Originally Posted by The Populist
Ok, if the Mini can do everything the iTV can do, as well as function as a computer, why buy an iTV? For twice the money you get the ability to surf the net and use a suite of programs. The Xbox 360 can do everything the iTV can do, plus play kickass games at the same price.
So where does iTV fit as an appliance?
I see you are getting your post count up!
For the 12 year old - 27 year old crowd, despite the $100 minimum higher price for the XBox 360, probably when given the choice between the two, the XBox would get the majority. But to me, this is really not the interesting part of the Microsoft announcement.
(As I've stated elsewhere -) What is the MS and Sony business model that would allow them to make money by selling movies via their game consoles? Their game console business model is try to break even on the hardware, and make money on the licensing and games. Sony is good at that (but we'll see about the PS3), and MS seems to be getting better at it.
The Music/Movie business model is the opposite - break even on the downloads giving the profits to the content producers, and make money on the hardware. Apple is doing great at this with the iPod and iTunes Store.
So what is the MS model for downloading Movies and Music to the XBox 360? MS is breaking even (at best) on the game console, and the content providers make the money on the content. So if MS sells XBox 360s for just music & movies, it seems like this will just lose more money for MS. (BTW - this applies to the Zune also.) Can MS sell games to these people? If they are 12-27 years old.
My guess is that Apple will make their usual margin on the iTV, so it fits in neatly with the business model.
My prediction: MS shareholders will get fed up with these business models that just lose money. MS will end up spinning off the Application software (Office, etc.), the OS software, and their Gaming groups into separate companies, and stop this nonsense of their cash cows subsidizing their next bad idea.