Comments on: A lost cause we’ve never lost http://davidvoegtle.net/blog/2006/01/18/a-lost-cause-weve-never-lost/ Homestead on the virtual frontier Thu, 14 Aug 2008 01:15:24 +0000 hourly 1 http://wordpress.org/?v=3.0 By: demosthenes http://davidvoegtle.net/blog/2006/01/18/a-lost-cause-weve-never-lost/comment-page-1/#comment-30 demosthenes Thu, 19 Jan 2006 08:24:45 +0000 http://davidvoegtle.net/blog/?p=82#comment-30 Yeah, I compared apples to oranges, but I still think it's a silly business model. :-) Yeah, I compared apples to oranges, but I still think it’s a silly business model. :-)

]]> By: me http://davidvoegtle.net/blog/2006/01/18/a-lost-cause-weve-never-lost/comment-page-1/#comment-29 me Thu, 19 Jan 2006 06:42:55 +0000 http://davidvoegtle.net/blog/?p=82#comment-29 The 360 analysis is off the mark. MS has sold every 360 they've built, and have a huge demand for more. The reason they haven't sold more is because they can't produce them as fast as people buy them. The same is true of pretty much ever console at launch - it'll be true of PS3, too. Also, MS pulled off a worldwide launch, which limited availability in any one market. It is the first worldwide launch for a console, ever. PS3 won't do it. That means even if the PS3 launches in three months in Japan, it might not launch for six months here, or a year in Europe. Or more. And if they try to bring the launch dates together they'll run into supply issues just like MS did. Except by doing it this way, MS maximizes their "first mover" advantage, in all territories, and also creates a demand that is, surprisingly, not artificial (a charge levelled at Sony over the PS2). Also, all console makers lose money on consoles - especially at launch, and often well, WELL into the life of the machine. It's the razors/blades model. They don't make money off consoles, they make it off accessories, software, and licenses. Later on they might, when prices for component parts come down (due to economics of scale, and relative obsolescense - the XBOX1 on the shelf now has the same guts as the XBOX1 on the shelf four years ago - a feat a successful PC couldn't claim). But then prices also come down for the console itself over time, so, again, the money isn't made that way. Really, these "analysts", even if they understand computers, don't necessarily understand consoles, and shouldn't pretend they do if they don't. So no. Not a major disappointment. It's actually a smashing success, by any realistic metric. Also, the iPod will be killed if it doesn't creatively evolve, and that's the only thing Apple has going for it. It's going to be a commodity soon enough (five years, perhaps) on which Apple won't be able to make much money. Again, unless they keep innovating, which frankly I think they will. I think that's the big Bill was missing out on. But iPod as mp3 player? You betcha people will be getting those more from other players than Apple in a few years. PROBABLY. Because they'll be a dime a dozen. But by then Apple won't be selling mp3 players anymore - they'll be selling some convergence device and will be able to charge a premium for it. That's not a business model MS seems to understand well - although, strangely, the gaming division sort of does. But only sort of. BTW, if the PS3 launches to spec, it'll be losing FAR FAR FAR more than the X360. Either that or they'll have to charge $1000 for the thing. Unless you've seen Blu-Ray devices on the cheap lately? The 360 analysis is off the mark. MS has sold every 360 they’ve built, and have a huge demand for more. The reason they haven’t sold more is because they can’t produce them as fast as people buy them. The same is true of pretty much ever console at launch – it’ll be true of PS3, too. Also, MS pulled off a worldwide launch, which limited availability in any one market. It is the first worldwide launch for a console, ever. PS3 won’t do it. That means even if the PS3 launches in three months in Japan, it might not launch for six months here, or a year in Europe. Or more. And if they try to bring the launch dates together they’ll run into supply issues just like MS did. Except by doing it this way, MS maximizes their “first mover” advantage, in all territories, and also creates a demand that is, surprisingly, not artificial (a charge levelled at Sony over the PS2). Also, all console makers lose money on consoles – especially at launch, and often well, WELL into the life of the machine. It’s the razors/blades model. They don’t make money off consoles, they make it off accessories, software, and licenses. Later on they might, when prices for component parts come down (due to economics of scale, and relative obsolescense – the XBOX1 on the shelf now has the same guts as the XBOX1 on the shelf four years ago – a feat a successful PC couldn’t claim). But then prices also come down for the console itself over time, so, again, the money isn’t made that way. Really, these “analysts”, even if they understand computers, don’t necessarily understand consoles, and shouldn’t pretend they do if they don’t.

So no. Not a major disappointment. It’s actually a smashing success, by any realistic metric.

Also, the iPod will be killed if it doesn’t creatively evolve, and that’s the only thing Apple has going for it. It’s going to be a commodity soon enough (five years, perhaps) on which Apple won’t be able to make much money. Again, unless they keep innovating, which frankly I think they will. I think that’s the big Bill was missing out on. But iPod as mp3 player? You betcha people will be getting those more from other players than Apple in a few years. PROBABLY. Because they’ll be a dime a dozen. But by then Apple won’t be selling mp3 players anymore – they’ll be selling some convergence device and will be able to charge a premium for it. That’s not a business model MS seems to understand well – although, strangely, the gaming division sort of does. But only sort of.

BTW, if the PS3 launches to spec, it’ll be losing FAR FAR FAR more than the X360. Either that or they’ll have to charge $1000 for the thing. Unless you’ve seen Blu-Ray devices on the cheap lately?

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