployment of AD is ***OVER*** 50% off projection, and is particularly poor with some of MS' historical "early adopters" and "key partners"
4. Demand for the new WinCe is also reportedly well below projection, though no one's mentioned to me a credible sounding number
5. And let's not forget O2K, where demand is alleged 30%-40% below Worst Case, and by rumour, His Billness and His Steveness got "down and dirty" on the O2K marketing team????
While I have no way of certifying the above numbers, the fact is that MS spokesgeeks have acknowledged the above statements without having provided quantities.
you seem to belong to the "MS is God!" School.
MS has historically (like ALL Tech Companies) always overstated intial demand....Windows95 was the one exception to that, and MS ***HASN'T HAD*** a hit like that since, God, what year was W ***95*** again???...though i've had senior Softies tell me that "for sure" W2K was gonna be...it wasn't, it's been the most disappointing Office release in some time..
"I don't expect MS to make the same low-supply mistakes as Sony"
BONUS ROUND: many industry insiders speculated that the PS2 shortage could have been planned/intentional "market manipulation" by Sony trying to enhance both mid-term PS2 demand and beat the amazing amount of media buzz that "Dreamcast" rec'd...some think it could have also been a way to "Pump Prime" the marker in America and freeze Nintendo/Dreamcast sales for a few months????...
Re:Did you expect any differently? (Score:5, Insightful)
Most slashdotters wouldn't have been around for this so let me give ya'll a history lesson...
When the NES originally came out in the US it was bundled with Super Mario Brothers and Duck Hunt... (two Nintendo produced games)and peripherals (the duck hunter gun) which jacked up the price to cover their loss on hardware. Later a stipped down unbundled package was offered at $50-75 cheaper.
This has happened with every single console to date... the only reason you all are bitching is because it's r33t to bash MicroSoft.
Ah, its not to say that it is suprising... (Score:3, Insightful)
No offense to you guys who like the XBox-- but compared to the Gamecube, (which is made by the very experienced Nintendo,) its sorely lacking.
This is not an encouragement to boycott XBox, but i don't think that this sort of thing should be endorsed. Nintendo . as far as i can remember, always let you buy a bare system (which is to say, one without a game) and if you couldn't, you didn't usually pay much more than 40 or so dollars extra. Sega didn't do that, (correct me if i am wrong) and not even Sony. Microsoft is obviously inexperienced in this market, and hopefully they'll learn a lesson with this.
This could go into a whole "why big business is bad" or something, but i don't want it to. Its just an example of how Microsoft is screwing up because of their inexperience in the console market.
Just my two cents =)
Don't Like It That Way? Don't Buy It That Way? (Score:5, Insightful)
But it's not OK when it's Microsoft! (Score:3, Insightful)
Console makers LOSE MONEY on the console itself. They only makem oney on the games. This makes a lot of sense. I'm sure you'll be able to get one without games if you want, just look around.
Nothing New (Score:5, Insightful)
Console manufacturers have been doing this for years. Nintendo did this most recently with the Gameboy Advanced. It's Standard Operating Procedure. If you don't like it, don't buy it. It's not like you don't [ebgames.com] have [ebgames.com] options [ebgames.com].
Ugh... (Score:3, Informative)
"Loyal Xbox fans will have to dole out hundreds of dollars more than they expected to secure an Xbox," said Geoff Keighley, editor of Gameslice, an online game site.
Loyal Xbox fans? You mean all the ones who bought the previous version of the Xbox and played all the games that came out for it?
Folks, this is really simple: if you don't like the price, then don't buy it! If still you want one, wait a month or two until it drops in price and retailers start selling the base units without all the crap. If you *really* want one and can't wait, then don't complain about getting screwed over.
Game consoles are one area where Microsoft is the newcomer and underdog. They're spending a LOT of money to make sure that the Xbox is a success. If you don't like these sorts of tactics and want them to stop, send them a message by not buying the thing. MS will certainly notice if there's no great demand for their product, despite all their spending on advertising.
Deja Vu all over again (Score:5, Informative)
Me: Are those Game Boy Advance boxes for real, or are they just boxes?
Salesperson: (very smug) Yes, they're real.
Me: How much?
Salesperson: $200 and up.
Me: (staggered) I'm sorry, what?
Salesperson: Yup. $90 for the Game Boy, plus two games of your choice, plus our accessory kit, plus a two-year extended warranty.
Me: Can I just buy the Game Boy for $90?
Salesperson: No. It's our special package deal.
The following day, I went to a local non-chain place, and they had plenty of Game Boys in stock. I picked one up for $100, no strings attached. Nintendo may not have mandated these "bundles," but just about every chain store latched on.
Don't buy bundles, unless you like to get stuck with all sorts of stuff you don't want.
Re:Deja Vu all over again (Score:4, Informative)
As for bundling, Microsoft does have a monopoly in the operating systems market (the Supreme Court may reverse this, but it seems unlikely at best). Under United States law, that status puts restrictions on their conduct with respect to the operating systems market (properly defined for PCs, yadda, yadda, yadda). I don't think this XBox bundling issue is relevant, because 1) The XBox isn't really part of the operating systems market in question, no matter what OS it is running, and 2) MS isn't doing the bundling themselves.
However, I think there is an interesting point to be made about an acute failure of capitalism illustrated in this example. Those with the most money are most able to change pulic opinion about their products and competitors' products. I don't believe Adam Smith's "The Invisible Hand" took proper account of this. The closest hint comes from this excerpt:
"Every individual necessarily labours to render the annual revenue of the society as great as he can. He generally neither intends to promote the public interest, nor knows how much he is promoting it...He intends only his own gain, and he is in this, as in many other cases, led by an invisible hand to promote an end which was no part of his intention."
The question then arises, what happens to a person that intentionally subvert public interest for his or her own gain? It is difficult to argue that Corporate America has the public's best interest at heart -- but this wouldn't bother Adam Smith. What I hope would bother Adam Smith is that many companies intentionally act against their customers interests. For example, recall the quote "The customer is the enemy" from the Arthur Daniels Midland case a few years back.
Interestingly, Adam Smith did have something to say about those who use their business deliberately to help public interest:
"I have never known much good done by those who affected to trade for the public good."
So should Microsoft cut the "customers' best interest" crap that they want us to believe, and admit they don't care? Or should the voluntarily put themselves into Adam Smith's catagory of "those who affected to trade for the public good"?
Coming back to my original statement, I believe Adam Smith was grossly naive about how a real market works, where people by stuff because they're told to buy it. After all, we're social creatures trying to harmonize with and improve society. We granted Microsoft the right to do business in our country and in the State of Washington, and I don't think that, as a society, we're reaping rewards proportionate to the privileges granted. Of course no one can say with certainty what things would have been like without Microsoft. My opinion is that we might have gained quality and *useful* innovation at the expense of some progress. And since we'll be here until the cows come home, I don't mind losing a little bit of progress.
-Paul Komarek
Hello? You Work For Microsoft Now (Score:4, Interesting)
Oh, and I forgot to mention... We're going to buy up half your competitors (at least 5 in the last 2 years), then release new versions of their well-known old titles (Marathon, MechWarrior, etc.) for our new console and bundle those with it at a "discount" so you can't hope to compete with us. Have a nice day.
Now the console game publishers can find out how it feels to be a Microsoft developer. The Behemoth is doing to this industry what it keeps doing to its Windows patners - promising them the world and then slowly screwing them over by bundling competing products and eating away at their market. Why can't one of these companies figure this stuff out?
Lower sales for the monopolist (Score:3, Insightful)
Most market studies show, for the non-geek computer user (which is pretty much the entire PC market) people are tired of:
1) Incremental PC performace increases.
2) Expensive S/W and H/W upgrades every two years.
3) Arrogance on the part of S/W and H/W manufacturers along the lines of "...we deserve access to your pocketbook every two years".
People are tired of these ridiculous PC upgrade cycles.
The market is saturated. Most studies show that everyone who wants a PC already has one, and doesn't want to spend a lot of money on another.
Gaming? The game sales are off, it's lost it's luster. After Columbine, parents want their kids out riding a bike or playing with their friends, not zapping their eyes on lame FPS regurgitation.
Today's PCs are the 8-tracks of the future. Piece of shit boat anchors. $1200 for a throw-away, non-upgradble PC? That will be behind the performance curve the day it's released? In a down economy?
Families who may have just gotten layoff notices are going to send $1200 to a federally convicted monopolist, who is the richest man in the world?
Well, this is America. I guess it might be a big hit.
Which begs the question... (Score:3, Interesting)
Or, if you return the console...will they force you to keep the games because they have been opened (despite the fact that you didn't open them)?
This is really quite a big mess. We have software and we have hardware. When you try to mix the two (unless you are including it free of course!) there are all kinds of sticky devlopments.
- JoeShmoe
``Loyal XBox fans'' (Score:4, Insightful)
Why be upset by this? (Score:3, Funny)
What would have me worried would be Microsoft selling the XBox for $149, paying a $50 trade-in for existing consoles (to reduce the user base), and giving away a bunch of games. All that they are doing with this kind of predatory pricing is convincing parents that their kids can make do with the existing Sony/Sega/Nintendo/whatever console.
Moderators, please note:
use of bold text to emphasize a point
negative portayal of Bill Gates and Microsoft
title not "*BSD is dying"
"fp" does not appear in title or body
prediction of negative outcome for Microsoft
"elite" not spelled "3l33t". "z" not replacing "s" at end of words (e.g., "hackerz")
message not critical of Apple, Linux, or BSD
Taken in total, those things must be worth a karma point or two.
Learning the lessons the hard way (Score:3, Insightful)
Will the game companies be Lemmings? (Score:3, Insightful)
Which is why it's SUICIDE for established game companies to program for the X-Box. Microsoft, in effect, will be using them to kill themselves. We all know that whenever MS enters any market, be it word processors or web browsers, they do it for the sole purpose of leveraging all their other might to "embrace, extend, extinguish" any and all competition. To me, it makes no sense for a game company to waste effort on programming for a rival software company when there are already viable alternatives, like Sony and Nintendo. If they wouldn't do games for X-Box, it will fail.
Fortunately, in the case of game software, MS's own history is against it. Though MS has produced a decent game here and there, they are FAR from the dominant player on the PC platform. This is because to have a megahit game title REQUIRES innovation. The real thing, not that word that MS, in Princess Bride fashion, continues to misuse. MS has always been an imitative, not innovative company.
Even the games that they have had success with (Age of Empires, etc) were imitations of products already on the market. They won't be able to get away with always being months behind whatever is "new and hip" in the console market, ergo, why they need the third party game companies on their side.
Also, it remains to be seen as to whether the X-Box will be a success. Will game console users, who so far are largely BSOD free, tolerate MS bugs? Since the X-Box is running Windows, it's not likely to be any more stable than any other PC running Windows, though the advantage of supporting only ONE hardware configuration will add stability that the average `Doze box won't have.
Which is perhaps what the X-Box has most against it... It's basically a non-upgradable `Doze PC in a game console box. Which means that it will quickly fall behind the conventional PC in power and capability.