Xbox Price Drops to $200 672
ProfBooty writes: "Just two days after rival Sony Corp. cut prices on the PlayStation 2, Microsoft has announced they are cutting Xbox pricing by 33% to $200. Nintendo still has no plans to cut pricing on the Gamecube. Now is definitely a good time to be a gamer with all 3 next-gen systems at $200. Too bad i just bought a Playstation 2 yesterday." I'd like to know if anyone has succeeded in porting a Free operating system to the Xbox.
Re:Cost Question (Score:2, Insightful)
Still waiting for game price competition (Score:3, Insightful)
My son said that two kids at school are waiting to buy xBox games when the price drops below $40 USD, since they have to use their own allowance money.
By my calculations, MSFT has to sell 10 games at $50 USD to break even on the price subsidy of the xBox. Nintendo still has a profit on both box and games, and Sony is just at breakeven due to manufacturing efficiencies on the 2.5 yo PS2 with clear profit on the games.
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I'd like to know if ... (Score:2, Insightful)
Someone has to break the encryption on the DVDs first or make a mod chip that lets you boot unencrypted CDs. Hasn't happened yet, but it's only a matter of time.
Then you have the problem of adding a keyboard and mouse to the Xbox. But that should be too hard.
But aside from the bragging rights, who cares.
40 billion in the bank (Score:4, Insightful)
Donut
Predatory pricing is illegal (Score:1, Insightful)
Of course... like M$ ever cared about the law...
Where did you buy it? (Score:3, Insightful)
If you bought it at Toys 'R Us, you can get back $100 [planetgamecube.com] if you kept your receipt and bought it within 30 days.
I think it's a great move by Toys 'R Us to keep people happy.
As for Nintendo, they're going to drop their prices at E3, I guarantee it. They stated back in April that if Sony dropped their price, Nintendo would follow suit and drop their price as well. I'm predicting a price drop down to $150 or $125. But, if they really wanted to make a splash, Nintendo would release a combo package of the Gameboy Advance, Gamecube, and the link cable that goes between them for $200 (a feasable price).
It won't matter, though. Nintendo is going to 0wn this E3, and this whole year. With new games coming out for all these franchises...
Re:Some Console Thoughts (Score:2, Insightful)
And I'm so sick of people's post wich are so kiddy and crap...
Sorry, but your comment was sounding like YOU are 5 years old.
"My console is better then yours. No it's mine, NO IT'S MINE! bouhouuhouuu... SHUTUP! bouhouuhouuu"
Yes, I meant to flame. But if you want to be taken seriously, post objectives comments and try to talk intelligently. People don't give a dawm about what flame war you had with your friend at school. By the way, you said he was arrogant, but so you were. Sorry for being rude, I had to say it.
Losing money never hurt Bill (Score:3, Insightful)
Let's take a trip down memory lane and think about all of the other money-losing ventures that the pundits thought would be the death of Microsoft:
- Microsoft Bob. An absolutely horrible idea with an even
worse execution. M$ spent millions developing and promoting it, and didn't
sell more than a handful of copies.
- Internet Exploder. Originally intended to be sold at a profit,
the IE group has cost Microsoft tens of millions of dollars in development
and support costs. What they have created is a money pit crafted from
insecure, non-modular spaghetti code. Many observers (such as ESR)
expected IE to implode under its own weight around the release of version
4.0, but it never happened.
- UltimateTV. Microsoft's lame attempt to make a Tivo and sell
consumers a crappy version of the Tivo service at the same high monthly price
as Tivo somehow didn't pan out. Go figure.
- Mac support. As it stands, Microsoft has not recouped its
development costs on any release of Office for the Mac. This should not
come as much of a surprise, as they offer steep bulk/site discounts to
educational institutions on these products.
As you can see from the above examples, Microsoft's sole goal is to dominate the computer industry by creating products that lose vast sums of money, but "hook" the consumer into their services and upgrades. This is why we need more than Linux and OpenOffice to compete against them; we need government action. We're already beating them in the marketplace, but that doesn't matter when they have infinitely deep pockets from which to draw funding.And that, my friends, is why Sony and Nintendo have a formidable enemy in Microsoft. Neither company has the cash reserves to compete with Microsoft on such an unlevel playing field, and neither one seems likely to survive in the video game arena for long without help from Uncle Sam.
Re:Finally, a market not easily.... (Score:5, Insightful)
This is like rooting for The Empire to wipe out The Borg...
Sony isn't quite as blatantly evil as Microsoft, IMHO, but they are one of the major forces behind both the RIAA and the MPAA. When you buy a Playstation, you're contributing to a pool that eventually helps to lobby for laws like the DMCA and SCSSA
It's a first for Microsoft... (Score:3, Insightful)
The question is, what will be MS's strategy for the Xbox2? They can't beat PS2 (and maybe not even gamecube). So they will go back and come up with the marketing strategy to win the console monopoly in the next round. They could give their Xbox2 away for a pittance, and hope to get such a large user base as to strangle PS3. But to really kill it, they also need developers to not develop games for the PS3. If they can accomplish both of those they have a shot.
Re:Finally, a market not easily.... (Score:5, Insightful)
The original warriors were the Atari 2600 and Intellivision. There were others, including Colecovision and other Atari systems, but these two ruled the roost.
In the 8 bit times, the NES and Sega master System ruled.
In the 16-bit world, you had Super Nintendo and Sega Genesis.
In the 32/64 bit arena, you had Nintendo 64 and Sony Playstation. The Sega Saturn floundered and died an early death.
Now, we have/had four competitors, the two dominant being Nintendo Game Cube and Sony PS2. The Dreamcast crashed and burned and it looks like the XBOX might be heading in the same direction.
Yes, the people enjoy choice, but it's only big enough for two main systems.
A little off topic, but... (Score:2, Insightful)
Sorry about that... (Score:2, Insightful)
After "For" insert the following:
Granted the game library is smaller than PS2, but many of the titles are absolutly amazing (Halo, Rallisport Challenge, Morrowind, Munch's Oddysey, Jet Set Radio Future, DOA3, Project Gotham...)
Okay continue statement...
Re:Cost Question (Score:4, Insightful)
It's common for clone makers when doing a school contract for a couple of years to price the machines at a loss up front. The first several months that they sell them will be at a loss. However, they know that the prices will quickly catch up by then, and they'll be making a nice profit.
Nintendo = no price drop land (good) (Score:4, Insightful)
...but this is arguably not predatory pricing (Score:1, Insightful)
Re:Predatory pricing is illegal (Score:4, Insightful)
Sony and Nintendo also lose a lot of money per sale. This is very common in the console business. Also, predatory pricing is only relevant when you are losing money by "severely undercutting" the competition. So, if MS sold the XBox for $49 then that would be "predatory pricing". However, matching the price of it's competitors is called "business" (except on
Re:The new Metroid had better be good..... (Score:1, Insightful)
It's the games, not the console (Score:4, Insightful)
The $200 price caught my attention for a second but it's back to the $50 games. Besides, how would I decide which of the 34 snowboarding games to buy?
Re:Predatory pricing is illegal (Score:3, Insightful)
I don't think that any game console mfr has ever made money off the hardware. It's all about cartridge/CD/software sales. Just a modern version of giving away the razors to make money on the blades.
Re:Cost Question (Score:3, Insightful)
Re:Predatory pricing is illegal (Score:2, Insightful)
What you say about "undercutting" could be used as a measure only IF (1) you talk about homogeneous products, (2) both companies have the same cost curves (technology) and (3) one is selling at the variable cost.
However, this in not the case, clearly. First, P2P and xBox are not full substitutes, since you can't play P2P games on xBox and the other way around, can you? Secondly, they companies have different production processes, thus their variable costs are different. Hence, you cannot use one companies price as a proxy of "variable cost" for both companies.... bla bla blah...
Re:Nintendo and Toys'R'Us (Score:2, Insightful)
So not only would you have people returning out of the box merchandise they would continue to walk into the store and purchase a brand new console at the discounted cost. Nothing better than having a dozen opened consoles that you'll have to take the hassle to send back to the manufacture.
Overall it is just good business practice, if you're shopping at a place that wont just give you the money within 30 days you ought to be shopping somewhere else.
Re:Cost Question (Score:4, Insightful)
Re:Cost Question (Score:5, Insightful)
M$ will absorb the loss, because they must. They have more than enough in the warchest to fund the thing for as long as they want to. That's the "beauty" of M$, with such huge resources behind them, they have play in the sandbox until _they_ decide it's time to get out (anyone here old enough to remember the early days of cdrom and who championed the format for years until everyone else caught up?)
Re:Why microsoft still makes money on the xbox (Score:2, Insightful)
Hold on. MSFT loses more than $200 now on each box. NTDOY makes money on each GameCube. Sony was breaking even on the PS2 - at best they're losing $100 per box.
With games at $50, MSFT needs to sell 10 to break even with the old price. Now it needs to break 15 games per box. NTDOY makes money on each game, so each game is gravy. Sony was in gravy for any games - now they have to sell 5-10 games at most.
With these economic realities, the best thing for Open Source is people buying xBox to turn them into Linux or BSD devices - and buying either no games or just buying Halo (one copy will do).
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Re:Cost Question (Score:4, Insightful)
Both Intel and nVidia sold MS some fairly low-production-cost chips. In the case of nVidia, they don't even make these chips, so they've got to pay whatever TSMC or UMC charge, and given that these were relatively low cost chips to begin with, the cost that TSMC/UMC charges isn't going to decrease too much. Even if the price does decrease, nVidia may decide to keep the extra profits for themselves, and keep charging MS the same amount. MS is pretty much locked in to using nVidia chips for the lifetime of the X-Box, so nVidia isn't really forced to lower their prices.
As for Intel, they were producing a dirt-cheap chip (a low speed Celeron processors built on a
Same thing pretty much goes for the hard drive and DVD drive. These producets were all fairly low-cost models ot begin with, and cost cutting just isn't going to trim too much off the bottom line. What's more, in all of these cases MS is outsourcing production of each part to different OEMs, each of whom are going to look for a piece of the pie. I'd even hazard a guess that many of these OEMs took the contract with virtually no margins in the hope that this would turn into a very large volume deal, which it hasn't.
The one area that they can probably really cut costs down is memory. The memory that they're using is DDR400 memory, which used to be a pretty rare specialty part only for graphics cards, but now is becoming a LOT more commonplace and would probably have decreased in price significantly.
So, long story short, production costs probably have decreased somewhat since the initial release, but I doubt that they've dropped very significantly. My guess is that the drop in production cost is quite a bit less then this new drop in retail price.
Re:Cost Question (Score:3, Insightful)
Bottom line is, in the quantities they're buying, costs of manufacture should be substantially less than eight months ago.
Keep on dreamin' (Score:2, Insightful)
Face it, guys, the techies don't make the purchasing decisions, PHBs do. Windoze is marketed to PHBs and that's what's going to get purchased, period. I know it sucks, but open your eyes, guys!
Re:Losing money never hurt Bill (Score:4, Insightful)
No, that's where you're wrong. If you were actually to compete with M$ on any of their many playing fields, you would inevitbly face some of the anti-competative business practices which the company has already been convicted of implementing. Extortion-like pricing, custom-crufted code and underground whisper campaigns are only a few of their dirty tricks.
I'm all for free enterprise and entrepeneurialism. In fact that's why I dislike M$, because they discourage these things. But if you don't have any checks and/or balances, two bad things occur:
1) Only that which profits will survive. This is an ok (though not great) way to run a business, but it's no way to run a society. The maxim that "everyone in pursuit of their self-interest generates the best common good" has been roundly disprooved in history. This is because all people are not created economically equal, and hence many people's self-interest trumps that of others for highly arbitrary reasons. Furthermore, there are a great many things that a society should have that should not be profit motivated. Roads are a good example. The interstate highway system makes no money, but without this vital infrastructure commerce would fail. Defence is another example. You don't want your army going out to the highest bidder. This is why citizens collectivize to mutually provide funds (aka taxes) so that these social institutions can be run in absence of profit motivation.
2) Without checks and regulations on a market, you're likely to have a highly unstable situation. Die-hard lesse faire advocates will tell you that things will eventually even out, and this is true, but it would take many generations for a stable global economy to emerge (if it ever did) from the chaos of an unregulated market.
Look, anti-trust law was instituted for a couple of good reasons. On the one hand, it prevents monopoly companies from abusing consumers (e.g. selling tainted meat or fixing the price of oil). It keep's them honest. Secondly, it forces them to innovate, since they cannot retain market dominance by controling the market. A monopoly market occurs when one player controls the entire game. Therefore it make a lot more sense to have a player who is (at least in principle) working in the best interest of citizens, aka the government, in control, and let this player make sure everyone plays fair. We have a teacher watching the kids play at recess, and the teacher steps in to tell bullies to play nice.
The truth is that right now M$ is more economically powerful than you, I, or perhaps even the entire aggrigated slashdot community. Ergo, should they decide to focus their wrath on me for whatever reason, I'd like someone to be there to keep them off me.
In the end, the fatal flaw of free market idealism is the incontrovertable fact that the most important elements of life bear only a tangential relationship to the profit motive.
microsoft's deep pockets (Score:2, Insightful)
as a reason to do nothing most of the time until
the opportunity passes. Look at the history:
webtv -- they bought it and sat on it
go -- remember go, the pda in the early 90s?
remember windows with pen extensions??
somehow, pilot was able to make an entirely new
market from something that microsoft bought,
developed, then threw away because their research
showed that nobody wanted to leave windows 3.1
so, what I'm saying is that Microsoft's huge
cash reserve actually hurts their innovation
because they have no drive to make anything new
or better.
Re:Cost Question (Score:3, Insightful)
In the short run, consumers are getting a good deal when MS sells the Xbox for less than it costs to produce. In the long run, however, if it leads to the demise of competitive alternatives, everyone loses (except M$$$ of course).
Re:Linux on the XBox (Score:3, Insightful)
Re:Cost Question (Score:1, Insightful)
The question was, who makes money and who does not. MS most definitely loses money, as they were losing money even under the priginal price. Sony likely makes money, the hardware has been out for a while, costs are recouped, manufacturing less expensive, plus they get all the groovy licensing revenue.
Next time, at least PRETEND to be factual, as opposed to panning a non sequitor.