Microsoft Xbox 360 set to dominate

The Microsoft Entertainment and Devices Division was able to start the year by telling the world that they are three times more profitable than they were a year ago. Q4 ’09 profits from the division were $375 million, compared with $130 million for Q4 ’08. The increase comes from Moore’s law bringing down hardware manufacturing costs and from the ever increasing user base buying proportionately more software and Live services, which are a lot more profitable than hardware.

The Xbox 360 also currently heads the game sales chart with Mass Effect 2 and are by far the most popular platform for the monster hit that is Modern Warfare 2. This presages a year in which there will be a succession of huge titles that are not available on the other consoles. Halo: Reach, Fable III, Tom Clancy’s Splinter Cell Conviction, Alan Wake, Crackdown 2 and Scrap Metal for starters. For any game enthusiast these make owning a 360 essential, even if it is in addition to owning other consoles.

On the hardware side Microsoft are starting to roll out 250GB hard drives. And this autumn we have the much anticipated release of Project Natal. Microsoft have changed the design slightly to reduce the hardware by doing more in software (using 10-15% of the 360s cpu resources), this is to keep to the $50 price target and to increase the flexibility of the device. At this price Microsoft expect to sell several million units in the ’10 holiday season and so there is impressive game support coming from publishers. Pretty soon around half of all 360 owners will probably buy Natal and they will want Natal enabled games to play on it. Expect a surge in more family friendly titles, which will take the 360 to new demographics, further enhancing its success.

All is not sweetness and light at the Microsoft Entertainment and Devices Division, though. Their mobile strategy has been an unmitigated disaster with Google and Apple trampling all over them. This is the biggest possible problem for Microsoft as mobile devices are set to dominate computing and the internet. Even if they continue to dominate the office and grow to dominate the living room they could still be beaten by the owners of the mobile space.

Finally let’s risk making a prediction for the next generation of Microsoft home console, the Xbox 720, Xbox 3 or Xbox Phoenix. It is inevitable that Microsoft must do this because Moores law will leave the Xbox 360 looking less and less powerful. They will produce a scaled Xbox 360, so it will be backwards compatible. The new machine will have many more features and benefits such as 3D. It will be announced, probably at E3, in Q2 ’11 and will be available at retail Q4 ’11. Expect it to be 8 times the power of an Xbox 360 (Moores law says it will be) and expect the 360 to stay in production as the junior model in a two model range, retailing for $100.


  1. Ack! I had so much faith in you until this article. It just seems to scream ‘I’m being paid by Microsoft’.

    Yes, the Xbox is an excellent console, but to state that its got the only exclusives that you’ll ever need seems a little shallow minded to me. How about God Of War, Heavy Rain, GT5 and The Last Guardian, or are those not what you would consider worth while games?

    Notice that not one of the aforementioned games is a shooter, whilst 4 out of 7 of the games you mentioned are. It seems to me like the XBox is happy catering for its demographic- shooters, whilst the PS3 and Wii are broadening their demographic. This doesn’t necessarily translate into sales, but you can hardly argue against pushing the boundaries of gaming can you?

    You also overlook the recent game released for PS3 that will translate into sales for this year: Demons Souls, Uncharted and MAG. Of course the XBox has it’s share of excellent games last year too.

    I think that this console war is much to close to start announcing a victor already, wait until its over before you get your self all tidily on victory please. 🙂

  2. Why would they announce a console in 2011 and release it mere months later with almost no third party support? A quite ludicrous prediction.

  3. Can you hear that rumble in the background? The sound of Sony fanboys pointing their URLs at this webpage to claim ‘heresey’ and ‘blatant Xbotism’. They’re already foaming at the mouth with most of the online review community for only giving MAG scores in the 70’s.

    A lot of good points raised here Bruce, and this year does indeed look stellar for the 360.

    February has already been amazing with Mass Effect 2, and with Bioshock 2 to come, along with Heavy Rain which I am looking forward to – it should be an amazing month for gamers.

    If Natal can be pitched at around the same price as a new game release it could be a trump card move, given the obvious feature enhancements it gives over the Wii and the PS3 Wand.

    When we people realise the only ‘winners’ of the console war are gamers themselves? Seems a shame so many people are so devoted to one company only, as if they hold shares, that they miss out on so many good exclusive titles.

  4. Sony has a far superior exclusive line up for this year.I don’t want any of those 360 exclusives and i’ve been gaming since the 80’s.
    And M.A.G was ahead of mass effect in europe.This article reads like an MS press release.

  5. There will be no new consoles announced before E3 2012 (and even that might be a little early).

    First parties are keen to make their money back from this gen and demonstrate consistent profitability before committing themselves to the risky and expensive business of launching a new hardware platform generation.

  6. I honestly don’t see what this news has to do with PS3 at all. Bruce hit a few points spot on and to be honest 360 has a much more diversified catalog of games then the rest. From arcade, Indie (which are completely different), on demand and new software, one would have to be foolish to not see it. 2010 and beyond hold a lot of promise for MS and 360 if things keep going like they are right now.

  7. Sorry to be the bearer of bad news Steven L. but, Heavy Rain is a PS3 exclusive and BioShock2 is multiplatform!

  8. I don’t care what else microsoft does, as long as they start bringing Halo’s out for PC. And backdate them to the previous ones that were only for console.

    If they do that, then I won’t have to find Bill Gates and give him and the entire board of directors super wedgies.

  9. How can you write an article like this and not once mention the Wii?

    Ignore the Wii…and sure…you could argue that the 360 is in a fairly dominant position. Recognise that the a) the Wii exists and that b) it’s sold shedloads and will continue to do so for the foreseeable future, and things aren’t quite so rosey for MS.

    And, you’ve chosen to ignore how well the PS3 has been selling of late.

    Also, why is the fact that MS are rolling out 250gb HDD such a big deal? This is only bringing it in line with the PS3, and doesn’t alter the fact that MS have charged extortionate prices for larger 360 HDDs for years (where PS3 owners have been whacking in 320gb HDDs for as little as £50….). This is MS playing catchup, not trailblazing.

    So…in summary… if you ignore the facts…then…yeah…Microsoft Xbox 360 is set to dominate…. And who needs facts anyway?

  10. How can MS pitch Natal at $50.00 when they sell 250GB harddrives at $178.00? They gouge on peripherals. Sorry, but to price Natal reasonably because it suits their business needs, but still charge $100.00 for a wireless adapter that even a Nintendo DS adds in for free is just a slap in the face to the consumer. I can just hear the MS meeting now, “Oh wait, if customers don’t have Natal, we can’t compete with Nintendo. Ok, we’ll make that price attractive but make them bend over for any other peripheral we sell.”

    I have come to the conclusion that Bruce Everiss is actually Aaron Greenberg’s pen name. You hear that Aaron, we are on to you. You just have to get better at writing and a little more factual in your predictions:

    “Pretty soon around half of all 360 owners will probably buy Natal”

    “Pretty soon around half of maybe some of the world’s population will probably die”

    My statement is just as statistically accurate and is based on the same amount of research and fact (I guess? maybe? Pretty much?)

  11. Well, xbox it’s without a doubt the winner of this generation of consoles! Better online, better marketing, better hardware prices, better support for programming studios, better support for Indies! Better all-around average of good games.
    Still… they have the financial means to do so! So they just did there job!

    I continue to think that consoles are the dark side of gaming 😛 PC for ever 😉

  12. The only reason I am like is since it has brought many game of PC heritage to consoles and also in time many of such titles are now on 360 as well as they have now made way to PS3.

    BUt yeah the most important reason is that count any of the game in the 360 exclusive list Halo, Splinter Cell, Mass Effect 2 are of PC heritance and I personally like these titles.
    If you look to most PS 3 titles they are basically of console heritage say Uncharted 2, Ratchet &clank etc.

    So the range of titles what 360 specifically has is what more I like. Not to mention most 3rd party titles are now multiplotform.

  13. Completely agree with you Bruce.
    2010 – 2011 will be the last two years of this hardware cycle.
    And in the next 2 year Microsoft will continue to earn HUGE amount of money from software and accessories (Natal).
    And while in 2011 Ps3 younglings will be still waiting for the “PS3 Year” (these people is waiting since 2007!) all the othere will enjoy the new xbox.

    And when everyone will look back at this hardware cycle, there will be only one clear winner…

  14. @ Nic

    Where did I say that Bioshock 2 wasn’t multi-platform, and that Heavy Rain was available on the PS3 only?

    I have both a PS3 and a 360, so platforms mean nothing – all that matters to me are good games, regardless of the platform.

    I simply stated that February is a good month for GAMERS not for fanboys.

  15. Bruce, I really hope you’re right about 2011 being the year of the Xbox “720.” I can’t wait for the next generation. I don’t want to wait 7-10 years for new hardware. Hopefully Microsoft does good and ignites the next generation console war.

    Anyways, I think you’re spot on in the article. Microsoft will dominate, mostly because of the way Natal will explode into the masses. The exclusive will definitely help as well.

  16. To be honest Natal IMO is a waste of time and resources much like the HD-DVD was for MS. More casual games will be made for the 360 consoles thats now known as a Hardcore console. So mixed views is the better wording used for peoples ideas off Natal.

    I really think that 360 will Suffer due to Natal gaming.

    Hardcore Games will be pushed back because of needing games made for Natal, and that will come with a price, IE, people giving up on 360 and moving to PS3. I mean who really wants to come home from work and dance around the room playing a game. If i wanted that, i would have the Wii downstairs as my main console.?

    As for games coming out, the PS3 has the better line up. Mass Effect 2 is a great game, but much better on the PC than 360. OP also talks about ”
    Tom Clancy’s Splinter Cell Conviction ” but what he failed to also tell you is that the ” Tom Clancy’s Splinter ” Franchising is becoming Multi-Plat and will be on PS3, although Cell Conviction will be a exclusive ( could be a timed one ) who knows.

    So all i’m saying is be a gamer, and play to be happy, not just a fanboy due to whats being said around the net. Theres always a good reason to own both consoles.

  17. I agree that MS are renowned for pricey peripherals, but a lot of analysts are predicting they will gladly sell Natal at a loss around the $50-80 mark, as they see it almost as launching an Xbox 360 V2 – knowing that they will claw back much more than the losses by selling the software, which as we all know – has a higher attach rate on the 360 than any other platform.

  18. Well done Bruce. Now you are 100% right in you view of modern gaming world. Microsoft allready cooking next xbox 4 years. and it will be 5 years ahead of PC tech in 2011. it will be a real beast. they allready spend 1billiond USD to next xbox. Microsoft&AMD want to show asian&japans who the king in producing computer architecthures.

  19. Really dude somebody is a fanboy, and any console will never will catch up to pc graphics and really asian and japan? Asia is a content with japan in it

  20. Er…..

    1. Multiplats sell more on 360 because there are more 360s. You can’t use the same argument twice. Actually, some multiplats sell more on PS3!

    2. And anyway, using sales divided by time on market, PS3 is ahead of 360 despite the latter having no competition for its first year (longer in PAL). And MS sold another million by bricking consoles just after MW2 came out. Punishing gamers? Then why didn’t they ban their accounts and wipe their Achievements? We know why: post-PS3 Slim NPD numbers.

    3. Natal will only use 10-15% of the CPU. But it will reserve 33% of the resources at ALL times, meaning up to 23% will be idle. Wave goodbye to Natal in top-level games. MS admitted this CPU fact in December. Missed that one, eh? Don’t worry, just update your article.

    4. So 360 leads the charts with ME2 this week. ME2 was launched this week. Back to Wii games next week. You know, the Ninetendo console that you’ve forgotten about.

    5. 250GB hard drives for the 360 – at FIVE TIMES THE PRICE I PAID FOR MY 500GB SATA, which I stuck in my…….well, you guess. How does this new rip-off add-on show 360 dominance?

    6. You speculate (entirely) that millions will buy Natal. This is proof of 360s dominance how? Doesn’t Sony have motion tech due out? Doesn’t the Wii still kick everyone’s a$$?

  21. @ Jamie.

    I 100% agree with that. ;o)

  22. Wow Bruce, what’s the deal here? Are you trying to give 360 fanboys some false sense of security or something? Becuase your comments section is filled with Microsoft fanboys almost crying in glee for the simple reason that they are as ignorant as this article.

    Xbox 360 dominating? LOL, better check your facts. YOY sales show that in January the Xbox 360 was the only console to see a DECREASE on last year while the PS3 and Wii saw modest increases, just when you think the 360 can’t do any worse, it goes and drops sales YOY. LOL, pathetic.

    Also, the Xbox 360 has constantly finished last in worldwide hardware sales every month since September 2009 and it doesn’t look like it’s going to change it’s fortunes anytime soon.

    As for exclusives, Mass Effect 2 and Splinter Cell are not exclusive – ever heard of a PC? Yeah, apparantly those things play games too. The PS3’s lineup for 2010 is untouchable, Microsoft’s game lineup for 2009 was pitiful at best and this year it’s set to be even worse. How are Microsoft supposed to compete with games like Heavy Rain, God Of War 3, Gran Turismo 5 and The Last Guardian?

    Finally, Natal is going to flop. A rumoured 200ms lag time and apparantly, unless you’re white, it can’t detect you. What a marvelous piece of engineering fit for the company who inveted the RROD.

    Xbox 360 hardware sales have been terrible, so much so that the 360 is haemorrhaging exclusives (GTA DLC, Star Ocean). The PS3 is booming YOY and even if Microsoft do launch a new console next year they probably still won’t get it right.

    In short – Microsoft are much like yourself, they’re not fooling anyone and should just give it up.

  23. @Jaime

    You’re a little bit hurt about an article? Try taking your fanboy glasses off and think openly for a minute. Going point by point trying to disprove everything shows desperation. Maybe you’re scared your precious PS3 is going to be left in 3rd place after all?

  24. While there are still block-buster games, it seems that there is a movement more towards shorter games for casual play – especially as budgets shrink and risks for bigger budget games increases.

    I wonder how the new Xbox, given its technical superiority will interact with more and more casual games? Or any other 3rd generation console, for that matter.

    Technological sophistication is increasingly becoming less of a barrier, giving way to financial considerations and aesthetics.

    We’ll be able to create 3D games that are indistinguishable from reality – but will we be able to budget for them? Will we be willing to wait decades for these ‘mega-games’ to be released? And once they are released, are they then so obselete against newer technology that they are seen as childish junk?

    Once we reach 3D realism, what shall we strive for then?

  25. An interesting observation about profitability. I did not realize that Microsoft’s Xbox unit is now three times more profitable. Incredible, and great work! I suspect that it will take Sony a couple more years before finally turning a profit on the PS3. But they are catching up and doing a much better job on the software front. If we could just convince Sony to develop more RPGs, I’d buy one!

  26. Wow… look at all these comments. I don’t know if you put this up on n4g or if someone else did, but that’s just asking for trouble… you don’t even have to say PS3 once and they assume you’re dragging the console in the dirt… and look at all the people who can see the future… no I think… or most likely… it’s “IT WILL” I don’t think you have enough time to make all the crow pie to feed these fools

  27. Bruce, nice article but… Can you use the term “Moore’s Law” a little less frequently please?

  28. Izzy, I can’t comment on Jaime’s points, as I don’t know much about the PS3 (I’ve only ever played on one, and that was just once, for Resistance Fall of Man (very good), and some car racing game), but Jaime’s comments seemed logical, and even if they are wrong, then his post still doesn’t seem to contain fanboyism.

    I consider “fanboyism” to be the display of groundless faith in and obsession with one product (or one company’s products), while displaying equally groundless contempt for all other competing products, and I have to say that your comment seems to reek of fanboyism, with your uncalled for phrase “Maybe you’re scared your precious PS3 is going to be left in 3rd place after all?” , your dismissal of his listing of all of his points as desperation, when listing points and answering them is actually an INTELLIGENT action, something sadly missing from your post.

    And you sneer “You’re a little bit hurt about an article? Try taking your fanboy glasses off and think openly for a minute.”. Erm, he shows no signs of being hurt by the article, just of considering it flawed. And his posts shows thought (even if his resulting arguments are wrong, which I can’t comment on), whilst your post shows none.

    Personally, I think the XBox 360 is great, and I have little interest in the PS3 or Wii at the moment (I don’t have the time, let alone the free cash, to play games on two current gen. consoles, and I’m a first person shooter fanatic, so the 360 suits me fine), and I hope that the Natal revolutionises gaming, but I don’t let that blind me to the 360’s few faults (it’s unreliability, which is by far the worst, though that’s mostly solved now, and about time!), nor to the fact that there are other consoles that might better suit other people. If I did have this attitude, then I’d be a fanboy.

  29. Bruce we can all add links mate.

    Microsoft say that the Live community has grown to 23 million – both Gold and Silver users –

    Sony, meanwhile, says that it has clocked over 40 million PSN accounts, coming from a mixture of 33.5 million PS3 owners and 56 million PSP units sold.

    SCEA CEO Jack Tretton said the rise in PSN came with a 155% jump in digital sales between 2008-2009.

    Sony recently fuelled rumours that the PSN service will implement subscription charges.

    Final retail code has just arrived in the building for the Xbox ‘cut’ of Final Fantasy XIII. Having just finished the game in just under sixty hours on PS3 puts us in prime position to note the differences in visual quality.

    ” While facial detail appears largely unchanged, the characters’ clothes appear at first glance to be lacking finer details, with notably lower resolution textures.
    Incidental environmental objects and enemies appear less detailed, both in texture and geometry.
    The game’s CG is extremely compressed and pales alongside the stunning HD goodness which blu-ray offers. ”

    Ultimately, no matter what you’re playing it on and we would discourage anyone from deciding not to buy it if they’re already planning to. However, if you have a choice, the PS3 version has the edge..

    Sony, Microsoft, and Nintendo have all released their fiscal reports for the closing months of 2009, and some of the numbers are very interesting.

    While Microsoft currently holds a 5 million unit lead over Sony in worldwide sales, Microsoft is currently at 38.7 million units, while Sony has 33.5 million, things are looking up for Sony.

    Sales figures for fiscal year 2009 are much better for Sony than in previous years.

    Since April 1st till December 31st, Sony has moved 10.8 million PS3 units. On the competitor’s side, Microsoft has moved 8.5 million. ?

    Gran Turismo series developer Polyphony Digital revealed lifetime sales data for every game and the numbers are astounding. In the 13 years since the first title was released on PlayStation, well over 55 million Gran Turismo games have been sold.

    For comparison, all three Forza Motorsport games have sold less than 10 million copies combined–not even a quarter of Sony’s series. Exactly who’s in the driver’s seat?

    This all looks & sounds to me that PS3 and Sony are doing very well and in fact games like the above FFXIII are better on PS3 than 360 due to no hardware limits unlike what the xbox 360 has. ( Limited Disc Space ).

  30. Sure it could the Xbox 360’s biggest year, but it will be overshadowed by the PS3.

    natal looks cool and all, but you can’t really play any real games on it
    “dodge ball” really?
    i also dont like the Playstation move

  31. @Jimmy

    I am impressed. Presumably for you to know that you can’t play real games on Natal, Microsoft must have sent you a prototype. And all the publishers developing for it must have sent you secret copies of their upcoming titles that are still at least 8 months from completion. You have unparalleled access to the industry!

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