robbie bach
Latest
Robbie Bach: 360 will be profitable in 2008
In an interview with eWeek, Robbie Bach, president of Microsoft's Entertainment and Devices division, disclosed that he believes the Xbox 360 will be profitable by next year. We reported recently that the EDD lost $315 million last quarter, down from $415 million the same time the year before. If losses continue to shrink at a similar rate every quarter, it's reasonable to assume that Bach is correct in his assessment. Bach notes that the Xbox 360 has multiple avenues to generate money. Among them are of course game sales, but Microsoft also makes money from selling ad space on Xbox Live (as well as collecting subscription fees) and selling peripherals. According to Bach, Microsoft is "humming pretty well in the business."Also discussed in the interview is the potential of the Zune and Microsoft's plans for XNA. Hit the "read" link to check it out.
Microsoft: "Does it make sense for us to be in the movie business?"
The interview with Microsoft's Robbie Bach is all over the grid today. While most of the hubbub on the net concerns price cuts for the 360, there's another little gem in this interview. Bach replies to a question about the lagging progress of the Halo movie by saying, "There are a couple of things you have to recognize. Does it make sense for Microsoft to be in the movie business? It's not what we do, nor would I anticipate us ever doing it."Bach is saying this to the people who ask why Microsoft doesn't just fund the reportedly $200 million dollar budget film themselves. It's also why Microsoft got into trouble with the film to begin with. Both Fox and Universal pulled out of the deal because MS wanted them to pony up $5 million upfront and then 10% of all the film's profits later. The three companies couldn't come to terms on the deal when the studios tried to change things, and the picture fell apart.
Microsoft exec says Sony stretched too thin
Robbie Bach, President of Microsoft's Entertainment and Devices Division, had more to say than setting us straight on how much the Xbox 360 would cost. Buried in the interview, Bach had a few choice words for Sony. The gloves are off ... even further. Bach likened Sony's business model to that of the various failed invasions of Russia. According to Bach, Sony has overextended itself in trying to battle the DS and the Xbox 360. He further said that Microsoft -- with a resource chest far greater than Sony's -- would be stressed trying to enter the handheld market. The overextended statement could make sense; Sony is trying to compete on two fronts using state-of-the-art technology, which is demanding on production facilities and resources. Microsoft seems to have recognized that Nintendo's business model allows them to compete on two fronts and decided to focus on in-home consoles. Would Sony have made a more prudent decision in keeping the PSP efficient and affordable (or not entering the market at all) while pushing the technological limits with the PS3 or will offering two high-technology gaming solutions result in a major victory?
Xbox 360 price cut vs. cost reduction
The San Jose Mercury News has posted an interview with Robbie Bach, President of Microsoft's Entertainment and Devices Division (a title alone that speaks volumes about the structural problems at MS), that has some interesting tidbits in it. Most notable is when Bach says, "Right now we are thinking about how to cost reduce the Xbox 360. That seems to be the first order of business."It has been rumored for some time now that the Xbox 360 would see a price cut around the holidays, but now that Black Friday and the PlayStation 3 launch have come and gone, you can kiss that one goodbye. What Bach is talking about here is that Microsoft wants to drop the production cost of the 360, in an effort to make it profitable. There's a big difference between cost-reducing and price-cutting. When a manufacturer costs reduces, they're making it cheaper for them to produce something, usually by switching to different vendors or using cheaper materials. Microsoft promised that they would cost-reduce the Xbox 360 every year, which they've already done this year. The console was rumored to cost Microsoft between $525 and $715 for each unit produced, vs. the current production price of around $329, giving MS a chance to make a small profit on each premium system sold. As they find more cost-reduction options over the next year, that gap should widen. The only time we'll see a price drop on the console itself is either when the PS3 drops theirs, or when the Xbox 720 II Virtual Gameulator comes out. Of course, you can always take Micro Center's deal and get $100 off, your choice.Microsoft has repeatedly said that the Xbox division won't turn a profit until 2008, although Bach dances around that with statements like, "Xbox is on the trajectory we thought it would be on. We feel very good about that." There's a difference between a good feeling and black ink, though. It will be interesting to see how Microsoft not only plans to compete with Sony not only in numbers of consoles sold, but where the profits are coming from.If Microsoft really wants to make a profit, they might think about buying stock in companies that sell red pens if they keep releasing things like the Zune.
Sony spread too thin, according to Microsoft exec
Mercury News has some fighting words from Microsoft's Robbie Bach. The President of E&C goes on record saying that Sony is unable to successfully compete in the upcoming generation as Sony must focus its efforts across three platforms: PS2, PS3 and PSP. "I think Sony, frankly, suffers a little bit from this problem, which is they're spread really thin across all these areas. And trying to do PSP, competing with Nintendo, PSP to DS; competing with us, 360 to PS3, I think it does strain -- it would naturally strain any organization."It's interesting to point out that Microsoft, a company with quite possibly the largest monetary battle chest in the world, has avoided the handheld market, simply because the battle against Nintendo would be too resource-draining. While two-front wars have never been too successful, the consumers should feel comfortable in knowing that at least Sony puts dedication behind its products, unlike Microsoft. I'm confident that Sony will support the PSP for years to come, just like they have with the PS2. And that's something millions of currently abandoned original Xbox consoles can't vouch for.[Via GameDaily]
