MS has nothing to compare with in it's history. it is it's first
Its losing money. Anybody but micro$oft would have gone broke with this.
This is like like the .com fever ... when it was more important to have
hype, style, and cool products than it was to have boring things like
profit... or even revenue.
Microsoft is "doing decently well" because businesses so tied to
microsoft they're in a situation where they buy thousands of "Client
Access Licnenses" so that the software they bought for one computer can
legally talk to the software they bought for another computer. And they
can't get out of it because switching vendors is even more expensive.
I think those who've brought up MS losing money on the XBox make an
excellent point. They can't just keep losing money on it forever and still
please their investors.
I was mainly thinking 'perception-wise' in terms of Sony being on top with
Xbox in second place and GameCube in third.
More hype. The company is profitable. Period. In 'the real world' that's
all that matters.
I think they are profitable because of their GameBoy business. It seems
(from the articles which I've read including statements from higher-ups at
Nintendo (I don't have any links handy)) that the GameCube is thought of as
a bit of a blunder on their part. They seem to be saying things like, "How
do we not make the same mistake next time?" (which is good - it's a
realization that they have goofed this one up a bit.)
From 90%+ with the NES they really only had one direction to go. Sure
Sony has won this round, everybody agrees, but all three are poised for
the next round. Its far too early to call a winner for the next round.
Maybe it'll be Microsoft... maybe its their turn in the sun... but
consoles aren't like operating systems or office suites, they get
replaced wholesale every few years and the next round after that is
anybody's grab.
While the 'once on top' statement does have merit, I still think that there
is something to being associated with creating losing products. The NES was
when they were on top (forgetting GameBoy for a moment). With the SNES, N64,
and GameCube, they've seemingly screwed it up just a bit more each time.
I think Atari is a good example of this. They had their huge success with
the 2600. The 5200 was a dog, sales-wise, and the 7800 was even worse. They
then try to re-enter and bring out the Jaguar in the mid-90s. I think the
people associate Atari with failed machines and thus stayed away from the
Jaguar. They'd more likely go with a Nintendo or Sega over it because of
Atari's past failures. It's no fun owning the machine that was left behind.
People see that and avoid buying a machine that they will feel left behind
on.
And again profitability rears its ugly head. We all know Nintendo was
making more per title than MS. So even if MS outsold 2 titles to 1 its
possible Nintendo walked away with more cash from it.
Sooner or later MS is going to want to run XBOX like a business, with
profitability expectations. When that happens it will be a much more
interesting environment.
I think you (and others) have made excellent points in regards to MS and
their sales and profitability (well, with regards to their video game
division).
Have a great week!
Brad
