The Xbox 360 has been riding high on a wave of good news. From boosts in stock performance to Sony's stumbles, it would appear all is happy in Microsoft Land. However, for every Candyland we find there's bound to be some tooth decay.
Susquehanna Financial Group has calculated that the Xbox 360's attach rate is currently a 5.2 (meaning there are 5.2 games circulating for every Xbox 360 console sold). While the number may seem impressive up-front, the high attach rate could ultimately predict the 360's failure. The idea is that casual gamers don't buy a lot of games, but there are many more of them; a high attach rate indicates a hardcore crowd. According to SIG, "an attach rate of 8 and an installed base of 50 million is superior to a console with an attach rate of 12 with an installed base of 20 [million]."
A high attach rate is a good thing early in a console's life -- publishers know they can pull a profit early on -- however, as time goes by, those same publishers will find that competing for those 5.2 units sold will become difficult when the install base doesn't grow. If the Xbox 360 still has a high attach rate, it is not outside the realm of possibility that it will be an enthusiast machine, not a mass-marketable product (SIG thinks the PS3 may be worse). However, if the console is selling for a major loss, a high attach rate may not be a bad idea.