Microsoft settling in for second place?
by Kyle Orland 
{ Sep 5th 2008 at 3:50PM }
The question, then, becomes how much this sales position really matters. Microsoft's sales might fall just shy of Nintendo's, but that doesn't seem to be hurting the company's ability to attract big-name games or roll out new features for the system. In fact, with Nintendo's decidedly less powerful system catering to a decidedly different audience, Microsoft's position relative to Nintendo might not matter nearly as much as their position relative to Sony. And on that score Mattrick has no doubt: "We will sell more consoles this generation than Sony," he told BusinessWeek.
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Reader Comments (Page 1 of 3)
Ninjakamster (PS360 FTW!) @ Sep 5th 2008 3:53PM
They really DON'T have to be in 1st place, they just need to make some profit, they've lost a lot of money on the Xbox and 360, I wonder how much they have recouped.
Their system can't really compete with the Wii, how can a BMW compete with a Honda, expect to be in 1st place in sales?
samfish @ Sep 5th 2008 3:59PM
If the Wii if a Honda, then it's a Honda that can fly, unlike the more expensive BMW that is rooted to the ground.
I hate those insipid car analogies.
Poisoned Al @ Sep 5th 2008 3:59PM
They don't even have to do that. Remember that Microsoft has more money then God, and can flush millions away and it wouldn't make a dent. Even if it costs them in the long run, getting their brand under your TV as well as on your desk will be worth it to them. Sony on the other hand, don't have a Scrooge McDuck bin of money to fall back on, which I find worrying. I think the PS3 is a bit shit, but I don't want Sony to give up making consoles.
samfish @ Sep 5th 2008 4:05PM
"Even if it costs them in the long run, getting their brand under your TV as well as on your desk will be worth it to them."
That's why they entered the console market in the first place. It's the main reason I've never been comfortable with them joining the consoles wars, and now find it hard to get excited about the PS3 this time around, too. They both are using their consoles as Trojan horses to get into our living rooms and control everything...and I'd much rather see a more organic solution to that, rather than be locked down by MS and Sony's proprietary media formats.
Poisoned Al @ Sep 5th 2008 4:07PM
@samfish: A Honda that can fly, but doesn't seem to go anywhere.
And I think the 360 is more a Mercedes. Costly, high performance, and will break down if there's a week in the month.
Zertoss @ Sep 5th 2008 4:14PM
If we're going with vehicle analogies and the Wii is a Honda, then the 360 is a Ford F-series. Sure, it has a bad reputation of breaking and it can be kinda noisy, but it really does work more often than not and has a lot of power. The PS3 is like the Toyota Tundra. It's big and powerful like its American competition, maybe even MORE powerful, but it's also quieter with a smoother look.
Saeth @ Sep 5th 2008 4:15PM
They've lost a lot of money to the RROD, not the system itself. The system was making them a profit before the price drop.
Anyways, making a profit off the consoles is just a plus for all three companies. Software is where the real money is made.
They're making oodles and oodles off all of those 100$ wireless adapters, 150$ 120gb harddrives, 50$ subscription fees, and the endless amounts of downloadable content.
samfish @ Sep 5th 2008 4:16PM
"A Honda that can fly, but doesn't seem to go anywhere."
Well if BP, Shell and others would wake up to how popular the flying Honda is and build more flying Honda refueling stations...
Saeth @ Sep 5th 2008 4:18PM
Bleh, I talked about software making them money but I throw in accessories as an example.
Point being 360 pushes a TON of software (Just look at the charts - almost every multi-platform game gets the floor wiped clean by the 360 version)
Poisoned Al @ Sep 5th 2008 4:21PM
No, I think the PS3 is a Ferrari. Fast, expensive, totally impractical and owned by wankers.
Titanium_Orchid @ Sep 5th 2008 4:33PM
@Poisoned Al
Why all the hate? Did your dog get run over by a Ferrari driven PS3?
el serpiente @ Sep 5th 2008 4:37PM
Poor Al can't afford a PS3. Shall we take up a collection?
Shagittarius @ Sep 5th 2008 4:37PM
"They both are using their consoles as Trojan horses to get into our living rooms and control everything..."
Whereas nintendos Trojan horse gets to your living room opens up and Nothing ever comes out of it.
Duke @ Sep 5th 2008 4:40PM
I agree that the first place issue doesn't matter to the business. What matters is how much they make off of their sales. Having sold millions of units and a huge amount of software are all that matters to a business. Its not like they go look at their bank statements and think "This really is nothing at all since we aren't THE number one console. It disgusts me!"
All fanboy bs aside, you all know that if a product makes boatloads of money, it will thrive. Further, they will continue to get great games because of the high install base - what does it matter that they aren't the number 1 console in sales? Developers don't ignore dollar signs. (Generally)
*This post is car analogy free.
Zertoss @ Sep 5th 2008 4:48PM
Well there you go, Shag. The Wii is the least likely to take over Troy. That could be a selling point!
Wii - 100% Achaean Free!
Poisoned Al @ Sep 5th 2008 4:48PM
"Poor Al can't afford a PS3. Shall we take up a collection?"
BUZZZZZZ! Oh dear, look at what you COULD have won! As my primary games system is a PC, money isn't the reason I don't have a PS3. Well done on using the oldest and shitest fanboy argument possible. Have a brown star!
Hala Madrid!! (Madrileno hasta la muerte!) @ Sep 5th 2008 5:00PM
"Oh hell, Son, I was high that day. That doesn't make any sense at all, you can be second, third, fourth... hell you can even be fifth"-Reese Bobby
Haggard @ Sep 5th 2008 7:35PM
I'm in a similar position to Al. Pretty much exclusively a PC gamer, except I have a PS3 to play Rock Band. I hate the freakin' thing.
If I didn't have a PC (which maxes out new games and wasn't any more expensive than the PS3 at launch - go figure) I'd probably go down the 360 route; but frankly, I've played consoles and I just couldn't trade the experience of my PC for one of those idiot boxes.
Lone Starr @ Sep 6th 2008 12:53AM
Ninja brings up a good point. There's a little (or big, har!) thing called economies of scale. Being first may not be optimal in terms of profit for MS.
Also, this isn't doom and gloom from Mattrick. How credible would he be if he obviously OVERsold the brand?
RC @ Sep 5th 2008 3:53PM
MS will finish 3rd this generation, unless they artifically end it by rushing out another console next year.
Poisoned Al @ Sep 5th 2008 4:02PM
How do you work that out without using fanboy logic? At the moment, Microsoft sell more then Sony and that don't look like is going to change any time soon. I hope Little Big Planet DOES push the PS3, but I have doubts.
Zertoss @ Sep 5th 2008 4:08PM
I don't know, man. All those facts he cited are solid.
Hyams @ Sep 5th 2008 4:54PM
PS3 has outsold the 360 every week since the Christmas period last year, and has cut the 360's lead down by around 2 million.
Unless the 360's US price cut really gives it a good boost, it's pretty much destined for a close third place. PS3 could quite possibly catch up by the end of 2009.
Arnon @ Sep 5th 2008 5:12PM
Yeah, except your logic really doesn't make sense.. it outsold it by.. 20k last month? it's not exactly a lead, and even if it continued, it would take them about 3 years for the PS3 to surpass the 360 in total sales.. and that doesn't really seem possible due to the recent price drop and the HUGE games (That mostly everyone knows about, even if they don't game) that are coming out this holiday.
Hyams @ Sep 5th 2008 5:23PM
PS3 has outsold the 360 by 2 million so far this year.
So the 360 currently has a 5 million lead (down from the 7 million at the begining of the year).
Total sales during the Christmas period tend to be pretty much the same as the entire rest of the year. So if everything repeats, the PS3 will outsell the 360 by another 2 milliong.
But the 360 is having a price cut in NA...
So let's take a guess at how successful the price cut is. Let's say it helps the 360 sell another million, which is both reasonable and impressive, all at once. Remember: this price cut is only in the one region (NA).
It is therefore possible that the PS3 will outsell the 360 by another 1 million during the Christmas period.
That'll give the 360 a 4 million lead. It's entirely feasible for the PS3 to get rid of that 4 million year in 2009. Remember: the PS3 will most likely get a world wide price cut next year, to counter the 360's NA price cut.
Hyams @ Sep 5th 2008 5:25PM
Also, you completely ignored the PS3's impressive game selection. I'd say the 360 and PS3 are pretty much equal when it comes to their games this fall (with a slight advantage to the PS3, IMO).
Albert @ Sep 5th 2008 7:27PM
Err, slight lead to PS3? TIED?
PS3 Exclusive:
SOCOM: Confrontation
LittleBigPlanet
Resistance 2
MAG (Is it even coming out this year?)
360 Exclusive:
Rock Band 2 (Timed)
Silent Hill
Fable 2
Gears of War 2
Banjo Kazooie
Lips
New Dashboard
Left 4 Dead
Alan Wake (Maybe 2009 lol.)
Come on dude, I haven't put anything other than a BD Movie in my PS3 in over three months.
Price cut, new games, and the most anticipated game of the year will boos the 360 this holiday. No way in hell MS is screwing around this year.
By the way, 360 is turning a profit. In the beginning stages it wasn't. Wii was throughout its entire life and is the PS3 making any profit, not sure.
Hyams @ Sep 5th 2008 7:44PM
Dude, couple of problems with your list:
1) You missed out Motorstorm 2,
2) You also missed out Wipeout HD,
3) Silent Hill is coming to the PS3 as well,
4) Rockband 2 is coming to the PS3 during the Christmas period as well,
5) Alan Wake isn't coming this year,
6) MAG isn't coming this year either,
7) The dashboard update isn't a game.
8) Lips? Seriously?
I mean, really, the big titles for each console are:
PS3: Resistance 2, LBP, Motorstorm 2.
360: Gears 2, Fable 2, Banjo.
Like I said, pretty much a tie, but I'm giving *my* favour to the PS3.
Hyams @ Sep 5th 2008 7:47PM
Also, yes, the PS3 is making profit now. Money generated from game sales is greater than money lost on hardware. Microsoft are in the same position.
And yes, Sony are still in debt, but then, so are Microsoft.
Arnon @ Sep 6th 2008 6:47PM
Gears 2, Fable 2, Banjo-Kazooie 3, Left 4 Dead, and some arcade games.. (I think Banjo-Kazooie 1 is coming for it.)*
Matt @ Sep 12th 2008 9:24PM
hymas:
u must have missed the june/july figures for consoles sales.
i think joystiq now told you that the 360 sold more consoles than ps3 BEFORE the price drop.
after the price drop the gap will widen a bit more..
it wont be closing anytime soon... lol
Matt @ Sep 12th 2008 9:31PM
hymas: mr logic who has little logic:
motorstorm 2 is not a big release.
(motorstorm 1 is the best selling ps3 game because it was bundled with 2-3 million ps3 consoles)
not many people went out and bought that game... lol.
gran turismo 5 in 2009 will be though.
resistance 2 will probably sell 50% of the amount of total copies that gears 2 sells.
wanna bet?
cod5 comes in november.
remember its not only about exclusives.
cod5 will probably sell a lot more copies on the 360 than the ps3.
all cross plat games will continue to sell better on the 360, further driving sales and profits.
and you left out a few 360 exclusives.
but you could not find any other ps3 exclusives.
last ps3 game i played was mgs4 and ninga guiden sigma. and not MGO, that was just a joke.
JohnMazz @ Sep 5th 2008 3:55PM
I dunno, I think for Xbox to come in second isnt a loss. Sony is another big company with, I have to admit, a really cool system that can do some really cool things, and if MS beat it, I'd count that as a victory. First would be nice but at least they're not third...
Dirty @ Sep 5th 2008 4:25PM
It must be pretty painful to drop from overwhelming first with ps2 to third for ps3.
On the bright side they are still selling ps2s.
Red Leader @ Sep 5th 2008 3:57PM
I know from a business point of view that MS isn't in the lead, but judging by the quality of their product (minus RRoD's), MS makes the most enjoyable console right now.
BananaBoat @ Sep 5th 2008 3:57PM
Ok, look, there is nothing you can really do to combat a console that people have no problem spending 250 dollars on for no other reason than to play Wii Sports, and never buy another game. Microsoft's goal at this point is to completely edge out Sony and become the defacto hardcore gaming platform next gen. They are already winning in terms of software attach rate, number of consoles sold (even if you take away their year lead), and in bringing former Sony exclusives over to their platform (Grand theft auto, Final Fantasy, etc).
The 360 isn't competing with the Wii at this point. It can't.
Fernando Rocker @ Sep 5th 2008 4:12PM
"... no other reason than to play Wii Sports, and never buy another game"
But Wii do you say that? I guess you follow the charts here in Joystiq every month with the NPD for the USA and every week with Media Crate for the Japanese sales.
The Wii is selling software, even more than the 360 at this point. The attach rate is lower (but higher than the PS3) but the huge install base makes the diference.
Just check the this chart from UK last week, and the Japanese too... and check the NPD here in Joystiq.
http://kotaku.com/5044118/british-sales-charts
http://kotaku.com/5045561/how-did-too-human--afrika-fare-in-japan
80% percen of the titles are from DS and Wii platforms.
Vidikron (FU) @ Sep 5th 2008 4:19PM
Yes, look at all that quality software on those British charts. Good job Nintendo!
tmacairjordan87 @ Sep 5th 2008 5:03PM
Yeah seriously fernando. All you're doing is proving to us how shitty the wii and ds lineup really is.
Dale @ Sep 5th 2008 5:06PM
I have to disagree with you... I bought a Wii and have owned many, many games for it.
Of course, I played each of them for about an hour before heading back to the 360, but still.
BananaBoat @ Sep 5th 2008 10:15PM
...Obviously I wasn't referring to people with a vested fanboy interest in the Wii when I said that people are only playing Wii Sports. Of course "hardcore" gamers have bought Zelda, Metroid, Smash Bros, Mario Galaxy etc by now, but the soccer moms and the grandparents? Wii Sports, and Wii Play is literally all they play. That's millions of consoles being sold that aren't selling any reasonable amount of software with them. It's fine for Nintendo, since they make money on every console sold (unlike Sony) but it really sucks for the third party developers. Then you have to take into account that most of the wii software sold, is first party, which is extremely harmful to third party developers (and is why you see so much cheaply made, third party garbage on the Wii)
The Wii console outsells the 360 and the PS3(possibly combined) but as consoles get added to the install base, the attach rate isn't charting anywhere near as high as it should (except for first party games). Take away the first party titles, and the Wii isn't even doing as well as the PS3 with attach rate. The DS is irrelevant, as it's not even a home console.
I don't know any other way to put this, other than to say that the Wii is such a victim of it's own success, that it shouldn't even be mentioned in the same breath with the PS3 and the 360 anymore. If the third party developers were smart, they'd completely abandon the Wii, and force Nintendo to turn it into even more of a first party machine than it is now. Why anyone other than the Wiiware devs would bother to sink time and money into making what is doomed to be a gigantic flop, is beyond me. Mad World is the only light at the end of the tunnel as far as I'm concerned. If it weren't for the distant hope of a new Zelda sometime this decade (hopefully) I'd probably sell my Wii right now and buy something more useful...like...I don't know...anything else.
Oh, and I may have made it sound like I wanted the 360 to win over the PS3, when I'm actually pretty much indifferent. Just saying the PS3 and the 360 are in competition with each other, while the Wii is in an entirely different league.
Wah-hah-ha! @ Sep 5th 2008 11:23PM
You presume that all 3rd party titles are doomed to be a gigantic flop? Where do you get that?
BananaBoat @ Sep 6th 2008 12:08AM
Ok, in the interest of political correctness, I'll amend my statement:
Games that aren't first party, and aren't for kids (or sports games) are doomed to failure on the Wii. This statement isn't to be taken literally, but rather as a mostly correct generalization on the state of third party Wii game sales.
Fenix @ Sep 5th 2008 3:58PM
"analyst Billy Pidgeon told the magazine, "I expect the 360 to remain in second place this generation."
What happened to "Year of the PS3", or "PS3 will take lead over 360 in 08" and all that jazz?
samfish @ Sep 5th 2008 4:02PM
PS3 will overtake it eventually, unless the PS3 starts to lose steam in year 3 the way the 360 seems like it is.
So say I, the Amazing Criswellfish.
Fernando Rocker @ Sep 5th 2008 4:02PM
... just wait until...
riggs @ Sep 5th 2008 4:06PM
until you stop posting?
Red Leader @ Sep 5th 2008 4:08PM
It aint 09 yet.
Fenix @ Sep 5th 2008 4:13PM
I dont think the 360 lost steam but rather just hit the ceiling on buyers willing to pay that much for a new console. This price cut will change things a lot. Especially this Holiday Season with the help of some other little title.
"I have a rendezvous with Death..."
xGeneral DEATHx @ Sep 5th 2008 4:41PM
I agree, Fenix. I've got some friends that bought a Wii as their first console purchase this generation, and their systems have been collecting dust...just the other day, two of these friends finally said they wanted to get a 360 because it was hitting the price "sweet spot" for them. I don't mean to bash the Wii, the numbers don't lie, but it's basically a financial fad...there are some quality titles on it, but for the most part, it hits a price point "sweet spot" with the SWEET low price of its shovelware library, which even the most diehard Nintendo fanboy will admit is a HUGE library.