Analysts warn of 'struggle' for Xbox 360 in Europe Options

[Xbox-Scene]

Analysts warn of 'struggle' for Xbox 360 Posted by XanTium | June 6 12:50 EST | News Category: Xbox360

From gamesindustry.biz: [QUOTE] Senior industry analysts have voiced concerns over the future of Microsoft's Xbox business, labeling the US firm's attempts to market 360 to casual audiences "disastrous", and predicting that the console will "start to struggle in the market" over the coming year. "When you look at an installed base basis, the Xbox 360's going to come in third place when all's said and done," said DFC Intelligence analyst David Cole. "The concern I would have with a company like Microsoft is, one of these days they're going to have to make a profit on this business otherwise why are they in it?" Nick Parker, MD of Parker Consulting and an analyst for Screen Digest, argued that 360's failure to succeed in key continental Europe territories pointed to a fundamental image problem. "The trouble with Xbox 360 is it hasn't managed to shake off this urban, irreverent adult male feel; so it hasn't gained traction in the more casual gaming markets of mainland Europe such as France, Spain and Italy, where it's stalled," he said. "And there are already rumours of Xbox 360 being delisted from certain retailers." Cole argued that, despite Microsoft's perceived failure to appeal beyond its core audience, it was still possible for publishers to do strong business in 360's bread-and-butter areas. "If you're doing a first-person shooter title, you're clearly going to want to be on Xbox 360, and that's for years to come," he offered. "[But] their efforts at marketing outside of the first-person shooter crowd have been disastrous." [/QUOTE] Full Story: gamesindustry.biz

[steveju]

Yay... more Sony FUD from a Sony-paid analyst and same analyst confusing shipped consoles to sold consoles.

Few questions
1. Wasn't Microsoft already making a profit from the 360? (maybe just a tiny bit, but still... profit)

2. "Sony faced a similar challenge into turning its PlayStation 3 business into profit."
Wait... when did Sony start to make profit off PS3?

[halcyonx12]

Yay... more Sony FUD from a Sony-paid analyst and same analyst confusing shipped consoles to sold consoles.

Few questions
1. Wasn't Microsoft already making a profit from the 360? (maybe just a tiny bit, but still... profit)

2. "Sony faced a similar challenge into turning its PlayStation 3 business into profit."
Wait... when did Sony start to make profit off PS3?

Look how much MS was trying to counter the notion that they weren't selling in the UK though... this is obvious PR posturing. Either way you're not going to gauge the console wars week to week like people keep on doing.

[sabbath_dude]

I see they whipped out the old "Xbox is only good for first person shooters" argument again . And last I heard the 360 hardware makes profit on every sale and has done for some time now, not to mention the high attachment rate it has. Same goes for the Xbox section of Microsoft, wasn't there a story not so long ago about how they had finally started to make a profit?. Sounds like PR bullshit to me.

[shodanjr_gr]

"The trouble with Xbox 360 is it hasn't managed to shake off this urban, irreverent adult male feel; so it hasn't gained traction in the more casual gaming markets of mainland Europe such as France, Spain and Italy, where it's stalled," he said. "

This is the money shot.

Me and you and almost everyone else on Xbox-scene belongs to the core-gamer demographic. We have games as a main hobby, we play long, complicated, mature (both due to story and violence) titles, and we devote a significant amount of our free time to gaming. That makes us the early adopters in a console's life, the people who push the consoles out the door on launch, and the demographic that developers target when building their fancy 3D engines and flagship titles (think Bioshock/Mass Effect/Call of Duty/Halo).

The thing is, there is only so many of us. And console makers NEED to tap the rest of the crowd, the "casual gamer". The guys who buy a PS3 just to play Madden (or in Europe, FIFA and Pro Evolution soccer) and spend 2 to 3 hours a week on their consoles/PCs. The parents who buy their children Harry Potter and Golden Compass games to go with their recently viewed movie. The middle-aged-crisis men and women who exercise on Wii-Fit hoping they will lose some weight.

The PS3 will eventually tap that market, since it has the image to do so. The PS2 was the main console of the previous generation. It was BOTH the Wii and the XBOX of last gen. People KNOW it, recognise the brand, and when they mean "game console" they use the word Playstation. The Wii will already taps that market due to the price and gimickyness.

The XBOX 360 hasnt done so...there have been very sporadic attempts at that market (think Viva Pinata for instance). Almost all 360 titles are aimed at the 20-30 male mature gamer target group...and there arent THAT many of us out there...

[21cwSpanky]

I see they whipped out the old "Xbox is only good for first person shooters" argument again . And last I heard the 360 hardware makes profit on every sale and has done for some time now, not to mention the high attachment rate it has. Same goes for the Xbox section of Microsoft, wasn't there a story not so long ago about how they had finally started to make a profit?. Sounds like PR bullshit to me.

Maybe on the per console hardware profit margins but you need to factor in shipping, marketing, xbox-live server's and maintenance over there, the hundreds of people who are needed (and get paid) each time an xbox sells. Do you think MS just makes a bunch of boxes here for a certain amount of money and bill gates sits on the phone and ships them via UPS to europe? You have no business sense whatsoever.

Also most of those attach rate figures are for the US NOT europe. Last attach rate figure I heard out of europe was 3-5 games per console. Sure you can be profitable overall and still take a loss in a region, but why? The only reason is to not alienate consumers, which microsoft has proven time and again it has no issue whatsoever with.

This post has been edited by 21cwSpanky: Jun 6 2008, 09:10 PM

[TreFacTor]

Personally if MS doesn't make another unit, I will become a casual gamer, because the cost of the PS3 is more than I'm willing to pay for a console at launch (599). Yes they lowered the price, but they also didn't have any must have games that I wanted. The 360's game library is what made me buy one. At launch the PS3 advertesed alot of games that never surfaced on the machine, and are now canceled (many first party titles). Although the online network being free on the ps2/3 is compelling, the interface is lacking, and boreing to say the least. If MS or some other company doesn't keep sony and nintendo on their toes, we will have nothing to play but rainbows and lolipops, and shoots and ladders. I personally won't buy a wee... there is not one game on it that I want, face it, it's a childs toy, and I'm a gamer from back in the original Amiga and CTRS-80 days it just doesn't bring the experience that I want as a gamer. The ps3 comes in second place only because it has adult games. The purpose of the extra hd space has yet to be invisioned to it's fullest potential. (MGS has multiple installs and 90 min cutscenes that can't be skipped..... OWWW!)

[anonim1979]

Microsoft did have one champion at the session, however. When the panel began criticising the multi-SKU strategies of Microsoft and Sony, with specific reference to the 360 Elite, a hitherto unusually silent Epic Games boss Mark Rein called out: "Are you guys crazy?", claiming that Elite had been the only profitable SKU for Microsoft. Parker responded by stating that the real issue was consumer confusion.

At last, someone with a brain!

[sabbath_dude]

Maybe on the per console hardware profit margins but you need to factor in shipping, marketing, xbox-live server's and maintenance over there, the hundreds of people who are needed (and get paid) each time an xbox sells. Do you think MS just makes a bunch of boxes here for a certain amount of money and bill gates sits on the phone and ships them via UPS to europe? You have no business sense whatsoever.

Also most of those attach rate figures are for the US NOT europe. Last attach rate figure I heard out of europe was 3-5 games per console. Sure you can be profitable overall and still take a loss in a region, but why? The only reason is to not alienate consumers, which microsoft has proven time and again it has no issue whatsoever with.

Well to start with all the 360s I've seen have been manufactured in China. I don't know about the consoles in the US (possibly manufactured in Mexico?) but any you find in Europe are assembled in China. Regardless of where they're manufactured Microsoft will have them shipped out in bulk so the cost per console to have it reach the wholesaler is going to be pretty small. Next up is the big difference in price the US and European customers pay for the same console. In the US the standard price of a Pro is $350 where as in the UK (mainland Europe is near enough the same) we pay the equivalent of $374 and thats only after our recent price drop, before that it was $492 and before that $552!. So if the 360 hardware is making even a small profit in the US (which I believe it is) its got to be making Microsoft a killing over here. You also mentioned Xbox Live?, again you guys in the states pay $50 per year where as here in the UK we get made to pay $79 per year.

As for the attachment rate in Europe I don't know the exact figures. Maybe you could link to the article showing the 3-5 games per console (I'm not disagreeing with that I'm just curious to see). Either way 3-5 per console is still pretty good and again here in Europe we pay around $80 for a new release.

My point is I highly doubt Microsoft are loosing any money here in Europe. They could probably do with better marketing in countries like France and Spain if sales aren't what they expected but to say the 360 is in danger of being delisted from retailers anytime soon is just more analyst bullshit.

[somenutter]

This is the money shot.

Me and you and almost everyone else on Xbox-scene belongs to the core-gamer demographic. We have games as a main hobby, we play long, complicated, mature (both due to story and violence) titles, and we devote a significant amount of our free time to gaming. That makes us the early adopters in a console's life, the people who push the consoles out the door on launch, and the demographic that developers target when building their fancy 3D engines and flagship titles (think Bioshock/Mass Effect/Call of Duty/Halo).

The thing is, there is only so many of us. And console makers NEED to tap the rest of the crowd, the "casual gamer". The guys who buy a PS3 just to play Madden (or in Europe, FIFA and Pro Evolution soccer) and spend 2 to 3 hours a week on their consoles/PCs. The parents who buy their children Harry Potter and Golden Compass games to go with their recently viewed movie. The middle-aged-crisis men and women who exercise on Wii-Fit hoping they will lose some weight.

The PS3 will eventually tap that market, since it has the image to do so. The PS2 was the main console of the previous generation. It was BOTH the Wii and the XBOX of last gen. People KNOW it, recognise the brand, and when they mean "game console" they use the word Playstation. The Wii will already taps that market due to the price and gimickyness.

The XBOX 360 hasnt done so...there have been very sporadic attempts at that market (think Viva Pinata for instance). Almost all 360 titles are aimed at the 20-30 male mature gamer target group...and there arent THAT many of us out there...

Just want to say i like Viva Pinata and im 28 and im looking forward to the next one and Nick Parker has no idea what he is talking about as far as i can tell the 360 is raping ps3 in europe everone i know has a 360 even my older sister i only know one person that has a ps3 and i wont ever buy one because there isnt a title worth getting it for also if the ps3 is so great why is it everywhere i went to get a copy of gta 4 on 360 it was sold out and the shelves were full of ps3 copies ?

This post has been edited by somenutter: Jun 7 2008, 03:26 AM

[utopaline]

"[But] their efforts at marketing outside of the first-person shooter crowd have been disastrous."


is this douche kidding???? Live Arcade, Fable, GTA 3 and VC (even though PS2 and PC first, still sold ALLOT), GTA 4 of course, Elder Scrolls 3 &4, the whole PGR series, Gears (technically 3rd person), Mass Effect, Crackdown (I don't care what you say I LOVED IT!!) Dead Rising and there are definitely more, but I think you get my point. I think this is an old article or something from the XBOX1 days or something. What a wanker.

Oh Well, that's why you don't believe everything you read.

[PerfectGun]

Yes. what this article doesn't point out that the most vocal and negative analyst was also a former Sony employee.

This is nothing but paid for FUD! Yes, MS for the last 2 public reporting sessions has shown the Entertainment division making a profit led by the Xbox Division and yes they are making money off each system sold now.

The Xbox has always been the underdog and has always pushed on thru all the dire predictions from talking asshats.

MS is not going to appeal to the "casual" gamer overnight and these things take time. What I find most baffeling is that people say the PS3 is more casual. It is NOT the PS2 and if you look at it's library Sony has no casual games released from it's first party studios. LBP is on the horizon but beyond that what is Sony doing to win the casual market? It seems to me they get a "pass" automatically because they were the last gen leader. The price of the PS3 is not at a casual price, the library certainly isn't kid friendly and the appeal of Blu-ray on PS3 is going to decline as stand-alone players come down in price.

It's funny that a recent report from Neilson ratings shows the 360 has the most broadest gaming appeal.

Here is the original story:
http://www.gamepro.com/news.cfm?article_id=190048

Then it was amended by Neilson because the PS3 had wrong numbers.
http://uk.ps3.ign.com/articles/879/879478p...mp;RSSid=879478

[Chancer]

as far as i can tell the 360 is raping ps3 in europe everone i know has a 360 even my older sister

You need to look at actual figures. The difference is now very small
Xbox 360 sales in Europe 6.78 million
PS3 sales in Europe 6.05 million
Source
In fact the only console doing any raping is the Wii.
Yes we know nobody buys the games. they are all crap blah blah...That is why 4 of the top 5 selling titiles worldwide are on the Wii
Source
Now I don't think the wii or it's games are anything near the stuff for the 360 or PS3 but fact is it has appeal to people.
At the end of this the analysts know no more than most people in this thread. We can all take wild guesses and speculate. The 360 in Europe is falling behind the PS3 in many recent weeks as regards sales so does need a boost, but MS are hardly likely to sit back on this issue.

why is it everywhere i went to get a copy of gta 4 on 360 it was sold out and the shelves were full of ps3 copies ?

You tell me. Perhaps you go to the wrong stores. perhaps everything you say is based on your own perception.
The figures for the game are below
Grand Theft Auto IV (PS3) Total Europe sales to date 1,902,410
Grand Theft Auto IV (360) Total Europe sales to date 1,682,566

Source