Who is Really Winning the Console War?

[midrael]

1-Up (http://www.1up.com) has a new editorial (http://www.1up.com/do/feature?cId=3147953&did=1) on what it means to win or lose in the console war and whether such terms are even relevant.

You can certainly lose at business, but outside of the occasional Fortune magazine ranking there's really no such thing as "first place," and you don't get a trophy at the end of the race. A company "wins" when its shareholders and investors see a healthy return on their cash at the end of the fiscal year, when earnings match or exceed projections.
Regardless of what the intentions of the 1up editors may be, I thought it was an interesting read and certainly helpful for keeping perspective regarding the big three.

[Rakael]

Damn, beat me to it. Good read.

[Vermillion]

Obviously written by someone at Sony, knowing full well they are going to finish second and are attempting to tell everyone that first place was overrated to begin with.

*dawns fireproof gear* FLAME ON! :)

[Yeti2005]

You know who wins the console wars? We do...the gamers. Sony, MS, and Nintendo are all trying to get your hard earned dollar whether it's through the use of an innovative controller, an amazing online platform, or new HD movies. Their competition is good for us.

[Ailer]

You can certainly lose at business, but outside of the occasional Fortune magazine ranking there's really no such thing as "first place," and you don't get a trophy at the end of the race. A company "wins" when its shareholders and investors see a healthy return on their cash at the end of the fiscal year, when earnings match or exceed projections.

Wouldn't this mean Nintendo is the only winner, since they are the only ones to see the black?

[Kelegacy]

In fact, it looks like the only losers here are those gamers who get so hung up on numbers and bragging rights that they forget how to enjoy all the great games these companies keep churning out. Seriously, guys -- it totally sucks to be you.

I know many people here that are guilty of just this.

[Cha-Ka]

My console could still beat up your console! :P

[Mozgus]

Awesome article. So 1up doesn't have to suck all the time, then? Impressive. Definitely ganna be handing this link out to any chode that gives me that Nintendo is Doomed attitude again.

[Roc Ingersol]

Something about [Group Identity] seems to foster a severe all-or-nothing mentality in [people]
I went ahead and generalized that, So we can all save time.
Political parties, religions, all manner of consumer electronics, etc.

It's all the same.

[bapenguin]

Wouldn't this mean Nintendo is the only winner, since they are the only ones to see the black?

Someone didn't read the article. :)

Anyway good read. The truth is we know nothing about the business world of these companies. They are multi-faceted companies with endless amounts of employess. They see a lot more than we'll ever see in the business operations of this stuff. Lets just be glad we have choices for our games.

[MaiXu]

If that's what makes a winner, then I guess Nintendo in winning, since they're making shitloads more cash on games alone than either MS or Sony. Yes, I know Sony and MS both have myriad other sources for income, but when it comes to profitability on games, Nintendo is in the lead.

[Ailer]

Someone didn't read the article. :)
So very true....

[dotbomb]

Nintendo's had exactly one money-losing fiscal period since going public nearly 45 years ago, and that was three years ago.

That's impressive.

[Murmillo]

I think the term of "winning the console wars" deals with us gamers. We win when the console we own gets the most games. So when console A has 10x the games of console B, console A (for the gamers) won the "console war."

[Citizen Philip]

Bipartisan goverment begets bipartisan people, which fabricates a mythical war.

That doesn't exsist.

Have Fun!

[Kamalot]

In Japan, DS is winning the Console war.

http://kamalot.blogspot.com/2006/02/analysis-of-system-expectations-2006.html

[MaiXu]

Bipartisan goverment begets bipartisan people, which fabricates a mythical war.

That doesn't exsist.

Have Fun!

Buuuuuuuuuurrrnnn! You are the insult master!

/agreed

[MosBen]

The idea of winning and losing may be useless, but too often people are unable to separate that pointless debate from pointing out when something goes well or poorly for a company. Regardless of whether you can even win or lose the console wars, it's certainly valid to talk about how Nintendo selling the least home consoles in a generation isn't a good thing. Is it their doom? Of course not, but would they prefer to have sold the most home consoles? You betcha. And obviously, I could do this with either of the other big two.

My point is that while the idea of "winning" may be rediculous, that doesn't negate the validity of discussing the ups and downs of the industry.

[askheaves]

Capitalist Economics is not a zero-sum game. Both sides of a fair transaction profit, competition is good for consumers, weak companies adjust or die in a market.

Don't worry. In 100 years, there will still be video games.

[01010]

Don't worry. In 100 years, there will still be video games.

The way we're heading we'll be lucky if the human race exists in 100 years.

[Dafizman]

I think the term of "winning the console wars" deals with us gamers. We win when the console we own gets the most games. So when console A has 10x the games of console B, console A (for the gamers) won the "console war."

Not when they all suck. Oh, excuse me, all but 3 or 4 suck. Hope you like "Popular Sport Title This Years Edition".

[carneconcarne]

Nintendo Wins! :)

[ZeroTactics]

Gamers are the real winners in the end. They get a bigger bang for their buck. More games on a console, better software developpement and bigger titles always means 'winning'. But 'investors are the winners' ? Investers are old poops at the other end of the world that use an agent to buy shares accross the globe so they don't give a sh*t about the 'quality' of games. And the biggest loosers are the people in the industry. We have to develop on multiple consoles that don't even work the same way for a pretty average salary while duking major overtime to have the best game possible so that gamers have fun, not to please investors.

[trip1eX]

Well Nintendo is the only one I'd consider investing in if you only valued each company's videogame business. Maybe Sony too I don't know much about them. I know they've made money tho.

The xbox tho is like a dot.com business ain't it? You know bleeding tons of cash with the hope of it paying off somewhere down the line. They've lost $4 billion plus and if you consider that they could doubled that $4 billion in 5 years if they'd invested it at 15% interest a year then they are $8 billion in the hole.

[president_fred]

The way we're heading we'll be lucky if the human race exists in 100 years.
<puts on tin hat> The world will end in nine years! We are doooooomed. DOOOOOOOOMED (http://chill.vault9.net/forums/lofiversion/index.php/t23475.html)
</takes off hat>

[Watership]

Well Nintendo is the only one I'd consider investing in if you only valued each company's videogame business. Maybe Sony too I don't know much about them. I know they've made money tho.

The xbox tho is like a dot.com business ain't it? You know bleeding tons of cash with the hope of it paying off somewhere down the line. They've lost $4 billion plus and if you consider that they could doubled that $4 billion in 5 years if they'd invested it at 15% interest a year then they are $8 billion in the hole.

You know, Microsoft threw cash at xbox to make it work. Nintendo has 20 years of experience, Sony has over 10, and more if you count their work with Nintendo earlier, and MS has 5. 5 YEARS of making a console. and they're #2. That's impressive. They created a 3rd console in a market that said there could only be 2.

They also did it with the tainted reputation that Microsoft has. Nintendo has 20 years of love and respect from their fans who will purchase the Gameboy Advance 3 times in a row, and love them for putting Mario tennis out. MS had nothing.

4 billion well spent.

[Zanzibar]

The xbox tho is like a dot.com business ain't it? You know bleeding tons of cash with the hope of it paying off somewhere down the line. They've lost $4 billion plus and if you consider that they could doubled that $4 billion in 5 years if they'd invested it at 15% interest a year then they are $8 billion in the hole.

Remind me to not hire you as an investment planner.

$4 bil over FOUR years. That means $1bil per year, Einstein. Not all $4b invested in the first year. So you wouldn't start earning interest on anything but the first year's investment. Right?

Year 1: $1bil * 1.15 (15% interest plus original ) = $1.15b
Year 2: $1.15b + $1bil = $2.15b * 1.15 = $2.4725b
Year 3: $2.4725b + $1bil = 3.4725b * 1.15 = $3.993b
Year 4: $3.993b + 1bil = 4.993b * 1.15 = $5.742b

Yeah, I know, $1.74bil is not chump change. But Microsoft played this exactly the way they wanted to. The pressure is now on Sony to not fuck it up. They're facing one of the richest companies in the world, who have virtually no debt to speak of and ridiculous amounts of money to burn. And MS hasn't already spent billions on developing a new chip, the Cell. And MS isn't basing the success or failure of their company on a new storage medium which may be obsolete in 5 years.

[Achilles]

War huh?

The last stage of the console war had Sony with its older equipment moving out first, crushing Sega and conquering their land. They continued to rage across the landscape unhindered by the armies of Nintendo and Microsoft, even though MS managed to capture and hold a small beachhead in most of the regions of the world. Nintendo lost ground as most of their allies abandoned them with the exception of Capcom, and they could no longer supply enough troops to the front lines to maintain their borders.

Microsoft has recently reinforced their army with new equipment, hoping to attack Sony early before they can improve their own equipment. But much like late era WW2 German tanks the new equipment is too complex to produce in large numbers so they can’t get it to the front line fast enough. And their new advance hasn’t gained the momentum they expected it to. Nintendo, which has lost ground, continues to have solid logistics, and is currently retooling its army for an experimental type of warfare, which could either be akin to civil war submarines, long range bombers, or something in between.

Sony bides its time behind its enormous borders, developing secret ‘super’ technologies that they will suddenly reveal late this year to try to gain new ground and destroy their competitors.

(yeah I read the article, it was uninteresting. Reading a game magazine analyze business is much like reading a business magazine analyze the game industry)

[RMan]

Although I don't think MS did a particularly bad job, saying they did a great job is a stretch, unless you're going to say that Sony did a magical, awe inspiring one with the PS1. Sony had less going for them as far as resources and arguably experience (MS had been doing OSs, games, and working closely with hardware makers for many years), and the only real advantage that Sony had over MS is that their competition was making a huge mistake (but that is a serious advantage) and when MS was up against Sony, Sony didn't make any big mistakes. However, I do think it’s money well spent and they’ll eventually win.

[trip1eX]

Remind me to not hire you as an investment planner.

$4 bil over FOUR years. That means $1bil per year, Einstein. Not all $4b invested in the first year. So you wouldn't start earning interest on anything but the first year's investment. Right?

Year 1: $1bil * 1.15 (15% interest plus original ) = $1.15b
Year 2: $1.15b + $1bil = $2.15b * 1.15 = $2.4725b
Year 3: $2.4725b + $1bil = 3.4725b * 1.15 = $3.993b
Year 4: $3.993b + 1bil = 4.993b * 1.15 = $5.742b

Yeah, I know, $1.74bil is not chump change. But Microsoft played this exactly the way they wanted to. The pressure is now on Sony to not fuck it up. They're facing one of the richest companies in the world, who have virtually no debt to speak of and ridiculous amounts of money to burn. And MS hasn't already spent billions on developing a new chip, the Cell. And MS isn't basing the success or failure of their company on a new storage medium which may be obsolete in 5 years.


Well of course being an internet forum I posted for simplicity there Sherlock. Yes you don't have to have the $4 billion dollars up front. But it also doesn't conveniently materialize out of thin air every year like you illustrated.

If the xbox was a separate company they surely wouldn't be waiting till their cash reserves hit zero every year before trying to drum up another billion dollars to cover 'em for the next year. They would have a hard time getting another billion after they've lost a billion 3 years in a row. And maybe they started with $4 billion of financing. Also why don't you throw in the interest they have to pay on their debt while you're at it.


Anyway the point there Einstein was that there's an opportunity cost here as well. That cost is the money they could have made elsewhere like if GAtes gave it to his pal Mr. Buffet instead. :)

Whether or not this pays off for them in the end is the big question. Personally I don't see them being in the black 4 years after the 360's launch. So 8 years and still being in the hole isn't an investment I would personally be comfortable with. Any of you guys like not making money on your investments after 8 years? I didn't think so.

IN the bigger picture maybe this is just a expense to keep the Windows monopoly. MS could easily see it that way and justify the costs that way. If they let Sony do too much in that space they could eventually threaten Windows itself.

[Wedge]

Don't be too quick to name Xbox #2 in this generation.

World Wide Sales Figures

Current as of January 2006:
Sega Dreamcast: 11 Million
Sony PlayStation 2: 100 Million
Nintendo GameCube: 20 Million
Microsoft Xbox: 22 Million
Note that Sony and Microsoft have only released the number of units shipped, while Nintendo has released the total sales. The total number of PlayStation 2's and Xbox's actually sold is less than the shipped figures.
These numbers are from wikipedia (http://en.wikipedia.org/wiki/Console_wars#World_Wide_Sales_Figures_3), I apologize in advance, though I read the same thing elsewhere: only Nintendo reveals the actual sales numbers, so Gamecube & Xbox might actually be tied in actual sales.


In addition: How many of those PS2s and xboxes are replacements and/or peoples second PS2/Xbox?
I am on my second PS2, and would have been on my second Xbox if MS hadn't replaced my shitty thompson drive with a samsung one for free. I never had a nintendo system break down on me.


And: How many of those xboxes do you think are used by technophiles as e.g multimedia centers only(cheap and easily modified, the xbox is)? I know more people that use it only for movies & music than use it only for games, for god's sake.


Main point: What would the sales figures look like if we removed replacement sytems and systems bought for other purposes than gaming? To make it easy for myself I usually just sum up this generation with: "Sony won, big time. Also rans: Nintendo & Microsoft. KIA: Sega."

[Zanzibar]

Although I don't think MS did a particularly bad job, saying they did a great job is a stretch, unless you're going to say that Sony did a magical, awe inspiring one with the PS1. Sony had less going for them as far as resources and arguably experience (MS had been doing OSs, games, and working closely with hardware makers for many years), and the only real advantage that Sony had over MS is that their competition was making a huge mistake (but that is a serious advantage) and when MS was up against Sony, Sony didn't make any big mistakes. However, I do think it’s money well spent and they’ll eventually win.

I, for one, will say that Sony did a 'magical, awe inspiring' job with the PS1. They correctly anticipated the shift that was coming from sprite-based graphics to full-3d polygon-based graphics, and created a machine that could do the job admirably. They also correctly recognized the need for a CD-based platform for more storage space, unlike Nintendo and the N64. They were rewarded with great loyalty from those gamers who saw that Sony had given them what they wanted before they knew they wanted it.

[RMan]

Yea, but everyone moved to 3D, you didn't have to be a genius to make that prediction (heck, Nintendo was moving to 3D on the SNES), and everyone also saw how useful CDs were (everything but N64 in that generation was CD based). I’d still say Nintendo’s cartridge silliness was Sony’s key to success, they’d never have gained ground like they did if not for that (heck, companies like Squaresoft may have stuck with their system, which would have been huge, and that’s just one company).

[Zanzibar]

Anyway the point there Einstein was that there's an opportunity cost here as well. That cost is the money they could have made elsewhere like if GAtes gave it to his pal Mr. Buffet instead. :)

Whether or not this pays off for them in the end is the big question. Personally I don't see them being in the black 4 years after the 360's launch. So 8 years and still being in the hole isn't an investment I would personally be comfortable with. Any of you guys like not making money on your investments after 8 years? I didn't think so.

IN the bigger picture maybe this is just a expense to keep the Windows monopoly. MS could easily see it that way and justify the costs that way. If they let Sony do too much in that space they could eventually threaten Windows itself.

Sorry about my Einstein comment. I'm in a bad mood today.

But I do think that Microsoft expected to lose a lotta money on the original Xbox because they could. It's a risk-versus-reward investment. Let's say that everything goes Microsoft's way: PS3 launches at $600, Halo 3 comes out on that day, Sony sells out, of course, but the X360 actually increases their lead to be insurmountable, Sony comes in a distant second, and as a bonus, Hd-DVD becomes the industry standard instead of Blu-Ray. The R&D costs on the Cell processor and Blu-Ray drives causes Sony to pull a Sega and discontinue gaming hardware production. There will be no PS4.

Video Gaming is a $10b industry on a per-year basis. If Microsoft can gain the lion's share of that market on the Xbox 360 (or even their NEXT console), then they will have gained back the piddly $4-8b they spent getting to that point in less than 5 years (if you consider hardware revenue, software licensing fees, accessories etc.) It's a long-term investment for them. If it doesn't pan out, oh well, but even if they play Sony to a draw, they still have the financial might to outlast anything Sony can throw at them.

[Zanzibar]

Yea, but everyone moved to 3D, you didn't have to be a genius to make that prediction (heck, Nintendo was moving to 3D on the SNES), and everyone also saw how useful CDs were (everything but N64 in that generation was CD based). I’d still say Nintendo’s cartridge silliness was Sony’s key to success, they’d never have gained ground like they did if not for that (heck, companies like Squaresoft may have stuck with their system, which would have been huge, and that’s just one company).

I agree 100%. Nintendo did more to help Sony than Sony did to help themselves.

[RMan]

Video Gaming is a $10b industry on a per-year basis.
I'd still say that's not MS's real goal here. Basically, they want to do exactly what they chastised Sony for doing, which is “own the living room”. If they own the underlying tech that’s used for entertainment (games, movies, eventually TV and TiVo type stuff) then they’ll not only have some control over the flow of that technology and media, but they’ll be in line to be the CPU of the future home (which they’re currently the front runner with the PC). If they ensure that infrastructure, then they’ll have another 30 years of income that’s practically impossible to compete with (they learned the power of owning infrastructure with Windows, and unlike AT&T it’s unlikely the government will force competition). Now, if Sony can become that system, then they get the same reward, although their focus will likely be more on the electronics end rather than the software end. I seriously doubt, though, that for either Sony or MS the games part is ultimately that important, it’s a means to an end I think.

[bapenguin]

In Japan, DS is winning the Console war.

http://kamalot.blogspot.com/2006/02/analysis-of-system-expectations-2006.html

Except the DS is not a console.

[Achilles]

I'd still say that's not MS's real goal here. Basically, they want to do exactly what they chastised Sony for doing, which is “own the living room”. If they own the underlying tech that’s used for entertainment (games, movies, eventually TV and TiVo type stuff) then they’ll not only have some control over the flow of that technology and media, but they’ll be in line to be the CPU of the future home (which they’re currently the front runner with the PC). If they ensure that infrastructure, then they’ll have another 30 years of income that’s practically impossible to compete with (they learned the power of owning infrastructure with Windows, and unlike AT&T it’s unlikely the government will force competition).Once you consider that Sony will not allow MS applications on the Playstation, and they’re positioning the Playstation brand as the next big personal computer, you’ll see pretty fast why MS entered the market. MS isn’t interested in owning your living room, they’re not going to make TVs, sound systems, etc. What they are going to do is block Sony from replacing PCs with Playstations because if they do Sony can put them out of business at a whim.

For example you can plug other people's equipment into the 360, like iPods, other people's memory cards, even the PSP. You can play it on which ever TV you like, or a monitor, they don't offer a TV. Same as you can connect to a PC, it can be any brand, made by Dell, Sony, or Alienware or whatever, as long as it runs windows. That's not trying to own your living room, it's trying to be the center of it. Sony on the other hand has said that their value chain sees someone with interconnected Sony products of every type playing games and movies on proprietary Sony formats. The original idea behind the cell is that each Sony product would be enhanced by being connected to other Sony products.

[Kelegacy]

Except the DS is not a console.
Heh, true. I missed that.

I swear, Kamalot is that Reggie Fils-Aime or whatever his name is, guy. It has to be true.

Pump'ed Up is Kuturagi.

Red Cloak is Allard.

Me, I'm not human. More like a penis, with arms and legs. Drive the ladies wild.

[Tohoya]

Sorry about my Einstein comment. I'm in a bad mood today.

But I do think that Microsoft expected to lose a lotta money on the original Xbox because they could. It's a risk-versus-reward investment. Let's say that everything goes Microsoft's way: PS3 launches at $600, Halo 3 comes out on that day, Sony sells out, of course, but the X360 actually increases their lead to be insurmountable, Sony comes in a distant second, and as a bonus, Hd-DVD becomes the industry standard instead of Blu-Ray. The R&D costs on the Cell processor and Blu-Ray drives causes Sony to pull a Sega and discontinue gaming hardware production. There will be no PS4.

Video Gaming is a $10b industry on a per-year basis. If Microsoft can gain the lion's share of that market on the Xbox 360 (or even their NEXT console), then they will have gained back the piddly $4-8b they spent getting to that point in less than 5 years (if you consider hardware revenue, software licensing fees, accessories etc.) It's a long-term investment for them. If it doesn't pan out, oh well, but even if they play Sony to a draw, they still have the financial might to outlast anything Sony can throw at them.


You need to read opening the xbox. Ms could lose a billion dollars a year, every year, ad infinitum and still be happy with their investment. Their main purpose is to prevent a Sony monopoly of the living-room, which will in turn threaten Microsoft's monopoly in the computing world, as consumer electronics and computers become closer and closer.

You know who wins the console wars? We do...the gamers. Sony, MS, and Nintendo are all trying to get your hard earned dollar whether it's through the use of an innovative controller, an amazing online platform, or new HD movies. Their competition is good for us.
I disagree. A unified development platform a la the computer would be much better in mt opinion. We're always talking about how gameplay tops graphics, about how software trumps hardware, right? We're hardcore gamers here. Competition within hardware necesarily inhibits competition within software. It lowers the amount of competition. If you're developing a PS2 game, you will for the most part be competing only with other PS2 games, since most people only buy one console and very few buy them all. How many RPG-starved gamecube owners bought Tales of Symphonia just because it was the only game in town? (or for that matter, N64 owners who bought Quest64). A DVD-like model, with a standard deelopment platform upon which manufacturers could compete on extra features (disk-changers et al) and simple quality would benefit gamers much better in my opinion.

[RMan]

MS isn’t interested in owning your living room, they’re not going to make TVs, sound systems, etc. What they are going to do is block Sony from replacing PCs with Playstations because if they do Sony can put them out of business at a whim.
In part, I think that's true, but my point is that Sony and MS are trying to get a newer market than just the PC market. I think Sony's trying to capture the markets that the PC will be sliding into otherwise (like media centers). I think the idea that Sony is going to try to compete with MS in MS's home (which is software and PC OS infrastructure) is incorrect, nobody's that powerful. If you’re suggesting that they’re going to make a PC that doesn’t run Windows and then try to compete directly with Windows (and thereby all Windows applications), then, umm, I think your insane, or Sony is :).

Also, the idea that MS won’t make TVs, sound systems, etc. is short sighted, I think. They make just about every type of hardware peripheral for the PC, I’m not sure why they wouldn’t do the same in the entertainment market if they had as much power and visibility there.
Sony on the other hand has said that their value chain sees someone with interconnected Sony products of every type playing games and movies on proprietary Sony formats. The original idea behind the cell is that each Sony product would be enhanced by being connected to other Sony products.
Sure, that’s pretty much what any company producing multiple, complimentary products would do. If Windows was enhanced so that it ran better with an MS mouse and MS keyboard, would that be bad? If you’re saying that the PS3 will not work without a Sony TV, then I’d say that is lame (and it’d fail miserably), but if there’s technologies they can introduce that allow the PS3 to work better with a monitor that’s implementing different technology, then I’m not sure that’s a bad thing (certainly not something MS wouldn’t do in the same situation).

[mister_slim]

My console could still beat up your console! :P
Yeah, but my dick is bigger.
:p

For example you can plug other people's equipment into the 360, like iPods, other people's memory cards, even the PSP. You can play it on which ever TV you like, or a monitor, they don't offer a TV. Same as you can connect to a PC, it can be any brand, made by Dell, Sony, or Alienware or whatever, as long as it runs windows. That's not trying to own your living room, it's trying to be the center of it. Sony on the other hand has said that their value chain sees someone with interconnected Sony products of every type playing games and movies on proprietary Sony formats. The original idea behind the cell is that each Sony product would be enhanced by being connected to other Sony products.
Have you looked at how many memory formats the PS3 supports? Or how it uses bluetooth? Meanwhile the 360 has proprietary memory cards and wireless protocols. Anyway, it's not as black and white as you're painting it.

[Achilles]

Have you looked at how many memory formats the PS3 supports? Or how it uses bluetooth? Meanwhile the 360 has proprietary memory cards and wireless protocols. Anyway, it's not as black and white as you're painting it.We'll see how many of those memory formats you can use as memory cards. Everyone makes a killing on the memory cards, so I doubt you'll be able to use one made by someone else unless they're paying Sony to be supported. The reason MS has proprietary wireless proticols is because bluetooth isn't fast enough; we'll see if the Sony controller supports voice.

You'd probably be surprised how many components of the 360 were worked on by other companies. For example; every internal componet. There isn't a single chip or board in the 360 that's made by MS. This will not be true of the PS3 and Sony.

[Pumped'Up]

And the answer to this subject title is?

Obviously, NOT Nintendo.

[Mozgus]

And the answer to this subject title is?

Obviously, NOT Nintendo.
Whatever you gatta tell yourself :rolleyes:

[Montolio]

Watching the thrashing about is entertaining in and of itself but this is the exact same MO Microsoft has used to take over every other market they turned their giant attention towards. They're a one-trick pony and nobody seems to realize it until it's too late. I love this country!

[AbinSur]

Also, the idea that MS won’t make TVs, sound systems, etc. is short sighted, I think. They make just about every type of hardware peripheral for the PC, I’m not sure why they wouldn’t do the same in the entertainment market if they had as much power and visibility there.

If MS wanted to make TV's or stereos, they would probably just buy a company that already makes them. Most of these hardware products are already commodities, so there's little profit in trying to get into the market.

[RMan]

Most of these hardware products are already commodities, so there's little profit in trying to get into the market.
Correct, unless you're already a market leader. If MS didn't have such a presence in the PC market, I doubt they'd try to make PC hardware, but they do, so they make them. If they had the same presence in the entertainment market, they’d make that hardware as well, because the plain and simple fact is that they’d have an advantage over their competition, making their success more likely. This is what Sony is trying to do, I’m not yet convinced they have that power, but we’ll see (regardless, it’s no different than what MS would do, though they’d perhaps secure the market a little more first).

[Achilles]

Correct, unless you're already a market leader. If MS didn't have such a presence in the PC market, I doubt they'd try to make PC hardware, but they do, so they make them.They make mice and keyboards. They don't make real PC hardware. Even their media center PCs are provided through other companies like Dell and Sony with parts by ATI, IMB, Nvidia, and dozens of other companies, they don't even make the tuner cards, they support other people's tuner cards. You can buy a Sony media center PC, is that MS trying to own your livingroom? They're simply not interested in making their own hardware, it's too expensive and there are plenty of other companies that they can just partner with to acomplish the same thing.

[fushi]

And the answer to this subject title is?

Obviously, NOT Nintendo.
Ay wassup yo :highfive:

[RMan]

They make mice and keyboards. They don't make real PC hardware.
Hehe, my mouse and keyboard feel pretty real to me, and I paid real money for them too. I’m not sure what the point to that is, is the fact that they don’t make ALL pc hardware make them fundamentally different? IMO the fact that they’re not yet as prolific as Sony doesn’t really change anything about their motives or what they’d do in the same position.
Even their media center PCs are provided through other companies like Dell and Sony with parts by ATI, IMB, Nvidia, and dozens of other companies, they don't even make the tuner cards, they support other people's tuner cards. You can buy a Sony media center PC, is that MS trying to own your livingroom?
Nope, but that’s just because they’re not in the same position, not because of some ideological stand. They don’t walk into the processor market or the video hardware market simply because they would unify those hardware makers against themselves, and they have a symbiotic relationship with them, so that’d be stupid. In areas like mice, keyboards, gaming hardware, they had no such loss potential so they had no problems making the hardware. They’re focusing software development on media centers and entertainment, making keyboards and remotes that are supposed to be used in front of a TV, and yet their plan is fundamentally different from Sony’s? No, it’s the same plan, Sony’s just got a bit of a lead (at least they are perceived to). The only real difference is that Sony is more likely to focus on hardware sales since that’s their foundation, and MS is more likely to focus on software sales since that’s their foundation, but either will be more than happy to sell you hardware and software if they have the means.
They're simply not interested in making their own hardware, it's too expensive and there are plenty of other companies that they can just partner with to acomplish the same thing.
I’d say they’re less likely to make hardware than Sony, but to assume they won’t ever just because they say they’re not interested in it now is naïve (they’re just not able to tackle that much of the market right now). I’m sure Sony will be more likely to do the same with their software, so I fail to see the fundamental difference (other than it being the current marketing line for making people fear Sony).

[bjornbarspingvinen]

I would say Nintendo has lost marketshare ever since SNES. And if you in the end have no marketshare, it doesn´t matter if you make cheap consoles or niche yourself.

[AbinSur]

Hehe, my mouse and keyboard feel pretty real to me, and I paid real money for them too. I’m not sure what the point to that is, is the fact that they don’t make ALL pc hardware make them fundamentally different?
Actually, yes. Microsoft entered the keyboard and mouse business over a decade ago, around the time Windows 95 was introduced. There were several factors that made it very easy for them to do so:

1) Mice and keyboards are very cheap to make.
2) It's cheap to design new mice and keyboards
3) Microsoft has a plethora of developers they can use as free product testing (as well as for getting new ideas)

Microsoft added specific value to their keyboards and mice. The "window" key. The split ergonomic keyboard. The scroll wheel (I think that was MS, but I'm not sure). The fact that this division was profitable is why it's still around. The same is not true of Microsoft's other endeavors into consumer hardware. There used to be a whole group devoted to consumer networking gear (routers, switches, etc.) It's hard to add value to these items, though, so in essence, they were just selling commodity products. The division was closed down.

The point is that Microsoft making mice and keyboards is really the exception to their hardware philosophy, not the rule.

...but that’s just because they’re not in the same position, not because of some ideological stand. They don’t walk into the processor market or the video hardware market simply because they would unify those hardware makers against themselves, and they have a symbiotic relationship with them, so that’d be stupid.
Also, these are very mature markets with high barriers to entry. Microsoft gains nothing by going into them. There's no way they could ever make money selling CPU's, simply because Intel and AMD do it much better already. There's no niche in the market for Microsoft to try and fill with a new product.

The only real difference is that Sony is more likely to focus on hardware sales since that’s their foundation, and MS is more likely to focus on software sales since that’s their foundation, but either will be more than happy to sell you hardware and software if they have the means.
Your point seems to be that if Microsoft had hardware to sell, they'd try to sell it to me. But they don't. This is why their strategy is different. Their current goal in fact is to force ALL hardware to become commoditized. This is why they say things like "Media doesn't matter," and why Bill himself said a few years ago that he though PC hardware would be virtually free in the near future.

What IS identical are their goals (and maybe this is what you were saying). Both are seeking dominance through inertia. Sony wants you to buy their stuff because then you feel compelled to buy MORE Sony stuff since it all connects together more easily. I admit, I bought my Sony DVD player because I can use the remote from my Sony receiver to control both.
Microsoft wants you to use Media Center because then you'll be using their formats, and you'll probably have a WinXP computer back there somewhere that you'll need Office to run on. And no matter what hardware you're using, you'll still be paying them a license fee for that software.

[Kamalot]

Except the DS is not a console.

console: (housing for electronic instruments, as radio or television)

Why is the DS not a console?

[Kamalot]

Me, I'm not human. More like a penis, with arms and legs. Drive the ladies wild.
Ha! Mind if I quote you on that? ;-)

[Schnoogs]

Trick question...the PC is winning ;)

[RMan]

The point is that Microsoft making mice and keyboards is really the exception to their hardware philosophy, not the rule.
I do not believe it's an exception to their rule, because I think their rule is that they will make and sell hardware if it can turn a profit and/or increase the sales of their other products.
Your point seems to be that if Microsoft had hardware to sell, they'd try to sell it to me. But they don't. This is why their strategy is different. Their current goal in fact is to force ALL hardware to become commoditized. This is why they say things like "Media doesn't matter," and why Bill himself said a few years ago that he though PC hardware would be virtually free in the near future.
Interesting, I hadn’t seen that statement. Well, the only way that works is if hardware advancements stop and then they can make money purely on software sales and perhaps subscription based plans (at least with software, they can force upgrades easier than hardware). I’m not sure this would happen in the near future, because the hardware makers (Intel, AMD, NVidia, ATI, etc.) would have to shrink dramatically in order to sell their products substantially lower, or they have to be replaced (and I doubt that’d happen in less than 15 years).

Still, that plan only works if they can be the locked in software standard for these pieces of hardware, and in that case they’re just making money through a different method (much like selling the console systems at a loss to make it back on software sales) yet still with the same goal and effect. In the end MS wants you to buy a system that runs their software so they can own the living room, and Sony wants you to buy their system that runs more generic software that owns the living room. They are both trying to tackle the same new frontier with the tools at their disposal.
What IS identical are their goals (and maybe this is what you were saying).
That is what I was saying, but that if they had the same resources as Sony instead of their software resources, they’d try to take the market the way Sony is. This is why their attacking Sony’s wanting to “own your living room” PR line doesn’t work on me.