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Xbox Warranty To Cost $1 Billion, Customer Good Will 158

Posted by Zonk
from the pricey-proposition dept.
An anonymous reader writes "The Financial Times reports that Microsoft will take a charge against profits of more than $1bn as it tries to limit the potential damage to its videogames business from a design flaw in the Xbox 360 games console leading to units failing." It's bigger even than that, though. Early this week the news was about Xbox Live's growth, but since yesterday the headlines have taken a turn. Peter Moore has admitted the company is shy of their goal, some 400,000 units short of the 12 million Xboxes they'd planned to ship. These facts combined have made for some grim questions, including the San Jose Merc's Nooch asking why you'd want to buy an Xbox in the first place.
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Xbox Warranty To Cost $1 Billion, Customer Good Will

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  • Good move (Score:5, Insightful)

    by nbvb (32836) on Friday July 06, 2007 @09:36AM (#19766429) Journal
    I'm not a Microsoft fan - not by a longshot (I've never - NEVER - used Windows at home. Went from DOS to OS/2 to Mac OS X. But I digress...)

    Anyway, this is a great decision on their part. It's nice to see that they acknowledge the problem and are willing to stand behind their product. Nothing negative about that. And they're going to reimburse people who've previously had the repairs done.

    This is a good thing, and I'll applaud them for doing the Right Thing (tm).

    Not that I'd buy an XBox (hell, all I have in the house is an Intellivision and a Dreamcast...), but it's still good to see them do what's right.
  • Why Buy A 360? (Score:4, Insightful)

    by Zonk (12082) * Works for Slashdot on Friday July 06, 2007 @09:41AM (#19766495) Homepage Journal
    I'm going to have to respectfully disagree with Nooch here. That's a really extreme viewpoint to take. Yes, these technical issues are pretty bad; I myself have returned my 360, though I only had to do it once before I got one that seems solid.

    That said, dismissing an entire console because of technical issues is pretty crass to me. Not only have there been several wholly worthwhile titles released for the system already (Crackdown, Overlord, plus tons of multi-system releases), but this summer, fall and next spring bear an avalanche of awesomeness. Bioshock, Mass Effect, that Halo thing, Two Worlds ...

    I guess I understand where he's coming from, but I feel reluctant to dismiss great games so casually. Ultimately, it all comes down to the games, and the 360 has some really great offerings.
  • Obvious answers (Score:5, Insightful)

    by Mr_Silver (213637) on Friday July 06, 2007 @09:41AM (#19766499)

    Peter Moore has admitted the company is shy of their goal, some 400,000 units short of the 12 million Xboxes they'd planned to ship. These facts combined have made for some grim questions ...

    Unless my maths are wrong, they're 3% shy of their target. Which doesn't seem to be too shabby.

    ... including the San Jose Merc's Nooch asking why you'd want to buy an Xbox in the first place.

    Ummm, because the Wii hasn't got the graphics capability of the XBox? The PS3 and the Wii combined don't have the half of the games portfolio that the Xbox has? That the online gaming for the Xbox is way ahead of the other consoles? That the PS3 costs double that of the Xbox?

    I don't own any console but this whole piece just seems to be pointless Xbox bashing to me.

  • by Control Group (105494) * on Friday July 06, 2007 @09:42AM (#19766501) Homepage
    MS may be late to acknowledge the issue - no later than I'd expect any major corp to be, but late regardless - but if retroactively extending the 90-day warranty to three years isn't a move to earn customer good will, I don't know what they could do that would.

    I mean, aside from shipping free 360s to every gamer on the planet...which seems a little unreasonable.

    I'm not one to throw out accusations of spin too often, but trying to present this as some sort of disrespect, slam, or screw job by MS seems a little unwarranted.
  • Good will (Score:4, Insightful)

    by DogDude (805747) on Friday July 06, 2007 @09:43AM (#19766517) Homepage
    Somebody doesn't understand what "good will" means. By voluntarily admitting to problems and accepting returns/recalls, they are increasing good will towards themselves. Not admitting to a problem hurts goodwill. I'm not buying an XBox 360 because I don't like them, but I wouldn't not buy one because of this recall/warranty stuff.
  • by svendsen (1029716) on Friday July 06, 2007 @09:43AM (#19766521)
    I'll be the first to say I under estimated the xbox 360 failure rate and will go eat some crow during lunch. When I am wrong I am wrong.

    So I wonder how MS will fix this? Yes they will fix the design flaw but I think their only next move is too replace all the 360s out there. Upgrade each unit by the next step up (core users gets premium , premium users get elite, and elite get a free game + a fixed unit).

    I am also curious to know if this move will bring a class action lawsuit against MS (I'm guessing yes) and if those with one can simply say I am returning this for full refund even if its 1 year later because it's a known design issue. Could I call up my credit card company and say the product I was sold was a lemon I want to reverse charges to *Insert where bought here*, etc.

    Now the Nooch article is just a troll. Why would anyone want the 360. Games buddy. Seriously he points to the ps3 as much better but doesn't offer a bench mark to compare them. Based on games alone (right now) the 360 wins. Want a built in blu ray then the ps3 wins.

    Either way MS is in some crap for this one. My 360 has not given me one issue yet this pisses me off.
  • Customer goodwill? (Score:5, Insightful)

    by vigmeister (1112659) on Friday July 06, 2007 @09:45AM (#19766547)
    Ok. Someone explain to me why this is going to COST MS goodwill. I purchased my Sony laptop explicitly because they were offering returns on their batteries based on a few isolated incidents (not sure if this was legally mandated). That shows that Sony wanted to pretend to do the right thing for the customer which benefits me in the long run. It makes perfect sense to buy an XBox360 if you thought that the price was right before the warranty announcement and fanbois are probably going to be happy about the warranty. Regardless of the high percentage of problems, most customers - >50% - still have a working system and if they do not, eventually will - for 3 years. If your PS3 dies after 15 months, you suck on it. Eventually, all that matters is the image and how much you think they will do in the future to keep that image up. And I think this is a + for MS in my book.
  • What again? (Score:4, Insightful)

    by LordPhantom (763327) on Friday July 06, 2007 @09:49AM (#19766589)
    I'm not a Microsoft fanboy.... and I likely wouldn't buy an XBOX on principle.... but isn't this headline a bit inflammatory?

    So Microsoft's sales projections are off 400,000 units on 12 million, suddenly the world seems less bright? They've made bucketloads of money (although the warranty extension might cause some trouble). The negative editorial linked in the article seems light on reasoning and heavy on opinion, but does all of this really warrant grim questions? It's not like the console or Microsoft is going to go under because they had to extend the warranty on the hardware. It's not like this thing is the Phantom or NeoGeo or something.
  • Re:What again? (Score:5, Insightful)

    by Tom (822) on Friday July 06, 2007 @09:52AM (#19766615) Homepage Journal

    They've made bucketloads of money
    That's the point. They haven't. The whole console branch is a loss leader. Less consoles means less games sold means less of the only part of the console business where there is actual profit potential.

    Yes, it's a major problem, especially for a company that is very used to exceeding their goals.
  • by Krinsath (1048838) on Friday July 06, 2007 @09:56AM (#19766665)
    I'm not terribly sure about that. Most people who were formerly mad at Microsoft will be mollified by the fact that they at least stepped up and admitted an error, no matter how long it took them to actually do so and that the money (if not the time) is being refunded. People, in general, are generally fairly tolerant of people who make mistakes when they A) acknowledge them and B) make amends for any injury caused. Microsoft is doing both, so I'm fairly sure that will build customer goodwill in the long-term. The people who look down on them for this were probably the people who would do so regardless, so why bother attempting to please people who aren't interested in being pleased? As far as "grim news" about the shortfall in 360 sales....a 4% shortfall? That's what 400,000 units of 12 million equates to. This is "grim"? What's Sony's shortfall on the PS3 at the moment? We won't mention Nintendo of course as they've been a runaway success by any standards. While I'm personally greatly annoyed by my 360 with the way it's clearly malfunctioning (play a game longer than an hour or two and I run the risk of the disc magically becoming "unreadable") but not badly enough to get it repaired under warranty, I still enjoy the platform. I do have to question some of the rather sensationalist headlines on this story though.
  • Re:Good move (Score:3, Insightful)

    by Araxen (561411) on Friday July 06, 2007 @10:04AM (#19766797)
    It's a good decision on the part, but they had to make this decision otherwise a Class-action Lawsuit was going to come sooner rather than later now.

    This still doesn't address the fact that the 360 has a faulty design! I don't know about anyone else but every console system(pretty much anything to hit the market) I have owned is still working today minus an Atari Jaguar. I expect when I buy a system for it to work the life of the console on the market. The Xbox 360 is going to be around more than the 3 year warranty. The 360 has a life of at least 5 to 6 more years. 3 year warranty is nice but doesn't cut it with the design flaw the 360 has.
  • by Taulin (569009) on Friday July 06, 2007 @10:09AM (#19766869) Homepage Journal
    My 360 went bad, but the return process MS has setup is so painless and quick (same week deliver and return), it didn't bother me. My Wii and 360 together cover all assets of console gaming, and I love them both. I would get a PS3, but all the good games for it are also out on the 360, so I don't see a reason yet. I can see how all the news of tech problems could deter someone from getting one, but if they are mild to high level console player, they are really missing out.
  • Such Bullshit (Score:5, Insightful)

    by ObiWanStevobi (1030352) on Friday July 06, 2007 @10:15AM (#19766943) Journal
    Never had any trouble with the PS2, yeah right. I've had the same disc read errors with that that you eventually get on any machine.

    Anyway, what is the reason you buy any console? It's the games. I don't buy a console to play music, watch video, or IM. I buy one because I want to play the new high end games and I cannot afford the bleeding edge of high-end PC gaming. Yeah, the Wii is fun for minigames, but not even in the same league as PCs, 360, or PS3. To suggest that it is an alternative to them is totally bogus. I have a Wii that is a lot of fun with company, but not much fun otherwise. It has weak graphics, and it's games by and large have very little depth. It provides a gaming exerience much different than that of the other consoles. For those that want graphics, depth, and powerful AI, the Wii is no substitute.

    Why buy a 360? Once again, it's the games, and the cost. Want to play Halo 3, you're going to need a 360, or ruin your powerful PC with Vista. That's a no-brainer. Want to play Dead Rising, Ace Combat 6, Gears of War, Mass Effect, Forza 2, Bioshock, etc.? You're gonna need a 360 for most of them, or PC with a graphics card that costs more than a 360.

    The PS3 seems to have plenty of power, but no games to really take advantage of it. Oblivion is the best game the PS3 has, and it plays just as well on the Xbox, and even better on the PC. Other than that, the PS3 has a long list of lackluster titles. With better titles, the PS3 would be a better system, but it keeps missing out on exclusives that really hurt it.

    Finally, you have online service and achievement points. Being able to see all your friends on and invite them into a game while they are watching a movie or playing another game is pretty cool, as well are the game demos and extra content you find on Xbox Live. And although you would think those achievement points are just a gimic, and they are, they are a very compelling one.

    The 360 has the games and online. Until PS3 can at least come up with some good games, it is a high-priced movie player. If you can afford PC gaming at that level, neither console is appealing.

  • by Cutriss (262920) on Friday July 06, 2007 @10:30AM (#19767149) Homepage
    Why fix all the units? Why not just fix the broken ones?

    True, I'd absolutely love for Microsoft to upgrade me to an Elite for my trouble, but those things use a whole different motherboard. You think MS is going to just chuck all 10M existing units in the trash for the asking? That would cost them a lot more than $1.15B.
  • by Aladrin (926209) on Friday July 06, 2007 @10:32AM (#19767163)
    Because to do so, they have to admit that they were denying the problem in the first place. There were shops that were refusing returns and telling the customers to go directly to MS for repair because MS wouldn't take any more returns from the shop, stating they didn't believe there could be that many bad consoles.

    That's good customer service, yeah!

    So as a consumer, how should I see this?

    A) No worries, it won't happen to me!
    B) It's okay, I'll only be without my console for a week to a month or so.
    C) Microsoft only admits problems once the become a PR nightmare. If I buy their next product, I'd best be sure to wait until it's stable.

    People are -already- doing C with their software products. 'Wait for SP1 before you buy Vista.' etc. MS even recently told people NOT to do that specifically, admitting that it's a known action people are taking.

    How much more will it take before people just start referring to MS as the 'wait before you buy' company?

    No, there's plenty of 'customer good will' lost here. The only way to engender good will is to be proactive, no reactive. (ie: Don't wait for 1/3 of your customers to complain before believing them.)
  • Profits. . . (Score:3, Insightful)

    by Anonymous Coward on Friday July 06, 2007 @10:46AM (#19767353)
    Um, is anyone else wondering how the 360 will ever profit given how much money the XBox project has already burned? I would never buy a product which wasn't designed to make money off of me because any alterior motive for a company to give me a product I don't trust. How many thousands of dollars has Microsoft spent on each XBox/360 owner? It's like a rich dork courting an amazing girl - throwing money all over the place for her and not giving a shit that she's using him for $$$. How does this benefit the rich dork? He makes her depend on him and marry him and write a prenumpt to keep her around.

    Now more than ever the Microsoft assimilation jokes should be going on but apparently everyone's okay with Microsoft being devious as long as it's in the name of Halo. You don't burn money like they are without the goal of monopolization. Microsoft has done nothing but exploit the weaknesses of capitalism and the people who are aware of it aren't nearly as vocal as they should be. This is why they have their Windows monopoly, their Office monopoly, and why they have a chance of monopolizing "home entertainment." It's because the Slashdot geeks who are supposed to be boycotting this shit and supporting non-evil (yeah, I said evil) alternatives are too busy playing Halo on their 360 or Half-Life on the Windows PC.

    It doesn't piss me off when Joe-Shmoe-I-don't-know-a-HardDrive-from-HighDefini tion buys a Microsoft product because he's an uniformed consumer. It pisses me off when someone who knows how fucked up Microsoft is buys their products anyway. You make assimilation jokes then jack yourselves in.
  • Re:Good move (Score:3, Insightful)

    by twistedsymphony (956982) on Friday July 06, 2007 @11:14AM (#19767731) Homepage
    Well they have fixed/will be fixing most of the design flaws

    They've added a much improved heatsink to the GPU [xbox-scene.com], They've reinforced the PCB around the processors to keep it from warping [llamma.com], and they should be pumping out the 65nm chips any day now (for all we know they already are).

    It will be much less costly for them to actually fix these errors than to pay for additionally two way shipping and replacement of 1/4 to 1/3rd of everything they produce.
  • Re:Why Buy A 360? (Score:2, Insightful)

    by Anonymous Coward on Friday July 06, 2007 @11:25AM (#19767929)

    I'll bite:

    * Microsoft has no solution to the hardware failures - system bought this month are still failing

    Their solution is the warranty program and hardware changes (maybe heatsinks [joystiq.com], maybe something else) will undoubtedly show up soon. The financial onus is now squarely on Microsoft to reduce hardware problems.

    * Microsoft has no solution to the disc scratching problem - you aren't covered under this billion dollar's worth of repairs for anything other than the specific RRoD problems

    But you would be covered under the 1-year console warranty. I've known someone who this specific issue applied to and got it fixed.

    * The system is the loudest ever due to the crappy 12x speed DVD drive and fans

    No argument there.

    * Forced to pay 50 dollars a year for online play that adds 250 dollars to the price of the console over five years

    And it adds 500 over ten years and 5000 over one-hundred years. Look, multiplayer isn't free, but you aren't forced to pay for it, and you aren't forced to pay up front. All other online services are free to other players.

    * No dedicated servers - laggy games that aren't even hosted by Microsoft

    The entire system is managed by Microsoft and has an impressive track record. Games might be peer-to-peer, but I've never seen lag and voice chat works in every 360 game I've played. What kind of connection do you have?

    * Low player count games - Gears of War only could handle 8 players, Halo 3 can only handle 16 - that is pathetic in 2007

    How is that an indictment of Microsoft or their console? Neither developer has said that Xbox Live was a restriction for multiplayer match size.

    * Halfassed backwards compatibility - Microsoft tried to get away with skipping it and they were forced to put in an amateur effort where even the games that 'work' don't really work or have major issues

    I found their advertising fairly clear on this. While I wish all games would work, 90% of my old Xbox games work fine. Go read the compatibility list [xbox.com], it isn't small. This becomes less of an issue as the system gets older.

    * Absurd peripheral prices

    Whose [ebgames.com] aren't? That hardly sways me from one console to another.

    * No ability to upgrade the harddrive - you are forced to only upgrade to one size drive and you have to pay twice as much money as it's worth

    That might be the only accurate thing you said, but again, you aren't forced to upgrade. You aren't even forced to use the HDD at all.

    * No HD movie playback - Microsoft decided to throw a tantrum over BluRay's Java layer and gamers lost out

    The 360 has the best downloadable HD movie option available at the moment. It also has an HD-DVD drive option, which isn't standard, but the 360 costs $200 less than a PS3 anyway. I don't feel limited by the lack of it.

    * Pathetic storage medium - the 360 is the first console to ever have LESS storage than a previous generation - 7 gigs for the 360 versus 8 gigs for the Xbox. And open world games have to use only a single layer due to the 100 ms layer switch penalty thus limiting games like GTA to only 3.5 gigs

    I've never heard of this. Oblivion seemed pretty expansive to me, I'm so sad for GTA's worries.

    * Botched graphics system - can't handle 1080p in real next gen games like Lair on the PS3 due to the retarded 10 megs of EDRAM that were designed for 480p

    You are starting to show your true fanboy. The 360 can output in 1080p and was designed for 720p, which it looks great at. Check out the 360 to PS3 graphics compariso [eurogamer.net]

  • Re:Why Buy A 360? (Score:3, Insightful)

    by despisethesun (880261) on Friday July 06, 2007 @11:42AM (#19768219)
    A large percentage of those games are coming out for PC and PS3 as well, so technical issues are a valid reason not to buy a 360. People don't buy consoles just for the games, they buy them because it's supposed to be a hassle-free gaming experience. No wondering if you have the right video card for the game you just bought, no settings to muck around with to get the best framerate, no upgrade treadmill (or at least a severely reduced one), you just pop in the game and it works. If that ceases to be the case, then the lack of 360 exclusives really begins to work against it. I've wanted to get one for some time now, and I'm glad I held out considering all the technical issues and the high failure rate. When MS gets that all sorted out, I'll consider picking one up (assuming I don't have a PS3 by then).
  • Re:What again? (Score:3, Insightful)

    by despisethesun (880261) on Friday July 06, 2007 @11:53AM (#19768431)
    They expected to sell 12 million 360s by now too, and they just admitted they failed there (though not by that much). I'm not saying it's impossible for them to make a profit, but given the incompetence shown so far, I wouldn't bet on it.
  • Re:Profits. . . (Score:2, Insightful)

    by Alexpkeaton1010 (1101915) on Friday July 06, 2007 @12:26PM (#19769029)
    No where in that incoherent babble of a comment did I see anything relating to logic or common sense. They sell you a console, and then sell you games for it. They also sell you a subscription to play on a closed online network which offers both free and paid content. What the hell is wrong with this? When the consoles break they extend everyone's warranty and fix everything for free. How is that evil?

    Even if Bill Gates bought and sold virgins on the black market Sony would still be 1000000x more evil than MS just because of Sony BMG. And the reason why MS is kicking the snot out of Sony is not because of a "monopoly", it is because Sony arrogantly was not willing to pay for 3rd party exclusives, while MS was.
  • Re:nope (Score:5, Insightful)

    by badasscat (563442) <basscadet75NO@SPAMyahoo.com> on Friday July 06, 2007 @01:10PM (#19769687)
    Um, isn't the console still losing money. I read that MS was aiming for Gaming to be profitable in FY08. With an extra billion dollar hole to dig themselves out of, it might take an extra year, or two to get back to even for them.

    It's going to take a lot longer than that.

    Before this announcement, they were slightly more than $5 billion in the hole on the Xbox and Xbox 360 together. Now they're approximately $6.5 billion in the hole.

    That's a huge amount of money. That's like an entire year's worth of MS Office sales (not profit, sales).

    What they're talking about in FY08 is profits going forward. But the Xbox program will not be profitable on the whole for many years, if ever. And it won't even be profitable going forward if stuff like this keeps happening.

    What I think is 'odd' [which applied to MS means I think they are lying] is that there was no "pattern' to these XBOX 360 failure for 1.5 years, but one finally appeared in the last 0.25 years. This would make sense IF only a limited batch of them were faulty, but MS extended the warrantee for all 360's, and not just for a batch of 360's within a range of serial numbers.

    It must be a design flaw, which the article summary got right (this is one of the few sites I've seen with the guts to say it).

    Look at it this way. A certain number of units of any piece of electronics are always going to be defective, no way around it. The average is 5%.

    MS is now tacitly admitting that their defect rate is well above 5% - for it to cost them $1.3 billion with only 11 million systems out there, the defect rate must in fact be close to 100%. But even if they're counting on fixing some more conservative number of systems - say 30% - that's still well above the industry average. However you look at it, they're admitting to an "unacceptable" number of defective units, and that can only happen if there's something about the design that's causing it to happen.

    What that means is that all Xbox 360's are at risk. It doesn't matter when you got yours; it has RROD potential today, tomorrow, and every day after that. That's the case because all 360's are designed the same way - there hasn't yet been a significant change.

    I am curious to see what the 360's made after this announcement look like, side by side with a pre-announcement system. If there is no change, then I think it's safe to say the flaw still exists - and I sure wouldn't buy such a system. If there *is* a change, though, then I think we'll have a clearer idea of what the flaw was... but it'll still take time to know whether or not the fix was effective.

    Either way, I'd put off buying a system for at least six months at this point. Let the old units work their way through the system, wait for the new units to prove themselves.
  • by tb()ne (625102) on Friday July 06, 2007 @01:31PM (#19770009)

    Because they are not doing it out of good will but for damage control (e.g., to avoid class action). Plus, it makes it known that they were bullshitting when they repeatedly claimed that the 360 doesn't have a higher than normal defect rate [mercurynews.com]

    As for warranties, I'd much rather have a 15 month warranty on a product with about a 1 percent defect rate than a 3 year warranty on one that has a defect rate that is somewhere less than 50 percent.

  • by BobMcD (601576) on Friday July 06, 2007 @01:40PM (#19770125)

    Adding a warranty program this late in the game does hurt them, at least a little:

    1) Denial that there is a problem is no longer an option. There is a problem, and it isn't small or isolated. It is significant enough to cost MS billions of dollars.

    2) Everyone who stood up and agreed with MS that there was no problem is now outed as being wrong. Not that this a HUGE deal, but lets wait and see if those same folks stand up for them again any time soon.

    3) They face stiff competition from two other console vendors that aren't having these types of problems. And lets face it, everyone has only one favorite console. Xbox360 is likely to have lost that spot on more than a few gamers' lists.
  • Re:Such Bullshit (Score:2, Insightful)

    by wezeldog (982156) on Friday July 06, 2007 @03:06PM (#19771343)

    I'd mod insightful, too, but let's not get carried away.

    To the anecdotes!!!

    My first PS2 is still going, maybe not as strong. I have 6 year-old and we've left it on for days for certain games that have crappy save points. I got a 360 for Christmas for said 6 year-old. I couldn't land a Wii and the wife said Santa had to come through with something. The punk was interested in Viva Pinata and it was a hit. I played the wheels off of Medal of Honor 2. Other than the Live Arcade, there ain't a whole lot of family friendly games on the 360 that aren't re-hashed licensed property crap that is available on other consoles.

    Santa shelled out some cash for the 360. Want WiFi? Add 100.00 unless you go the Buffalo Wireless Adapter route. Hard drive? An amazing 10GB for you to download Strange Brew to. So it may be a wash after accessorizing a 360 to PS3 specs. And it looks like BluRay is winning. To be fair, I just watched Roger Corman's The Fantastic Four, so fidelity doesn't matter to much to me, either.

    I also had to return my 360. This with the knowledge that we can't leave it on for hours at a time, like the PS2. Yes, it was a quick and fair process. I got letter back saying, in effect, 'Dear Valued Customer, the unit you sent in was completely boned. Here's a new one. Thanks for flying.' Goodwill? After 6 months, the thing should work.

    I understand the online success. I download demos, full games and trailers. Achievements? Meh. Seriously. I once ate the filling out of ten twinkies. Does that count?

    Games. Since the punk got a 360, I pre-ordered Mass Effect in December 2006. (Disclosure:Bioware fanboy). ETA, Jan 2007, no Mar 2007, No Jun 2007, how about Sept 2007? No problem. Bioware is not going to ruin their name, but Mass Effect was announced with the 360. Yeah, the 360 has some good games, but when I go to EB Games or Blockbuster, it seems like the 360 aisle should be longer for a console that has been out so long.

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

    by Blakey Rat (99501) on Saturday July 07, 2007 @12:23AM (#19776891)
    Um, is anyone else wondering how the 360 will ever profit given how much money the XBox project has already burned? I would never buy a product which wasn't designed to make money off of me because any alterior motive for a company to give me a product I don't trust. How many thousands of dollars has Microsoft spent on each XBox/360 owner? It's like a rich dork courting an amazing girl - throwing money all over the place for her and not giving a shit that she's using him for $$$. How does this benefit the rich dork? He makes her depend on him and marry him and write a prenumpt to keep her around.

    This is a common tactic used to bash the Xbox, and I have a simple response to it:

    Why the hell should any consumer care about the profit margins of the products they buy? Seriously, what difference does it make when I buy a toaster whether or not the toaster maker is pulling in a profit or not? This is not even in the top 10,000 things I look for when buying a product, whether it's a game console or anything else.

    If you're to the point of arguing that the Xbox is a bad product because that weak-ass reason then just give up, ok? Save us all a bunch of time.

    Now more than ever the Microsoft assimilation jokes should be going on but apparently everyone's okay with Microsoft being devious as long as it's in the name of Halo.

    And how exactly is Microsoft being devious? They say it costs $400, you go to the store and pay $400 and you have one. I see no scheming or dishonesty there.

    Microsoft has done nothing but exploit the weaknesses of capitalism

    Really, I thought they were in the business of creating and selling computer software and related hardware. The very fact that the Xbox exists proves that they do more than 'exploit the weaknesses of capitalism.' (I think you were thinking of Enron or perhaps the RIAA when you came up with this little gem of an argument. In fact there are tons of companies that exist only to shuffle paper around and never produce any products, but Microsoft ain't one of them.)

    This is why they have their Windows monopoly, their Office monopoly,

    It's unthinkable that they might have these monopolies because they had a better product than the competition?

    It's because the Slashdot geeks who are supposed to be boycotting this shit and supporting non-evil (yeah, I said evil) alternatives are too busy playing Halo on their 360 or Half-Life on the Windows PC.

    Maybe some Slashdot geeks don't think like you do. Again, it's unthinkable that people might independently come to their own opinions instead of entrusting the anonymous coward who unilaterally declares their favorite past-time "evil"!

    It doesn't piss me off when Joe-Shmoe-I-don't-know-a-HardDrive-from-HighDefini tion buys a Microsoft product because he's an uniformed consumer. It pisses me off when someone who knows how fucked up Microsoft is buys their products anyway. You make assimilation jokes then jack yourselves in.

    It's a free country, I'll buy whatever game system I like. Even if I didn't like my Xbox, I'd half consider buying one now just to spite you-- nothing entertains me more than pissing off geeks like you who can't do anything but engage in spit-flying lectures on how evil Microsoft is.

    Also: No I don't make assimilation jokes; I have a better sense of humor than that.
  • by anduz (1027854) on Saturday July 07, 2007 @09:31AM (#19779299)
    I didn't buy an xbox 360 because I'm a fan of xboxes or microsoft and somehow hate everything else, I bought it because I took a good look at the upcomming games for all consoles and the one to carry the most that I wanted to play was the xbox 360. Some of those games are comming for pc or ps3 aswell, but some like Mass Effect aren't (in a good long while anyways) and there is something to be said about sitting in your comfy couch playing with a nice controller. But if any of those games I favor were comming out for the ps3 and not the xbox 360 I'd have gotten that instead. Those brand doomsayers and fanboys should get a grib on themselves and reality if you ask me, all the freaking brands exist solely to cash in on us and why on earth do you want to be a fan of that?

    Microsoft went too cheap this time and now they have to make amends, but so what? It's not like Sony or Nintendo couldn't be the next in line for that since they all do things like it if they believe they can get away with it and still have happy customers.

  • Re:What again? (Score:2, Insightful)

    by Allador (537449) on Saturday July 07, 2007 @06:40PM (#19783569)
    Note that they dont strictly have to make that 3B back again, as the XBox franchise is a tremendous corporate asset that has tangible value in and of itself and its immediate P&L.

    MS is smart about these things. They're selling an integrated ecosystem of products. Selling lots of XBoxes means lots of people creating games for the XBox. Creating games for the XBox means you're 80% of the way to creating the game for a PC (or vice-versa). So this grows the windows franchise as it tends to expand the games industry (more games = more windows buyers).

    Same goes for XBox live. They get advertisers for XBox live, so the more xbox players they have, the more xbox live users they have. So more money for advertisements, more money for cross-product tie in (selling other stuff through xbox live).

    And it just goes on like that.

    MS is in the community & ecosystem business. They can sell some types of products at break-even, if it grows the whole ecosystem, as it then sells more windows & office products.

    MS is very savvy about this stuff, and it allows them to create network benefits off of products/divisions that dont make a huge amount of money in and of themselves.

    Not to mention there's going to be a certain amount of just raw, tangible assets (capital, talent and otherwise) in the xbox divisions that just makes the MS corporation more valuable.
  • by LKM (227954) on Monday July 09, 2007 @05:17AM (#19797717) Homepage
    And in 5 years, you won't be able to play these games anymore because your 360 is dead, and Microsoft either leaves the console market or releases the 720 with broken backwards compatibility.

"In matters of principle, stand like a rock; in matters of taste, swim with the current." -- Thomas Jefferson

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