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[sonycowboy]

I think we've seen many posts that make the assumption that the Xbox will be discontinued for multiple reasons:

1) All software development on Xbox seems to have ground to a halt. So, perhaps Microsoft has already told developers it's gone.
2) It costs too much to drop to $99 (or $79)
3) They want to focus consumers on Xbox360
4) They want to put 100% of energies into producing the Xbox360 from a manufacturing standpoint.

And I've sort of gone along with it. However, with discussions regarding the PSOne's life cycle and the PS2's potential remaining lifecycle, it strikes me that it would be a huge mistake by Microsoft. And I'm beginning to think that the Xbox

1) There are a whole class of buyers that don't know the Microsoft brand at all. Those that buy systems at $129, $99, & $79. If they aren't introduced to Xbox this generation, then they potentially won't experience it until 2008/2009. But they will be experiencing the PS3 and become familiar with the Playstation franchises. That seems like a real pitfall of stopping production.

2) The PS2 will continue on, unchallenged, in 2006 & 2007 for the consumers dollars. This fits in above, but it means that Sony could have a 80%+ market share of those consumers.

3) They're going to lose for Xbox360 anyway and they've got the money. They can't lose that much on the Xbox @ $99 (< $100, potentially < $50 next year), and they can continue to make quite a bit of income on XBox software, that they will lose out on.

4) Publisher's would love to opportunity to make some extra money off of the Xbox as the investment in software tools are pretty much behind them and it's as cheap to make an Xbox game than ever.

5) By stopping software development, they're leaving out new fans (< 1 year), who might not be too happy that their system of choice has no new experiences for them.

Whattya guys think?

 

[DarienA]

I think it will... I think it's a mistake not too.... the console still has lots of life in it, and there is a strong userbase of folks who buy stuff(after the curve has pasted), sales of the PSOne after the PS2 became the new crown jewel show that low cost software, with a low cost unit = a nice tidy profit.

In terms of costs, as I understand MS can't redesign the unit to make it smaller? Is that true? I'm not sure why, I keep hearing that modders have gotten the components in to smaller units... and I don't see cost as being that much of a factor(ie. the parts too expensive to keep buying to product the unit). Too expensive? This is MS, they can afford it. I think it would help perception to keep the Xbox a viable unit.

 

[jedimike]

You're using a lot of assumptions there...

For one, I've seen Xbox games planned all the way until Q4 '06. Xbox development will certainly slow down, but there won't be an immediate cease. 1st party development will stop, just like on every other console, but 3rd parties can choose to do what they want.

I'm also convinced that we'll never see a $99 price point for Xbox. It will remain >$100 until MS pulls the plug on production this Fall. I really don't think it is a big deal for consumers or for MS. I know Sony sold a lot of Playstations well after PS2 was out, but that was an exception rather than a rule. Typically manufacturers are are comfortable with stopping production on one system to start on another. Sony was just lucky that they had the resources to do both.

I still also believe that MS will have a compatability solution. It may not be available at launch, but they will have an Xbox compatable SKU at some point.

 

[The End]

Not a chance. Sony makes their consoles smaller by integrating the CPU and GPU onto one chip. Being that MS doesn't manufacture their own hardware, this isn't going to happen. Neither Intel nor Nvidia want to give the other the specs they'd need to accomplish this.

As it stands right now, the Xbox hardware is a money hole for MS. they're going to stop manufacturing it as soon as they can.

 

[Link316]

I thought part of the reason for rushing out the Xbox2 so soon was to try to stop the bleeding on the Xbox, that's why it wouldn't make any sense for them to keep producing it and to take an even bigger hit by selling it @ $99 or less

 

[DarienA]

I'm also convinced that we'll never see a $99 price point for Xbox. It will remain >$100 until MS pulls the plug on production this Fall. I really don't think it is a big deal for consumers or for MS. I know Sony sold a lot of Playstations well after PS2 was out, but that was an exception rather than a rule. Typically manufacturers are are comfortable with stopping production on one system to start on another. Sony was just lucky that they had the resources to do both.

Wait are you saying that you don't think the PS2 will sell well when it hits $99? I think that it was the exception rather than the rule because it seems that previously no manufacturer really thought seriously about doing it. I think we need to see what happens this next generation to see if the rule has been changed though, or if the PSOne was really just an exception.

 

[sonycowboy]

I thought part of the reason for rushing out the Xbox2 so soon was to try to stop the bleeding on the Xbox, that's why it wouldn't make any sense for them to keep producing it and to take an even bigger hit by selling it @ $99 or less

Can you really call it bleeding, though? Sure, Microsoft has lost $3 Billion, but in that same time frame, they've had profits of over $30 Billion, and that's without their mountain of cash continuing to grow all by itself.

I just don't see it hurting them and I think it would substantially help their XBox market positioning.

 

[jedimike]

Wait are you saying that you don't think the PS2 will sell well when it hits $99? I think that it was the exception rather than the rule because it seems that previously no manufacturer really thought seriously about doing it. I think we need to see what happens this next generation to see if the rule has been changed though, or if the PSOne was really just an exception.

Not at all... I think PS2 will sell great at $99 even if PS3 is out. I just think that obviously that's not a viable solution for MS and really only works for Sony since they have the resources to manufacture their own products. I also believe that the continued selling of "old" products really has no effect on current products. Selling Playstations at $99 didn't make the PS2 successful. It was just a market that Sony was able to take advantage of.

In other words, I don't think MS is ignorant for stopping Xbox production. It will have no effect on Xbox 360 sales and doesn't serve a useful purpose for MS. There is nothing for them to gain by continuing to manufacture Xbox consoles.

 

[sonycowboy]

In other words, I don't think MS is ignorant for stopping Xbox production. It will have no effect on Xbox 360 sales and doesn't serve a useful purpose for MS. There is nothing for them to gain by continuing to manufacture Xbox consoles.

Nothing useful? Nothing Useful?

Did you read my original post? IMO, letting the cost conscious consumers experience Xbox w/Halo, PGR, Splinter Cell, Fable, Xbox Live, etc is a incredibly strong reason to keep manufacturing them.

THE ONLY REASON I can see for stopping production is if continued production somehow hurt the Xbox 2, but Flextronics can make both. Xbox production is < 1% of their contracted capacity. But, I really don't see how (other than the obvious short term financial ones, and potentially publishers languishing on XBox development) continued production of the Xbox is going to hurt them .

The overall good it can do for the Xbox consumer awareness and acceptabilty to me would seem to outweigh any negative. Also, we know Microsoft is committed, I don't think if they thought it would cost them another $1B to keep the business going that it would phase them one bit if it positions them better for next generation.

 

[Link316]

I just don't see it hurting them and I think it would substantially help their XBox market positioning.

I think still having the Xbox available would hurt their cause for the Xbox2 because the system itself isn't that old and its already more powerful than their competitor's, selling it for $99 could cannibalize Xbox2 sales and it might not even pick up that many new consumers cause Sony can easily match any price point, and who knows? maybe they just want a fresh new start in Japan

in any case I say its a mistake for them to rush out the Xbox2 so soon, and I hope Sony doesn't let MS force their hand and wait until 2007 to release the PS3

 

[jedimike]

There will be more than enough product available to satisfy demand. As soon as Xbox 360 hits, the resell market will be flooded with used Xbox product. If I want to experience any console made, it is very cheap to go buy one and some games even though it is no longer in production.

The difference being that EB and Gamestop make all the money vice MS or Sony. If your 3yr old nephew wants to play Halo when he is 10, he can. And he can do it cheap.

 

[jarrod]

1st party development will stop, just like on every other console, but 3rd parties can choose to do what they want.

Erm, 1st party R&D on Xbox was halted last year. The only games still in R&D are those looking at release next quarter, everything else was bumped up to Xenon or just canceled completely. Meanwhile, you'll still be seeing 1st party PS2 and GC games in 2006 and probably later... hell, even GBA seems to be getting a better 1st party wind down than Xbox.

I know Sony sold a lot of Playstations well after PS2 was out, but that was an exception rather than a rule. Typically manufacturers are are comfortable with stopping production on one system to start on another. Sony was just lucky that they had the resources to do both.

I take it NES, SNES and every Game Boy are exceptions as well then? Because those platforms all went on years after their sucessors hit market.

The truncated Xbox lifespan reminds me more of how Sega almost always prematurely killed their platforms (Genesis & Saturn in particular). Nintendo did the same with N64 (due mainly to the high media costs) and openly admitted later it was a mistake they wouldn't continue with GameCube. You still see some level of budget R&D for Xbox in 2006, but it'll be mostly budget/throwaway stuff I think with little in terms of desirable exclusives. Sort of like Genesis in 1995, where smaller tier developers and giant multiplatform publishers look to make a fast buck off a decent sized base with nothing else to play.

 

[GhaleonEB]

I agree with your points. Microsoft has been insisting that they are in this business "for the long haul" (and to be fair, they are largely acting like it), but I agree that this should include pulling in the discount gamers. Stopping the production early is pretty short-sighted - sales/revenue from a system does not stop the instant the successor is released.

 

[ram]

it will be interesting to see, if electronic arts supports the xbox in 2006 too. we know that they will be developing for the xbox2, but what if they drop the development on the xbox1 as soon as the xbox2 arrives in stores? then, i think you can say the xbox1 is official dead...

 

[Shin Johnpv]

it will be interesting to see, if electronic arts supports the xbox in 2006 too. we know that they will be developing for the xbox2, but what if they drop the development on the xbox1 as soon as the xbox2 arrives in stores? then, i think you can say the xbox1 is official dead...

hell EA still released Madden on the PS1 this year

you will see at least Madden on the Xbox till probably 2010

 

[Shin Johnpv]

in any case I say its a mistake for them to rush out the Xbox2 so soon, and I hope Sony doesn't let MS force their hand and wait until 2007 to release the PS3

the PS3 will be out in 2006 I don't think theres anyway sony is waiting till 2007 to release it

 

[Chi-Town]

I think still having the Xbox available would hurt their cause for the Xbox2 because the system itself isn't that old and its already more powerful than their competitor's, selling it for $99 could cannibalize Xbox2 sales and it might not even pick up that many new consumers cause Sony can easily match any price point, and who knows?

People who would be buying a $99 Xbox aren't the same consumers who'd be putting down several hundred dollars for an Xbox 2. Casual gamers(who are the people who finally buy a system when it hits the $100 price point) don't early adopt and pay the premium to be the first on their block to get the new hot thing.

 

[KeithFranklin]

I think they will just limit the number they make available each month. So they will still create them and sell them but they wont make 2 million available over the holidays. I almost think they have started that already this year.