X-Box: $-1,000,000,000 a year

[Paco]

Y'know Paco. Maybe I'm just not observant, but just a second ago I saw the PS2 in your avatar. I never noticed it before
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It's been there since I made the avatar several months ago. Can you guess who's head that is? ;)

I'd say you're being optimistic there. Minimal loss? Sorry... they'll lose money. Oh, they're partially trying to cope by having that "core" system which has a corded controller and no harddrive, but they'll still lose a good bit. This isn't cheap stuff. Oh yes, and what does "full control over the production" mean? As far as I can tell, nothing...

Of course it's not cheap in the sense that they're just giving it away, but in the sense that Microsoft learned from their mistake with the Xbox. Microsoft has been forking out a huge amount of money for the GPU, and the deal they made with Nvidia concerning the royalties has proven to be one of the most expensive parts in the Xbox.

This time Microsoft owns all the tech themselves (they're not licensing it from the GPU maker). All they pay for this time is the production costs, and that will get cheaper over time (MS expects annual cost reductions). The royalty fee they were paying Nvidia never budged.

Plus, they are making the customer pay for the harddrive this time.

Ah yes, the great support from Square... oh wait, it's a port of a PC and PS2 game? Right... Tecmo? They're already weirdly in love with X-Box so it's expected. As for the others, yes, MS is clearly making a better effort than before, and launching first will help, but between how dominant the PS2 is (really, the next console generation starts when PS3 launches, I think...) and how the Japanese don't really like foreign stuff, it won't make a big enough dent to truly damage Sony. Or Nintendo, for that matter, in the Japanese market.

The Japanese developers can't ignore the American or European markets. They are individually bigger than the Japanese market (which is dwindling). They recognize that Xbox has a growing userbase, especially in the U.S., and it would be silly to just ignore that customer base.

I don't have the gift of telling the future so I'm not going to touch the rest of what you said.