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Ballmer Justifies 360's Costs

Posted by Zonk on Wed May 03, 2006 01:20 PM
from the best-things-in-life-aren't-free dept.
XBox (Games) Microsoft The Almighty Buck
Next Generation follows up on news last week of the enormous financial burden the 360's launch has placed on Microsoft. CEO Steve Ballmer sent around an email discussing the company's bright outlook with the new console. From the article: "While Xbox 360 hardware itself is the most prominent area of videogame-related investment, Ballmer indicated that further development of Xbox Live is also integral to the success of the platform and its respective division, saying, "We must execute our Live strategy with speed and precision." Relatedly, Live's downtime yesterday has resulted in an underwhelming feature addition: messaging.

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  • Speed and Precision (Score:5, Funny)

    by oahazmatt (868057) on Wednesday May 03 2006, @01:24PM (#15255762)
    "We must execute our Live strategy with speed and precision."

    a. Speed
    b. Precision

    You know the rules, Steve. You pick one or the other.

  • MS vista for gamers? (Score:3, Insightful)

    by paladinwannabe2 (889776) on Wednesday May 03 2006, @01:27PM (#15255791)
    From the article:

    "The software giant also plans on releasing the gaming-focused Vista operating system to the public in January 2007."

    Since when is MS Vista focused on gamers?

    • I think he means they are going to release yet another flavour of Vista "MS Windows Vista - gamers", alongside the other 7 flavours of Vista that are planned.
    • Sinces M1CR05oF7 W1ND0WZ V1574 GAMERZ EDITION.

    • DX10 (Score:5, Insightful)

      by Anonymous Coward on Wednesday May 03 2006, @01:38PM (#15255868)
      Well.. MS Vista doesn't really contain any benefits for gamers, in any way.

      However, MS Vista does contain DirectX 10-- and as far as has been announced so far, DirectX 10 will only be available for MS Vista. Before long, DirectX 10 is going to be required to play any new video games. So if you want to keep playing video games and get all the features and whatnot, you are going to have to upgrade to Vista. So you just have to learn to think like Microsoft. The way you probably think, "focused on gamers" means "designed to appeal to gamers and make gamers want to buy it". The way Microsoft thinks, "focused on gamers" means "we will be forcing gamers to buy it".

      In other words, Vista is "focused at gamers" the same way a sniper rifle might be "focused at" someone unexpectedly running across the White House lawn.
      [ Parent ]

      • Re:DX10 (Score:3, Insightful)

        by CaymanIslandCarpedie (868408)
        It'll be the game developers who will decide if gamers are "forced" to upgrade to Vista not MS. DirectX10 is just a new tool MS is providing to game developers. It will be up to the developers to make a business decision if the new tool offers enough per

        • Re:DX10 - OpenGL (Score:3, Interesting)

          by S3D (745318)
          It's my opinion that DX10 may actaully make OpenGL more attractive for games. With huge installed Win XP base, any DX10 game not sponsored by MS had to be released for DX9 too. All new features of DX10, like unified shader will probaly supported by OpenGL
          • Interesting idea, except that most articles I've seen mention that DirectX9 will be installed side by side on Vista, so I expect game companies will just focus on DX9 for the meanwhile.
            • That's not how it's worked in the past, DirectX has just always been backwards compatible (for varying values of compatible. DirectX 5 stuff using D3D frequently fails to run on DX8 or 9.)
      • However, MS Vista does contain DirectX 10-- and as far as has been announced so far, DirectX 10 will only be available for MS Vista. Before long, DirectX 10 is going to be required to play any new video games.

        So here's a question - rather than get Vista, w

        • So here's a question - rather than get Vista, why not simply buy a 360?

          The answer is still just as simple as it was when the question was "why not get an Xbox" or for that matter "why not get a Playstation" or what have you.

          That answer is still fl

    • DirectX10 which will ship with Vista is supposed to add some features but mostly make big improvements in simplicity and performance of the DirectX engine for game developers. I'm not a game developer though so cannot say if in reality its the best thing
    • Since when is MS Vista focused on gamers?

      Well... Ever since you needed a top of the line gaming rig just to run Vista with all the desktop effects on.
    • The Vista "Ultimate Edition" is focused on gamers as it features "game optimization" tools or some such nonesense. It's also supposed to be the version with the most digital rights management/"hardest" to pirate.

  • Metaphors... (Score:4, Insightful)

    by Kuukai (865890) on Wednesday May 03 2006, @01:37PM (#15255863) Journal
    Microsoft has always said that the console race is a marathon, not a sprint. However, this initial costly sprint remains important during a period when the company boasts the only next generation system on the market.

    A marathon where you're bleeding money for most of the race. Sure hope another company doesn't zip past you on a bicycle [folklore.org] or something.

  • Xbox Live as a money maker is not going to happen (Score:2, Insightful)

    by Anonymous Coward
    In this console generation's cycle. Why do I say that? Because it's widely and publicly known within the industry that the iTMS' profit margins are razor thin. The store drives sales of the hardware, which is where Apple is making their money. Now tell me,
    • The content provider sets their price, not MS. Blame Bethesda software for the stupid horse armor.

    • Re:Xbox Live as a money maker is not going to happ (Score:2, Interesting)

      by Anonymous Coward
      Even going by Microsoft's own inflated marketing numbers, the first Xbox had less than seven percent of owners signed up for the service.

      Just to put that in perspective, Sony who didn't see the need focus heavily on online gaming last gen had more people p
    • Halo 2 continues to be the top game on Live. Not a 360 title.
      Hardly surprising, there are what - 22 million Xbox units out there compared with maybe 4 million 360s? What surprises me is how many 360 titles ARE in the overall top 10.

      Likewise, I find it int
    • Likewise, I find it interesting that to this date MS refuse to state how many Live subscribers and users they have.

      If you're looking for specific numbers accurate down to single digits, you aren't going to find it -- no company is that specific; specific i

  • 360 is a decent machine, still needs work (Score:3, Interesting)

    by Nightspirit (846159) on Wednesday May 03 2006, @01:53PM (#15255992)
    I had a 360 for about a week, took it back, and got a ps2 (for a specific game, plus some cash in the pocket). First of all, they did a great job with the dashboard, it looks slick and you can customize it. The achievements, gamerscore, and interaction with other gamers are genius. Geometry wars and burnout were some of the funnest I've had playing games ever. Downloading demos was genius as well, I had as much fun downloading and trying new games as I did playing ones I paid for.

    So why did I take it back? Well, perhaps I wouldn't have if street fighter II was out already and Oblivion wasn't such a bugfest (and runs suprisingly slow at times for a 360 game). The machine is noticibly loud (I even took it back and got another and it was still loud). If I had an enclosed cabinet, this wouldn't have mattered as much. The future announced games didn't hold much interest to me. But the biggest factor was that the 360 sucks as a media center, and it couldn't replace my hacked xbox with Xbox Media Center. Lack of divx support and video only available to MS XP Media Center Edition killed it as a media center. My TV only has a couple componenet video inputs, so my decision was to keep the xbox and take back the 360.

    What MS needs to do is quiet down the console (they are already taking steps towards this with a smaller chip), add divx support (and FLAC tag support, but that doesn't have as wide an appeal as divx), remove the "XP media center" lock-in for videos (they are taking steps towards this, but we will see what they actually do), improve the media features in general (better media player features), and add more games to xbox live (porting abandonware would be cheap and make a killer system IMO).

    • Re:360 is a decent machine, still needs work (Score:5, Informative)

      by Osty (16825) on Wednesday May 03 2006, @03:24PM (#15256854) Homepage

      Just some nitpicking:

      Well, perhaps I wouldn't have if street fighter II was out already and Oblivion wasn't such a bugfest (and runs suprisingly slow at times for a 360 game).

      While Oblivion does have its share of bugs, the only slowness I noticed was after playing for a while and letting the game cache get fragmented. There's a work-around to clear the cache by holding down any button on the controller when you start the game (hold it through the BethSoft logo. Once the 2K logo displays, you can let go). Not the best solution, but it is a solution. I'm right there with you, wishing for SFII. What ever happened to shipping it in March?

      The machine is noticibly loud (I even took it back and got another and it was still loud).

      You should clarify that the DVD-ROM is loud when it's spinning at full speed. The machine itself (fan noise) is very quiet, and the DVD-ROM is also quiet while watching DVDs. There's not a whole lot you can do about drive speed when it's running that quickly (the 360 DVD-ROM is something like 16x, compared to the 4x in the Xbox or PS2).

      But the biggest factor was that the 360 sucks as a media center, and it couldn't replace my hacked xbox with Xbox Media Center. Lack of divx support and video only available to MS XP Media Center Edition killed it as a media center. My TV only has a couple componenet video inputs, so my decision was to keep the xbox and take back the 360

      You're dinging the 360 for not doing something it never claimed to do. The 360 is a Media Center Extender. In other words, it's completely dependent on a Windows Media Center PC to feed it media. It sounds like you want the 360 to be a stand-alone media player (or mostly stand-alone, while occassionally pulling media from the network).

      As for having limited component video inputs, get yourself a mux. I'm preferential to Audio Authority's 1154A [audioauthority.com], but you don't need to spend > $200 on a mux. You can find decent ones (minus auto-switching, audio format conversion, and the cool rack-friendly form-factor) for less than $50. You do realize the PS2 can do component output, right? The graphics will still look PS2-bad, but the color and sharpness will be better (and if you have a game that can support 480p, like GT4, you can only do that over component).

      add more games to xbox live (porting abandonware would be cheap and make a killer system IMO).

      There is no such thing as "abandonware", legally. Either the games are released to the public domain, or they're not (or they're released under a license that makes it possible to port them without legal troubles). "Abandonware" games that are still technically under copyright cannot be ported without proper consent. The question is, who gives that consent? How do you get permission to port a game that's been out of print for 15 years, and the original developer/publisher has been out of business for 10? Who currently owns the property? You have to track down the series of sales of IP until you hopefully find the right company you need to deal with. This is painful.

      I do agree Microsoft needs to add more games to XBLA, but I don't think that's really going to be a problem for them. I think we're just in the lull before the storm right now, having not had any new XBLA games since Jewel Quest. Prepare to be bombarded (good thing I just finished up Oblivion, so I'll be ready to play some new arcade games)!.

      [ Parent ]
      • "While Oblivion does have its share of bugs, the only slowness I noticed was after playing for a while and letting the game cache get fragmented."

        What about the dirty disk errors that pop up at random? (the oblivion tech forum is rampant with them, so I kn
    • (porting abandonware would be cheap and make a killer system IMO).

      "Abandonware" is just an excuse for copyright infringement. There's no law (or moral justification, IMO) that says that just because a product isn't being sold anymore it's legal to make an

  • Kudos to MS (Score:3, Insightful)

    by i am kman (972584) on Wednesday May 03 2006, @02:03PM (#15256075)
    At least MS recognizes they can't live on keyboards and mice alone and the future of computing for the masses will not be driven by PCs, but by game consoles, TVs, iPods, cars, and many other non-PC based that integrate into everyday life.

    It's all about the user experience, not the keyboard.

    But it still remains to be seen how well MS competes in a world dominated by primarily device-driven devices - particularly since this seems almost the exact opposite of their business model and strengths.
  • I had nothing to do with the new feature.

  • Strange... (Score:3, Insightful)

    by Aphrika (756248) on Wednesday May 03 2006, @02:12PM (#15256152)
    When you're sat on a $40 billion slush fund, I didn't think you had to justify making a loss. I mean, the money's there to be spent taking the company into new markets, right?

    So what M$ and Ballmer did was exactly right. Heck, I bet Sony'd love a $40 billion slush fund right now, then they could offset PS3 losses against it. In fact, any company would love to do this - all to often you hear about a single product bombing and taking a whole company with it...

  • But his strongest justification is.... (Score:3, Funny)

    by Foobar of Borg (690622) on Wednesday May 03 2006, @02:14PM (#15256179)
    "I love this X-Box, YYYEEEAAHHH!!!!" *throws chair*
  • A solution to start making serious money would be to port the games available in MAME32 to run on the XBox. This would involve offering a nominal fee to every owner of each old ROM, setting up a good team to write the emulator code, and figure out the pri

  • Downtime NOT just for messaging (Score:4, Informative)

    by radish (98371) on Wednesday May 03 2006, @02:35PM (#15256386) Homepage
    Relatedly, Live's downtime yesterday has resulted in an underwhelming feature addition: messaging.

    This is a myth. Microsoft have said repeatedly that the downtime was not for any specific new features but to prepare the various systems (Xbox Live, xbox.com, forums, etc) for future upgrades and the onslaught of E3 (masses of trailers, demos, etc). The messaging addon is nice, but you can't seriously believe they took down the entire network for a day to add a feature like that.

    I can understand the 13 year olds on the forums not understanding the need for downtime for infrastructure upgrades and rework, but I'd expect a little more from the /. crowd.
    • I can understand the 13 year olds on the forums not understanding the need for downtime for infrastructure upgrades and rework, but I'd expect a little more from the /. crowd.

      Nobody ever went broke overestimating the stupidity of /.'ers. Or, uh, somethi

    • I can understand the 13 year olds on the forums not understanding the need for downtime for infrastructure upgrades and rework, but I'd expect a little more from the /. crowd.

      Or, you know, they could have testing servers, and get the new stuff workin

    • If they don't compete in the right markets they'll easily become outdated and post very slow growth outlook. They want to dominate all computing platforms. That includes the internet. In the future that will mean the multimedia living room. If they don
    • Since when did MS even know Operating Systems?

      Stick to Office Suites.

    • Re:Good grief... (Score:3, Insightful)

      by babbling (952366)
      It minimises their risk. Instead of putting all their eggs in one basket, they spread them around, and since they are Microsoft, they'll usually have at least some degree of success in every market they're in. Income from multiple sources is a sign of a he

      • Re:Good grief... (Score:4, Insightful)

        by AuMatar (183847) on Wednesday May 03 2006, @02:31PM (#15256345)
        Except thats totally wrong. They got blown out of the water by Sony, and lost to Nintendo in 2 out of 3 markets (only winning in the US). In total, they ended up about on par with nintendo, while losing 3 billion over the lifetime of the product. Thats not a success, if I owned MS stock I'd be wanting the people in charge fired.
        [ Parent ]
        • Good point, but isn't laying those foundations the most important part? Putting themselves ahead in units sold sounds like some damn good foundations to me!

          I hope Nintendo comes through and takes the lead because I think they're the best games company out
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