Microsoft is obviously the primary beneficiary if the Xbox 360 platform "wins" the console wars. Its platform had a 12 month headstart on Sony's PS3 and Nintendo's Wii. However, the Wii outsold this console in January and February of 2007. Microsoft also published several popular games, including the Halo franchise. Halo 3 exceeded sales of $125 million on its first day of release.
Microsoft is currently not leading the next-generation console competition with 2.4 million units sold as of the end of April 2007. In contrast, the PS3 had sold approximately 1.3 million units and the Wii sold about 10.5 million units.
In 2007, Microsoft wrote down $1.5BN in Xbox 360 related charges, as technical design flaws led to widespread product defects. The charge was mostly composed of the cost of repairing defective systems.
- Lite-On IT, a Taiwanese company (TPE: 8008) manufactures HD-DVD optical disk drives for Xbox. This benefits the disk maker because of the console's large installed base, but Microsoft has been pushing its components makers to decrease prices by 5-15% on a quarterly basis.
- Logitech International, a manufacturer of peripheral electronic equipment (e.g., computer mice and video game controllers) owns the exclusive rights to manufacture third-party wireless controllers for the Xbox. The company depends not only on the success of the platforms but also on the content created. For example, the company increased its unit sales of console gaming peripherals from FY 2005 to FY 2006 (ending March 31) by 21% but saw its revenue decline by 7%. The reason for this apparent contradiction was that it sold many fewer expensive racing wheels due to the lack of popular racing games available on the Xbox 360. The company also offers accessories for Sony's PlayStation 2 & 3 as well as the PSP platform. Overall video game sales made up 7.2% and 6.1% of the total sales for the company during FY 2007 and 2008, respectively.[3]
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