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[Kevin - The Alchemist - Sonney <alchemist AT darkcanvas.com>]

On Sat, Nov 17, 2001 at 10:17:36AM -0500, Thomas Beckett spoke thusly:
>       That's called "penetration pricing".  They figure that (almost) every
> Xbox unit they sell is one sale that Sony or Nintendo don't get.  And
> every Xbox sold is a customer captured for the games/software that work
> only on Xbox, and for which MS gets a licensing fee for every unit
> sold.  And every Xbox sold contributes to the network externalities
> among consumers that increase the value of the next Xbox waiting to be
> sold.  MS is built on network externalities ("the value of a network
> increases geometrically with the number of members in the network" more
> or less).  

And the funny thing is, most console gamers I know own more than
one. because the "kilelr games" of each season are pretty platform
specific. The thing Microsoft has missed is that console games isn't
about market penetration, per say, but quality of games. Nintendo beat
the Sega genesis because they SNES had better games, something I hate
to admit because the Sega (which I won) was a better box
technologically. Sony beat both Nintendo and Sega with the PS1 because
the games were better *AND* the box was better tech. 

Microsoft will probably burry Nintendo. I dowbt that they'll go away,
but I also doubt that Nintendo's Gamecube can come close to the XBox
in terms of marketing. Like the Genesis and Dreamcast, it might be a
tech marvel, but if the games aren't there...well, what's the point in
buying the system? or keeping it?

>       So buying an Xbox because you're against Microsoft and you want to
> subtract a few pennies from Microsoft's bottom line is counterproductive
> in the long run, because MS stands to gain much more if you buy it.  

Somewhat. The gaming market is fickle, unlike the PC market. This
year's top seller could be next year's doorstop. Market History alone
show the rise and fall of several promising platforms (and the XBox
does have some promise, M$ or no), that were burried by lack of games,
or worse, lack of developers. How much does it cost to become an XBox
developer? I have no idea. SInce the majority of games companies
develop on multiple platforms, it's not a big deal for them. For the
little guy, who can only afford to devote himself to one platform or
the other, what's it going to be? [3]

I have yet to see sales figures. *IF* M$ can keep up the tech, and
not piss of the gamers, they may have a shot at it.[1] Sony, however,
knows how to fight this sort of thing, as does Nintendo. But one of
the three stands to loose, because the console industry, like most
industries, usually has two juggernaughts. [2] And Nintendo is looking
kind of weak. Will they become the Dreamcast of 2002? 

We'll see at the end of Q4. 

[1] "I have to buy a new console that won't play my old games?" has
been a common complaint. A lot of home users don't want to give up the
older games, but want the new ones too. Sony did a masterful job by
making the PS2 backwards compatible. This is how Atari lost, though,
and Nintendo too. 
[2] This is particularly true of retail, but looking at industries as
a whole, there are typically two Major players, and then a lot of
secondary ones. Sears & JC Penny. WalMart & Target (formerly
Woolworths & KMart, then KMart & WalMart). Sony and
Panasonic. Whirlpool and GE. GM and Dahmler-Chrystler. You get the
idea.
[3] And have you heard how they (MS) are (trying to) screwing over musicians 
on
their games? I'd worry about developing on a platform where the
llicenser wants you to basically give them your work for pennies
nearly royalty free...

-- 
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--      Kevin "The Alchemist" Sonney      --
--  New email : alchemist AT darkcanvas.com  --
--  http://www.darkcanvas.com/~alchemist  --
--  ICQ: 4855069            AIM: ksonney  --
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"If you'll read the subtext for many of those old strips, you'll find
the heart of an old-fashioned Libertarian. And I'd be a Libertarian,
if they weren't all a bunch of tax-dodging professional whiners."
  -- Berkley Breathed, 2001