Eight news stories 4.12

  • Microsoft have been shipping internally updated Xbox 360s since September. Now with the 65nM Jasper chipset and 256K of RAM so no external memory unit is necessary. The revised machines are recognisable by their smaller (150W) power supplies. It was the cheaper manufacturing costs of this revision that gave Microsoft the headroom to reduce prices going into Q4. The elegant design of the 360 paying dividends of competitive advantage.
  • The Black Friday thanksgiving weekend is one of the biggest in US retail. And this year for every Playstation PS3 that was bought there were three Xbox 360s sold. If ever you needed evidence that Microsoft have won the HD console war then this is it. The combination of a lower price, a far better game lineup and Xbox Live inevitably make the 360 more attractive to customers.
  • Nintendo make a profit on every Wii sold and make a higher percentage of profit on their software than Microsoft or Sony. And demand for the Wii is still so great that they were selling for greater than retail price on eBay for Black Friday. In fact I am surprised that the $6 figure for profit on every Wii is so low. Moore’s law, the comparative simplicity of the machine and the enormous manufacturing scale should have conspired together to deliver far more unit profit.
  • Half a million Nintendo DSis sell in one month in Japan. It looks like Nintendo have learned from what Apple do with the iPod. Planned obsolescence with users upgrading every time a new model comes out.
  • Atari speak out about the damage that secondhand games do to the industry. As has been pointed out on here before the effect is the same as piracy, people playing games without contributing to the development cost. And the retailers who do it are shooting themselves in the foot as they are forcing publishers to move away from the high street to other business models.
  • Electronic Arts has bought Korean free to play developer J2MSoft. A clever move here by EA, they are buying three things here. Firstly the proven IP, secondly the expertise in the Asian market and finally a headstart in using different business models. Let’s hope they get value from all three.
  • Square Enix say that they will help the Xbox 360 in Japan. “There is a growing interest in Xbox 360 among Japanese users, due to the release of familiar titles, the increasing appeal of overseas titles, and the excellent reputation of the Xbox 360’s network services.” Another part of the worldwide tide turning in favour of the Xbox.
  • Nintendo DSi flash cartridge released. So it will be open season for the pirates, again. It really looks like Nintendo don’t care about piracy on this machine. Presumably they make a big profit on the hardware and sell more machines when the games are free. And with such huge numbers sold there are enough honest people to still make publishing worthwhile.


  1. “It really looks like Nintendo don’t care about piracy on this machine. Presumably they make a big profit on the hardware and sell more machines when the games are free. And with such huge numbers sold there are enough honest people to still make publishing worthwhile.”

    …and a belated welcome to what the rest of us have known for at least five years! So are you now recanting all the times you’ve said on this blog that the DS (and others) aren’t worth developing on because of piracy? Do you now accept that piracy grows the market in general, which then provides more opportunity for selling to honest consumers, as well as for generating money by selling hardware at a profit? That it’s not a black-and-white case of “all pirates = evil scum who never buy games”?

    Nintendo could easily have made the DSi much harder to pirate for. Instead, they made a tiny token effort for the sake of appearances, knowing that piracy is one of the things that’s made the DS so profitable.

  2. Actually cliffski my point is proven completely. If all platforms were as highly pirated as the DS then the whole game publishing industry would be a lot smaller.

  3. On some of those points:

    Jasper: This is good news for anyone buying a 360 this christmas, although they’ll still need to buy a HDD, Live subscription, and (likely) a wifi adaptor to be able to use the machine as advertised. Just think how well the 360 could have done if they hadn’t rushed a faulty design to market in the first place. They’d have saved the $1.1bn repair bill, and not had over 1m QA failed machines not even make it out of the factory, for starters.

    Black Friday: This is what happens when you slash the price of your machine to shift it. But consumers buy hardware for specific games, not brands. If you’re factoring “brand loyalty” for a piece of hardware into your reasoning, Sega and Nintendo both provide great case studies of how transient market favour is.

    Wii profit: I also think the $6 estimate is very conservative. I’d be surprised if they hadn’t been making a profit since early on. Maybe it’s something to do with exchange rates.

  4. Hold on – if every platform was as successful and profitable as the DS, the industry would be smaller?

    You’re going to have to explain that one.

  5. cliifski, that is not what I said and you know it.

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