Forgot your password?
typodupeerror
Games Entertainment

The Economist Looks At The Console Industry 215

Posted by Hemos
from the what-will-happen dept.
Fromeo writes "The Economist is running an interesting article discussing the state of the console industry, along with their usual interesting graph, showing the cycle that the industry follows."
This discussion has been archived. No new comments can be posted.

The Economist Looks At The Console Industry

Comments Filter:
  • by DigitalHammer (581235) on Wednesday June 26, 2002 @06:42PM (#3773821) Journal
    Why buy them? As my friend would say "They're a downgraded computer in a shitty-looking box".
    • You forgot to add "with games you can't get for a PC" to your statement.
      • That's why we've got emulators. Most games for consoles eventually get ported to PC anyway...think of Atari games, the original sonic games, Grand Theft Auto 3, etc...some are old but still get ported. Emulators play the new stuff on PC for you. There (was) bleamcast and bleem! and theres snes 9x and even a ps2 emu out. Also, consoles' technology gets out dated in a matter of weeks or use outdated parts as soon as they come out.
        • you still can't get the following games for PC. All of which I truely love...
          FFX
          GT3
          MGS2
          Dynasty Warriors 2 (or 3)
          Dragon Warrior VII (ps one)
          And for x-box:
          Halo (yes, where is that MAC game they call Halo Mr. Jobs? Mr. look how awesome macs are at macworld Mr. Jobs? Too bad it came out for X-Box first!)
          Game Cube:
          Pikamin.
          Super Monkey Ball
          RE:Zero
          DreamCast:
          Soul Calibur (the one true fighting game)
          I mean sure if you want to wait like ten years to steal these games then you don't have to buy them. And yes, if you are using an emulator you are stealing, there is NO grey areas about them. Just admit it you thief.
          • Re:Ummm... (Score:3, Informative)

            by ckd (72611)
            And for x-box:
            Halo (yes, where is that MAC game they call Halo Mr. Jobs? Mr. look how awesome macs are at macworld Mr. Jobs? Too bad it came out for X-Box first!)

            Well, what do you expect when Microsoft used their petty cash account to buy Bungie (a long-time Mac-first or hybrid-first company)?

            Remember, the original plan was for Halo to come out for PC, Mac, and PS/2 (the latter was officially killed, the other two are merely "delayed"). Do you think they would have sold more copies for PS/2 than they did for XBox? Do you think that Microsoft therefore basically gave up profits so they could use Halo to help XBox sales? Doesn't that sound kind of like the actions they've been convicted of in other areas?

        • Bleem never worked right.

          A PS2 emulator? What, does it need a dual 2Ghz system to run?

          I've fiddled around with emulators for older systems, but I've yet to find one that would play 100% the same way it would on actual hardware. They might make nice alternatives when the hardware and software is unavailable otherwise, but both the Playstation one and two are alive and kicking.

          Also, unlike PCs, consoles are not about hardware. They're about games, and only games. Do I care that my PSX has only 4MB of memory and a 2x CD drive? No. All I care is that I can play PSX games on it.

          Do you care what processor your microwave uses? I doubt it. All you care is that it can make popcorn and heat up your leftovers.

    • Re:Consoles.... (Score:1, Interesting)

      by Bob Kronkel (580551)
      Exclusive games? Better graphics? Hdtv support? They don't crash? They don't make you use windows? Cheaper? They don't require upgrades every 2 years?
      theres more reasons, but the simpsons is on.
      • Exclusive Games? That's why we've got emulators.

        HDTV support? X-box only.

        Don't Crash? I beg to differ. Try playing Super Smash Bros. on N64 with 4 characters using specials at the same time. You'll see the difference then.

        Cheaper? Yeah, but hardly worth the value when you're paying for outdated parts.

        Better graphics? Depends if your talking about Xbox or PS2. PS2's getting pretty crappy now...GTA3 on PS2 was a BAD, lagtacular idea. Xbox? Geforce3 simply drives up the cost. Even with M$'s oversized bank account and lowering Xbox's price to 199, it loses a jesusload of cash in the process-about 200 per unit. "Better graphics" can only go so far.

        Upgrades? That's the consoles' downfall. When some new fangled game for the Xbox comes out that uses a lot of pixel-shading power, will the Box lag like a hippie's mind on LSD? Of course it will!
        • All the consoles now have HDTV support, GC has had it since the start, same with X-Box. Sony just realeased a special hdtv adaptor in Japan.

          BTW, All you emulator thiefs can go take a long walk off a short pier.
          • emulators are still good for playing out of print games, like snes, regardless if its "stealing" or not.
            • My problem isn't with emulators, or the people who use them to check out games. It's with the people who think that it's not stealing from the programmer and content people of the original game and the people who justify the theft of the original ROM.
              All the 12 year olds who never had a SNES now think it's their right to go back and steal all these games? I don't think so. I don't care if you do it, just do sit there and try to say that you have some right to do it just because the original company went out of business or some such nonsence. Making games is/was hard work, and people (especially geeks on /.) should respect that if they like to play games.

              Most video games are like pop music, they are shallow and only ment to be used for a short time. They don't really have depth or meaning. They are ment to distract you for a short while and then you move on.
    • Re:Consoles.... (Score:4, Interesting)

      by s20451 (410424) on Wednesday June 26, 2002 @06:51PM (#3773931) Journal
      Why buy a $1500 gaming computer, with all the worries about compatible hardware, flaky software, etc. etc., when you can buy a $300 console, plug it into your TV, and be on your way? I have a console because I use linux on my main box, and if I'm working and want to take a break, I don't want to have to save everything, shut down, reboot into Windows, play the game, shut down, reboot into Linux, and re-open my work. There are also all kinds of games (like Gran Turismo) that are unavailable on the PC.
      • ...play Neverwinter Nights on my console.

        oh

        But we WILL be able to play it on our Linux boxes, once we get all the flakey software drivers and hardware compatibility out of the way. :)
      • When I take a break from Gran Turismo, I like to reboot into Linux:) 4+ usable GFlops, gotta love this box!

        [goro@ps2]$ dmesg
        use boot information at 0x81fff000(old style)
        boot option string at 0x81fff100: root=/dev/hda1 crtmode=ntsc
        Loading R5900 MMU routines.
        CPU revision is: 00002e20
        Primary instruction cache 16kb, linesize 64 bytes
        Primary data cache 8kb, linesize 64 bytes
        Branch Prediction : on
        Double Issue : on
        Linux version 2.2.1 (root@anps2rel1) (gcc version 2.95.2 19991024 (release)) #1 Wed Nov 14 18:28:00 JST 2001
        no initrd found
        Console: colour dummy device 80x25
        Calibrating delay loop... 392.40 BogoMIPS
        Estimated CPU clock: 294.240 MHz
        Memory: 30828k/32760k available (1192k kernel code, 672k data)
        Checking for 'wait' instruction... unavailable.
        POSIX conformance testing by UNIFIX
        PlayStation 2 SIF BIOS: 0250
        Linux NET4.0 for Linux 2.2
        Based upon Swansea University Computer Society NET3.039
        NET4: Unix domain sockets 1.0 for Linux NET4.0.
        NET4: Linux TCP/IP 1.0 for NET4.0
        IP Protocols: ICMP, UDP, TCP, IGMP
        Linux IP multicast router 0.06 plus PIM-SM
        Starting kswapd v 1.5
        PlayStation 2 device support: GIF, VIF, GS, VU, IPU, SPR
        Graphics Synthesizer revision: 00005515
        Console: switching to colour PlayStation 2 Graphics Synthesizer 80x28
        pty: 256 Unix98 ptys configured
        ...
      • Re:Consoles.... (Score:2, Interesting)

        by Flamerule (467257)
        Software, software, software, my friend!

        The reason to buy a gaming computer is because consoles don't work well for a whole lotta games -- and there are all kinds of games that are unavailable on consoles.

        • Tried playing Everquest on a console? Alright, that may change in the future-- well, no, because most console owners don't have keyboards for them.
        • What about any first-person-shooters? Those thumb-sticks can't come close to the accuracy of a mouse and keyboard.
        • Do you even want to think about playing Homeworld on a console? There aren't enough buttons on a controller to handle 3d strategy.
        • "snort" Can you say, simulation? No flight sim would be playable without a keyboard.

        Conversely, some games work better on consoles -- or at least on a controller. You can always hook up a controller to your computer, but if you're mostly going to be playing those types of games, you may, indeed, want to dispense only $300 of your money.

        • Fighting games
        • Racing games
        • Hell, most any action game
        • And some styles of RPGs work well too

        But the gaming world only uses software as an excuse -- I can't imagine being bereft of my beloved Civ III, Heroes of Might and Magic IV, Deus Ex and Homeworld, but I think people tend to classify themselves as a console or PC gamer, and stick to one to the exclusion of the other. I'm a PC gamer, and my pet peeve is whenever someone refers to computer games in general as "videogames". Even though I should know better, I ignore most things happening in the console world, with the exception of some exceptional titles that remind me of my early days on the SNES -- like Metroid Prime. And for the past half decade I've been bereft of Metal Gear Solid, and every Final Fantasy after VI.

        So, should I have forgone the complexities of my dual-boot Mandrake/WinMe system for the PSX, PS2 and XBox? Well, the consoles may be simpler, and cheaper, but it doesn't matter, because I can honestly say the PC games I've played are worth the thousands of dollars I spent to play them. My advice is, go into debt and buy everything, because games are more important than money.

      • Amen to that!
        I have got a PII 400 laptop and a PS2

        My laptop (which I bought for $400) is fast enough for my computer needs.
        And the PS2 is great for games.
        I also got a GameBoy advance to play while I am travelling...

        Which means I have a totally portable computer/game system suited for all my needs. Besides, it will still be up to date in 1-2 years.
        Try to do that with a PC without burning all your cash every year!

    • I disagree. I've always found having a console to be handy when all your computers are either working on something or not working on something.

      Of course I had consoles before I had any real computing power under my control but still having the control pad and everything sitting right there was nice. Plus one didn't have to make sure he had the latest hardware to run the games. You could be assured the machine would support the games you wanted to buy (although slowdown was common in the past).

      The biggest disadvantage I see is the lack of a good resolution display for them. Networking is a definite lack but if the companies could manage to get a broadband standards based implemtation out there i would be quick in line to buy. Heck maybe even HD TV would made them look nice.

      Of course there is the lack of disposible income in my current budget but that's another issue :)

      Cheers
    • I see the console as a calculator, a special purpose computer that does its job very well. Just as it is dumb to buy a PC to do an ocassional calculation, IMHO it is also dumb to buy a PC just for games.

      I think the PC has wider variety of more innovative games, and the only selling points for consoles are cost and simplicity of operation. I know a lot of people think the consoles have better graphics, but I still think Fifa 98 for the PC looks better than the newer PS and PS2 versions

      • Re:Consoles.... (Score:3, Insightful)

        by SirSlud (67381)
        well, I'd say that a well equipped gaming PC will blow an Xbox or Gamecube (sorry, I dont put the PS2 in the same league, but thats for another flame-ridden thread ;) away in terms of:

        - FPS
        - resolution
        - online play
        - saved game complexity

        but the consoles win with:

        - FPS consistancy (games designed at a 'lowest denominator' level in terms of performance, so you dont slow down as much as PC games do when stuff gets really messy)
        - control
        - $-per-unit-of-performance

        Also, dont forget the suitability of certain types of games:

        - online lends itself to PC
        - fps to PC
        - PC games more editable
        - loading times on consoles usually better (or at least Gamecube just blows everything away with its cute lil miniDVD media)
        - multiple people at the same time .. duh, console :)

        I dunno. As always, it depends on what you like to play. Some people need their Quake, others their Platformers. Console games are often designed to be more pickup-and-play than PC games too.

        The fact that most people have larger televisions than monitors helps the console in terms of display real estate in most homes too ..

        Okay, thats all I can think of. Spewing over. :)
    • Let's just clarify something : Console != Computer. Apples and Oranges.

      Why buy them ?

      Steps for getting a Game running on a console :

      1. Buy Game for console.
      2. Insert Game in console.
      3. Power On.
      4. Play.
      Simple.

      "shitty-looking" - Damn, looks like I just fed a troll.
    • by Anonymous Coward

      Why buy them?

      I used to think the same thing. In fact, my thinking was 'you're always better off spending the console money upgrading the PC'. But I've recently taken a good hard look at my PC and decided its time to piss off the shitty Win98 partition and go completely Linux, and at the same time 'legitimise' my software ownership by throwing out all my pirated microsoft software. The only thing I had the Win98 partition around for was to play games. So, one PS2 and one partition format later, and I've vanquished the evil empire altogether.

      I consider my console cash has bought me a little freedom from tyranny, and perhaps a little better quality of life.

    • Consoles provide high-end graphics (at the time of their design) at much cheaper prices. More importantly, the games utilizing these graphics can optimize the hardware to 100% output (especially in later generations of game releases), since all the consoles have identical specs. Not so with PCs, which generally have wasted development time catering to different power levels, and can't fully optimize hardware. This has alleviated somewhat with the smaller numbers of 3D card manufacturers and the semi-standardization of APIs. Sure, if you're a billionaire, buy a new computer each month.
  • Interesting quote. (Score:3, Insightful)

    by tshak (173364) on Wednesday June 26, 2002 @06:45PM (#3773865) Homepage
    I found the following interesting:
    the opportunity to create a network of consoles through which all kinds of entertainment content, including films, games and music, can be distributed. That was Sony's original aim with the PlayStation 2.

    All of the XBox naysayers talk about how the "XBox is a PC" and how MS won't focus on the gaming experience but try to bundle it (see the recent PVR leak). However, it is obvious that Sony is trying to do the exact same thing - this is not the first time I've seen mention of a "Sony digital media center". So, really, the only "true" console is the GC, which of course a silly contention.
    • Microsoft stated when the XBox was released, that they were discontinuing their UltimateTV PVR in hopes of merging it into the XBox. This pissed a lot of people off in both camps. First, who wants a console when they just want a PVR, and second, who wants a PVR with monthly charges when all they want is an XBox. Their online strategy costs even more money on a yearly basis. Nintendo was smart and has seen what has happened to the CDTV, Dreamcast, and soon Microsoft and will just stay a true to life 100% console machine for the masses while Sony and Microsoft try and duke it out in an unwinable online arena (Really, who cares when all the online games are already on the PC and play BETTER on the PC?) .. Kudos to Nintendo for keeping their boat afloat.

    • Sony's PlayStation business currently generates around 60% of the firm's profits. That figure has exceeded 100% at times.


      How the hell does one business line exceed 100% of a compannies profits?
      • Pobably because some products loose money.
      • > How the hell does one business line exceed 100% of a compannies profits?

        When the company, exclusive of that business line, is losing money. For example: product A made by company X shows a net profit of $120 million a year. Leaving aside the revenues and costs associated with A, X loses $20 million a year. Result: Company X as a whole shows a net profit of $100 million a year, with product A being 120% of X's profits.

        Chris Mattern
  • by Wesley Everest (446824) on Wednesday June 26, 2002 @06:49PM (#3773916)
    Gotta love how the game industry plays with their numbers of bits. I imagine it'll take another hardware generation or two before the marketing guys come up with another number to hype.
    • I wonder how these reporters would react if you pointed out to them that the Gamecube and Xbox are both 32 bit and the PS2 spends most of its time in a 32 bit mode.
      • They'd probably stare blankly at you.

        Dunno what you mean about a PS2 32 bit mode though. Unless you're referring to most of the intructions only operating on the low 32 or 64 bits of its 128 bit registers.
        • I'll admit I don't know as much about the PS2 as I do the other machines, but from what I remember, the PS2 has the ability to turn each of its 128bit scalar registers into 4 32 bit element vectors. And this vector mode is the prefered way of doing most hard calculations (considering you rarely need to deal with 64 bit numbers much less 128).
          • by Phil Wilkins (5921) on Wednesday June 26, 2002 @10:49PM (#3776010)
            That's ok, I know more about the PS2 than either of the others. The actual situation with regards to EE registers is pretty complex, as the EE actually consists of the core, 2 vector units, and an fpu.

            The core has 31 128-bit registers, and instructions to manipulate them either as 32-bit, or 64-bit integers, or as 4x32-bit integers, or as 8x16-bit integers (where 4x32 bit means, four 32-bit integers packed into one-128 bit integer). The reason there's 31, is that register 0 (zr) is a constant 0.

            Each vector unit has 31 4x32-bit float registers, and 15 16-bit integer registers. One of the vector units (VU0) is available to the core as a co-processor, as are all of it's registers. The other sits in the DMA stream, and can be thought of as a pumped up vertex shader.

            Finally the fpu is pretty traditional, with 32 32-bit float registers.

            So thats 31 128-bit integer registers, 31 4x32-bit float registers, 15 16-bit integer registers, and 32 32-bit float registers. Giving us a total of 109 registers, with a total of 8208 bits, and that's not including 20 or so status or result registers.

            None of this is modal, you can mix core, VU, and fpu instructions as you like. There's also nothing stopping you treating a 128-bit core register as a 32, 64, 4x32, or 8x16-bit integer, nor moving it to a VU0 register, where it's treated as a 4x32-bit float.

            There's also the IPU, a DMA controller, and a whole bunch of other stuff, but they're not directly accessibly from the core. Well, actually, even that's not true, as most things are also memory mapped, but that's only really for debugging, as memory mapped access has a habit of stalling everything.

            Oh, and the bus to the RDRAM is 128 bit, while the bus to the GS is 64 bit.

            So, in summary, mostly 128-bit registers, and a 128-bit data bus. It's a 128-bit system.
    • Actually the industry has severly downplayed the number of bits in their systems. This was a big deal esp when the jump from 16 -> 32 was made (3D0 era), but since then most manuf. usually just mention it, vs making it a key selling point (e.g. the 128bit Emotion Engine vs the 128bit Playstation2).

      I guess this is a combination of the industry realizing that bits don't mean much beyond 32 and that the average user is now computer savy enough to know that the number of bits really doesn't matter (now the Mhz, why everybody knows that _it_ is the most important factor in performance ;)
    • You'd be able to address every sub-atomic particle in 31 different universes.
    • Back when original GeForce (NV-10) first came out?

      do you know how nVidia (supposedly a respectable company) pulled 256 out of its you-know-where? this is quoted from Tomshardware:

      Well, it took me some time to really understand that as well. First of all it isn't the price, Creative Labs are supposed to ship theirs for $249, but if you're in the right state with low tax it may still add up to $256. It should also not really be the memory interface, because this is only 128-bit wide. Some think that the usage of DDR ('double data rate') memory excuses the use of '256' for the memory interface, but that's in my humble opinion not quite all right. GeForce-cards with SDR- RAM would anyway not deserve the '256' then and the fact that data is transferred with the rising as well as falling edge of the memory clock does still not make it wider than 128-bit. The memory interface is anyway my critique-point number one, because it provides the boards equipped with SDR-RAM with a slower memory bandwidth than TNT2-Ultra-boards. GeForce's memory is currently clocked at 166 MHz, while TNT2-Ultra runs it at 183+ MHz and both chips have the same memory bus width of 128-bit. NVIDIA did not tell us the memory clock of the DDR-RAM card in our test, but I guess it's 166 MHz too, so that this card has at least 81% more memory bandwidth than TNT2-Ultra.

      But let's get back to the magic '256'. I could hardly believe my ears when I was finally told what the '256' stands for. NVIDIA adds the 32-bit deep color, the 24-bit deep Z-buffer and the 8-bit stencil buffer of each rendering pipeline and multiplies it with 4, for each pipeline, which indeed ads up to 256. So far about the fantasy of marketing people, they are a very special breed indeed.
    • Yep, this article is so full of errors, simplification... But then, it's target audience is non technical so that's really no surprise!

      If Slashdot readers expect to learn about Technical informations on the consoles in the Economist, then they are going to the wrong website. They should try Ars Technica instead...

  • When Ill be getting My Playstation 20?
  • For people who may have misread the summary as I did ... The Economist article concerns game consoles. Given the range of topics on /. it very well may have been about "consoles" (e.g., WYSE terminals).

    Clarity isn't a four-letter word.

  • by Anonymous Coward on Wednesday June 26, 2002 @06:55PM (#3774006)
    ... is like the National Enquirer mentioning Scientific American.
  • by simm_s (11519) on Wednesday June 26, 2002 @07:02PM (#3774072) Homepage
    The X-Box has a 128bit processor, dude I can't wait until Intel releases that for my PC.

  • Wrong Wrong WRONG!!! (Score:4, Informative)

    by Cutriss (262920) on Wednesday June 26, 2002 @07:04PM (#3774104) Homepage
    My god...this article has more inaccuracies than a Slashdot story!

    but Sony, Microsoft and Nintendo all intend to release plug-in adaptors to link their boxes to networks.

    And WHERE do you plug in the Xbox broadband adapter, eh?

    Both Sony and Microsoft decided that ordinary modem connections were too slow to do justice to their advanced consoles.

    Really? Then why does the PS2 network adapter have BOTH network and modem ports?

    All three firms are losing money on their consoles, though exactly how much is difficult to say.

    Wrong again! Microsoft is the only one doing this!

    And as far as that sales graph goes...not a single one of these systems is 128 bit. The GameCube and Xbox are both 32-bit systems (PowerPC-based and Intel x86, respectively). I don't know about the Emotion engine in the PS2, but I suspect that with less than 32 MB of RAM, there's no reason for it to have more address lines, so it's probably 32-bit as well. And the Dreamcast uses a SH4 processor...That certainly isn't 128-bit either.
    • Some companiese have plans to release USB analog modems for the XBox, that hook into the controller ports, for those people without broadband.

      I agree that most of this is marketdroidspeak...

      AFAIK, the "graphics" portion of the chipset is how most consoles are measured... The chipset in the dreamcast was a 128bit memory interface PowerVR chip, for example. The PS2/Xbox/GC all have equivalent or better graphics chips.

      The whole "xx-bittedness" of a console really means nothing. It's the games - I play more of my Sega Saturn library now that anything else, just because the games are damn fun.

      BBK
      • by Steveftoth (78419)
        It was that the bit rating of the console was always the main processor. Not the graphics. The NES only had 4 bit graphics, but it was an '8-bit' system. Sega genesis could only display 64 colors at once and the SNES 256, yet these were all, '16-bit' systems. The main processor was the heart and soul of all the consoles before the current generation. As it would do almost all the work. Only in the last generation did we finally see co-processors that could actually do more then flip a couple of bits. So now they rate it by the largest thing in the system they can get away with, which is usually the size of an internal register.

        You really just can't compare apples to oranges which is what they are doing. All these systems over the years have compeletly different architechures. From the Atari 2600 to the X-Box, the only similarity is that they are all modeled after turing machines. So at the end of the day, they should be compared on which games they have and not how powerful they are.
    • Later they say that

      Sony and Nintendo both plan to release adaptors for their consoles

      So they really don't know what they are saying.

      All the consoles to date have not had greater then 32 bits worth of addressing. The new consoles PS2, DC, X-Box (in the GPU) , even Jaguar, have many 128-bit (or larger) data paths and multimedia registers. The PS2 has a over 2000 bit wide bus in the GS, but only 4 Megs of vram. I love how they say the nintendo 64 is actually 64 bits ;p

      Also they missed the Atari comeback effort in the early 90's after the Genesis came out. Both the Lynx and the Jaguar are not on this graph.

      • Also they missed the Atari comeback effort in the early 90's after the Genesis came out. Both the Lynx and the Jaguar are not on this graph.


        Yes they are. You just can't see them because their lines are being hidden by the abscissa of the graph.
    • All three firms are losing money on their consoles, though exactly how much is difficult to say.

      Wrong again! Microsoft is the only one doing this!


      Are you sure about this? 150 bucks seems really cheap for a GC...

      • Yes, Nintendo has stated many times that they can sell the Gamecube at $99 and still make a profit. They have always stated that they will have the trump card no matter how fierce the pricecuts get, and you know what? It's true.
        • Not only is it true, but I just love getting those dividend checks from Nintendo along with the quarterlies that prove that it's true.

          MSFT is really hurting - bad. If they can't sell 8-10 games per xBox, they lose money. Period. And the only reason their metric of games per box is where it is, is the 3 game bundles they sell it with ...

          At least I'll be laughing while I play Oddworld: Munch's Odyssey on the GameCube and The Sims on the PS2 ...
          • I Can gaurantee you that Nintendo cannot make a profit on the GameCube at $99. They don't control the costs of their components, unlike Sony; They are subject to market prices.

            Also, if we were to believe you, Nintendo would have been very stupid to set the price of the GameCUbe at $199. If they could have broken even by selling at $99, can you imagine the sales they would have racked up ?

            Don't let your antipathy for the other console manufacturers dither your common sense. It's not becoming.

    • the "128 bit" refers to the width of the graphics bus, not the cpu. the nintendo 64 wasn't "64 bits" either, but its graphics bus was 64 bits wide - at least, that was their marketing spin on it.

      as for losing money - all three manufacturers are indeed losing money on the hardware - not just microsoft although they are definitely losing the most money - none of the three companies are profiting from the sales of their hardware at this time.

      the number of bits that a cpu can crunch in a register has no relevance to having more or less address lines.
    • by Have Blue (616) on Wednesday June 26, 2002 @07:54PM (#3774673) Homepage
      And WHERE do you plug in the Xbox broadband adapter, eh?
      Into the ethernet port on the back, perhaps?
      Wrong again! Microsoft is the only one doing this!
      I have yet to hear real numbers from a reliable source (and I have talked to several people inside MS) that prove or disprove this point. All the console manufacturers use the same business model.
      And as far as that sales graph goes...not a single one of these systems is 128 bit
      Already been pointed out many times, but an argument could be made that the (128-bit) graphics processor is now the most important part of the console (it's certainly doing far more work than the 32-bit CPU).
      • I have yet to hear real numbers from a reliable source (and I have talked to several people inside MS) that prove or disprove this point. All the console manufacturers use the same business model.

        All of them used the same initial business model, but Sony and Nintendo are far beyond the "initial entry." Regardless, their smaller, more efficient, custom MIPS designs have shrunk in die size as fabrication technology as shrunk to smaller feature sizes. Normally "commodity x86" wins in economies of scale, but the sheer quantities of Sony and Ninendo volume also gives them the same econoies of scale benefit despite their custom chipsets. So then it becomes a matter of total die size -- X-box loses, big time!

        One only needs to read EETimes and a few other engineering magazines to see articles about how much it is actually costing Sony and Nintendo to reproduce their MIPS-based solutions. Microsoft? What would Microsoft know about Sony and Nintendo's costs?!?!?!

      • " I have yet to hear real numbers from a reliable source (and I have talked to several people inside MS) that prove or disprove this point. All the console manufacturers use the same business model."

        Not necesarily. Sony and Microsoft would be losing money because they're using new, proprietary technology developed solely for their consoles and they can't get enough volume out for the price to start dropping off.

        Nintendo, on the other hand, specifically went out of their way to avoid making another N64 and, in their efforts to make the console easier to write for (among other reasons), essentially used off-the-shelf parts to throw together the GCN. Practically right on up until the console itself was unveiled Nintendo told third-party developers that there was no need to get dev kits because there wasn't anything in the GCN that needed to have a new dev kit written for it.

        Not having to throw money at the DVD Consortium only explains part of the price differences between the GCN and its competitors.

    • Sony's PlayStation business currently generates around 60% of the firm's profits. That figure has exceeded 100% at times.


      How does one business line generate more than 100% of a company's profits?
    • And as far as that sales graph goes...not a single one of these systems is 128 bit. The GameCube and Xbox are both 32-bit systems (PowerPC-based and Intel x86, respectively). I don't know about the Emotion engine in the PS2, but I suspect that with less than 32 MB of RAM, there's no reason for it to have more address lines, so it's probably 32-bit as well.

      First off, the external addressing of the chip has nothing to do with the internal width of the chips registers. The last time I checked, the Nintendo Gamecube was MIPS 5000-based, which is an enhancement of the 64-bit MIPS 4000 core. And the Sony Emotion engine is a customized MIPS 4000 core with a specialized 128-bit SIMD execution unit and registers.

      The only reason the X-box can challenge them with its general Intel x86 approach is the fact that the CPU clock is much faster (almost 4x the PS2's) and has a GPU that is 18 months newer in design. Otherwise, at least the PS2 is a much sweeter custom design -- and it costs far less to reproduce at today's feature sizes in the massive volume consoles are reproduced at.

      • Er... (Score:2, Informative)

        by questionlp (58365)
        The last time I checked, the Nintendo Gamecube was MIPS 5000-based, which is an enhancement of the 64-bit MIPS 4000 core.
        I think you have the Nintendo 64 and the Gamecube mixed up. According to Nintendo, the Nintendo 64 [nintendo.com] has a customized MIPS R4000 whereas the Gamecube [nintendo.com] has an IBM Power PC-based processor.

        I do not know what the main processor in the PS2 is derived from, but MIPS does ring a tiny bell.

  • Just finished a read that covered the beginnings of the console wars pretty well called The Ultimate History of Video Games [amazon.com], while it's not quite as complete as the title would have you believe, and it's not the easiest read in the world, it's still has a lot of information about how the economy and people who purchase video games drive the market.

    It will be very interesting to see how the competition pans out over the years... Microsoft and Sony make quite an assumption that gamers are really looking for the "Total-Multimedia-Experience" and "Network Gaming". Personally, I'd just like to see innovation replace the same old styles of games being re-released with a facelift every year...

  • by sterno (16320) on Wednesday June 26, 2002 @07:11PM (#3774184) Homepage
    Okay, this is a matter of some debate from the many articles I've read on the console industry. Are they all really losing money on the consoles?

    It seems pretty clear that Microsoft is losing money in a big way on the consoles. I have seen nobody suggest otherwise, and if you think about what their hardware is and the price it makes sense that they are losing money.

    For sony, the profit/loss question seems more up in the air. I've seen most places say that they are losing money on it but I've seen some articles suggesting that the loss is minimal or may in fact be a small profit.

    As for Nintendo, I've gotten the sense that they are actually making at least a small amount on their consoles. They didn't throw in all the power that the other two companies did planning to instead rely on the power of their collection of games as incentive to buy.

    So does anybody have any reasonable factual information about how much the companies are or are not losing?

    • According the the Inquirer [theinquirer.net], the PS2 costs Sony $185 to get out the door. They also claim that each Xbox looses $150 for MS.

      http://www.theinquirer.net/25060210.htm [theinquirer.net]

      I don't have any references about Nintendo, but I've heard rumors that they can build a GameCube for That means that for at least a little while, Sony was pulling in a cool $115 in profit on each PS2 they sold.

      • So it would appear from those figures that Sony, at least, may be making a small profit. But I'm wondering, are those prices purely the hardware cost per unit?

        Each manufacturer does a lot of marketing. Also add to Microsoft's hemorraging that I'm sure they have to put quite a bit of money into getting exclusive titles for the X-box. Sony has enough market share that developing only for PS2 makes perfect sense. Most of the exclusives on Nintendo are all manufactured by Nintendo. So, in the end i have to believe Microsoft is really hurting relative to the other manufacturers. Having said that though, they have billions in the bank, they can afford to take a hit in the short term if it pans out long term.
    • For the record, Nintendo has stated that they eventually plan to sell the Gamecube for $99 and still turn a small profit. They did this from the getgo, and was a very smart decision. I dont know anyone who uses their PS2 or XBox as their DVD player since they BOTH have a LOT of movie compatability problems. It was a good idea, but didnt work out. Nintendo saw no need to try and fuse anything but pure gaming into the console.
  • Atari and the 80s (Score:3, Interesting)

    by freeweed (309734) on Wednesday June 26, 2002 @07:16PM (#3774226)
    Rather frightening that on the graph, everything pre-nintendo is labelled "Atari systems". Of course, society back then pretty much equated Atari with video games (see: Blade Runner for a good chuckle).

    I know the VCS pretty much decimated all competition back then, but does anyone have any harder figures? Adding the Colecovision and Intellivision into the pot, there must have been some signifigant inroads into Atari's numbers.

    The funniest though, has to be the fact that they say Atari systemS. Sorry folks, but other than the venerable VCS/2600, Atari didn't really do squat in the marketplace.

    • The funniest though, has to be the fact that they say Atari systemS. Sorry folks, but other than the venerable VCS/2600, Atari didn't really do squat in the marketplace.

      I think that's the point they were getting at. The 2600 represents the pinnacle of Atari's achievements in the console market. After that, they were fairly irrelevant.
    • by astro (20275)
      The 5200 was not at all irrelevant. At the time, it had games that could not be produced on any other console - only on the "personal computers" of that day - Atari 400/800, C64, etc. I was positively blown away when I first played games on the 5200 (at a JC Penny store in Fairbanks, Alaska, maybe 1981 (82?)).

      There was a huge downturn in consumer spending in the early 1980s, that anyone in their mid-to-late 30s should remember as a fact of teenage life. This absolutely killed the market for game consoles at that time, given that it drove a huge price war among "personal computers".

      This was also when Activision in particular rose to what was a huge business empire for the software world at that time - they produced titles for every console platform as well as every "pc" platform at that time that I am aware of. They later bought many of the rest of the companies that produced the classic PC games at that time (i.e. Infocom!).

      So what you had was similar, oddly enough, to what we have today - "personal computers" that had as good or better titles than the most advanced consoles at a slightly higher cost (then - C64 for $299, Atari 5200 for $199; today, a PS2 will cost me $200, whereas I can build a K7 900mhz box with Nvidia GForce 4 for ~$300) but in both cases the PCs can do far more than the console.

      I have no idea what my original point was at this point, except that maybe folks should look to Activision for where the really sound business model is - ~24 years of success in a time that saw literally hundreds of other HW *and* SW makers go by the wayside.

      --astro

      Yes, I have a Gamecube. And yes, my current "high end" PC is a 1ghz Duron. And I am happy as a clam with both.
  • People keep counting nintendo out and it's really the only console maker that I can think of that has games that are worth making multiplayer versions of. When I think playstation 2 I think violence adult mature games, kickboxing and shit nothing really multiplayer. When I think Xbox I don't think about much because there are no games but when I think Nintendo I think of all sorts of multiplayer games, they don't necessarily have the best graphics or any of that but they are really fun. Could you imagine multiplayer mario kart?!?! An online tournament of mario kart (time to email nintendo).. if the next big thing is multiplaying consoles. It'll definitely be ps2 , xbox VS nintendo. This is gonna be good.
  • by cascino (454769)
    Sony's PlayStation business currently generates around 60% of the firm's profits. That figure has exceeded 100% at times.
    Huh?
  • Wrong as usual... (Score:4, Interesting)

    by Viewsonic (584922) on Wednesday June 26, 2002 @07:31PM (#3774401)
    Nintendo stated many times that they plan to eventually offer the Gamecube for $99 and they will still be turning a profit on the machine itself. However, they didn't plan on cutting prices so soon to fight the competition. As usual the person writing the article just assumes all the consoles are losing money when in fact Sony has refab'd their system for the pricecut so they dont lose money, and Microsoft has done nothing but lose tons of money from the start.
    • In recent news in the WSJ (don't know if online, I read the print version), they will be offering some xBox games for the GBA and GameCube, specifically including Oddworld: Munch's Odyssey.

      OK, it's official, I have absolutely no reason to buy an xBox anymore.

    • I remember seeing figures that the PS2 costs $185 with cost being reduced for the newer version with the all-in-one chip design.

      The GameCube costs around $100 right now, and cost can be brought down in the future by using the same integration techniques used my Sony.

      The X-Box xosts M$ around $350 (source from the Red-Herring) with no real possibility to reduce the cost since all components where already cheap and are provided by third party companies.

      Microsoft used of the shelves components to build a cheap PC, but now that PC components have moved beyond that, the costs are not going down...
      Microsoft is new to the console business and the X-Box fiasco is going to cost them dearly. But hey, they have got money, and they are here to learn.
      They might get it right eventually (or give this market alltogether.) The future will tell...

  • by bigdavex (155746) on Wednesday June 26, 2002 @07:34PM (#3774429)

    Nothing illustrates the battle's ferocity better than the eye-watering price cuts of the past few weeks.

    It makes people cry? Maybe the hardware makers, I guess.
  • Perhaps the reason why 'gaming is no longer the province for children and teenagers' is because that when gaming consoles became popular (i.e. in the day of Atari/Colecovision and then NES/SMS) these same people were children/teenagers themselves? (Ok, that may be stating the obvious)

    And why didn't NEO-GEO make it into the chart? That was by far the best console during that time...too bad it was $100 a game (or some ungodly price like that) and some ridiculous amount for the console. I knew a kid who had one, but he was a prick and never invited me over to play it, because he was a spoiled brat.
  • Huh? (Score:5, Funny)

    by Ex-Parrot (587949) on Wednesday June 26, 2002 @07:42PM (#3774516)
    Sony's PlayStation business currently generates around 60% of the firm's profits. That figure has exceeded 100% at times.

    That sounds like either new math or Andersen accounting practices.

    • Re:Huh? (Score:4, Insightful)

      by baboyer (109846) on Wednesday June 26, 2002 @08:33PM (#3775010)
      It's called subsidies. They were using profits from the games to offset losses in other groups. Because of this, the profits from the PlayStation business were actually larger than the profits for the whole company.
  • 60-100%? (Score:2, Insightful)

    by layingMantis (411804)
    Sony's PlayStation business currently generates around 60% of the firm's profits. That figure has exceeded 100% at times.

    Wtf? This is a surprise to me. So Sony is basically dependent on their video game console? If the number "exceeds" 100%, then all of Sony's electronic hardware and music properties are (or were), losing money. And Sony has only been in the 'console' business for 8 years or so.....

    This is probably false info, considering all the other inaccuracies in this bad article.

    • While the numbers do sound suprisingly large, they do not imply that every other business of Sony's was losing money.

      Say I run a business with 4 arms. Arms 1, 2, and 3 makes $1,000 this year. Arm 4 looses $2,000. My net profit is $1,000. This means it is accurate to say that Arm 1 made %100 of my profit. Nonetheless, most of the arms of my business are making money.

      All it takes is for them to write off a bunch of loses at some point for this to be feasible. I'm not too familiar with Sony's business, but it wouldn't suprise me if, say, they wrote off a bunch of loses because of overpriced aquisitions they made during the tech boom that subsequenty dropped in value. If this write-off was as big as their profits from all non-PS businesses, that would make the quoted figure correct.

  • When the xbox was first brought to the public's attention, one of the strengths mentioned was that since it was at heart an intel cpu and nvdia gpu (which are common in PCs), a great quantity of games would quickly be ported from the PC to the xbox. This has not happened, and the lack of game titles available has become a very severe criticism of the xbox.
    What is preventing PC games from being ported?
    • My guess would be royalties. After all, your PC game company can create a new PC game and not have to pay a dime in royalties to Microsoft. If the company takes the time to make an XBox port, then they have to worry about copies of their XBox port stealing sales from their more lucrative PC version. When the XBox market gets large enough so that it is worth the risk the PC game companies will probably do the necessary work. In the meantime, however, only those companies that Microsoft is paying are likely to come out with XBox titles first.

  • by Kirby-meister (574952) on Wednesday June 26, 2002 @10:03PM (#3775718)
    The article is not entirely accurate - not all three consoles are losing money on hardware sales.

    Sony owns its own factories and is an R&D company - they have been lowering the size of each of the PS2's chips, and very recently put both the Emotion Engine and Graphics Synthesizer on one chip, allowing them to further cut costs on production.

    Look at it this way - back when the PSX was released, the price of $300 meant it sold at a loss. Opening up a PSX showed a mess of an architecture and the things were commonly known to overheat (infact, when PSX-mastermind Ken Kutaragi showed that the PS2 could be kept in a 'vertical' position, a lot of people had to chuckle at the fact that the only way their PSX's wouldn't overheat is if they were in the same position). But by the time the PS2 was unveiled, the cost to make a PSX core was around a couple of bucks at most, a reason why a PSX chip is the I/O processor inside the PS2 (and thus allows just-about perfect PSX emulation on the PS2.

    That was over a period of 5-6 years, so I imagine at this point Sony has been able to drastically cut costs to the point where $199 might actually be a profitable price.

    Meanwhile, both Intel and NVidia are pocketing whatever production improvements they make, and are sticking it to Microsoft. I believe this might be the reason Microsoft has recently been getting ready to start their own chip production (for the Xbox 2, of course).

    As for Nintendo, I have no idea how ArtX's Flipper GPU license is being handled (especially since ArtX is now a part of ATI, the reason ATI's logo appears on every GameCube), nor do I know too much about the Gekko, other than it was done with the help of IBM. Panasonic helped with the proprietary disc format, but I believe the only thing they got from that is the right to make a DVD-playing GameCube, the Q. The only thing I know is that the GameCube doesn't cost nearly as much to make as an Xbox, and probably less than or equal to (but more likely less than) a PS2.

  • The future... (Score:2, Interesting)

    by EuroChild (523969)
    What's the bet that Microsoft will release Xbox 2 and 3 in a short time period? They will stick to the PC mindset which says "why squeeze most out of a system when you can upgrade?" That will be the downfall of the Xbox (and its predecessors) because they won't push the system to it's full potential. The original playstation had every bit of power used in its later games. This is what allowed it to become top console because it was around for years without changing (originally the ps2 was to be released in 1998 and ps3 in 2001/ 2002 but this was obviously pushed back).

    Anyway, that's my 2

Never say you know a man until you have divided an inheritance with him.

Working...