FEATURE: IS THE XBOX 360 PAST ITS PEAK?
Seven years after the introduction of its first console, Microsoft is waging a new war with Xbox 360 – against itself. Phil Spencer, the general manager of Microsoft Game Studios Europe, believes the war can still be won.
ImageIn September 2005, Microsoft’s Xbox division reported it had lost a total of four billion dollars during its four years of involvement in the console race. For any other company that might have been the end of their involvement in the industry. For Microsoft, it was the necessary price to gain a foothold in the burgeoning videogame market and the prelude to, two months later, launching the Xbox 360. With that move, Microsoft forced the beginning of the current generation.
The timing was always intended to give the 360 a head start on its competitors and had mixed results: on the one hand, consumers upgraded and the 360 certainly got its lead in early (to the tune of nearly ten million units), but on the other the allegedly rushed testing of the hardware resulted in the infamous ‘Red Ring of Death’ phenomenon, and the costliest warranty extension in videogame history. But more than two years since that launch, and now facing some stiff competition, is the 360 in the dominant position Microsoft claims – or does the console rule an empire built on quicksand?
The 360 has several major achievements to its name: a software catalogue currently unmatched by its competitors, a peerless online service, and arguably the best traditional controller of those available. It has created a fiercely loyal community and worldwide sales stand at 18 million worldwide, with around seven million of those in North America. Returning to that $4 billion (£2 billion) ‘investment’ in entering the market, fiscal 2008 was always cited by Microsoft as the year in which it expected the Xbox division to begin turning a profit.
The last two financial quarters have seen positive results. Over the period of July 1 to December 31 2007, the Xbox Entertainment and Device Division reported an income of $522 million (£263 million) from a total revenue of $5.53 billion (£2.8 billion).
The division also incorporates PC games and accessories, phone operating systems and Zune, but Microsoft itself attributed the increase in revenue primarily to ‘increased Xbox 360 console sales, videogame sales led by Halo 3, Xbox Live revenues, and Xbox 360 accessory sales’.
Wondering just how big or small a part of Microsoft the division is? That total revenue of $5.53 billion was part of a $30.3 billion (£15.2 billion) total revenue in the same period, so some rough-as-they-come beer mat sums would tell you it’s about 18.25 per cent – a proportion that, even allowing for the varied products contained in the division, puts to rest the sneery idea that Microsoft can simply afford to throw money at the brand. And sure enough, the 360 has hit Microsoft’s business targets: in particular, Bill Gates’ E3 2006 prediction that the console would sell 10,000,000 units by the end of 2006 was surpassed by nearly half a million.
But think about the figures for a moment. If 1.5 million 360s were sold by the end of 2005, 10.4 million by the end of 2006, and 17.7 million by the end of 2007, then the Xbox 360 sold significantly fewer units in 2007 than it did in 2006. The bad news doesn’t stop there: 2007 saw its head start battered aside by the unstoppable Wii, with little chance of redress, and the PlayStation 3 reaching the 9.5 million unit mark worldwide. The only territory in which it outsold the PS3 was North America, and without the sales spike around Halo 3 things would have looked considerably worse.
"Software is where the real money lies, and the 360 boasts an attach rate of seven games per console, far in advance of Nintendo and Sony."
It seems strange that this is the case. After all, with its obvious attributes and its late-2007 software lineup, why didn’t the Xbox 360 dominate the year, and the Christmas period in particular? Microsoft began 2007 with a huge unit lead, its biggest game properties due to arrive on the shelves, plus a significant marketing spend, and in the event managed to sell less hardware than the previous year.
Of course, hardware sales are only part of the story, and software is where the real money lies for platform holders and third parties: in this respect, the 360 is in rude health, boasting an attach rate of seven games per console, far in advance of Nintendo and Sony’s figures, as Phil Spencer, the general manager of Microsoft Game Studios Europe, is keen to point out: “If you’re a third party thinking about where your game might work, the 360 has got to be at the centre of your business case.”
The 360’s software catalogue is deserving of such success, and for a certain section of the market is the most comprehensive available: exclusives such as BioShock, Blue Dragon, Crackdown, Dead Rising, Forza Motorsport 2, Gears Of War, Lost Odyssey, Mass Effect, Project Gotham Racing 4 and crossplatform titles such as Assassin’s Creed, Burnout Paradise, Call Of Duty 4, FIFA ’08, Need For Speed ProStreet and Pro Evolution Soccer 2008 cover a lot of bases. For players who specifically enjoy the established videogame genres, the Xbox 360 is currently the machine of choice.
There’s one more title to add, but it doesn’t seem to suit lists. It’s difficult to discuss the Xbox story in any sense without mentioning it: Halo. Its importance cannot be overstated: the first game was the biggest-selling Xbox title for four years in a row, then Halo 2 was released and became the bestselling Xbox game worldwide, redefining the online component of console games and dominating Xbox Live until the release of Gears Of War. In September 2007 Halo 3 was released and instantly became the 360 title with the highest worldwide sales, standing at over eight million copies, and was responsible for the only massmarket special edition of the 360, an unfortunate gold and green creation (which, weirdly, didn’t come with the game itself).
It’s an overwhelmingly important IP for Microsoft, far more so than any single title is for Sony – which is why Christmas 2008 will see both Halo Wars and Halo Chronicles released, and it will be no surprise to see the franchise’s momentum refueled on an annual basis until the inevitable Halo 4. The title’s success simply can’t be denied – and nor can the fact that it’s first and foremost a gamer’s game, built around infinitely nuanced controls and a Legendary difficulty setting, set up to be tweaked and played in variants, rewarding myopic devotion with superhuman levels of skill, and built to sustain a huge online community for years to come.
Many of those traits are shared by the breadth of the 360’s software catalogue: first person shooters, deep racing titles, third person action adventures, sports titles and old-school JRPGs. These are gamer’s games, traditional games, and, importantly, some of the greatest ever made.
But if you want success, a chance of a PlayStation 2 level of success and industry dominance, is that the right kind of portfolio to be pushing? The PS2’s line-up is an ongoing software success story, its sales still keeping pace with and regularly exceeding the current generation of machines, and the reason is that its range of third party titles accommodate any demand any gamer could make. It’s a lesson that hasn’t been lost on Spencer.
“If you look at the third party portfolio for the 360 now, and its success on a worldwide basis relative to the PS3, it’s obviously different to PS2 versus Xbox. You see those ‘breadth’ titles that third parties ship, be it the Lego series, the Pixar movie games, Guitar Hero or Rock Band, and they’re all coming to our console.”
"The ‘casual gamer’ doesn’t exist – there is no homogenous group that can be targeted with one or two releases over a period of time."
In comparison to the original Xbox, it’s true that on paper the 360’s line-up has a wider appeal. But if the console’s portfolio is unfairly accused of being all about bald space marines and fast cars, there still remains an overwhelming dominance of traditional genres in the software catalogue, and a doubt over Microsoft’s ability to cater to the videogame massmarket. It’s noticeable how contrived the 360’s casual software can seem: Viva Piñata became the poster-child for Microsoft’s attempts to convince the industry of the console’s family appeal, and is still being touted over a year after release – surely indicative of a lack of depth in the area – while the ‘inspiration’ that Scene It took from Buzz! is obvious.
Ich finde es prinzipiell unsinnig von so einem kleinen Ausschnitt direkt auf eine ganze Masse zu schlussfolgern.
