Blog Post

Is Xbox 360 doomed?

We’re still a few months from holiday shopping season, but I’m making this prediction now: The Xbox 360 is this year’s PS3. Last year, of course, was when Sony’s over-priced, under-delivered next generation console cost the company its preeminence in the console market to the Nintendo Wii. Similarly, the game industry will remember 2007 as the year Microsoft gave away its lead in the console wars, and lost its bid to become the living room PC.

Why am I so confident? Well, take the case of this dude named Brian. He’s having trouble getting his 360 to work. Then again, he’s not alone: he’s actually like an estimated 1 in 3 of all 360 owners, costing Microsoft a hit of nearly 2 billion dollars after it extended the 360’s warranty. He’s having so much trouble, nine 360s have collapsed on Brian. [digg=]

But that’s not even the worst part.
This is: Brian Crecente is the editor of Kotaku, currently the world’s most popular gaming blog. This is like a major auto company giving the publisher of Car and Driver magazine a test drive in its latest vehicle, and having the wheels promptly spin off. Nine times. Add to this the industry shift toward casual games and the Wii, not to mention the sudden, unexpected departure of Xbox captain Peter Moore to Electronic Arts, and you have a portrait of a console in crisis.

Meantime, according to VG Chartz, the Wii is already neck and neck with the 360, with a worldwide installed base now of 9.36 million to 10.15 million, respectively. It took the 360 nearly two years to get that audience; the Wii, less than one. And when it comes time to buy a console for the holidays, which one do you think gamers will buy?

Call me crazy, but I’m guessing it won’t be the one that failed their friend Brian nine separate times.

Update, 9:35am: Frequent GigaOM contributor Blake Snow has a more gamer-centric opinion leading to the same basic conclusion: The Xbox 360 is in Trouble.

73 Responses to “Is Xbox 360 doomed?”

  1. greendrake

    Om, your contributor just got beat down for everything he wrote, and never responded.

    I know nothing about this space, but Wayne needs to respond to these comments to remain credible in any way.

    Brand management Om. Oh wait, you are getting bought out by weblogs/aol? Thursday it is…

  2. This is just a silly attempt to grab traffic and has no basis in reality. I read the gaming blogs, how come they aren’t claiming this? Because their readers would know it is total BS. The 360 has a unbeatable lineup of games (Halo..Mass Effect…Bioshock…anyone found anything more than 2 good games for the Wii? so far, every purchase has been awful and make the controls seem like a terrible idea).

    Secondly, Xbox with XBLA has a perfect outlet for casual gamers. Couple that with a likely price cut and you have a box that is far more powerful than the (two Gamecubes duct-taped together) Wii for a comparable price to the Wii just without the gimmicky controls. Plus, casual gaming and serious gaming can and will have a future…this is not a zero sum game.

    I better stop now because there are so many flaws in your argument I could go on for some time.

  3. Understand this…The 360 online/games are top notch with nothing even to compare it too… Yes hardware is a problem but Im
    still here and I dont intend to jump ship. At the end of the day Microsoft delivers the content NOW while Sony is full of wind with its next year/later BS. By the time Sony gets it together the 720 will be close at hand.

  4. Stephen using that rationale Sony and MS should totally abandon the video games business all together after this generations results to date

    Why are you comparing iPhones to Zunes?? One is a phone and one is a music player , they are not even targeted toward the same market.

    If there is any nichey device in the video game world it is the Wii. So far it has failed to produce any substantial list of AAA games beyond Wii Sports, sure it has sold like crazy and is always in demand(due to Nintendo not upping production) but does it have any legs to last this generation? That is still a huge question in the gaming world.

  5. Maybe it might be important to mention that Microsoft has NEVER made a dime on an Xbox. In fact, they have lost millions, excuse me billions on a device that is nothing more than a niche device. As the article states “a worldwide installed base now of 9.36 million to 10.15 million, respectively. It took the 360 nearly two years to get that audience; the Wii, less than one.” Showing that Nintendo knew how to turn a profit were Redmond failed.

    The Xbox and the Zune have done little for Microsoft. With lack of sales of the Zune (while Apple has sold well over 100 Million iPods at a nice profit) and nothing but broken Xboxes causing MS to take a 1.1 BILLION DOLLAR write-off!

    I think this Xmas will not be a great time for Xbox. By the end of the year Apple will have sold more iPhones than MS sold Zunes and enough Apple TVs to help ensure that Xbox will not be the living room PC. How many people over 40 buy Xboxes?

    Apparently, there are not enough of the “real” gamers to turn a profit. At this rate it may be MS that pulls the plug when their stockholders finally have enough!

  6. Got to agree, I know about 10 people with xbox 360’s and of them 8 have had at least one fail n them, im on number 4 myself. As soon as the PS3 starts bringing out the top titles im switching over!

  7. I think this story is crap, how is the xbox doomed, when there are 10million already out there and now you get a better warranty.More games on the xbox than the ps3, cheaper games, and better to come.
    The Wii sells becasue its asy to play, they have reached another sector of the market.Xbox will never die becasue M$ are far too big, they lost nearyl 2billion but yet they still make a profit!! youre not gonna kill off that war machine!

  8. Insignificant anecdotal evidence aside (comments included),

    I don’t think that anything Kotaku can say is going to have any sort of noticeable impact on the 360’s sales in this holiday season. It’s the third one it has been through, come on!

    Kotaku readers who want a 360 have already purchased it. Those who are buying for the next round of games, Mass Effect et al, are going to be convinced on the merits of the game, not the console. And lastly, and perhaps most importantly, more casual gamers who are pondering a purchase at this point in the game aren’t reading Kotaku.

  9. if sony delivers some titles?? They’ve only been saying that since the console launched yet its all bout next year with Sony(their biggest exclusive launches are still 2008). You can only overhype games for soo long before that hype starts wearing thin. Better question is Sony gonna sacrifice the PS3 winning this generations battle in lieu of winning the war in hi-def media??(blu-ray)

  10. What’s up with the Title of this story? Anyways if Sony delivers some great titles by the holidays I think you start seeing the xbox being pawned on Ebay. Xbox is the thing now but Sony is the future.

  11. I have had 2 360’s die on me. (both red rings)
    They are in the same exact environment as my PS3. The PS3 has not had any problems.

    This is a HUGE problem for the 360. I tell all my gamer friends who have yet to jump to the next gen not to buy the 360.
    I expect a lot of xbox users with problems are doing that.

  12. Wrong!!

    Between myself and friends, I’ve never had this happen. I believe there are problems (but then again don’t cell phones, PCs, and cars all have problems too ?). Nine failures in a row tells me its something in the environment. I think the Wii is great, but it’s Pizza and Apples. They are different products. I don’t believe there are many (if any) people that go to the store thinking “should I buy an Xbox or a Wii.” The Wii is great family fun. But you can’t watch or play in HD. I agree the price could be lower. Same is true of the Wii — it’s a bit overpriced for circa 2002 technology.

  13. this is a terribly biased article, very sloppy. the 360 has the largest install base of any next gen systems and is still outselling the PS3 2 to 1. if you dont believe go back and check out the npd’s for the last 6 months. nintendo is doing really well, but is it really microsoft you should be writting your fanboy sob story for. Sony might need your pity more mr wagner

  14. I don’t tend to agree with this. I have a first gen xbox that is still going strong.

    I think the games line up is second to done. Mass Effect and Halo 3 are good exclusives to be had. COD4 and GTA4 coming to ps3 and 360 means there is no reason to payout for a ps3.

    I do think MS are shooting themselves in the foot with the price point. Lets face it they can afford to drop $100 off it and this would make them the winners of the next gen race. What they would lose in money for the console they would make up on games sales easy.

  15. What does “doomed” mean exactly? Is the suggestion that Microsoft will pull the plug or just that the installed base will plateau?

    It doesn’t seem to be much of a debate that the Wii will surpass Xbox in installed base but hardware sales aren’t MS’s primary concern. A better indicator will be the attach rates for games and for content purchased on Xbox Live. I’m not suggesting Microsoft doesn’t care if it’s installed base plateau’s. But it’s competition certainly isn’t the Wii. Everyone I know that has a Wii also has a more traditional console as well.

  16. Slippy Sloppy

    I don’t mind the 360 being a media extender but thats a good point about it not having a brower. I mean Mickysoft – they’re supposed to be the browser kings yet there’s no Internet Explorer for the 360. Streaming content off the net through the Wii is one of the best things about the the console, apart from the mini-games of course ;)

  17. I think the author is way off the mark on this one.

    Firstly, the Xbox 360 has the strongest line-up AAA games coming in the latter half of this year of any console I can remember. Good games sell consoles: FACT. One of those games also happens to be Halo 3, which already has pre-orders of over 4 million units, and is guaranteed to shift a few 360s also.

    Secondly, MS have owned up to the fact (finally) that there has been a problem with failure rates, specifically the Red Ring of Death syndrome. The warranty has been extended to 3 years to combat this problem. Also, according to anyone I know whose 360 has failed, the repair service has been very efficient. Hardware revisions are also being made to prevent this happening to newer consoles.

    Thirdly, Peter Moore leaving, although I’m sure a blow to the company, should not really affect the consumers decision to buy a 360, nor was it sudden or unexpected. EA approached Mr. Moore several months ago with an offer that meant he could return to the Bay Area of San Francisco, where he grew up, and is not at all indicative that he is deserting a “failing system” as the author seems to be trying to imply. How many non-hardcore gamers do you think even know who Peter Moore is?.

    The Wii has done phenominally well with hardware sales, however, the target audience for the Wii is considerably different from that of the PS3 and Xbox 360. Therefore, any success that the Wii enjoys, should not necessarily be at the expense of the others.

    The point is that, far from being on the way out the Xbox 360 is poised to start making waves again.

  18. i got an xbox 360 at xmas 05 and it died recently it kept freezing and showed red ring of death and it cost me 85 quid to get it fixed of microsoft and im still waiting for my 360 to get back to me its nearly been a month without it.

  19. As others said the Wii sells more because it has a larger market not because it’s more popular with the gamers that’s like saying a Cavalier is doing better then the Ferrari because it sells more

    In truth most gamers who have the money have either a Xbox 360 + Wii or PS3 + Wii then there are the millions of none gamers out there that are content with bouncing around like complete morons and playing “stick your leg out game” lol

    The Xbox 360 is doing great if any console should worry it’s the PS3

  20. Nick Walker

    I believe the 360 will start to fall hard on it’s face starting now. Many people bought a 360 due to it’s next generation status. Out a year before PS3. Graphics are better with the PS3 already and not many machines are having problems unlike the 360’s. Also, many people didn’t realize that they were purchasing another computer for their home. Another point is that although the initial cost for the 360 is cheaper, with live added into the cost you as a consumer will be paying more. Finally, how many games for the 360 are you needing pay extra for content. Mini expansions anyone? Ridiculous!! Plenty of games feel weak/short. That’s okay though, just keep shellin’ out the dough for extras that should be included.

  21. C’mon James! The 360 is hardly doomed. Neither are the Wii or PS3. They’re all going to be fine this year. A few things:

    • Xbox 360 has Halo 3. This will probably be the biggest game of the year.

    • There are lots of casual games on Xbox Live Arcade.

    • Don’t insult Car & Driver like that.

  22. We’ve had two 360s in the house display the “ring of death”. We were lucky enough that it went away & that we haven’t had a problem since.

    The 360 won’t go away because it appeals more to “real” gamers. The Wii has more universal appeal & that’s why it will probably leapfrog past the 360.

  23. Damian

    As an Xbox360 owner since launch day and no problems whatsoever there I don’t wholly agree. The games line up is superb and graphically there is very little difference to the PS3. I am worried though, for other reasons… if they are trying to become the living room PC they are certainly taking their time about it. It’s software is designed as a media centre extender whereas it is far more than capable at being a media centre in it’s own right. It can’t play media from external harddrives or from over the network with out another PC running. If you’ve seen xmbc running, you would know what the possibilities are. Where’s the internet integration (radio, flash video, etc?). The Wii has a browser for heaven’s sake.

  24. great read, and really a great point I don’t have any one of the new console but I will get one this holiday I really what a 360 but I am really thinking of getting the wii or maybe the PS3 only if they cut $100 more so I can get it for $400 and not $500.

  25. Slippy Sloppy

    I don’t really care that 360s have a 1 in 3 faliure rate, what I care about is that Microsoft are supporting customers and are going to fix it. They seem to be getting a lot of flack for doing the decent thing – and who cares if it’s costing them $1b, all I care about is me and the service I get.

    I own a Wii but the 360 is a far better machine, it’s online play is flawless and the although the Wii has a great controller it is essentially a Gamecube. It doesn’t matter how many Wii’s Nintendo sell, it all comes down to the games and while the 360’s has a huge library of excellent games, the Wii only a handful.

  26. ps3 or Wii?

    @Wagner James Au,

    Which one is more popular & Why? PS3 or Wii?

    It seems like PS3 after lowering the price is getting momentum. Wii doesn’t have very many games, and remote control novelty wears off after a while.