Microsoft bleeds money outside of it's monopoly
<a href="http://http://www.theregister.co.uk/content/4/28128.html"; target="_blank">http://www.theregister.co.uk/content/4/28128.html</a>;
Seems Microsoft can't make a dime outside of Windows and Office, makes you wonder why people say Apple should ape their actions. Perhaps Apple doesn't do everything Microsoft does, but why would they want to when outside of PC's all Microsoft does is bleed money at a rate that would shut them down if it weren't for Windows.
Nick
Seems Microsoft can't make a dime outside of Windows and Office, makes you wonder why people say Apple should ape their actions. Perhaps Apple doesn't do everything Microsoft does, but why would they want to when outside of PC's all Microsoft does is bleed money at a rate that would shut them down if it weren't for Windows.
Nick
Comments
Too bad it doesn't bleed enough money to offset its gigantic profits.
For example, XBox may not be doing well and I think that the profit margin is rather low, but its just a tactic to gain market share. Sooner or later, either the prices of the machine or the games will increase, once there is a substantial market share.
I remember when Sony first started the trend of selling the console for cheap and making all the $$$ off of games.
Another problem with Microsoft is that the Japanese will not buy anything sold to them unless it was made in their home country, so Microsoft's endeavor in Japan is only to woo Jap developers to make games for American shores. One Konami rep explained that they won't even be releasing one of their games in Japan, because there is no technically possible way they can turn a profit with it, since even Dreamcast sales in Japan are beating the crap out of those for Xbox. So any money MS puts towards Japan is just throwing money out the window.
Microsoft has explained that Xbox has been, from the start, only to get their "foot in door" in the videogame industry.
So, yes, the company is obviously losing a lot more money than the Japanese-based Nintendo or Sony, and is the only party facing an uphill battle for mindshare (Nintendo and Sony are on their forth and second consoles, respectively).
I believe Xbox Live, however, is going to change things, financially, for the MS' Xbox division. In a year or two, it might even put them on the road to profitability.
[ 11-17-2002: Message edited by: Steve ]</p>
They sell tons of stuff in the United States, but we can't sell jack over there. I don't even think they will buy beef from America unless it's from Japanese owned farms.
Check out Rising Sun by Michael Chrichton, a little old but still gets the gist of it. Also has a nice plot to boot.
<strong>Yeah, I've read some books about that Japanese thing, it's kind of odd.
They sell tons of stuff in the United States, but we can't sell jack over there. I don't even think they will buy beef from America unless it's from Japanese owned farms.
Check out Rising Sun by Michael Chrichton, a little old but still gets the gist of it. Also has a nice plot to boot.</strong><hr></blockquote>
Japan has very strong import barieers. All imports are subjected to lots of goverment regulations and the japanese govt subsides its domestic producers.
This explains why everything is so expensive in japan. <img src="graemlins/oyvey.gif" border="0" alt="[No]" />
<strong>That and the fact that the Japanese companies wont buy our goods anyway...</strong><hr></blockquote>
Yeah, they build their own CPU's and GPU's instead of buying ones mande in America. <img src="graemlins/oyvey.gif" border="0" alt="[No]" />
Mostly it's not necessarily where it's made, but rather assembled. Japan is not a country rich in resources, they have to buy all kinds of raw materials and things from other nations. But try to sell them a Ford Taurus. Not gonna happen.
On the other hand, here, we buy a ton of goods assembled in Japan and other countries. We've all but lost the consumer electronics market to them, try to think of how many American companies make TVs anymore. Back in the fifties, they were all American companies. Now, what's left, GE/RCA and Zenith? And I'm not sure if those are completely American-based either.
One minor example...
Xbox Live has really lived up to the hype...so far.
We will see how long Microsoft manages to hold the cheaters at bay, but for now, there is a gaming network where no one has a hardware advantage, connection advantage nor any cheating software running. Skill is all that matters. If they can maintain this, they will make a TON of money. They have certainly been trying. Keeping out those with modded Xboxes (modded Xboxes can run unsigned code and therefore cheating apps). Microsoft's harsh stance against modders on XBL has everything to do with their strong desire to make it a cheat-free environment and less with a "OMG, EULA violators, LOL! They must be pirating software" attitude.
For people who have been playing games online for a while, XBL is something we've ALL been waiting for. It manages to sweep aside just about every major issue that has plagued games like Counterstrike.
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All Microsoft does is bleed money at a rate that would shut them down if it weren't for Windows.</strong><hr></blockquote>
Yeah, right. Go read the financial statements instead of someone digesting it for you. MS's cash reserve can support these money losing divisions if they so choose to for a hundred years.
[QB]Yeah, I've read some books about that Japanese thing, it's kind of odd.
They sell tons of stuff in the United States, but we can't sell jack over there.[QB]<hr></blockquote>You should go back and read some of those books again...
Japanese spend more per capita on American goods than Americans do on Japanese goods. However, there are over twice as many Americans than Japanese. Hence, an american trade-deficit.
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Another problem with Microsoft is that the Japanese will not buy anything sold to them unless it was made in their home country</strong><hr></blockquote>
[quote]Originally posted by Spart:
<strong>
They sell tons of stuff in the United States, but we can't sell jack over there</strong><hr></blockquote>
Oh, is that why they buy so much European designer stuff? Or that they buy BMW and Mercedes instead of Lincoln and Cadillac? Could it also be (generally speaking) the Japanese consumers don't tolerate things that aren't made better than what they can make themselves?
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Yeah, right. Go read the financial statements instead of someone digesting it for you. MS's cash reserve can support these money losing divisions if they so choose to for a hundred years.</strong><hr></blockquote>
Without Windows, MS wouldn't have the cash reserves to finance the rest of the company's divisions (Office notwithstanding)
<a href="http://www.nationalpost.com/financialpost/story.html?id={0F6156CE-2CFB-4C7F-BBDF-BDB77FA7E939}" target="_blank">85% profit margin on Windows!</a>
I'm not sure that's the case. The quality of the service has been much worse than when it was in 'beta'. MotoGP had downtime on the first day, patches weren't loading on certain machines, DDEs (Dirty Disk Errors) are common in Mech Assault, Unreal Championship, and NFL Fever 2003 on launch systems, and the interface from game to game is different.
It has been fun when I've been able to get into games, but lag from the host side hasn't been fun to deal with. But it should only get better, right?
Another problem is the lack of new games coming out that support the system (for the rest of the year):
NCAA Basketball 2k3
NHL 2k3 (which has been delayed for some time now)
Capcom vs. SNK 2 EO
The lack of a Live version of Halo really hurts it too. Had Xbox Live launched with a Halo multiplayer disk instead of MotoGP/Whacked demos, you would see a much bigger reaction to it. Then again, sales of Unreal Championship, Ghost Recon, Mech Assault, and Splinter Cell would have been flat.
MS is still losing huge money with the Xbox as well. The current Xbox bundle which features a Sega GT/Jet Set Radio Future disk from Sega as well as one of the new S-type controllers sells for $199. It is estimated that Microsoft loses about $140 when they sell one of these systems. Some stores are offering free DVD remotes with this bundle as well raising the loss to about $150.
The problem with the gaming market is that Microsoft has already admitted defeat this time around to the Sony PS2. MS has had to re-adjust it's sales figures for the system on three ocassions now, and the console launched just a year and four days ago. Not a good sign.
For MS to be able to raise prices on games and the consoles, they are going to have to completely knock off Nintendo and Sony because consumers are almost always going to go for the cheaper deal.
Sony and Nintendo have already announced their intention to stay in the console business for the 'next generation'. Nintendo, last night, announced a new Game Boy Advance reader for the GameCube. It hooks onto the bottom of the Cube and you can play GBA games on your television with a GameCube controller. You can use a standard GCN-GBA link cable in controller ports 2-4 to link systems. Priced at less than $50, this will probably push a few GCN and GBA systems.
Then you have Sony which has such a grip on the market that it will be tough for anyone to dethrone them. Even if MS gets it's next console out 6 months before the PS3 with better specs and at a cheaper price, they are going to have a tough time competing. Yet MS is willing to bleed billions to get the Xbox to succeed. Only time will tell, but if Halo 2 doesn't impress, the console could be in trouble.