Last generation of consoles was a failure for Microsoft. Some will argue with me about that to a great extent and I could not say their opinion was wrong. But in all honesty, they stunk. At the end of its lifetime, it had cost the company about $4 billion. While establishing themselves ahead of Nintendo in sales, they fell behind deeply in profit. Only selling about 24 million units compared to about 100 million (at the point of 360 launch), things were looking poor for Microsoft. People were already writing them off as done for the next generation and Sony domination would continue.
Along the way, a rock hit Microsoft in the head. They thought that they could buy their way to victory with the vast funds available to them. With a vast amount of money available to them and willing to spend, they developed the Xbox 360 and started to buy exclusives. With help from Sony’s arrogance and a poor PS3 launch, Microsoft looked like they were in pretty good shape. They began snatching up Sony’s exclusive games like it was nothing. Sony had an approach of not paying for exclusives, while Microsoft did not care at all. While being exclusive to Playstation last generation, games such Resident Evil, Final Fantasy, Devil May Cry, Tekken, Star Ocean, Grand Theft Auto, Virtual Fighter, and more found themselves on the Xbox 360. They payed for exclusiveness of Bioshock and others. And what had it earned them up to 2008? A 5 million lead after a year head start launch from Sony. In 2008, Microsoft was losing the sales war to sony until around September, when they made the 360 free with coffee at 7-11. Nah, just kidding. But they did drop the price to a low of $199. This allowed a lead of another 3 million for Microsoft at the cost of losing more money on the Xbox 360. Sounds like a good idea right?
Now, what I’m trying to present here is this. When does it end? I mean, they have to run out of money eventually, right? I haven’t even mentioned the $1 billion lost on the RROD issue. Microsoft can’t keep doing this forever. They’ll eventually dry up on cash for their games division in next generation at this rate. What I present to Microsoft is to keep the $50 charge for Xbox Live. Yes I know, its really frustrating for us consumers. But it seems like a necessity for Microsoft to keep this money flow coming in or else. Well, I hope that it doesn’t to that point. For the next generation, Microsoft should not focus on buying up companies or exclusives and should instead continue to focus on their online service and in-house development. Make Rare good and not just release another Halo. Turn a profit. Become the best.
tapout
Interesting article although I don’t think they paid for most. I think there was a realization by most developers that it they were going to spend so much money developing for the Ps3 they might as well also develop for the 360. Turned out to work the opposite way but it allows them to develop expensively on 2 rather than a little less expensively one 1.
Now this doesn’t mean they didn’t buy exclusivity or even games themselves. All the Square Enix games in Japan, Tales of Vesperia, Bioshock, Lost and Damned, Fallout 3 DLC, ect were all helped by MS monyehatting.
And then of course there are the losses in the generation. MS is close to $5.5 billion in losses since the start of the original Xbox if I remember correctly. Little do people know, none of that includes how much they spent on research and development in the years before that which I think amounted to about something similar to what it’s at in losses right now.
In other words, MS is never going to turn a profit in the games industry and I don’t think they ever planned on doing so. I will never stop saying that MS’s sole purpose in this industry is to slowly dwindle Sony’s dominance such that they can hurt them in other markets where they pose a threat to MS. Eventually it’ll lead to a hostile takeover.
I don’t have anything to back it up but it’s what MS does and why I deeply despise the corporation. I love their video game consoles but they as a company are just terrible.
uh huh