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Xbox Hackers, Linux, the DMCA, And Modchips 343

Posted by timothy
from the oh-my dept.
HardcoreGamer writes "The New York Times has a long article on Xbox hacking, why Microsoft hates it, and who does it (Google). 'Xbox hackers are exploiting Microsoft's business model, which is to sell Xbox hardware at a loss...' but Microsoft doesn't make the money back on software -- as it planned to -- if you decide to load up Xbox Linux. Where else can you get a PIII-733 with graphics and audio for $180? The reporter talked to the IDSA; Andrew Huang, author of 'Hacking the Xbox: An Introduction to Reverse Engineering'; a Manhattan exec who hacked his Xbox and said 'The reality is that if you could bypass Microsoft's operating system you would end up with a fairly powerful computer for less than $200;' and others. The article discusses the DMCA, modchips, the Xbox Linux Project and lots more. A good -- if long -- read. A shorter version of the story is at the International Herald Tribune. Best quote? 'Microsoft is a company passionate about innovation and creativity. We are also very committed to respect for others' intellectual property and we request the same respect applied to our innovations.'"
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Xbox Hackers, Linux, the DMCA, And Modchips

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  • Respect ? (Score:5, Insightful)

    by theefer (467185) * on Saturday July 12, 2003 @10:26AM (#6423504) Homepage
    Since when is this word part of the capitalist vocabulary ? Doesn't seem to consistant with the ongoing lawsuits, FUD wars, hypocrisy, etc.

    Exploiting other company's business model flaws is the basis of the world economy, so let's not be stupid, if they don't want flaws to be exploited, they've better not have flaws in the first place. Too bad, it's too late now.
    • Re:Respect ? (Score:5, Interesting)

      by gilesjuk (604902) <.giles.jones. .at. .zen.co.uk.> on Saturday July 12, 2003 @10:40AM (#6423562)
      Indeed, they would encase the whole PCB in opaque resin or glue the case shut if they wanted the XBox to be a huge secret. They didn't and so they must live with their decision.

      Sure the business model is sell for a loss and make back the money on licensing etc.., this just exposes how stupid that business model is. It's being tried on printers and printer ink now, the consumer is getting screwed. Sure printers are affordable, but heavy users of inkjets would sooner pay more for the printer and have cheaper ink.
      • Re:Respect ? (Score:5, Interesting)

        by mikewolf (671989) on Saturday July 12, 2003 @11:27AM (#6423716)
        are you kidding?

        this is the same business model that gaming systems have used for years.

        it makes perfect sense for video games...

        the hardware is expensive, but if you can sell it for cheaper you can triple or quadruple your game sales revenue...

        don't think this is some new business strategy that MS through the years, this is standard practice, and it works for gaming systems (otherwise all of the gaming companies would be out of business by now)

        it might not make sense for printers, but i'm not sure that i agree with your comment about the ink cartridges, b/c why couldn't you buy generic cartridges and circumvent giving the manufacturer any money back????
        • Re:Respect ? (Score:5, Insightful)

          by gilesjuk (604902) <.giles.jones. .at. .zen.co.uk.> on Saturday July 12, 2003 @11:51AM (#6423835)
          It did make sense until the arrival of the internet.

          Once a console's copy protection has been busted and the method is easy, then it's game over. See Dreamcast for an example of that.
        • Re:Respect ? (Score:5, Insightful)

          by Waffle Iron (339739) on Saturday July 12, 2003 @12:25PM (#6423956)
          don't think this is some new business strategy that MS through the years, this is standard practice, and it works for gaming systems (otherwise all of the gaming companies would be out of business by now)

          The main difference is that older gaming systems had hardware that was either an underpowered toy, or totally incompatible with any software, or both. It was intrinsically useless for most other purposes.

          Microsoft may have made a mistake by boxing up a standard PC that can run off-the-shelf software, selling it below cost, and then trying to lock it up with a flimsy electronic scheme. I realize that they were trying to leverage PC game software for their platform, but there are downsides to that approach that they have to live with now.

        • Re:Respect ? (Score:5, Informative)

          by kotj.mf (645325) on Saturday July 12, 2003 @12:27PM (#6423962)
          it might not make sense for printers, but i'm not sure that i agree with your comment about the ink cartridges, b/c why couldn't you buy generic cartridges and circumvent giving the manufacturer any money back????

          Because the printer manufacturer puts a chip in the cartridge that makes sure you can only use the manufacturer's ink, and then invokes the DMCA [theregister.co.uk] when a generic manufacturer attempts to circumvent that "feature." Pay attention.

          Generic cartridges are quickly becoming a thing of the past.

        • Re:Respect ? (Score:5, Informative)

          by fiftyvolts (642861) <mtoia&fiftyvolts,com> on Saturday July 12, 2003 @12:32PM (#6423981) Homepage Journal

          I would like to point out that the above post provides incomplete information. Console companies have done this for a long time, but all it has done is run their profits into the ground.

          "Lies!" you say? well its not. Take exhibit A: the case of Sega Saturn vs Playstation. While Sega was trying to make the "Ultimate 2D machine," Sony was flexing its CE muscles and spending millions on researching how to manufacture their own chips cheaply and quickly for the playstation.

          When they both were released the Saturn retailed for $399 and the playstation at (drum roll please) $299. Sega attempted to get in on the market by selling their product at a loss and match the $299 tag on the PSone. Sony on the other hand was _making_ money on the console because it had spent its time and effort on mass producing its own components. The Saturn, as we all know, was a business failure.

          The same goes for the DreamCast and N64 which were both also sold at a loss. Time will tell on the XBox and GC. I think Nintendo might have learned their lesson and will tred more carefully, but MS... well, let's just say that the odds of the XBox making them money is quite low.

          Sony is not selling the PS2 at a loss either, keep that in mind...

          By the way the above can be read about in more detail on this site [actsofgord.com]. It's more entertainning there anyway.

          • Re:Respect ? (Score:4, Insightful)

            by Maul (83993) on Saturday July 12, 2003 @02:22PM (#6424441) Journal
            At launch (and up until recently IIRC), Sony WAS selling the PS2 at a loss.

            The difference is that the PS2 has sold more games.

            I don't personally believe that the PS2 has the _best_ game lineup, but it seems to be the most popular.

            Selling the console at a loss is OK if you end up on top of game sales.
          • Re:Respect ? (Score:4, Insightful)

            by Mathonwy (160184) on Saturday July 12, 2003 @02:45PM (#6424549)
            let's just say that the odds of the XBox making them money is quite low.

            Ahh, but there's the trick. It doesn't HAVE to make them money right now. This is microsoft we're talking about. They can afford to take a hit. (Heck, if they wanted to, they could probably afford to just GIVE every household in the united states an XBox) Making money would be nice for them right now, but that's more of a side bonus. The main thing they need to do is cost their competitors (Sony/nintendo/etc) market share. Even if they have to sell at a loss for a while to do that, they can probably afford to. And having a complete monopoly on household gaming would almost certainly be worth that kind of investment....
    • Re:Respect ? (Score:2, Informative)

      by dook43 (660162)
      There's no flaws in the hardware design of the xbox. There are flaws in the savegame handling of 007: Agent Under Fire (and various other games, not Microsoft's fault) that allows unsigned Linux to be run. As for modchips, you can stick a xilinx PLC in between any parallel bus structure (read bunnie's book) and find out exactly what signals are being sent between the northbridge and the processor. Duplicate those signals, and voila! You have a hacked xbox. As bunnie mentions, however, as a parallel bus g
    • Re:Respect ? (Score:2, Insightful)

      by Sespindola (542253)
      Amen.

      IANAL, but it seems to me that the lobbying efforts that companies throughout the world are making in order to save their tecnically inept asses, is sending "fair use" down the drain.

      Imagine you buy a Ford, and is stops in the middle of nowhere. And you can't even touch the engine because it could be seen as "modding" it.

      Hold on people, we are about to face some rough corporate times.

    • Thanks for the half-baked economic theory. Where were you when the rest of us were in Econ 101?

      This has nothing to do with a "business model" (a vacuous phrase if ever there was one). And it doesn't have anything to do with Microsoft's intellectual property rights.

      MS would have a valid point about IP rights if they were selling a book containing the source listings for the X-Box. But, they aren't. The physical manifestation of that code in the X-Box hardware is real property ("real" as in "real estate")
      • by cait56 (677299) on Saturday July 12, 2003 @02:24PM (#6424452) Homepage

        There are really three distinct issues here:

        • Selling of modded X-Boxes is clearly an abuse of Microsoft's Trademark.
        • Modding the X-Box to bypass game security is clearly a violation of the DMCA. Even if you are running unauthorized third-party games rather than illegal copies, you are still using Microsoft's Intellectual Property contrary to the software lisence that was granted with the sale of the unit.
        • On the other hand, even if disrupts Microsoft's business plans, you have the right to throw your X-Box into th trash. If you have th right to throw it away, you have the right to salvage the parts. My hunch is that if you can turn an X-Box into a Linux box without using Microsoft ROMs that you have merely salvaged parts that you owned anyway. That's completely legit, especially if you are essentially just enabling the PC industry standard parts.
        • Interesting? Informative? No, how about incorrect.

          Selling of modded X-Boxes is clearly an abuse of Microsoft's Trademark.

          So if I put a new engine in my Ford truck and sell it I'm violating Ford's trademark? No. Building your own game console and calling it an XBox would violate Microsoft's trademark. Selling a used item, in original condition or no, does not in any way violate the original manufacture's trademark.

          Modding the X-Box to bypass game security is clearly a violation of the DMCA. Even

  • heh (Score:5, Interesting)

    by Wibla (677432) on Saturday July 12, 2003 @10:26AM (#6423506)
    "We are also very committed to respect for others' intellectual property and we request the same respect applied to our innovations.'" Yea, we've seen some _Very_ good examples of that in the past...
    • What's their innovation? Letting you play games on PC's, only with really really big controllers?
      • No, buying FASA Interactive and driving them into the ground. I am still waiting for a Shadowrun game.
    • Re:heh (Score:5, Insightful)

      by Anonymous Coward on Saturday July 12, 2003 @11:09AM (#6423649)
      "We are also very committed to respect for others' intellectual property and we request the same respect applied to our innovations.'" Yea, we've seen some _Very_ good examples of that in the past...
      I am wondering what they think is so innovative about the X-Box? It's just a PC with chip developed by Intel, a motherboard and graphics processor developed by NVidia and piss-poor security developed by god-knows-who. It is the cheapest possible way for them to get into the market. I honestly can't think of a single thing they've done that could be labelled "innovative".
      • Re:heh (Score:3, Informative)

        by Oloryn (3236)

        I honestly can't think of a single thing they've done that could be labelled "innovative".

        They've taken this technology made by others, and incorporated it into a new product. In marketing-speak, that's 'innovating' (remember that Microsoft is really more of a marketing company than a technology company, and as far as Marketing is concerned, technology doesn't really exist until it has been incorporated into a sellable product). It's not innovation in the ordinary or technical sense of the word, but mark

  • by grimani (215677) on Saturday July 12, 2003 @10:28AM (#6423515)
    I think the P3-733 for 180 comparison is not completely valid.

    The XBox is not really extensible like a regular PC. How many PCI slots do you have? How many USB/FireWire ports? As a console, many 'regular' features unnecessary for a console that we take for granted are not included.

    This kinda limits the usefulness of the XBox.

    It's kinda like those deals on the Dell server machines you can get with some creative configuration and coupon applications.

    Sure, you get for $300 a full powered server machine...but it has no AGP slot. So much for gaming...

    Are there updated drivers for the XBox video card available at all?
    • Limited RAM (Score:4, Insightful)

      by gilesjuk (604902) <.giles.jones. .at. .zen.co.uk.> on Saturday July 12, 2003 @10:36AM (#6423545)
      64MB is a problem too, yes you can solder on another 64MB if you're skilled enough. But that's a lowly amount of RAM by modern standards.
    • uhm... (Score:2, Insightful)

      by FunkyELF (609131)
      No PCI slots, why would you need one? You have ethernet and audio. Why would anyone upgrade their video drivers for linux anyway...anyone actually play tuxracer? USB ports...it has 4, all of the controllers are misshaped USB controllers. All you need is one adapter and a hub and you're all set.

      Ok, so you can't upgrade the RAM, but it has all a 733MHz needs. You think all this limits the usefulness of the XBox...I think its the best thing that ever happened to linux, no hardware compatability issues fo
    • Just looking at this, I can think of something I'd like to do, and it might work.

      Suppose I wanted to set up a Virtual Linux server? What I might do is buy one DELL server, 4-5 XBoxes,2 ethernet boxes, and one copy of 007, allowing a modless Linux reboot. That would be a serious system, and expandable, too.

      Although 65 MB of RAM isn't a lot, if you don't have a lot of processing to do, then it might be just fine.

      Moreover, Microsoft said that they're more focused on mod chips. That being the case, it loo
    • by dackroyd (468778) on Saturday July 12, 2003 @11:40AM (#6423776) Homepage
      How many USB/FireWire ports?


      Four USB ports. The Xbox controllers are USB devices, just with a different connector. The Xbox-Linux people sell usb-Xbox convertors.

      Sure, you get for $300 a full powered server machine...but it has no AGP slot. So much for gaming...


      Ex-squeeze me ? It's an nForce motherboard with a builtin GeForce 3 type card (Geforce 3 + a bit extra). So yeah you can't upgrade it to the latest card, but it's more powerful for graphics than 80% of the PCs in use for games today.

      Are there updated drivers for the XBox video card available at all?


      I believe the standard nVidia linux drivers just work on the XBox.
    • by rnd() (118781)
      I think it's silly to expect a $300 PC that is being marketed as a server to be designed for a top-end video subsystem.
    • BTW... if anyone can answer this, I'd appreciate it. Over at Xbox-Linux, I see debian dists [nice], Mandrake, and some others. I see reference to the 007 hack. But I don't see any combination that allows a simple Linux user to pop 007 and one or two CDs, and install Linux.

      Does anyone know if that will be coming out? Because if it does, then I seriously need to consider this solution.
  • by period3 (94751) on Saturday July 12, 2003 @10:30AM (#6423519)
    Here [walmart.com]
    • by garcia (6573) * on Saturday July 12, 2003 @10:37AM (#6423551) Homepage
      Don't troll.

      The fact of the matter is that an XBox has
      TV-out and excellent graphics and sound cababilities.

      Walmart machines do not.

      People want to use the XBox as a multimedia center for their living room. A quote from another article related to this one (I refuse to read NYT) said something along the lines of, "the XBox looks excellent next to a TV in your living room, it's more silent than a typical PC, and its small form-factor make it perfect. Not exactly what Bill Gates had envisioned."
      • People want to use the XBox as a multimedia center for their living room. A quote from another article related to this one (I refuse to read NYT) said something along the lines of, "the XBox looks excellent next to a TV in your living room, it's more silent than a typical PC, and its small form-factor make it perfect. Not exactly what Bill Gates had envisioned."

        The quote was also in the NYT article, it's from Michael Steil of the Xbox Linux Project.

        That the XBox has a small form factor, looks good next t
      • Parent doesn't strike me as a troll. The fact is that the XBox is being described as a computer in the NYT times article. A computer is a general purpose machine. In terms of general purpose use, the Walmart machine is propably a better computer, not to mention more powerful (twice as much RAM, heftier CPU). Since the article claims that the XBox is cheapier than a PC, this seems like a statement that bears correcting.
    • Does anybody else find it funny that the first sentence in the description of the computer, sold on Walmart's website, reads

      "Note: Linux operating systems may not be compatible with some dial-up Internet services, such as AOL or Wal-Mart Connect."

      Hilarious! You can't by a Walmart computer over the internet with a Walmart computer.
  • *sigh* (Score:3, Informative)

    by tom taylor (610506) on Saturday July 12, 2003 @10:31AM (#6423523) Homepage
    Where else can you get a PIII-733 with graphics and audio for $180?
    Oh man, not another thread where we have to go through and total up the components until someone believes that PC prices have actually dropped since the X-box came out! Come on, someone get the calculator out :)
    • Re:*sigh* (Score:5, Insightful)

      by Anonymous Coward on Saturday July 12, 2003 @10:56AM (#6423615)
      Ok, build me a $180 computer.

      It must have at least:
      733MHz PIII
      5.1 channel surround sound audio
      GeForce 3 graphics
      64 MB RAM
      8/10 GB HD
      4 USB ports
      TV out and support for HDTV
      Ethernet jack
      DVD-ROM
      1 controller
      2 games

      I'll ignore the other parts of a computer (such as the power supply) as I'm sure you'll factor those into your equation.

      Now, assuming you can find a machine with all of those components for $180, let me know how well it plays games, DVDs, etc. Will it play games with the graphical qualities of Halo, JSRF, or Brute Force? Will I be able to hear such games in 5.1 surround sound? Can I watch DVDs on this machine with my HDTV (after some hacks to enable progressive-scan)? Will the machine be able to pump out DTS surround signals to my reciever like the XBOX can?

      I'm not saying you can't build a decent media computer for cheap, but I hardly think you should discount the power and capabilities (both before and after hacking) of the XBOX.
      • Re:*sigh* (Score:2, Insightful)

        by FunkyELF (609131)
        Agreed...I love my xbox. I love streaming divx from my PC to my xbox in the living room. I love playing emulators on it. I love borrowing games for 10 minutes and ripping them to the 120Gb HD that I put in it. I love how jealous everyone is of my xbox. I think its an awesome bargan for all of that, but everyone is saying $180 without including the price of the modchipo. Also....I don't think this graphics issue is completely valid for one reason alone. Yes is has awesome graphics on the TV but you ha
      • Re:*sigh* (Score:3, Informative)

        by dboyles (65512)
        Can I watch DVDs on this machine with my HDTV (after some hacks to enable progressive-scan)?

        This isn't exactly relevant to your post, but the Xbox is horrible when it comes to DVD playback. I have a 3+ year old Pioneer DV-525 that blows it away. I find the picture that the Xbox produces, even with component video and nice cables, is unacceptable for anything other than casual viewing. If I want to actually sit down and watch a movie, I'll use the DVD player. The Xbox is so bad, I considered returning
  • by mikeophile (647318) on Saturday July 12, 2003 @10:32AM (#6423526)
    We're embracing and extending the XBox.
  • Huh? (Score:4, Insightful)

    by Realistic_Dragon (655151) on Saturday July 12, 2003 @10:32AM (#6423529) Homepage
    I thought that the XBox selling costs covered variable costs (ie the parts in the box), and so even if it doesn't entirley cover the fixed costs (ie the factory) at low volume it will do eventually when enough units have been shipped has been reached?

    If this is the case then XBox Linux helps MS by raising the volumes (not to mention giving them better sales figures to lie about to their game makers).

    If of course they are selling below variable cost then well, count me in for loads of the things - I have no problems attempting to bankrupt the swine who injected cash into SCO to prolong their litigation.
    • Re:Huh? (Score:3, Interesting)

      by provolt (54870)


      If of course they are selling below variable cost then well, count me in for loads of the things - I have no problems attempting to bankrupt the swine who injected cash into SCO to prolong their litigation.

      While I agree that MS isn't my favorite company, I'm pretty sure that them selling a couple thousand XBoxes at a loss is not going to bankrupt Microsoft. The fact is most people buy games and MS makes some money. A bunch of people running linux on XBox won't change those numbers. If it was going t

    • It was my impression that the XBox costs MS $320 to produce (all costs). I could find no breakdown of the costs, but at any rate, MS has been trying to lower the manufacturing costs by selecting a second manufacturer [com.com]. The article would make it seem that the factory costs were variable if they went to a second manufacturer.

      As for parts costs, MS does have some leeway with their suppliers. As CPU prices drop, MS could possibly negotiate for a better price from Intel, but they've already pissed off nVidia [siliconvalley.com].

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  • Creativity? (Score:5, Insightful)

    by DragonMagic (170846) on Saturday July 12, 2003 @10:33AM (#6423535) Homepage
    So...

    They're all for innovation and creativity... but you should respect their own...

    Yet you can't innovate or create new items with their hardware that you PURCHASE, because they won't respect YOUR innovation and creativity.

    Sounds like they want their cake and to eat it, too.
    • Re:Creativity? (Score:2, Interesting)

      by mrBoB (63135)
      No no... remember that EULA you read and agreed to before opening the box? They are just licensing the right to _use_ the Xbox to you! BAH.
  • I get it now. (Score:2, Insightful)

    by Rosyna (80334)
    Microsoft is pressing charges against people that blatently point out their flawed business plan. When other companies sell "at a loss" it does mean they actually lose money, just that they don't get enough profit from it to make it worth it.

    And you know because it's MS they've never be able to fix all the exploitable (security) holes in the XBox.
  • Umm @ Wal-Mart? (Score:4, Interesting)

    by nurb432 (527695) on Saturday July 12, 2003 @10:39AM (#6423556) Homepage Journal
    You can get a whitebox for $200... Perhaps not *quite* as powerful, but close enough.. AND you get ports.. and no silly mods needed to run what ever you want..
    • Re:Umm @ Wal-Mart? (Score:3, Interesting)

      by Jeff DeMaagd (2015)
      I bought a used 500MHz Xeon workstation for $200, with 256k RAM, Firewire, USB, SuperIO, actual PCI slots, even three ISA slots for my legacy tasks, etc, in a better looking, albiet much larger, package, and the performance likekly easily nukes XBox. No reason to futz with mods and other crap.
  • To claim that they are doing it for price is a bit off. The people do it so that they can feel in some way they have gotten away with something. They are told that they shouldn't, then they do, and they gain bragging rights. They gain a tiny amount of control in a world that has little of it for the average perosn - they are briefly a David to the Goliath of Microsoft. The money isn't an issue.

    True, to get a PIII 733, a NVidia graphics card, etc etc for $200 is a good deal at first glance I suppose.
    Were I in the States, I could go to pricewatch and order me up some parts.
    PIII 733 by itself is $67, you figure you still need a motherboard and case, that is easily another $80 at least, and then you need the graphics card...

    But looking again, you can get a PIII 1G and the motherboard as a combo for $65.
    You can get a case for about $30. You can get the video card for about $80.
    So a better system for cheaper... and the thing is, that is only if you are still looking for the PIII, if you stepped up to an Athlon XP, you would then get far more processing power, and you would only be spending a little more.

    Granted, that doesn't help you if you have no clue how to put together a system, and you only have $200... but I have a feeling the type of person willing to hack a perfectly good game system, and then run Linux on it, is going to be able to put together a computer system on their own.

    In the end, I think the monetary reasons for hacking are non-existant, aside from those bad at math.
    It is the fun factor and the thumb-your-nose-at-MS factor.
    • Form Factor (Score:4, Insightful)

      by nurb432 (527695) on Saturday July 12, 2003 @10:45AM (#6423579) Homepage Journal
      its a bit more then 'because I can'.

      The Xbox is designed to 'fit in' to the entertainment center..

      Getting a pc small enough to 'fit in' would cost more then the average white box..

      And if its JUST for use for video/dvd.. why bother with building something that sticks out like a sore thumb anyway
      • Re:Form Factor (Score:3, Informative)

        by Jeff DeMaagd (2015)
        But XBox isn't a quality DVD player either. But then, there aren't any really good DVD player programs as they only read the DVD's progressive flags, they just weave or bob. Weave often gives you combing, and bob simply blurs the image on a bad flag or a video sourced image.

        For $200 one can get a real DVD player that reads 3:2 pull-down cadence and fixes it in real time. Or for $80 you can get a real interlaced DVD player that can at least read problem discs better and have better MPEG decoding.

        I did b
    • That situation sounds good, except you need to throw in a DVD drive and a harddrive. Also, whatever motherboard you have is going to be pretty old and not have an ethernet controller or decent sound. You'll probably need a scan converter to hook your vga output to your monitor too.

      I think it's silly for people to spend so much effort on a non-upgradable box(except the HD) but the money issue is there, and they want to, so let them play :)
    • Then, there's also the point that a good number of people who are buying it for hackery purposes are also going to go and buy X-Box licensed games. Why not; you've got the console anyway and geeks like games.

      This hard-nosed approach is a clever marketing move to play you X-Box hackers for rubes, I think. Not that it's like it's a bad thing to be taken advantage of this way; X-Box has a superior lineup of games and better hardware than the other systems out there anyway.

    • But looking again, you can get a PIII 1G and the motherboard as a combo for $65. You can get a case for about $30. You can get the video card for about $80. So a better system for cheaper

      You left out the CD/DVD reader - which the XBOX has - that pushes your homebrew box over the $200 mark.

  • by Greyjack (24290) on Saturday July 12, 2003 @10:43AM (#6423572) Homepage
    If all you want is a cheap PC, just get this [walmart.com] instead. Useable PC for $200, including keyboard, mouse, & speakers. Hell, they'll even ship you one with Linux (Lycoris) on it for the same price.

    Granted, it doesn't quite have the same graphics horsepower, but hey, it's cheap!

  • Reality Czech (Score:5, Insightful)

    by Asprin (545477) <gsarnoldNO@SPAMyahoo.com> on Saturday July 12, 2003 @10:43AM (#6423573) Homepage Journal

    They are requesting respect for their innovations, huh?

    IIRC, the whole idea was to take existing off-the-shelf PC parts that used an existing PC architecture and put them in a box that could easily mass produced with a very short time-to-market and an OS that allowed existing developers to leverage their existing skills.

    Hmmm... That sounds familiar... now where have I heard that before?

    Oh, of course! That's what made BG a gazillionaire in the first place! [about.com]

    I'm not against MS wanting to control a closed platform they developed, but I am insulted by their insistance that this is an IP issue. It's not an IP issue, it's a PP (physical property) issue. If they don't like people voiding the warranties on their hardware, they should have made their CDs spin backwards like Nintendo.

    • Well what I think that Microsoft doesn't get. That other people in retail do get. People want to find new ways of using any product beyond the ordinary specifications. This why people use screwdrivers as a file, or as a lever, although this may break the screwdriver, people will try it anyways because they dont want to pay for an other tool for a small job. Computer and software are tools just like a screwdriver. This fact is why a lot of people are stopping from using Microsoft products and switching
      • ...and best of all, with Linux, you can TRY IT OUT AND SEE IF IT'S GOING TO WORK BEFORE YOU LAY OUT THE CASH for the fully developed system!
    • If they don't like people voiding the warranties on their hardware, they should have made their CDs spin backwards like Nintendo.

      Actually, it spins from the outside of the disc to the inside, instead of from the inside to the outside.

      That said, you are absolutely correct. They were so concerned about leveraging existing developer skills and saving on the initial hardware design costs, but what they ended up with was an easily hackable, big, ugly, noisy console.

      At least Nintendo knows what a console is a
    • You are Insulted? How would you feel if you agreed to let a friend borrow your car and he decided that the fact that it was in his posession allowed him to sell it to the highest bidder or destroy it? Sure, he would be in posession of it, but that does not grant him the right to do with it whatever he chooses.
  • by Penguin2212 (173380) on Saturday July 12, 2003 @10:45AM (#6423577)
    "Microsoft is a company passionate about innovation and creativity. We are also very committed to respect for others' intellectual property and we request the same respect applied to our innovations."

    My response to quote, "How long have you worked for Microsoft?"
  • by Anonymous Coward on Saturday July 12, 2003 @10:52AM (#6423600)
    All evidence I've seen regarding Microsoft 'losing money on the X-Box' is related to dolts who think they can go to pricewatch.com and figure out what an X-Box costs to produce.

    Hey - jackasses - you're not Microsoft, and you're not purchasing millions of bits of hardware at a time. You aren't getting bulk discounts. You aren't making deals.

    Anyone have any actual evidence that Microsoft loses money on each X-Box?

    "My friend's second cousin's husband's acquaintance works for.." isn't evidence.
    • by Troed (102527)
      Yes. People who _work_ with analyzing these kind of things say that Microsoft lost money on the xbox back when it was $299. Parts have gotten cheaper (but not by much since they're special made now when they're old). Best estimates say that MS is still losing ~$100 on every Xbox.

      You could probably dig up a few links yourself if you're really interested.

      (There's also a popular myth saying _everything_ loses money on the hardware and gain it back on the software. It's wrong. Sony and Nintendo are both makin
    • Three words: Opening the XBox It's a book about, basically, all the decisions Microsoft made during the time they were working on the XBox. If that doesn't alleivate your doubt, I don't think anything will.
    • How about this [com.com]?

      $97m one year, $190m the next?
    • by DarkMan (32280) on Saturday July 12, 2003 @12:14PM (#6423914) Journal
      It comes from two sources. Firstly, standard practice in the console biz is to start selling the thing at a loss, with the expectation that you can optimise the production pipeline, so that you can make a profit on the boxes sold later. That's actually quite a specific price bracket, and is chosen to reduce the cost of entry, maximising profit from the system in totality (including game royalties). In effect, the hardware is being subsdised from the game royalties. Note that Sony started like that for both the PS1 and PS2, and now makes a small profit (I think it's around £20 a box) on the PS2.

      Second piece: The original market price of the Xbox, claims that they were not going to drop the price, and then the round of price cuts. That's circumstansial, but if they were not selling the boxes at a loss [0] after those steep cuts, I'll be very surprised.

      Interesting economics point: How many games does the average console owner have, per console? I'll take a stab at 4. Therefore, the correct thing to look at, from a business point of view, is not the profit per console - but the profit from console + 5 games. Me, I'd price the box so that the initial loss on the hardware is around the profit on 4 games [1]. Keep the initial cost's low, more adoption, and leach the money out of the customer base over time.

      Now, that's all well and good, but none of that says how much profit is made on each box right now , only what they would have done at launch (loss), and near the end of the xbox lifetime (profit).

      I'm going to accept that after the price dropped to 200, they were making a loss per box. They seemed quite forced into it, mainly by Sony, who had probably already improved the manufacture of PS2's, so they were not worried by the price cut.

      Do they make a loss now?

      Let me evade that for a moment, and discuss the development costs of the console. Aught they to be included in the 'cost' per unit sold? From a strictly business point of view - yes. You need to make back that money, before any profit is generated. From the 'does the manufacturer lose money on this sale' point of view - no. You can make the dev costs back from other sales. This complicates the whole question.

      Note that this is based on economic arguemnts, and this sort of anaylsis will applie to any sales model that has a buy in cost that is greater than the per unit cost (printers, razor blades etc).

      Let me link to a few facts: BBC: Microst loose $177 million [bbc.co.uk]. Note that that's from September last year, and is for 3 months preceding, off revenue of $1.28 billion

      Q4 2002 (CNET) [com.com] made a $348 million loss for the division.

      Next quarter (Q1 2003) [com.com] at CNET, and it's $190 million loss.

      And it's too early for Q2 2003 data (rember that we need by divisional break downs, not overall profits for this).

      So, they're definitly making a loss somewhere in their buisness, within the division that handles the Xbox. Is that on the xbox itself, or something else? [2]

      No one can answear that. Apparently [red-mercury.com] Mircosoft have confirmend that they make a loss on the hardware.

      I'll take a different take to the linked article. The initial launch price was $300. Assume microsoft get $7 per game (average of the 5-10 range), and that would put the manufacturing costs at $330, or so; consistant with the analysts estimates in the above link.

      They were forced to drop the price to $200 before they wanted to - I think that's clear. So suddently they were makeing over $100 loss per system. How much had they managed to reduce costs by? The above link trys to assert that they drop in lines with Moores law - that's crap [3]. My guess is that the cost is sliding down into the $220 to 250 range, based off the fact the M
  • by CrazyJim0 (324487) on Saturday July 12, 2003 @10:55AM (#6423610)
    Sounds like a monopoly trying to flood the market with cheaper goods to kill off the competition.

    Its actually the #1 reason monopolies should be controlled.

    Is anyone awake out there, or have we lost our rights?
  • by Homology (639438) on Saturday July 12, 2003 @10:58AM (#6423620)
    If MS respected other companies IP so much, why the following : (http://www.gnu.org.pe/resmseng.html)

    As an example, the condemnation by the Commercial Court of Nanterre, France, on 27th September 2001 of Microsoft Corp. to a penalty of 3 million francs in damages and interest, for violation of intellectual property (piracy, to use the unfortunate term that your firm commonly uses in its publicity).

    The link is to an english translation of the response by the Peruean congressman Edgar Villanueva to US pressure to abandon open source plans.

  • by Anonymous Coward on Saturday July 12, 2003 @11:00AM (#6423625)
    Fine Fine .. we won't copy Microsoft Bob.

    Sheesh.
  • by HisMother (413313) on Saturday July 12, 2003 @11:02AM (#6423631)
    > Microsoft is a company passionate about innovation and creativity
    Yep, sure. As long as their customers aren't being innovative or creative, they're cool. Big Bro... I mean Microsoft retains that right for himself alone.
  • by twoslice (457793) on Saturday July 12, 2003 @11:03AM (#6423633)
    That is where we want to go today!
  • by BasharTeg (71923)
    "Where else can you get a PIII-733 with graphics and audio for $180?"

    Right here:

    http://www.bzboyz.com/store/product4127.html
  • windows on the xbox? (Score:3, Interesting)

    by TubeSteak (669689) on Saturday July 12, 2003 @11:08AM (#6423647) Journal
    It might sound stupid, but has anyone tried putting windows on the Xbox? I realize running linux is a slap in the face to Bill Gates, but wouldn't running his own OS be much more useful to the majority of people? The only reason i can think of for not doing this is the limited RAM on the Xbox. It'd be interesting even to see a proof of concept.

    please don't flame

  • Where else can you get a PIII-733 with graphics and audio for $180?

    um, i don't know, ebay?
  • by vjzuylen (91983) <vjzuylen@hotm a i l . com> on Saturday July 12, 2003 @11:24AM (#6423708) Homepage

    The EFF's Fred von Lohmann made an interesting point in the article:

    "Others will say that this is about piracy and all that, but they forget that the principle of tinkering with the stuff that you own was the principle on which the entire personal computer industry was founded," he added. "This is basic business and basic science in the technology world and we think that this right to tinker, this freedom to tinker, remains legally protected."

    While I certainly believe in the right to tinker with an Xbox you paid for and use by yourself, I see a shady area when it comes to interaction with other (unmodified) Xboxes - like on Xbox Live. I'm talking about cheating here, but I think the same can be applied to use of compromised software in an online environment.

    Online PC games have been plagued by cheating players since day one, because of the ease with which their client software can be modified. Xbox Live does not have this problem yet (so far cheaters have been exploiting existing flaws in Xbox games), but I fear this will not last for much longer if easy, modchip-less Xbox hacks become commonplace.

    Which brings me to my point: just how far should your right to tinker extend? What if it interferes with my enjoyment of the product? Especially since I paid for the product too, and I'm using it for its intended purposes while you're not?

    This is one of the main concerns of many Xbox Live users like myself, and I haven't seen this issue addressed properly by either the media or the Xbox hackers. Can anyone enlighten me? How do Xbox hackers feel about this matter? Are they taking it into consideration?

  • According to Linux Journal, the xbox runs off a celeron processor. I also highly doubt microsoft is still taking a loss on manufacturing these things... the cost of hardware has been halfed since microsoft first introduced the system.
  • by Trolling4Dollars (627073) on Saturday July 12, 2003 @11:47AM (#6423816) Journal
    Microsoft sure has a funny way of looking at innovation. The original meaning of innovation is to take something that already exists and to find a new use for it. This is NOT what Microsoft does. They take something that already exists and use it in exactly the same way that someone else does or plans to and then renames it. (cough! Indrema) They've done this over and over, yet they claim to innovate. If they had it their way, they'd claim they invented the GUI too...
  • by Blackknight (25168) on Saturday July 12, 2003 @12:16PM (#6423924) Homepage
    I will respect their IP rights. I don't pirate MS software or anybody's else's software.

    However, MS has to respect that once you buy something, you have the right to do whatever you want with it. If I want to buy an Xbox and use it as a door stop, that's my right.

  • Prediction (Score:3, Insightful)

    by BillsPetMonkey (654200) on Saturday July 12, 2003 @12:20PM (#6423936)
    This is another example of giantkiller technologies like XML , P2P and Linux. The battle lines are still being drawn, but the core message is the same - businesses have to adapt to the new model, because it's not going away. Notice how PS2 modders have been pre-empted with PS2 Linux? That was no accident. That was just smart thinking from Sony (albeit rare). Wait until XBox sales start flagging, and watch the reins come off the modding community. I'm sure even Microsoft's CEO is capable of some smart thinking.
  • by jidar (83795) on Saturday July 12, 2003 @01:49PM (#6424300)
    The majority of Xbox linux users -also- buy Xbox software. I know that's how I do it. Splinter Cell and Halo are awesome.. so is Linux.
    The way I see it, I'm just a legitimate customer who found some uses for his hardware in addition to what the manufacturer intended.
  • by Anonymous Coward on Saturday July 12, 2003 @02:52PM (#6424572)
    "Where else can you get a PIII-733 with graphics and audio for $180?"

    Damn, I can do better with PriceWatch:

    $64 Soyo M7IWM/L Motherboard, Celeron 1GHz CPU
    $56 MGS Powered by ATI RADEON 7500 128MB SDRAM
    w/TV-Out+DVI AGP 4X/2X
    $20 MID ATX Turbo CASE W/ 230W ATX POWER SUPPLY
    ---
    $130

    Now add this $32 hotswapable 20 gig HD I found at HTC Net Store and for about the same price, you get a hard drive.

    Now, out of the U.S., this will be hard to do, but if you live in the Imperial Homeland, the argument that modding your XBox is cheaper than building your own PC does not fry.

    Note: I did not include links for two reasons: 1) every changes so fast, they would probably dead or misleading by the time you read this and 2), I ain't a sales person. Do your own searching.
  • by serutan (259622) <snoopdoug&geekazon,com> on Saturday July 12, 2003 @03:34PM (#6424720) Homepage
    Theft of Marketing Strategy Outcome! For God's Sake, we must be sure the definition of "intellectual property" prevents individuals from doing anything that disrupts a business plan. Come to think of it, it should be a crime to buy an advertised sale item without also buying two items at regular price. Theft of bait! Damn freeloaders.
  • by Geartest.com (582779) on Saturday July 12, 2003 @05:33PM (#6425120) Homepage
    In addition to the main article, the NYTimes also has a sidebar that describes the obstacles "bunnie" Huang faced trying to get his "Hacking the Xbox" book published [nytimes.com].

    Wiley Technology Publishing -- which often works with Microsoft to publish guides for Microsoft products, like the Xbox -- agreed to publish Huang's book then backed out, citing DMCA concerns, but says they would not ask Huang to return the advance they paid him.

    Unable to find another publisher, Huang self-published and began selling copies out of his garage. The Electronic Frontier Foundation then stepped in and helped Huang find a new publisher.

    There's more in the article, including some discussion about the chilling effect recent legislation has on intellectual freedom.

  • by snoopyjd (665929) on Saturday July 12, 2003 @06:24PM (#6425264)
    It seems to me that their strategy was to lower the price of the XBox to encourage more people to buy it, and it doesn't seem like they are losing money on the actual hardware (marketing, R&D, and other accounting matters may likely show a loss). Additionally, it seems like they have been trying to keep this debate going in the media and on the internet.

    Therefore, by giving their hardware praise and talking about how inexpensive it is I think a lot of people are unwittingly playing right into MS's hand. When people see these comments they are likely to buy the product and use it however they see fit, but will probably buy a few games, and maybe participate in on-line gaming. This is exactly what Bill is looking for.

    Of course such forward thinking and creative marketing may not have occurred to MS, but then again they did build a corporate empire based on a decision to lose money on their sales of DOS to IBM thereby encouraging millions of other users to lock themselves into their products. But then again I could be another MS spy sent to discourage people from hacking the Xboxes.
  • by Mulletproof (513805) on Saturday July 12, 2003 @07:08PM (#6425388) Homepage Journal
    "The reality is that if you could bypass Microsoft's operating system you would end up with a fairly powerful computer for less than $200"

    As self righteous [slashdot.org] as hackers can be over the XBox-Linux debacle, I don't know of a company in the world that slit their own throats like these fools expect MS to. I'm sorry, these people simply aren't living in reality [maxconsole.com].

    I've said it before and I'll say it again-- when a company has so much to lose by allowing the competition access to their product only a stoned idiot would consider this a good thing for their business, yet we have plenty of absolute fucking idiots crying that they somehow have a right to force MS into Linux compatibility when that God given right to Linux never existed. "It's a sad day for Microsoft" only because somebody got smacked upside the head with a reality check.

    Look, I like the hacks as much as the next guy. I'll be using it just to play the import Yukikaze [aquasystem.co.jp] (Movie; Cripes this game looks hot), but it just bugs the shit out of me when people insist on pushing their own little open source fantasies in places where reality simply doesn't allow for them.

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