360 outsells Wii for XMas

[stray]

Interesting times...

Honestly, I wish there was just one console, powered by IBM and Toshiba, with most of the competition lying on the software/entertainment end of things. Make it a closed, but slightly restricted system like PC laptops have. Let any manufacturer build one (ala 3DO), which in turn, would provide another level of competition too.

Hell, I wouldn't mind if MS provided the OS.

[Trippy]

Yes, Microsoft by achieving total dominance in the desktop OS, office suite software, and browser market (not that browsers generate any direct revenue) in the territories that matter have basically stuck the company into neutral since there's nowhere for the company to go except downwards:



Any attempt to enter a new market and grow the business that way just means cutting into their incredibly high 30% profit margin (another advantage of being a monopoly) which is double or more than companies like Apple, Intel, and Cisco, and they have to face already entrenched competitors. Probably their only hope for significantly increasing shareholder value over the long term is to reinvent themselves akin to way IBM turned itself into a service company. They made some noise when they were waging the first browser war about turning into an Internet company but clearly that is not in their best interest since that marginalizes the OS and office apps as we are seeing now with the rise of Web-enabled applications that can replace most of the common functionality of desktop apps.

[Trippy]

As a long time Apple user, current owner of 2 new Apple machines, an iPod and a Airport to go station as well as a shareholder, I agree - but Apple is largely irrelevant at this scale, for now anyway. Times may change.

Apple may just be a pimple on Microsoft's butt when it comes to OS market share but Apple is actually 1/4 the market cap value of MSFT, thanks to their rising stock price, and their P/E is significantly higher (about double) meaning investors predict far more medium term growth for them than they do for Microsoft.

[stray]

They made some noise when they were waging the first browser war about turning into an Internet company but clearly that is not in their best interest since that marginalizes the OS and office apps as we are seeing now with the rise of Web-enabled applications that can replace most of the common functionality of desktop apps.

That "Internet company" thing is still in place. It's one of things that kind of turns me off about the 360 (The game console itself is neat. Ballmer's musings about it are not).

"Live" is their new brand name. Whether that be search engines, MSN, .NET, connected Zunes, Vista, XBox Live, IPTV, etc..

[Trippy]

They made some noise when they were waging the first browser war about turning into an Internet company but clearly that is not in their best interest since that marginalizes the OS and office apps as we are seeing now with the rise of Web-enabled applications that can replace most of the common functionality of desktop apps.

That "Internet company" thing is still in place. It's one of things that kind of turns me off about the 360 (The game console itself is neat. Ballmer's musings about it are not).

"Live" is their new brand name. Whether that be search engines, MSN, .NET, connected Zunes, Vista, XBox Live, IPTV, etc..

You can't use a Web browser on Xbox cause that would destroy their OS market (we've talked about this before) and most of that other crap is Windows dependent. Other companies that are building Internet applications don't care what OS you are running on as long as you have a modern Web browser and they are not typically paying a MS tax to develop and run them -- e.g. eschewing things like .NET for Open Source development solutions and deploying on non-MS OSes.

[Trippy]

Sony on the other hand is not only extremely mismanaged, but they have a fundamental business divide that is causing massive infighting. As a huge content producer they need to be proponents of DRM and standardized media. As a huge consumer electronics manufacturer they need to supply the consumer with the products they want. It's a source of massive conflict internally and coupled with their lame duck management is killing the company. Add the not invented here issue you mention and it becomes lethal.

Interesting times...

Sony's content divisions are actually a small portion of the company -- about 14% of their overall revenue -- and electronics, which doesn't include games, dwarfs everything else revenue-wise, though not profit-wise. Unfortunately by promoting Howard "I love DRM" Stringer to the CEO position they've basically told the world that they are content company and are acting as such when in fact they are not.

[stray]

Back to sales, here's some interesting data (btw, should we just dub this the official console war thread? :P):

NPD info through Kotaku

Comparing launch periods, the PS3 launch period has pretty much equaled the 360's (PS3 = 687k, 360 = 607k). The Wii kicked ass with 1.1 million.

However, the 360 outsold both the Wii and PS3 last December. But was topped by the DS and PS2 (with the PSP coming in a close 4th).

360 = 1.1 million
Wii = 604,200
PS3 = 490, 700
DS = 1.6 million
PS2 = 1.4 million
PSP = 953, 200

Turns out Sony didn't do too bad overall, and wasn't too far behind the Wii in December (surprises me).

SCEA total figures in December probably kicked them back in a comfortable position as well.

2.8 million units of hardware, 22.4 million software, 6.9 million peripherals, making up to 1.6 billion dollars in December alone.

[Jeff Kelly]

Those numbers don't seem right to me but what do I know ;-).

What's interesting though is the fact that the Wii has sold 1,8 Million units since launch while the 360 has sold 2 million units for the christmas season.

That should bring the 360 to about 6 million units sold since launch which means that the Wii now has sold nearly 1/3 as much as the 360 has, quite impressive.

[stray]

Those numbers don't seem right to me but what do I know ;-).

Well, NDP only tracks US sales, so it may or may not mean nothing in the bigger picture. You could say the 360 outsold the Wii because the crowd here is different, or that people couldn't find a Wii or PS3 and went for a 360 instead. /shrug ;)

[Jeff Kelly]

Well, NDP only tracks US sales

Ah, that explains it.

[Big Gulp]

What's interesting though is the fact that the Wii has sold 1,8 Million units since launch while the 360 has sold 2 million units for the christmas season.

Not really.  It's (relatively) inexpensive, it's got a fresh new control mechanism, and it caught the right amount of holiday hype.  It was in the right place at the right time.

Does the Wii have legs, however?  I doubt it.  The 360 and PS3 most definitely have a longer lifespan ahead of them, but I have a feeling that the Wii is going to eventually be a big cause of buyer's remorse because it's going to look very, very dated.  I could be wrong, I never would have predicted that the DS would pick up like it has, but I think the handheld market is very different from the console market.

[stray]

Hmm...

I'm wondering how accurate those NDP statements are now. Should I have posted that? Didn't realize a lot of retailers aren't tracked by them (the biggest being Best Buy. Of all things. CompUSA just announced they would provide data to them this week, so they aren't included in that report either). Looks like Nintendo is contesting the numbers, saying they shipped well over that. Sony, as was pointed out earlier, shipped a million. Doesn't seem likely that 300,000 PS3's are just sitting on shelves (though some are, I know).

[stray]

Does the Wii have legs, however?  I doubt it.  The 360 and PS3 most definitely have a longer lifespan ahead of them, but I have a feeling that the Wii is going to eventually be a big cause of buyer's remorse because it's going to look very, very dated.  I could be wrong, I never would have predicted that the DS would pick up like it has, but I think the handheld market is very different from the console market.

I'm starting to rethink that position. Look at the PS2. Still the best selling console (With a total of 110 million sold overall. What the hell?). If anything, the Wii might pick up it's steam as the console for cheap ass gamers and parents (joke) sooner or later.

[Roac]

I'm starting to rethink that position. Look at the PS2. Still the best selling console (With a total of 110 million sold overall. What the hell?). If anything, the Wii might pick up it's steam as the console for cheap ass gamers and parents (joke) sooner or later.

Yes.  The graphics on a PS2 are nice, and don't improve much with a PS3 without HD.  It's also about 1/5 the cost and has a HUGE library of games.  I bought one for my step-father this past Christmas, for tihs reason.  He won't buy anything for himself, isn't a graphics whore by any means, but loves shooters (esp WWII stuff).  He plays very little, but does enjoy when he does.  So I can get that, and there's easily over a dozen games for him to pick from.   The Wii has slightly better graphics than the PS2, a control scheme that kicks ass, and games that are fun for casual gamers like that.  What it lacks at the moment is a large library, but that's comming, and an equivalent price point (250 > 130, but it's not too far off, not like the 360/PS3).

What Nintendo has done is to nearly monopolize the casual gamer market, and position themselves as a very solid contender for second console in serious gamer livingrooms.  The 360 and PS3 are pushing hard to be out on the cutting edge, which isn't where most people want to be, but that is where the potential to get mindshare on future trends lies.  Whatever the media center future might be, both are trying very hard to get ahold of it and are willing to front billions and put off profit for years to get there.  Their gamble is that HD, downloadable multimedia, and other integration stuffs aren't mainstream yet and won't be for some time; but it will be at some point, and damnit, they want to own it.  If one or both of them guess right then in 3-4 years they could be rolling in cash, but it'll take them that long to find out.

[HaemishM]

What's interesting though is the fact that the Wii has sold 1,8 Million units since launch while the 360 has sold 2 million units for the christmas season.

Not really.  It's (relatively) inexpensive, it's got a fresh new control mechanism, and it caught the right amount of holiday hype.  It was in the right place at the right time.

Does the Wii have legs, however?  I doubt it.  The 360 and PS3 most definitely have a longer lifespan ahead of them, but I have a feeling that the Wii is going to eventually be a big cause of buyer's remorse because it's going to look very, very dated.

I think that depends on what your definition of "has legs" is. Are you thinking a 5-year life cycle for the Wii? If so, you're right, it probably doesn't have legs. If you think more along a 2-3 year lifecycle, you're wrong. The Wii is a transitional system. In 2-3 years, you'll see Nintendo release a hi-def system, when more homes have them and the cost to develop for hi-def is lower. Meanwhile, that 2-3 year period is going to be ALL PROFIT, because they lose no money on the systems themselves. In fact, they make a profit. With the DS being a profit machine, 2-3 years down the line, Nintendo could have a decent war chest from which to take risks with HD, which won't be nearly the risk it is now.

[Murgos]

Supposedly, the 20gig PS3 cost $804 to make. It costs $840 to make the 60 gig model. I'll just set the median price at $820, and the median retail price at $550. So for every console sold, they're losing $270.

etc...

This math is borked.  The cost of production is amortized across the life of the product.  The more they sell they cheaper they are to make.

Pretending like you have a clue as to what the 5th million PS3 sold costs to make is asinine.

if it cost a billion dollars to design and build the production faciities and they sell 1 million PS-3s thats 1000 dollars a ps-3.  2 million?  500 bucks.  3 million?  $333.  (more because of operating costs and etc... but you get the picture)

It's actually not even that straightforward because the fab plants aren't making PS-3's 100% of the time.  Their costs are defrayed across all the products they produce.

I'm really getting sick of all the this company lost this and that company lost that for every x sold.  It's BS.  It's just not the truth of the way these companies work.

[WindupAtheist]

[stray]

I'm really getting sick of all the this company lost this and that company lost that for every x sold.  It's BS.  It's just not the truth of the way these companies work.

If you can, then provide better numbers. I'm all for it. :) I do not claim to be Sony's bookkeeper. I was only throwing out estimates and ballpark numbers. All I know is that those prices are already supposed to reflect bulk costs.

Start here and work your magic. If you're really sick about it.

[Murgos]

Did you really just post a link to a page with a chart full of made up numbers and then tell me to refute their made up numbers?

[Trippy]

Did you really just post a link to a page with a chart full of made up numbers and then tell me to refute their made up numbers?

I'll save you the trouble:

http://forums.f13.net/index.php?topic=8671.msg245062#msg245062

[stray]

Did you really just post a link to a page with a chart full of made up numbers and then tell me to refute their made up numbers?

They are the same numbers being spread about everywhere, from tech sites to brokerage firms. Pardon the fuck out of me. It's the best we've got.

Besides, I didn't ask you to refute anything. I asked you to give better estimates from those numbers, with mega bulk pricing in mind. Nothing more. I asked you to contribute.

[Murgos]

I originally added this as an edit to my post above but I'll stick it here since you already posted.

I can buy a 20 GB HD off ebay brand new in the box for 5 bucks and you really expect me to believe that Sony paid $43.00?  Or that a 400w Power Supply which I personally can make for about $6.50 with parts from radio shack costs Sony $37.00 to make internally?

Edit:  Even better.  A cooling-slash-mounting cage for $22.00?  I haven't taken apart a PS-3 yet but unless they mill that from a 20 lb billit of aluminum it doesn't cost more than 25 cents to make.

[stray]

I was going to say that article was written two years ago, but nope, it was in November.

So yeah, the hard drive's are iffy. Though they are SATA. Not sure about the RPM though.

[Trippy]

Those are 2.5" drives but the price is still wrong. I can buy a 40 GB 2.5" drive for $45 on Newegg.com. There's no way they are paying that much to Seagate for a 20 GB drive, or a 60 GB for that matter ($53 on Newegg).

[stray]

Do you think the total cost could be cut down as much as 30% then?

[Trippy]

Do you think the total cost could be cut down as much as 30% then?

There are two huge problems with the iSuppli estimate. The first is they have that $148.00 for "Other Components and Manufacturing" without explaining WTF that is. It's like they couldn't jack up their estimate high enough so they just put in a random misc. category and padded it so that it matched the number they were trying to get to.

The second related huge problem is the motherboard comparison between the PS3 and Xbox 360. They have the Xbox 360 at $204 and yet somehow the PS3's motherboard is 2.5X more expensive at $500. Now I'll grant them that the Cell is more expensive to make and there are a few extra widgets on the motherboard but 2.5X? That's just making stuff up again. So let's say the motherboard is $350 (basically tossing out that Other category from above) and let's equalize some of the other price differences between the Xbox 360 and the PS3 by getting rid of that cooling mounting cage and fixing that manufacturing cost (umm why is the PS3 6X more expensive to manufacture?). We will leave the case costs alone cause we know that that Spider-Man PS3 logo costs a ton of money to stick on there and of course black plastic costs a ton more money to make. That takes the 20GB PS3 down to $600.95.

So if you assume their Xbox 360 estimate is reasonably accurate the price difference between the two comes down to the extra cost for the Blu-Ray drive (+$100) and the more expensive Cell and slightly fancier hardware (+$150 + some extra). And that makes sense. $800 does not make sense.

BTW, pulling numbers (almost) completely out of my ass a year ago I came up with $615.00. Does that make me an expert too?

[stray]

If that's the case, then it doesn't seem too far fetched to say they would be profitting off the 60GB model within a year.

[Calantus]

Interesting times...

Honestly, I wish there was just one console, powered by IBM and Toshiba, with most of the competition lying on the software/entertainment end of things. Make it a closed, but slightly restricted system like PC laptops have. Let any manufacturer build one (ala 3DO), which in turn, would provide another level of competition too.

Hell, I wouldn't mind if MS provided the OS.

I would love for this to happen. 3 different consoles that all do roughly the same thing, their main difference being who gets paid and who gets what exclusive game (less relevant these days) is getting a little old. A solution halfway between what we have in the PC market, and how the console market is now would be perfect. One box needed and you get to customize your box but there's no huge change to be had (so no nvidia vs ATi in graphics cards goin on), but the fact that there are options means nobody can afford to put out a real shitty part.

[Stephen Zepp]

I originally added this as an edit to my post above but I'll stick it here since you already posted.

I can buy a 20 GB HD off ebay brand new in the box for 5 bucks and you really expect me to believe that Sony paid $43.00?  Or that a 400w Power Supply which I personally can make for about $6.50 with parts from radio shack costs Sony $37.00 to make internally?

Edit:  Even better.  A cooling-slash-mounting cage for $22.00?  I haven't taken apart a PS-3 yet but unless they mill that from a 20 lb billit of aluminum it doesn't cost more than 25 cents to make.

Not trying to be insulting here, but there are hundreds of costs factored in to buying, storing, transporting, inventorying, tracking, and managing hardware at the numbers that large scale distribution adds to the base cost of items.

Tell me this: can you buy 500,000 $5 20 GB HD's off of ebay in time for next quarter's production cycle--not to mention transport them to the production facilities, keep them in climate controlled storage until the production line is up to speed for that phase, and insure them for when one of the tractor-trailers transporting them is driven by a drunk and goes off a cliff?

I'm not defending the prices, but the comparison is simply not valid.

[Murgos]

Don't be stupid.  Of course not.  But if I can buy 20 $5 drives that are brand new then I can arrainge to recieve 2,000,000 from various suppliers over a spread of a year for $15 ea or there abouts.

Not to call you an asshole, asshole, but if retailers are carrying the part for ~$40 USD then there is a good likelyhood that they are paying approx 1/2 -1 /3rd that price from their supplier.

Anyway, as you obviously missed it, here is the point:

QUOTING RETAIL NUMBERS FOR THE PRICE OF PARTS FOR A MAJOR MANUFACTURER LIKE SONY MEANS THE ENTIRE COLUMN WAS BULLSHIT.

[Stephen Zepp]

Don't be stupid.  Of course not.  But if I can buy 20 $5 drives that are brand new then I can arrainge to recieve 2,000,000 from various suppliers over a spread of a year for $15 ea or there abouts.

Not to call you an asshole, asshole, but if retailers are carrying the part for ~$40 USD then there is a good likelyhood that they are paying approx 1/2 -1 /3rd that price from their supplier.

Anyway, as you obviously missed it, here is the point:

QUOTING RETAIL NUMBERS FOR THE PRICE OF PARTS FOR A MAJOR MANUFACTURER LIKE SONY MEANS THE ENTIRE COLUMN WAS BULLSHIT.

Ok, you come on board with an example of how you can cut a deal on a retail price using ebay on a single item, compare it to mass production and distribution of a game console (a completely strawman argument), I call you out on it politely, and I'm the asshole? I even said straight out that I'm not defending the prices--just calling you out on a rediculous argument :)

I guess "asshole" was the best you could come up with when someone calls you out (you know, as opposed to proving your analogy was appropriate or something) sorry to hear that.

[Murgos]

You are absolutely being an asshole.  You're not attacking my argument, you even mentioned that specifically you were not, you are instead attacking a price-point.  You are being a troll.


Edit:  P.S.  The price of a hard drive is indeed of importance when discussing hard drive prices.  Been drinking tonight?  Seahawks fan maybe?  A little down about the loss?  You know what to do, an hero status awaits.

[WindupAtheist]

I'm going to need a bigger chart.

[Murgos]

How about one of them there nifty 3-D charts?

[Stephen Zepp]

You are absolutely being an asshole.  You're not attacking my argument, you even mentioned that specifically you were not, you are instead attacking a price-point.  You are being a troll.


Edit:  P.S.  The price of a hard drive is indeed of importance when discussing hard drive prices.  Been drinking tonight?  Seahawks fan maybe?  A little down about the loss?  You know what to do, an hero status awaits.

Whatever dude. Seems you cannot read. My entire post was that your analogy was rediculous (to think that a price you could drum up on ebay for a single unit had anything to do with mainline production/distribution).

I guess I'd rather be a troll than an idiot who posts something completely off the mark as if it were valid and pertinent to the discussion. Who the hell cares what price you can find on ebay? Find me one hardware manufacturer that uses retail purchases on ebay in their pricing mechanisms for supplying a production line, and then maybe your post has some merit.

It's rediculous to even bring up ebay in the first place, much less what one person can find one deal on anywhere when comparing to production costs.

SURE a wholesale price is going to be different than what appears to be quoted retail prices in the post you were trying to rebut...but then why didn't you post wholesale prices? You freaking posted EBAY.