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For six years, the Internet Nexus served as my technology blog, but I've since started blogging at the SuperSite Blog instead. If you're looking for the blog, please head there. --Paul

Wednesday, April 18, 2007

Game Over for Xbox 360?

Me, in WinInfo:
Roger Ehrenberg, a financial analyst and the president and CEO of Monitor 110, Inc., says that Microsoft may very well have created the ultimate video game machine with its Xbox 360. But that can't hide the fact that the Xbox 360, like its predecessor, has been a financial disaster for the company. And maybe it's time that Microsoft stopped hemorrhaging cash and looked to other markets that would be more rewarding to the company and its shareholders.

"Gaming has been a disastrous endeavor for Microsoft, particularly from an investment perspective," Ehrenberg reported in a recent blog posting. "After five years and over $21 billion invested all they've got to show for it is $5.4 billion of cumulative operating losses, and Xbox 360 doesn't appear to be the silver bullet to turn things around."

And there are other problems with the Xbox 360, of course. Reliability of the console is so abysmal that Microsoft has had to update its warranty at least twice in order to appease customers. The Xbox 360 runs so hot and is so loud that it's almost completely unsuitable for use in living rooms, and these issues no doubt contribute to the device's horrid reliability. Furthermore, Xbox 360s are physically mangling game discs in a variety of situations, a condition to which Microsoft has yet to officially admit, 18 months after the release of the console.
I love the 360, and think Microsoft's done something special there. On the other hand, it's loud and unreliable. I've had three game discs scratched so bad as to be unplayable. I've had two consoles turn up dead with the "red ring of death," and I know of several friends who have had the same issues. I get together monthly with a group of guys up the street to play Halo 2 and, more recently, some 360 games, and they've almost all had problems with their consoles. We played last night, actually, and while Halo 2 played flawlessly, our attempts to play Call of Duty 3 and Gears of War, both 360 titles, were completely unsuccessful. Everyone was blaming Microsoft, and while that's kind of a simple and easy assessment, you know, it probably is their fault. This is a sad state of affairs.

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