Kevin Casey wonders if the game is up for Xbox
Will anybody be talking about the Xbox 360 by 2009? Microsoft has just slashed the price, bringing the starter pack in at under the cost of the Nintendo Wii. It seems like a lot of console for your money and sales of the hardware have surged on the back of it.
There are two ways to look at this development. Either it’s a competitive move designed to strike back at arch-rival Sony, or Microsoft’s accountants have depreciated its stock and it needs to shift units before the profit margin bottoms out.
The Xbox 360 has taken a pasting from both the PS3 and Wii. It’s now in third place in terms of monthly sales. Microsoft’s strategy of creating an all-round home-entertainment experience is also undercut by the the failure of HD DVD, the Microsoft-endorsed rival to Sony’s Blu Ray movie disc. HD DVD was scrapped in February – one format war which was over before it started.
Water off a duck’s back for Microsoft, which immediately claimed it would have no effect on its forays into movie and music content distribution. The films would be available for download anyway via XBox Live.
Yet having an in-built high-def disc player creates one more reason to plump for a PS3 when it comes time to choose an entertainment peripheral for your HD TV. With its greater versatility, it looks like Sony is holding the upper hand as far as movie systems go.
Microsoft still has the beating of Sony with its internet strategy – for now. Xbox Live is well established, even if access is tightly controlled by Xbox HQ, and the subscription costs a bit, too (when, as expected, Sony gets its internet act together, it will be offered for free).
Both consoles have similar games and good graphics, so on that front neither can claim pre-eminence.
Microsoft has blamed its recent falling sales on supply shortages. Yet the Xbox’s reliability has been a huge issue – the infamous Red Ring of Death, indicating a trip to the factory is needed for repairs, has struk many a gamer, In fairness to Microsoft, its customer service has been good, but repairs cost them $2 billion (¤1.27bn) last year alone. That’s not just unfortunate; that’s a black hole.
Time is catching up on the ol’ 360. The first one was released in 2005. The question now is, will Microsoft forge ahead and create a next generation of Xbox? It has poured billions into it, only to see Sony’s PS3 catch up, after starting much later. That said, Sony is also still licking its wounds from the launch of the PS3.
Consoles are designed with one purpose in mind – controlling the content you buy for it. Content control is not popular with the consumer. And, in the high-stakes game of console manufacture, it’s not clear if anybody can win.
Except maybe Nintendo, which has just released a new Super Smash Brothers Brawl game that sold 1.4m copies in the US in its first week. Imaginatively, Nintendo’s single-purpose strategy is to sell games, not dominate your music and movies too. It seems to be working.