Great reply Darkride66, you defiently deserve a bubble for that. The XBL revenue makes me wonder if that is the sole reason that upped the price to 60 dollars, to make a bit more because of falling 360 sales? Which isn't a big price increase, but there's nothing to really back up why they raised it for the gamers side of it, and with alot of gamers finding it hard to buy things in this economy, ten bucks is alot, especially for people who are getting hours cut or being laid off.

You know, that makes sense to me. As Forbidden says, the increase in the price of Live may very well be due to the fact that there is declining revenue from the hardware side of things.

It'll be interesting to see the official numbers from Microsoft's financials when they are available.

The whole reason why Console makers can't make their systems life spans last longer than 6-7 years before releasing another system is because of this. They have to continue to sell lots of systems and they have dried out the market by that point. I expect to see new consoles announced at this years E3 with continued support of the current systems for another 5-7 years after (like the ps2 and ps1 did).

***********

@disagrees
Look at every console released thus far in the industry. How long of a life span did it have before the next iteration was released? This doesn't mean the company stopped supporting it, they just released the new product. To think that Sony or Microsoft or even Nintendo will just sit on the current gen consoles for another 5 years is ridiculous. I know some of you only just bought a console because of the price but that doesn't mean you didn't just buy 6 year old consoles.

I guess this may have to on how they report their inventory in their balance sheets.

well, what do you expect?

It was written by none other than darkride66.
It was submitted by none other than darkride66.
SMGamers.com is darkride66's blog.

The actual post from Barron's reports weakening demand across the ENTIRE chip sector, not just what the headline implies.

What's more, the 40% reduction in production for the 360 is likely a ramping down of production after extra 360s were produced for the expected spike in demand following the release of the 360s.
This was to be expected, ceteris paribus.
Darkride66, however, conveniently neglected to mention this.
Is anyone surprised?

As a perfect parallel example, the ps3 experienced a similar spike in demand following the release of its ps3 slim, and subsequent reduction in demand and production last year.
http://www.escapistmagazine...

Funnily enough, the author darkride66, seeks to spin this as a specific negative for the 360, when cutting back production is actually a feature of the entire 'chip industry' and not restricted to the 360 alone.
Why does he do that?

How is it that this has become a specifically negative 360 spin, when in fact a multitude of related industries are experiencing the same circumstance?
It makes no sense.

Unfortunately, we all know that Darkride66 has often made analytic excuses for the ps3 profitability, blaming the global financial crisis and the appreciating Japanese yen for the PS3 losses.
Yet, now, he doesn't seem willing or able to apply the same business sense.

I honestly wonder about that guy.

Now I am just waiting for Darkride66's multiple account 'Coljessup' to show up.

You keep accusing me of being DR66, yet I haven't got a clue why. Just because I call you on your crap? How many other users who disagree with you do you PM accusing of being DR? If you think everyone who thinks you're full of it is DR, you must see Darkride everywhere. "Ah! He's over there! Now he's over there! He's everywhere!" That's a little freaky if you ask me.

I PM'd DR and know a bit about what you're about. I haven't been on this site long, but one thing that's consistent, whenever I see you posting it's crap. At least DR makes sense and sticks to the facts. You should try it sometime, instead of lies you push. "It's just ramping down because of ramping up!"

Brilliant. Now try to prove that just isn't a bold faced lie that you made up. Where's the proof that Microsoft is ramping down because of increased production? All I see is an analyst saying MS is ramping down because of falling demand. The numbers DR gave above seems to back that up. A whole year of falling sales? Spin that, loser.

I don't know if this site is DR's blog and frankly I don't care. He links right to article and it says clear as day, Microsoft is cutting 360 making by 40% due to falling consumer demand. DR's article is right on the money as far as I can tell.

And what's this BS about ramping down production? Don't you think the analyst - who tracks the industry and chip sales would know if this was the case? And Microsoft didn't ramp up anything. The fact is the 360s is in short supply and Microsoft said they're in short supply. Why would they ramp down if they can't keep up with demand? Why don't you use your head?

You accuse DR of spinning this negatively. And then you try to positively spin a forced 40% cut in production. Do you have any clue how much of a loser that makes you look?

I look forward to continuing to shoot down your crap with plain, old fashioned logic. I'm pretty sure everyone already knows what a troll you are - but it's fun to cut you down because you're so out to lunch with your comments. You can't argue, so you just invent crap. It's hilarious.

Pretty obvious to me, you can't handle the truth!

Very nice. +Bubs for owning the 'intelligent' trolls. ^_^
It's just so refreshing to know a few people can actually use their brains like you. Haha

Halo Reach limited console, people that already own a 360 will sell theirs just to buy that one. That's like saying GT5 isn't a system seller because anyone who wanted to try GT should already have a PS3.

@lokiroo420 - Doesn't matter there is still a next gen GT game on the PS3, if you wanted to play GT on your PS3 its possible.

Halo isn't a system seller but GT is? Get the fuck outta here with your fanboy BS.

Halo Reach has over 2 million pre-orders which is more than most PS3 exclusives sell in the entire existence, to say its not a system seller is just idiotic. Some of you guys try so hard to spin the dumbest shit its not even funny.

EDIT:

http://www.amazon.com/gp/be...

Look at #4 on the list, and you're going to tell me Reach isn't a system seller? This is just Amazon to, that's not including every other retailer around the world. You kids are in denial.

No its not the same as people wanting gt5, there hasnt been 3 games released with the gran turismo name.

edit:
"Halo isn't a system selling but GT is?" Care to write that in English?

what hit what? all those angry moms that throw disfunctional kinect at your head?

"There have been ZERO GT's"

Really big guy? What about the 5 million copies of GT5P sold?

Many don't recognize the existence of GTP as it will upset them to know they paid $40 for a game that gave them 1/4 of what they will pay for GT5 proper.

GTP is a slap to the face when you compare what it offered fans versus the real deal.

But remember....GTP does not exist and therefore cannot be used against a fanboy argument.

It's not a full game, nor was it expected to be received as one, considering there was a GT3p years ago, which also sold millions, then the release of GT3 doubled it.

These declines are on the back of extra revenue received from releasing games like Forza horizon 5 on PlayStation. So I’m being sarcastic here when I said they should go back to exclusives. Killing off a revenue stream from Ps5 sales will only make things worse

Contractual agreements are not the same as “gentlemen” agreements. If you think that they work with their distributors a month before production then their entire business model is trash. They work with companies like nvidia constantly for building the graphics cards they need. They work with companies that build motherboards years in advance. This is what proper business planning does.

They are not buying components on a whim like a consumer. So again, considering the ram isn’t a singular module and is integrated into the motherboard I highly doubt they wouldn’t have a final schematic that they are supposed to be building around.

If they are delaying production another 3 years then it’s obvious again this is an after though project and is just trying to be responsive to their bad execution they had the last 14 years.

It also isn’t far fetched to use their failure to produce first party titles the last 7 years including the highly anticipated games I mentioned all being cancelled. That they would continue to you know… lie

Yeah with FSR 5 they should be able to offer a much cheaper version of Helix.

Series S is what has killed Xbox Series so... Will they dare?

The factors are largely external. Covid and Russia-Ukraine war causing inflation led to the first price increase in 2022.

Then we get Trump's tariffs increasing hardware prices, AI boom causing a RAM crisis, war on Iran causing a worldwide fuel crisis which impacts the cost of everything.

Gaming doesn't exist in a vacuum. The last few years have been a shitshow and lot of it was definitely avoidable.

LucasRuinedChildhood,

For sure. No disagreement on the external factors doing a lot of this. Where I have to gently push back however is on two fronts:

1. The pandemic definitely caused some issues: asynchronous development was a big issue and really complicated timelines and affected game quality. At the same time, when it comes to price hikes, it's really difficult to know what was genuine necessity and what was taking consumers for a ride. The pandemic brought about "stag-flation" which was increasing prices and stagnant wages, which was a problem caused by supply chain constraints. There was also "Greed-flation", where companies that were slightly affected or had no issues took advantage of the situation and squeezed everyone citing supply chain issues when there were none.

2. It's definitely true that the tariffs, AI boom, and RAM crisis were all things enabled by tech broligarchs throwing money at this caricature of a world leader, one of them being Satya Nadella. I don't think Sony and Nintendo have contributed much to this problem if at all, but Microsoft's Nadella I feel was instrumental in causing every one of those issues. Microsoft as a company contributed to both candidates (though they gave Harris 4x as much if I recall), but Nadella was all in on letting AI run wild. He paid for unregulated AI, and got a war that's not a war (even though Trump called it that at least five times on television) that screwed up helium access. So for me, I feel that one of the players in the gaming industry is a key architect of these issues, and for that reason I struggle a bit to think of it as "external".