Will the Xbox 360 Gamble Pay Off?

by James R. Stoup Nov 27, 2005

The post Thanksgiving shopping rush has begun to die down. Soon however, it will be December and as Christmas fast approaches consumers will go crazy trying to find the perfect gift for everyone on their list. Invariably, every year in America there is the “Must Have” present. The one toy that every child must have to complete their life and truly make the Yuletide gay (you parents in the crowd know what I mean). The one gift that will let parents prove that they really do love their children. It is also the one gift that causes the most stress for your average mall going mom. They must stand in long lines, scowering the country side in hopes of finding this magical present that will make Christmas morning special for their darling little child.

And while this year won’t feature the “Tickle-Me-Elmo” doll as the top toy there are a few other contenders for the crown of Most Coveted Toy. My personal pick is the Xbox 360. It has quite a bit going for it, and yet, there are some problems. But the real question that I want to ask is will the decision to release the new Xbox still look good next Christmas? Once the PS3 and Revolution have come out will, in hindsight, Microsoft have made the right move in releasing their console first? Here is my take on things so far.

The upside of releasing early
Congratulations Microsoft, you have beaten arch rival Sony to the punch and shipped your machine long before they have. As a result you are poised to eat up market share this Christmas. Assuming, that is, that you aren’t plagued by supply issues. So, if enough Xbox 360s get into the hands of avid gamers then Microsoft has the chance of making permanent converts of some customers. Ideally for Microsoft everyone who buys a Xbox won’t buy a Playstation, this is unrealistic I know, but with the prices of the machines getting higher and higher it is now, more than ever, a possible scenario. Overall though it looks like pushing ahead might pay off in the long run for Microsoft because gaining market share at Sony’s expense will ultimately lead to higher profits, though it might take a year or so to fully realize them. Remember, Xbox live is only going to become more popular and thus that is a conduit that MS can use to increase sales.

The downside of releasing early
By far the biggest problem has been the system crashes that have been reported. And since these reports surfaced on the same day that the Xbox 360 was released, it leads me to believe it is a bigger problem than Microsoft wants to admit. One of two things is happening here, either there are a bad batch of Xboxs and some faulty part is causing the problem or the system software itself is fundamentally flawed in every Xbox. If it is the first case then the solution is a product recall. That can be a nightmare on a good day but during the Christmas season when your supplies are already limited, this could prove to be truly disastrous. Not as worse, though more embarrassing, than that would be if the problem turns out to be the software. This means that Microsoft will have to update the software somehow. Via Xbox live would seem to be the best approach but including update CDs with every Xbox would also work.
After that the next biggest problem is the selection of games. No Halo 3 has to be the most important game that is lacking in the initial line up. But there are also several other popular titles that haven’t yet made it to the shelves of BestBuy yet. This means that consumers will be without their favorite games for quite a while. And if the PS3 comes out before the bulk of the Xbox library then that will give consumers another reason to choose Sony of Microsoft.

Overall though I think Microsoft will be able to weather the storm and resolve the initial problems the Xbox 360 seems to be having. And even though the library of games is rather sparse I think it will suffice for now. However, if no major games have come out by the time the Playstation 3 comes out then there may be trouble. Yet I think in the end Microsoft’s strategy will prove to be the correct one. I think they will gain market share at Sony’s expense, initially at least. However, in the end, I feel that the Playstation 3 will just be too hard to beat, even with Halo 3 leading the way.


  • Another downside to releasing early, with a little background information included…  I’ve estimated that in the past 15 years I have owned over a dozen game systems - heck I bought a Sega Saturn for $500 on release day in 95, dropped $800 on 3DO, etc. and it doesn’t stop there, I’ve dumped countless thousands into games - hundreds of them.  Having said that, the downside to releasing early is quite simple, Microsoft simply does no innovate. Period.  Not their video game dept. at least.  The whole XBOX 360 thing, much like the regular old XBOX before it simply bores the pants off me.  Wow, gee, now its able to do what my gaming PC has been able to do for the past year.  Big deal.  How many FPS games can I really play at this point?

    The whole industry needs a kick in the ass these days, none of this is revolutionary at all, just more of the same with a few more polygons per second and (ooh ooh!) 20 more shadows on-screen at once.  Woo.  In walking by the demo display with my wife, we were still uncertain if we were watching an actual XBOX 360 game or an older XBOX game playing ON a 360.  Another guy standing watching mentioned “man that’s a great TV, too bad they aren’t showing movies on it”.

    I suspect that once the dust settles, the MS name will do little to get XBOX out of the #2 spot.  They’re hip, sure, with geeks but who else?  Do I really need a sequel to Perfect Dark?  I hadn’t even thought of that game in 5 years.  And hence, the mistake of releasing early.  If you’re a company not known for innovation then it’s usually wiser to wait and see what everyone else is going to do and rip it off, rather than just release a seriously boring and uninspired product.  Does PS3 look any better?  Couldn’t say…  the industry is so stagnant now that I have a very hard time even paying attention.

    dickrichards2000 had this to say on Nov 28, 2005 Posts: 112
  • Ahh, Christmas. I can’t say whether I am aware of something that disgusts me more than the “must have present” rush. It is about the deepest and darkest pit consumer culture has on offer.

    XBOX.. well, apparently the gamers love it for the LIVE networking. I think the most positive thing about XBOX is that M$ looses money on each machine sold. If you are a die-hard anti-M$ person with a deep wallet I would suggest buying as many systems as possible & to sell them on eBay at retail. If I got one for XMAS I’d do just that (quickly, to get the wretched thing out of my house). People will still buy it. I am totally with dickrichards2000, the whole thing is just boring, it oozes “we want money from this market too & we will do whatever it takes to get it” from its smoldering powersupply.  If you want guaranteed good & innovative games you buy Nintendo, if you want a extra-wide selection you buy Sony, you buy M$... well, can’t say really. But then I’m not a gamer, maybe I just can’t understand. Nevertheless I’ll likely buy a Nintendo Revolution next year. Yes, I am anti M$, yes I don’t care what others think about that attitude.

    Bad Beaver had this to say on Nov 28, 2005 Posts: 371
  • Yeah, you may be anti-MS like myself, even. But you can’t group Xbox in the same vein as Windows. Just in the same way that you can’t group Mac Office with Windows Office.
    The Xbox is headed by J Allard, steve ballmer and bill gates have NOTHING to do with the gaming division apart from give them money to make consoles and games. Heck, the Xbox gaming division uses Macs, J Allard’s favorite computers are admittedly Macs. For Christ’s sake, the Xbox 360 uses PowerPC processors!! The Xbox 360 developer kits were G5’s!!!

    Yes I have an Xbox. Yes I think Xbox Live is the most innovative and best gaming creation ever (as well as being successfully implemented,) but you can’t hate it because it’s Microsoft. It’s as far away from Microsoft as you can get. In all honesty, I constantly find myself going, “ohh yeah”, when I see the Microsoft logo.

    But in regards to the article for criticizing them for not releasing Halo 3 on launch - you do know Bill Gates told Time magazine they’re gonna use it as a weapon at the PS3 launch, right? In my eye that’s actually a lot smarter than playing all your cards at once. The console itself was obviously enough for the launch.

    BUT they do have to make sure they release Halo 3, like, the day before or the day after the PS3 release, to steal its thunder. If there’s a delay of even a week, they’ve screwed it up, and we’d have to wait until Xbox 720 before they have another good shot.

    Luke Mildenhall-Ward had this to say on Nov 28, 2005 Posts: 299
  • For the Xbox releasing early will hurt it. The non inclusion of a next generation HD DVD/BlueRay player will end up hurting the Xbox. It’s smallish hard drive will also end up hurting them. These are mistakes that Sony could capitalize on. I say could, because Sony is really the “gang that can’t shoot straight”. Sony will fumble it guaranteed. They’ve already blown it by not getting more involvement from Apple. Apple should be building Itunes for the PS3, They should ship Front Row for the PS3 as well. Apple should also be hired to do the interface for Sony’s online and PS3 GUI’s. Back to the Xbox.
    The early release means that the games are “meh” alot of me too titles and just a bit of gloss. The next generation of games should help it along though and those next generation games should be coming out around the time of the PS3 intro.

    mcloki had this to say on Nov 28, 2005 Posts: 25
  • Believe me, I can hate everything because it’s Microsoft. No problem.

    Bad Beaver had this to say on Nov 28, 2005 Posts: 371
  • Shows how much Microsoft has pervaded the Apple space. Not only does Apple not have anything to do with the story, the word “Apple” is not even used once!

    nigham had this to say on Nov 28, 2005 Posts: 10
  • Yeah, an article on Xbox 360 is better than no updates at all.

    In regards to Sony.. we will have to see. Like meloki says, the new generation of Xbox 360 titles will come at the time of the PS3, just when the PS3 is weakest in gaming terms (just like the Xbox 360 is now.)

    I think it’s so easy that the PS3 could fall. I can’t see how those specs are gonna hold up in a realistic price. I mean c’mon, it’s got a blu-ray drive!
    But also, by then, the Xbox 360 graphics may have even superseded the PS3’s launch graphics. Along with Halo 3.

    This console battle is gonna be so tough. I’d compare it to Nintendo vs Sega back in the day.

    Luke Mildenhall-Ward had this to say on Nov 29, 2005 Posts: 299
  • More like ColecoVision vs. Atari 5200… in the end of that one, no one “won” because consumers just got bored.

    dickrichards2000 had this to say on Nov 30, 2005 Posts: 112
  • ^ jeez. If you don’t want to read the article then don’t. It’s not hurting anybody. Just giving us something to read while we wait until MacWorld.

    Luke Mildenhall-Ward had this to say on Dec 03, 2005 Posts: 299
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