Why are older consoles almost all toploaders?

[DaveMMR]

The underlying problem with that strategy is not everyone signs up for Live when they buy an Xbox (unlike, for example, cell phones where your hardware is useless without a carrier subscription). 

That would be an interesting set of stats to have:  What percent of Xboxes never carried Live subs?  How long of a Live sub needs to be carried, on average, to break even overall?

Given that the 360 is very heavily wrapped around the Live service I'm willing to bet the percentage of new units that did not generate a subscription is small.  How many new units were replacements for failed units, though, and thus did not result in a new subscription but rather a continued one?  Does that statistically matter?

I'd be interested to find out as well - though I don't have the time at the moment to research this.  But I doubt the "Xbox Units to Live Subscription" ratio is anywhere close to 1:1 (counting both systems)*.   $50 per year is a lot of money to some people who may only have a passing interest in playing online (myself included) or simply don't have the requirements to play online (i.e. broadband connection).   What gets me online with the PS3, Wii and PC is that it is free.  I subscribed for a year of Live back on the original Xbox; but never renewed because I couldn't justify spending the money (of course, nowadays Live has more to offer - but if you want it to just purchase games online, the free version suffices).

*This quick article from 2009 shows 30 Million Units sold and 20 Million Subscribers.  Discarding all variables (second units, for example) - that'll be an average of 1 out of every 3 Xbox's not hooked up to Live.   But it's probably more complicated than that, so I'm not submitting that as hard evidence.

But yeah, MS wants people to use Live.  Really want.  That and software is pretty much how they make their money.     

[ChadTower]

You have to know the "time to break even on subscription" figure to have any idea what that means.  For every nonsubscribed Xbox there could be an Xbox that has gone to 200% of the break even point. 

[DJ_Izumi]

That article only says 'Live Subscriptions' and doesn't state if they are gold or silver so I imagine it's both.  Silver accounts afterall are still worth money, they can buy games, movies, DLC and all that without the need for Gold.

I think this number makes more sense on account of the plenty of people who probably havn't even made a silver account for their machines yet.

[DaveMMR]

That article only says 'Live Subscriptions' and doesn't state if they are gold or silver so I imagine it's both.  Silver accounts afterall are still worth money, they can buy games, movies, DLC and all that without the need for Gold.

I think this number makes more sense on account of the plenty of people who probably havn't even made a silver account for their machines yet.

Or "Free" versions (i.e. for people who want to just download games/patches and nothing else).  Also one needs to take into account any promotional subscriptions they offered in the past that's still active.   

[DJ_Izumi]

Or "Free" versions (i.e. for people who want to just download games/patches and nothing else).  Also one needs to take into account any promotional subscriptions they offered in the past that's still active.

Silver and Free are the same thing.  They just called it 'Silver' till they said 'Actually, we'll call it 'Free' instead' a few months ago.  I think too many people got the impression that 'silver' also cost money.

[DaveMMR]

Or "Free" versions (i.e. for people who want to just download games/patches and nothing else).  Also one needs to take into account any promotional subscriptions they offered in the past that's still active.

Silver and Free are the same thing.  They just called it 'Silver' till they said 'Actually, we'll call it 'Free' instead' a few months ago.  I think too many people got the impression that 'silver' also cost money.

Ah thanks, wasn't aware (haven't been a Live customer in years).   Yeah, "Silver" does sound like something you'd need to pay for.

[shmokes]

The underlying problem with that strategy is not everyone signs up for Live when they buy an Xbox (unlike, for example, cell phones where your hardware is useless without a carrier subscription). 

I think there is no underlying problem to the strategy because it is not in lieu of the razor blade thing, but in addition to it.  Microsoft gets licensing fees and royalties just like Sony and Nintendo.  They just have this highly profitable subscription thing going too.  Granted, they were taking a big loss on hardware that Nintendo never took, but at the same time it wasn't nearly as big as Sony's with PS3.  And I expect that Microsoft gets a similar percentage of every title sold to what Sony gets.  So, really there's no downside to Live and no reason that Live wouldn't have been just as successful on Nintendo's machine or on an Xbox 360 on which MS used Nintendo's profit-or-at-least-break-even-on-hardware strategy.

[DaveMMR]

The underlying problem with that strategy is not everyone signs up for Live when they buy an Xbox (unlike, for example, cell phones where your hardware is useless without a carrier subscription). 

I think there is no underlying problem to the strategy because it is not in lieu of the razor blade thing, but in addition to it.  Microsoft gets licensing fees and royalties just like Sony and Nintendo.  They just have this highly profitable subscription thing going too.  Granted, they were taking a big loss on hardware that Nintendo never took, but at the same time it wasn't nearly as big as Sony's with PS3.  And I expect that Microsoft gets a similar percentage of every title sold to what Sony gets.  So, really there's no downside to Live and no reason that Live wouldn't have been just as successful on Nintendo's machine or on an Xbox 360 on which MS used Nintendo's profit-or-at-least-break-even-on-hardware strategy.

Well yes exactly.  I wasn't factoring in game royalties, only discussion the strategy behind the theoretical possibility of Microsoft depending solely or heavily on LIVE for profit (which we know is not the case).   It was in response to Chad's post of:

Microsoft's strategy is subscription revenue driven.  Sure, you may pay $250 for the console, but you're going to pay hundreds more for Live whether you use it 1 hour a week or 40

Basically, I was saying in a round-about way, it would be a problem to depend on the subscriptions since it's not a requirement.   How much of that $50/year is profit is not known, but I imagine they'd have to assume a console buyer won't sign-up and make sure they're able to cover their loss with minimal software purchases from the consumer to drive an eventual profit.