In the console market, the Microsoft Xbox is in the basement with a total of about 14 million units sold to date, and every single one of those systems was sold at a loss and the cut is getting deeper and deeper and Microsoft announced plans to shave another $30 US off the price of a console to $149 US.
Even the Nintendo GameCube is doing better, despite the fact that its totally underpowered compared to the competition, and doesnt double as a DVD player. There are now more than 15 million GameCubes on the market, and its outselling the competition with a low price of $99 US.
The Sony Playstation 2 is still the king with over 70 million units in circulation around the world.
But Microsoft has an ace up its sleeve, not to mention more than $60 billion of mad money in the bank for times like these.
The next generation Xbox 2 is expected to hit the shelves in late 2005. They have the jump on Playstation 3, which is not expected to hit the market until mid-2006. The Nintendo GameCube 2 is expected late 2005 or early 2006, and is expected to be a much more capable with an IBM CPU, NECs DRAM memory and a DVD player.
Getting the jump on the competition is a smooth move for Microsoft, but thats just the icing on the cake. The cake itself is something more substantial as the Redmond, Washington-based company already world famous for its anti-competitive practices seeks to corner the game production software industry with a new set of tools. Its safe to assume that these tools wouldnt work on Playstation 3 or GameCube 2 consoles.
This week Microsoft unveiled a new software development platform that promises to cut the costs and time associated with game development by automating a lot of the coding.
The new platform is called XNA.
"Software will be the single most important force in digital entertainment over the next decade," said Microsoft founder, chief executive and chief software architect Bill Gates. "XNA underscores Microsofts commitment to the game industry and our desire to work with partners to take the industry to the next level."
It currently costs around $10 million to develop the average game, although the leading titles can exceed $50 million. With more than 100 million consoles out there and games selling for $50 to $80 Canadian, the more popular titles can make hundreds of millions and sometimes billions of dollars. The game industry as a whole does better than Hollywood.
Microsoft is betting that game developers will embrace XNA to cut their costs and development times some games do flop and that XNA will enable more smaller companies with good ideas but little capital to enter the gaming market.