GamePro: "Six Reasons The Xbox 360 Is in Trouble"

pappylap

1. It's unreliable. As Microsoft finally acknowledged this month, Xbox 360s fail more often than the company "is comfortable with." Some reports pin the "Red Ring of Death" failure rates as high as 33%. As a result, Microsoft increased the system's warranty from one to three years at a sizable and appreciated expense, but the company's unwillingness to fully disclose what's causing the problem undermines the solution. Gamers don't want to risk $300-400 at the chance to play games on 360, they want to make sure it can and will play games for years to come. Pile on the recent class-action lawsuits claiming that the machine scratches discs at random, and it becomes clear that the Xbox 360 isn't nearly as dependable as it could be.



2. It only sells marginally better than Xbox. Launch-to-date sales of Xbox 360 in the US are only 200K units more than the original Xbox for the same period. That's a bad thing. Granted, calling the first Xbox a failure would be unfair. But the machine was hardly a success as it lost billions of dollars throughout its life and only managed to sell 24 million units worldwide (14% market share) in comparison to PS2's 115 million (67%) and GameCube's meager 22 million (13%). Microsoft needs to sell more 360s than it did Xboxs -- many more -- if it wishes to secure a long-term place in the video game industry. The company's unprecedented and steadfast reluctance to drop the 360's $399 price despite Sony's exorbitantly priced PS3 could come back to haunt them.



3. A recent string of bad publicity. Microsoft's long-running denial of Xbox 360 failure rates mentioned above isn't the only public relations gaffe experienced this year. Robbie Bach, parent president over the XBox division, dumped $6.2 million in Microsoft stock just weeks before the company announced the costly $1.15 billion warranty extension. It marked the first time Bach had traded stock in eight months at a non-scheduled time, according to filings. Microsoft called the incident "unrelated," but the appearance of an insider selling stock right before a huge loss just looks bad. In addition, having Xbox president Peter Moore leave right before its biggest and most important holiday season doesn't look good either, whether voluntary or not.


Related FeaturesSeven Ways the Xbox 360 Beats the PS3
What Went Wrong: Microsoft's E3 2007 Press Conference
How to Turn Around the PlayStation 3
4. It has limited appeal. You'd be hard pressed to find a better "hardcore gaming" console than the Xbox 360 at the moment. But how does Microsoft intend to infiltrate the living room (assuming that's their ultimate desire) without first offering software for the entire family? You know, that whole casual-games thingy that seems to be doing so well right now ("Hi Wii!"). While Xbox 360 delivers traditional games in spades, it needs to start doing something different in lieu of superfluous first-person shooters if it wishes to sell more. By all means, keep the good core games coming, but Microsoft needs to surprise gamers with something fresh while broadening the console's appeal. The Viva Pinata series and Scene It! DVD games just aren't enough.


5. It bleeds money. Microsoft has lost unthinkable amounts of money on its Xbox business. In the six short years it's been in the industry, the company hasn't made a dime. When adding the recently announced $1.9 billion losses incurred in fiscal 2007, total life-to-date Xbox losses are conservatively estimated at somewhere around $6 billion dollars. Despite Microsoft's luxury in funding said losses with its monstrous war chest, the fears of investors are easily justified. But why should gamers care how much money is being spent so long as Microsoft keeps footing the bill? Because gamers should want team Xbox to stick around for the sake of competition and quality of play, not to mention long-term support. Every man has a breaking point, and anyone can pull a Sega and quit the hardware business -- even a rich kid with deep pockets.



6. It still doesn't sell in Japan. Can a console achieve ubiquitous success without the support of the second largest video game market in the world, i.e. Japan? That's the billion dollar question Microsoft is trying to answer while striving for moderate success in the country. Since first launching in December of 2005, however, Microsoft has sold a paltry 420,000 units in Japan -- hardly a dent, though not unexpected. And the allegation by some that the Japanese public don't buy American products quickly loses merit when realizing that even the native PS3 struggles in sales. Microsoft doesn't need to dominate Japan. It never did. But a larger variety of software, and smarter marketing efforts, targeted squarely at Japanese gamers would reinforce the company's global efforts in the video game industry
http://www.gamepro.com/microsoft/xbo...s/124008.shtml

__________________

You can checkout anytime you like but you can never leave.."

50"Pioneer KURO 111FD Pro Elite
Pioneer BD320 Blu-ray player
Pioneer VSX-919AH A/V Receiver
32" & 37" Olevia LCDs
Sony DHG HDD 500 gig DVR
Samsung DTBH260 Digital Tuner
One Roll of Charmin Quilted Plus in each Bathroom...

pearl-drum-man

Some valid points no doubt, some of which are being addressed. If the PS3 was having the same sort of success the PS2 did then I would say the 360 was in trouble, thus far the PS3 has struggled even more, which at least buys the 360 some time.

As for the comparisons to the Xbox, considering it is $100 more than the Xbox ever was, I think any sales improvement has to be seen as a good thing. We still haven't even seen Halo 3 yet, which is sure to move some systems. The fact that MS hasn't felt compelled to cut the price this far along in the life cycle means they must be somewhat confident in the future. It also means they have that card to still play at a later date. Regardless, the next 6 months should be interesting.

__________________
Samsung 32" LCD LN-S3238D
Toshiba HD D2
Yamaha YHT-390BL 5.1 HTiB
Samsung DVD-VR375 DVD recorder/VCR
Xbox 360

Ntruder

I wouldn't consider these reasons why it is in trouble. Everyone seems to expect the Xbox 360 to be the new PS2. Hell, if they split the market share with Sony, they have already gained tons of ground.

1) Not an issue with newer boxes. Launch is such a small portion of total console sales, I hardly think this will have an impact long term. This has been discussed

2) this is a meaningless point. People forget that cheaper consoles sell ten times more volume than expensive ones. Look at the PS2; its still rocking in sales. Probably beating PS3. High Xbox 180 sales ARE a good thing. You know why? Because what do Xbox owners buy in a year when they upgrade? An Xbox 360.

3) Bad pub? Eh. Microsoft has plenty of that any day of the week. Will that have an impact? Who knows.

4) What the xbox is doing is exactly what the PS2 did. Grab up lots and lots and lots of titles. Be the mainstream console that the PS2 was. (which it is already on its way to being) The Wii appeals to a completely different audience, forget about the Wii. Nintendo isn't stealing customers from Microsoft on this one.

5) Apparently whoever wrote this doesn't know much of anything about selling in the console market. Plus, Microsoft has been predicted to start turning a profit in Q1 of 2008.

6) This COULD be what keeps the PS3 alive in my book, IF the PS3 starts selling in Japan. But thats probably a good thing, keeping the PS3 alive will force Microsoft to be competitive. I don't even want to imagine a console market monopolized by Microsoft like the OS market is.

Steve44

...that confirms why I bought the PS3 based on potential. 360 is beating the PS3 now in terms of games and sales but the PS3 has more coming down the road, more games, HOME, (assuming online play will remain free) online play is still FREE, can use it for more than gaming - BluRay, media - videos, stream music, pictures etc....I still use all this.

Anyways, bad publicity for 360 is only a "fad", if you will. Assuming Microsoft can get back on track then it won't matter. Sony has had their issues even with the PS2 but still comes out the better buy than the original Xbox.

As far as NTRUDER's quote, "The Wii appeals to a completely different audience, forget about the Wii. Nintendo isn't stealing customers from Microsoft on this one."
That's not smart at all. I would suggest you 1. look at the industry more and/or 2. Get an education in marketing at the very least.
I'm not going to get into detail on this one but just think of this...
Pepsi and Coke products: They are direct competitors right? Just like PS3 and 360? Pepsi and Coke are not in the soda industry. They are in the FOOD industry. Every other liquid and food product affects the sales of Coke and Pepsi products (which includes food).
If the demand of beer goes down, what happens to Pepsi and Coke? (It increases) Yet they market to completely different markets! but are still related and affect the sales of each other.

Therefore, one can suggest that the Wii sales SURE AS HELL affects the PS3 and 360 sales. Holy crap, I can't believe I had to write all this.

macmarkus

I also read an artical reviewing the head of MS entertsinment division claiming they would see a profit in Q1 of 2008 as you stated. So I'm not sure where this "loosing tons of money" theory comes from.

It has also been pointed out to me when I pointed that out, by a veteran forum member,(PFC5) that they may be commenting on that single "division" of MS making a profit and not the company as a whole ?? I don't know about such things, except when they say it's the first time to see light ($$$) at the end of the tunnel since they launched the original box, I havr to think something is going their way, wouldn't you ?

Not to mention more developers are putting out exclusive titles for the 360. That speaks louder than anything anyone else says...IMHO. If the developers aren't worried (and who has more to lose ???) than I'm not worried. Then again, I have no shares in any of these places either, ha ha !

Good food for thought all.

Peace

mshulman

360 has more coming down the road too. Only thing you mention that is advantage of PS is blu-ray movies and free online play.

Other than that, they are both pretty equal. 360 has more games now but both having new and exciting games on the horizon.

__________________
Toshiba HD-A2 and HD-A3
PS3
Sanyo PLV-Z3
Canon HF-10
Onkyo 805

"I eat green berets for breakfast and I'm very hungry!"

macmarkus

Absolutely, to say Wii doesn't affect sales of either 360 or PS3 is foolhearted.
If you take wii out of the equation...IMO, PS3 is dead...I'll qualify that with a gaming device at least, still a niche for Blu-ray. A majority of those buying nintendo are doing it directly at the expense of the 360, IMO. It is the only viable alternative to the 360, people look for cheaper products to do, essentially, the same thing. PLAY GAMES ! The PS3 may have "Free" online etc. but what good is it if I can't find someone on there ?

For the PS3 to get back in this race, they have to come down AT LEAST another $100, and I don't see that happening this year. As with the PS2 vs. Xbox, even though the xbox was a superior piece of hardware, as the PS3 is to the 360, next year is too late ! The only difference this time around is, now the Wii is the PS2 and the PS3 & 360 are the Gamecube & xbox !

We don't know anything really, any of us. but it's fun to think we do, ha ha !

peace everyone

junehhan

If these developers continue to go multiplatform or jump ship from the PS3 alltogether, there might not be much potential in the future. It's appeal as a BDP are still limited considering how pitiful the HDTV adoption rates are, and the fact that many people buying a console want to play games first of all. Bad publicity for the X360 as you say is just a fad as it will die out and be forgotten before we know it. The PS2 had lots of bad publicity when those drives started failing, but it still sold fine and has been outselling the PS3 although i'm not sure about how that will happen after the recent PS3 price drop.

__________________
X360 Gamertag junehhan
Toshiba HD-A1 HD-DVD player
-Klipsch RSW10 Subwoofer
-Pioneer VSX1016TXVK reciever
-Klipsch Synergy Quintet III 5 channel speakers

AIM: jhhan80
HD-DVD's: Loving it!
BD's: When we get a reasonably priced BDP with lossless decoders
Everyone wants to live at the expense of the state, they forget that the state lives at the expense of everyone
- Frederich Bastiat, 1848

strawberry

Not really looking to start a cut and paste war with you, Ntruder (although I guess I have a funny way of showing it, don't I?) - as I tend to agree with you overall that there's no reason to predict doom and gloom for the 360, (I sure hope not- as I'd hate to think that the 360 in my living room won't turn out to be a good purchase!) I do have a bone to pick with a few things from your post, though.

I don't get that sense at all. Most people seem to be expecting the PS2-like sales performance from the Wii, not the 360. I think the jury's still out on that, myself- but if there's a consensus opinion out there- that's what it is.

Yes- this will be an issue with newer boxes. All MS has started to do to combat the 3RLOD issue is use new heatsinks for the RAM and the GPU. AFAIK, they're still using the same cold solder on the board and the same clamps on the underside which will still create tensioning that will eventually break the solder that holds the chips to the board. The only thing the newer heatsinks will accomplish is a further delay of the inevitable. This issue still needs to be more properly addressed moving forward.

The 360 is nearing its 2nd anniversary and has performed nowhere near as well in terms of hardware sales as the PS2 did during its first two years. It's a machine for hardcore gamers- and a damn good one- but has a long way to go before J6P decides it's time to pick one up for his 6-year-old kid.

In general, though- I think it's still to early to make categorical claims about any of these 3 consoles. We're still within the 1-year launch window of two of these machines, and not far removed from it for the third. And, if the history of the console hardware industry tells us anything, it's that nothing matters less than launch. It's what happens during the middle 2 years of any given console generation that determines the market share race.

__________________

Home Theater Setup
ISF-Calibrated Hitachi 57S500 HDTV
Denon 2807 AVR
7.1 JBL Venue Series Speaker System
Toshiba HD-A1
PS3 60 Gig
Xbox 360 Premium
Moxi BMC 9022 DVR
Logitech Harmony 880

Ntruder

First, I have a bachelors in Consumer Science and a minor in Marketing from the best university within 500 miles, so why don't you shut the F___ up about my education and stop being a prick.

Second, don't treat me like a two year old. I don't literally mean that the Wii sales have ZERO affect on the 360. So you're stupid semantic s argument is worthless.

Third, I know about 10 people who bought a Wii thus far. Only two of them own ANY other video game systems. They appeal to different audiences. And the simple fact that the Wii does not do what the Xbox does, and the Xbox does not do what the Wii does shows that they are not direct substitutes. Nintendo and Xbox can dominate the market together because they offer completely different things, unlike PS3 and 360. They are direct competitors. The same kinds of people buy those two systems, and most consumers will NOT buy both. But consumers WILL buy the Wii and the 360.

Its not a difficult concept to grasp. Try to focus on the real points, and stop trying to pick out stupid stuff to argue with me about.

Ntruder

Well remember, the PS2 didn't have the competition that the 360 has. Think of it this way: The PS2 was a returning console. The Nintendo had the gamecube on its way, and Sega had the already doomed Dreamcast. Xbox 360, a returning console, has the returning heavyweight champion Playstation coming back, and the wildly popular and innovative Nintendo Wii. The Xbox 360 has 10x the battle to steal the market than the PS2 did. Heck, that was a shoe in with that competition. Xbox 180 hit the market way too late, brand new console from a company that nobody likes. Shoe in for PS2. Totally different story for Xbox 360.

Secondly, I don't think Xbox is really targeting J6P (whoever that is) and his 6 year old son. If they are, they are doing a piss poor job of it. Viva Pinata? Come on. Just buy the kid a Wii. I just don't think this is the market that Microsoft is attacking. This is what the Wii is gobbling up, and there's really nobody to challenge it. The Xbox is going for the PS2's share of the mainstream gamer. They're expanding their third party support like crazy, and stealing former PS exclusives. They're doing a pretty good job so far, especially considering what I said last paragraph.

I agree with your first sentence, and I know that launch is meaningless in the long run. The PS2 is still moving great, and it launched in what? 1999 or 2000? Only a few million sales in the first year, 125 million now.

Ntruder

Ugh... Read my post above, I shouldn't have to explain this. I know you understand my point. Its like a BMW 5 series' sales aren't going to be horribly affected if Honda releases a new Accord. Not the greatest analogy, but you get the point. They both appeal to midsize car buyers, and every time one sells, the other does not, (or potential video game players) but they clearly are intended to appeal to a different crowd. Furthermore, the sales of Mercedes E-class is going to have a way bigger impact on the BMW 5 series than the Accord would have. Make sense?

You have some good points, and this will apply in many cases, but the Wii is not the next gen replacement to the Xbox or PS2. Its a new experience, and it doesn't fill the same void that Xbox 360 will. Biggest point I'm trying to make is that every Wii customer was not a potential Xbox 360 customer. Its probably less than half. Out of the Wii owners that I know, none of them were potential Xbox 360 owners, so the 360 in this case isn't affected by the Wii's success.

You guys are lumping video game players into one large category. Nintendo has been so successful with the Wii because they did NOT lump video game players into one large category. They are reaching out to people who don't play games and showing them something that they can love.

Steve44

pappylap

Hey Strawberry, Im heating up my popcorn and icing down my beer...Do you think this one has the potential to go 12 rounds...?

.........ouch!

__________________

You can checkout anytime you like but you can never leave.."

50"Pioneer KURO 111FD Pro Elite
Pioneer BD320 Blu-ray player
Pioneer VSX-919AH A/V Receiver
32" & 37" Olevia LCDs
Sony DHG HDD 500 gig DVR
Samsung DTBH260 Digital Tuner
One Roll of Charmin Quilted Plus in each Bathroom...

DeathDealerB

First NTruder vs. Glow, now NTruder vs. Steve44. NTruder now taking on all comers!!!

DeathDealerB

__________________
Samsung HL-S6187W
Sci. Atl. 8300 HD DVR
Xbox 360 Live
Gamertag - DeathDealerB