Xbox 360 Software Attach Rate Is 'Alarming' Posted by XanTium | November 21 17:22 EST

From gamasutra.com: [QUOTE] The latest issue of Jason Kraft and Chris Kwak's 'Video Game Journal' for the Susquehanna Financial Group examines the software attach rate for the Xbox 360, and explores why such an "alarmingly high" rate may not bode well for Microsoft's next-generation console. Specifically, the report cites the recently announced Xbox 360 attach rate of around five games per console sold as confirmed by Microsoft in October, a number that was up from the roughly four games per console attach rate announced by the company at the console's launch in 2005. It concludes: "We believe the unusually high attach rate on the 360 is a sign of an increasingly unhealthy console growth rate, and should be worrisome to publishers and investors." The analysts further explain their hypothesis by offering that a significant portion of the Xbox 360 consoles currently in circulation were purchased by hard-core gamers, who, by definition, purchase a lot of games. In conclusion, the authors state, "If the Xbox 360 sports an attach rate of ten by holiday 2007, it will probably be because it has failed to gather critical momentum. What does it benefit publishers and investors if ten games are being purchased by a total audience of 10 million 360 owners? It doesn't take effort to see that a console with an attach rate of 8 and an installed base of 50 million is superior to a console with an attach rate of 12 with an installed base of 20 mln." [/QUOTE] Read More: gamasutra.com

You can help out the Xbox 360 by having an attach rate of zero

Ummm, so this report is saying having a high attach rate is hurting the 360??? I don't get it, don't these companies make money off the games? So, having a high attach rate means more money means more games for everyone to enjoy. How is that a bad thing? The argument that haivng a lower attach rate with a higher installed base doesn't hold water since the barrier to more widespread adoption is the price of the 360 itself. The 360 is not going to cost less than 200 anytime soon so arguing it is not succeeding because it doesn't have a 50 million installed base is silly, especially considering it is just a little over 1 year old. How many other consoles reached 50 million in one year? Heh, I don't think any.

The whole time I was reading this, I was waiting for the punch line. When it never came I realized these people were serious, and now I'm just confused.

lol I hate analysis. They use OTT topic titles with underlying statements that mean nothing.

If the 360 had no attachments they would still moan. It's a good thing, m$ loose a lot of money making each 360.

They will never clamber it back without attachments.

What the fuck are this guy's talking about? you could have an attached rate of 0.5 like the ps3. does that mean that ps3 is not in deep shit here,or what because this does not make since at all.

This guy is a fucking idiot. High attach rates are bad for MS and bad for the dev. studios. WTFever. Seriously --- What a fucking idiot.

I am so sick of these ridiculous analyst articles on X-S. Just stop posting them already, my God.

so if i understand correctly these guys are saying selling more is a bad thing?? I really need to start my own analysist company so i can get paid to pull shit out my ass too!~

Blah.. WTF?

This is the dumbest report I've read in while. It literally makes no sense.
I trully believe the video game instrudy attracts the strangest comments in business I have yet to see.

I've been thinking all wrong up till now!! How stupid am I!?!?
I would rather work 80/hrs a week for $10/hr then 30/hrs a week for $30/hr.

To be fair though, I think what they are trying to say is it's better to have 50 million units selling 6 tiles then it is to have 25 milion units selling 10 tiles.
I get it but to be fair hard core gamers are early adopters and of course we see that this first year. Most average people adopt a little later in the cycle. So it's WAY to early to even comment on this. This is way this article is crap.

The article has some good insight on the hardcore gaming audience. The example figures are purposely exaggerated however, as it is unlikely the x360 will have an installed base of 10 million while the PS3 or wii has a base of 50 million. In addition even though the original xbox had a small installed base as compared to the PS2, the sales of xbox titles quite often beat out the PS2 sales.

Counter Comparison:
100 million consoles, 1 in 10 purchase a title per year means 10 million titles sold.
25 million consoles, 1 in 2 purchase a title per year, means 12.5 million titles sold.

A hardcore gaming base early in the consoles lifecycle can really solidify that consoles lead as development houses target that console for new title due to good game sales. The casual games follow suit with the most successful console in terms of installed base and game selection.

well im pretty sure the Wii and PS3 will have much higher attached rates , simply because you cannot copy there games..(espically ps3, anyone have a bluray burner?) where as everyone and there dog copies xbox games, I think i have purchased roughly zero.

ANYTHING can be copied/duped/ripped, in time.. LoL - Your exact statement, modified to fit the times, was once said about the original Xbox, lol..

I agree that the article is completely moronic. Furthermore, the only thing that will HURT the publishers is that jacked up fee they have tacked on to the "next-gen" consoles.. You can get the same game for $20-$30 LESS on PC in many cases.. I didn't mind $49 for a title on da Box, but this $59-60'ish crap needs to end. LoL.

That assumes that every one in the country is a pirate-thief like yourself.

If everyone was pirate-thief like you then the game industry would not exist. Maybe very hard to believe, I know, but there are human beings in the world whom don't even know XBOX-SCENE even exists.

I can tell you that the PS2 was modified for thiefs long before XBOX1 was and the numbers still kept going. So your statement is plain false.

Get a life tard.

These guys don't know what the fuck they are talking about. I've worked for them before.

In a way it makes sense..If they are selling few systems but to hardcore gamers who buy a lot of games then they are making money because remember that MS looses money on the 360 console/hardware (it costs more to make it then what they sell it for) but makes it up on the software/games that they hope to sell.....now if you sell a whole shit of 360 consoles to people who really don't play games that much and aren't buying games or are pirating then they don't make much money..

MS now makes around 70 dollars per premium system sold of the XBox 360. Prices in manufacturing has come down quite a bit already.

Just the way it's worded makes it seem incorrect.

I think the point the analyst is trying to make is that not enough hardware is being sold. If it was, the attach rate would be dropping or at least steading. Most people don't buy 5 or 6 games with the system, it takes them some time to get to that amount. Especially if they aren't hardcore gamers. Are enough casual gamers buying the system? Probably not. These are the reasons for the high attach rate.

MS still has a lot more work to do. But I disagree that the attach rate is Alarming. MS main 2006 focus needed to be targeted are hardcore gamers and early adopters. But in 2007 they need to target a wider genre now that their competitors are on the scene and their product is more affordable for the general gaming community.

Sounds like some one failed econ 101, or composition 101. his correlation of attach rate = only hardcore gamers is correct, just poorly conveyed.

does anyone know what the break even point is on a 360?

how many $50 games must a customer buy (or accessories) until MS breaks even?
1st what the marginal cost of a 360? and how much of each game sold goes to MS as Marginal Revenue? Accessories would just be a mess to figure.

If any one knows the answer this I would like to see it for each console.

this doesn't even take into account the R&D costs for the hardware. Not positive, but I would think that sony's R&D(Blue ray, SRX(or what ever it's called)memory, cell CPU) would be the highest, then Nintendo(motion sensing controls), last MS.

So according to this article it is better to create a console that you can sell to a shit load of people, and then feel free to make absolutely crap games for it. As long as they buy your console, fuck thier satisfaction. As opposed to a console that you can sell to less people (still in the millions mind you), but put out stellar games that the consumer would actually like to play, thusly wanting to buy more games. It's a load of crap. Games are what push a console. If GTA came out exclusively for the Xbox instead of the PS2, there would have been a huge shift in console supremacy. Granted the Japanese market has a lot to do with it. But great games will sell a console, and eventually people will buy more games.

Its much better to have 10 stupid Analysts making 100 moronic analyses, then to have 100 good Analysts making making 10 brilliant Analyses. Inhale the sarcasm.
Arkitekt

Wow, did you know that there are 10 million hardcore console gamers in the world? I did not know that. Yeah right, that many people all buy video games within the first year, without anyone else buying the same console years afterwards. Sheesh!



I doubt it. Even after a year, the attach rates are typically quite lower, so the 360 game sales have been impressive.

Besides, you're forgetting some important details...

- The Wii uses the DVD format, and it's only a matter of time before it gets cracked

- HK pirates will happily swallow the cost of a blu-ray burner since they can sell blank blu-ray disks for enormous markup, once the PS3 gets cracked

- Hardcore gamers don't rely on piracy for their games, and are a bit more discriminating as to what's worth their time. Hardcore gamers are the ones who finish games, not ones who feel the need to start a new one as soon as someone else rips it.

this guy must have went to a Sony press conference before he wrote this retarted report

Many of you guys are not reading the article. At first I thought they story was pretty screwed up but then I took the time to understand it (although I disagree with their conclusion based on it).

The attach rate is the number of game titles sold divided by the number of hardware consoles (360's in this case) sold. If the attach rate goes up then they are interpreting it as a higher ratio of games vs. consoles sold.

To make it simple, let's say there are 1 million consoles sold now and they sold 4 million games to date. That is an attach rate of 4. If, in the future, they sell total of 2 million consoles and 8 million games, that is still an attach rate of 4. On the other hand, if Microsoft instead sells 1.5 million consoles and 7.5 million games then that is an attach rate of 5, which sounds like a good thing, but they have 500,000 less consoles out there and 500,000 less games than the previous 2 million scenario. if the attach rate increases quickly, that most likely means that people are buying more games, but not as many new consoles are being sold. Do you guys understand this? It is simple math.

But having said all that, these statistical analysis have nothing to do with real market factors such has hype for certain games. There was a couple big games release for 360 recently (Gears of War and COD3) which a lot of existing 360 users probably bought, increasing the attach rate. But even so, if the hype for these games was that great, it should have spurred new console purchases. But does Microsoft include bundled games with this attach rate calculation? Buying a 360 today, you easily get at least 3, sometimes 4 free games included - this alone could make the attach rate invalid.

I'm guessing that console sales in Canada are typically close to those in the US, at least as far as the ratio of systems sold. If so, a high attach rate would only mean one thing -- more money for Microsoft. The 360 outsold the two launch consoles, thanks partially to game bundles, up here in Canada. Details here.

I think I understand what they're trying to say, but they're forgetting one fundamental fact.

Having a high attachment rate does not imply that fewer consoles will be sold. Indeed, logic suggests that if one sees all the "gotta have" games on a system, they'd be inclined to buy that system.

I think we all know that it's better to have an attachment rate of 10, and have 50 million consoles, than to have an attachment rate of 3 and have 50 million consoles.

I think I speak for everyone when I say, "I have 5 KILLERAPPS!!!" The 360 ROCKS!!!! And how many games does the average PS3 owner have??? Oh yea...... .89% or some god awefull amount like that??

Ummm.. NO thats not an assumption, its a fact... and your latter statement has nothing to do with what were talking about.
I have a Great life, ( lots of extra cash cause im a thief), but if you get this worked up and resort to name calling because of a interesting comment I suggest you probally need to a life.

Cool beans.

These guys are FAR from idiots. They consistently put out some really great stuff on the video game industry. I read the ENTIRE report, which is not available in that link. It simply says that the high attachment rate basically means that only the original "hardcore" gamers are really taking to the Xbox 360 and it's not increasing its installed base very well. I am familiar with these 2 analysts and probably 90% of what they print turns out to be correct. Without increasing the installed base, the console will struggle.

[Click]

...scrolling ... looking for the avatar and sig .. not seeing it

Where is TwistedSymphony's post at? This is his kind of stuff.

<< waits until Twisted has spoken.

Statistics can be skewed to interpret however you want. So basically there are what 6-8 million 360 consoles right now. Gears of war just went over the 1 million mark in 2 weeks....so right there the rate went up by .12 or so. I mean good games come out near the holidays are are probably more likely to sell to previous 360 owners....so how does this imply that not very many 360s are being sold. Personally I think the 360 market will be huge this Christmas with the PS3 sold out....no parent really wants to spend the $600, let alone $1000-3000 that they were going for on ebay when they can get a Wii (still somewhat new) or the 360 which has good reviews and a good fanbase and good (and now getting cheaper) games.

So real quick math....attach rate was 4, now is 5 (in October, so GOW doesn't count), but GOW accounted for a .12 increase....or another 12% of the attach rate increase seen in the last year....in 2 weeks. Really we need to compare after the Holidays, after all the huge spending cools down for electronics.

honestly i never post on these forums ever, but you obviously failed econ 101, the analysts are not talking about microsofts marginal revenue per xbox 360 they are talkin about how many games the gamer buys per console purchased - ie someone who owns an xbox 360s mean average for game ownership is currently 5, they predict that to goto 8 by 2007 dont refer to economics because you obviously failed it or goto a community college

ultimately they are talking about the success of the console and its profitability, it doesn't matter if 1 million 360 owners own 4 games or 2 million own 2games, point is 4 mill games are sold. therefore they are looking more at the console install base. they are saying that the only people who own 360's are hardcore gamers. meaning 360 isn't mainstream and wont be a success. the reason why this is stupid is that if MS stopped sell 360 at the 10mill mark, but it's attach rate grew to some astronomical number say 50. MS would be making money hand over fist because they have sold 50mill games in 1 year.



I'll give you the benefit of the doubt since i can see where you are coming from...looks like I too failed comp 101

This bit relates to the news article. and yes i understand his argument but it is very shallow



completely unrelated to the article just some questions that popped in my head as I was reading the article.


last thing that popped into my mind when thinking about the total cost of each unit to produce


so i don't think it is my econ that is bad but rather my composition...which you can flame all you want.

If analysts played any games at all they would know that the 360 has at least five games you feel that you must have.

Poor analysis its just not not enough to be number crunching every day they need to get out on the ground more.

Hello Fellow Gamers. Well. mat989 that's very interesting that you let the world know that you play pirated games. Now if you play on Xblive, you still pay M$, But playing pirated games on Xblive will get you banned (sooner or later). If you don't play on xblive then you're missing out on some of the BEST multiplayer fun there is. Also if your X360 dies (which all consoles do sooner or later) you will purchase another newer system. Which means again you're paying M$.

The X360 will sell very well indeed & with an attach rate this high per console, M$ & other developers will reap the benefits this holiday season (Especially on BLACK FRIDAY). So in closing people.. Enjoy the games, I'm Enjoying all of mine.

ZOMG LOOOOLL ROLF!!!!!1!!11one11!

BANNED

My take on this is people are holding out on purchasing a 360 because they're expecting a price drop. The reason the general public tends to adopt later in a system's life is because the hardware is generally cheaper at that point. With such a high price tag, the PS3 will likely suffer the most from this. Especially since the 360 will most likely drop in price far sooner and to a much more reasonable price than the PS3 could. The high attach rate is just a sign of a lot of good software on an expensive system. If the 360 was priced more like $199 for the Core and $299 for the Premium, the attach rate would drop dramatically over the 6 month span after that price drop. And bringing up the PS3's attach rate is ridiculous, only because when no one can get the system, they obviously won't be buying any of the games. Also, when you can buy most of the games for the 360... just a thought.

I see their point, but they didn't convey it very well, and I have a different interpretation. To them, a high attach rate means that only "hardcore" gamers are buying 360's so that the market demand for a 360 will decrease sooner. Once all the harcore gamers get the 360, no one else will want it. (their opinion).

But you could interpret the high attch rates in two other ways.

One: there are so many good games that people have to buy them.

Two: there are no must have games that force someone on the edge to buy one.

I personally think that up until GOW, number two was the real reason.

Many people were wating for the PS3 and Wii to come out and haven't decided to take the plunge yet, so the attach rates will likely go down as more people opt for the 360 (especially when they find out the price of the PS3, its funny but people have no clue).

Another interpretation is that people just think that $300-600 is way to much to spend on a video game console. It is hard to get the casual gamers to drop that kind of cash on a system that they won't hardly play. This is where the Wii is going to take off. Presuming that they can keep their supply up, the Wii will likely outsell either of the other systems because of its price. Little johnny wants a PS3, but the parents can only afford a Wii, so thats what he gets. It will be interesting to see how this all plays out. I like the 360, and GOW rocks, so I am content.

This article is pretty useless without numbers and perspective.

Using this as reference:
http://www.xbox360fanboy.com/2005/12/14/mo...launch-numbers/

As of November 30, 2005 MS had sold roughly 325k Xbox 360 consoles with an attach rate of 3.9.

As of October 31, 2006 MS has sold roughly 7-8 million Xbox 360 consoles with an attach rate of 5.

So while the attach rate has increased by 1.1. Consoles sold have increased by roughly 7 million.

So not only has the installed user base increased(from 325k to 7 million), the attach rate still holds.

That would means people buying a 360 have at least 3 or 4 games they must have. Since when does buying a few games for your console make you hardcore. You can only play 1 game at a time anyway. I consider my myself hardcore but I only like to play/finish one game at a time b4 I move on to the next one.

A friend of mine purchase a 360 premium last week and bought Gears and Project Gotham Racing. He is not considered hardcore by any means but once that system gets played by his 2 kids, he may go out and buy 2 or 3 more games.

again useless article. Then the article goes on to say:

If the Xbox 360 sports an attach rate of ten by holiday 2007, it will probably be because it has failed to gather critical momentum.

Excuse me??? IF?? the author states "IF"... Why not wait until holiday 2007 to look at sold and attach rates at that time to even begin to draw a conclusion...

I could see this attach rate being alarming IF by Holiday 2007 the number of consoles sold is 7.5million and the attach rate is 8, 9, or 10. Which would mean for an entire year they sold less than 1 million consoles but the attach rate goes up signaling a failure to reach critical momentum.

Just because the industry isnt accustomed to witnessing a console that has so many must have games doesnt mean its a bad thing.

A lot of analysts are completely useless.

One thing i would really like to add is that when you here Microsoft is selling the xbox 360 at a loss it is a skewed number.
What that really means is they aren't selling it for its market value. Its like if i were to scalp a ticket i payed $10 for and sell it for $50 but i could have gotten $75 for it. You could say it is a $25 dollar loss, yet i didn't lose any money, i gained 40 dollars.
Most people think microsoft is paying over $400 dollars for the system and selling it for under what they payed for it.
Believe me microsoft still makes a profit for every xbox 360 they sell

No. Read the recent news. At first MS was selling the 360 at a loss, because the amount of money to produce the console was far more than the selling price of the machine (and thats not even counting the R&D, Sony had to do the same with the PS3...they have to make it cheaper in order to provide it to the general public, not just the super rich). Really when the xbox came out...it had the specs of a computer(maybe 6 months old) for roughly 1/4 of the price. Granted it didn't have the same abilities, but they were still selling it at a loss. Recently they have now been able to reduce the prices of the hardware (through using different memory/DVD drive makers/etc.) and are now seeing at least a lower cost per console. Granted that article only takes pure hardware cost, not store profit/shipping/etc. into account. MS has always created profit through the games it sells. Think about 3rd party games....all MS does is sign the app, run through some tests, and produce the disc (actually they outsource that to some like Sony Disc Manufacturing, I know...I have been there....at least for the xbox they did). Then they turn around and sell the game for $60 and take a portion of the profit, while doing almost no work in the making of the game, just supporting the console. Xbox Live also sells a ton of memberships (not to mention the arcade games and themes) when games like GOW come out.....a huge plus for MS, cause they probably don't even share any of the profit from Live with the developers.

I want to know where their data to suggest it's only hardcore gamers comes from (aside from their ass maybe?).

How can you tell apart the hardcore gamer from the casual gamer who's really enjoying the system using their stats? Answer is, you can't.

And the fact is, there are a lot of popular high quality games that are coming out for the 360. Dead Rising, CoD, GoW, etc; the fact that these titles are very popular are one reason why attach rates are so high.

Their full VG Journal has all of the numbers you could ask for as well as historic references for which their concern is based. Again, these guys put out some pretty good stuff. I pretty much agree that up until this point it's been mostly the hardcore gamers buying them. I also think that will change pretty soon. This holiday season and an inevitable price drop in the near future will only mean a bigger installed base for this console.

I think with the recent news of MS being able to lower their parts cost of creating the 360....we should see a price drop soon, but not before Christmas. My guess is $250 to be even with the Wii, and should take even more of the share from the PS3.

Pirating will not affect attach rate at all, thankfully the percentage of scum pirates like yourself is very miniscule