As we've seen from Nintendo and Sony's standpoint, the fall in stocks can be from outright failure to make sales, or from what I perceive as forgetting your target audience. But what about Microsoft, where do their stocks fit in with all of this?
First, we need to remember that Microsoft is a huge corporation, and they are extremely popular all over the world. But what about Microsoft Games Studios, the branch of their company that actually produces the games for their popular Xbox 360 console, and for PC?
Let's look at this purely from a popularity standpoint - Microsoft's Xbox 360 has outsold both the PS3 and Wii in the United States for the past 18 months, as of August 16, 2012[1]. To still be pulling in such strong sales figures after almost 7 years on the market is a feat indeed. What is it that makes the Xbox 360 so much more buyable than its competitors?
Probably the most influential selling point of the Xbox 360 is its use as a social gaming media, allowing you to connect with your friends in almost every game on the console. Microsoft brings in a steady profit from their "Xbox Live" service, which charges, on average, $5 USD per month, and an estimate from Forbes in June 2010 put the total amount that Microsoft is making off of their Xbox Live Gold service at $625 million USD per year, and that's from subscription fees alone.[2]
On top of the subscription income, Microsoft makes even more money by selling advertisement space on the Xbox Dashboard. Microsoft seems to have stumbled upon a diamond mine, charging consumers to give them ads, and in effect winning twice. Next post, we'll look at the implications this has on games, and in the future, why I believe treating gaming as a "social media" has negative implications on the future of the industry.
References:
[1] Don Reisinger, August 16, 2012: Microsoft versus Sony versus Nintendo. Who wins?
[2] Oliver Chiang, June 17, 2012: Microsoft's Xbox Live Is Making Boatloads Of Money On Virtual Goods
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