g r o t t o 1 1

Peeve Farm
Breeding peeves for show, not just to keep as pets
  Blog \Blôg\, n. [Jrg, fr. Jrg. "Web-log".
     See {Blogger, BlogSpot, LiveJournal}.]
     A stream-of-consciousness Web journal, containing
     links, commentary, and pointless drivel.


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Wednesday, April 24, 2002
13:40 - Here, Penny Arcade-- take yourself a whack
http://www.penny-arcade.com/view.php3

(top) link


The first thing I saw this morning was an ICQ message of Marcus predicting my imminent blogging of this Penny Arcade strip. Yeah, I was powerless to resist. Who am I to introduce instability into the timeline?

By the way, though Steven den Beste cautioned me the other day against declaring the Xbox out-for-the-count just yet (bearing in mind the iterative improvements over many years that have been part of every other Microsoft product, from Windows to WinCE to IE to Office, supported until it's viable by pure marketing clout and money), I have a counterargument that I forgot to mention in e-mail. And that's that Microsoft's previous iterative development efforts have all been software-- high-margin stuff they could make a profit on even if they only sold a measly few copies. This time, it's hardware... and sold-at-a-loss hardware at that. It's going to cut them a lot deeper if they plan to subsidize Xbox sales (with the new European price cut, they're now making what... -50% margins?) than it ever did to give away Windows in shady bundling deals. Their big gamble is that people will buy enough Xbox games to offset the hardware costs via the licensing deals; but if people rush out and buy Xboxes and then suddenly find that whoops! there aren't any games! ... well, even Microsoft won't be able to sustain that for very long.

Especially if even gamers ridicule it. After all, IE caught on even in its sucky early days because it was bundled with Windows. WinCE is winning on its shiny colors and the Maglite-like glow of the iPaq screen. And Office won because it was ubiquitous (nice little feedback-loop thing there). Not so the case here, where gamers (who are fickle) will rally around the PS2 and Gamecube if they've determined that the Xbox is a waste of money. The competition is strong and has widespread brand loyalty and all kinds of market advantages. That's never been the case before.

So all I'm saying is that the dynamic is going to be different here, because the Xbox is such a clear market loser and a loss leader. That's a bad combination, even for Microsoft.

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© Brian Tiemann