Xbox Business Update Podcast | Xbox Everywhere Direction Discussion

[arandomguy]

In the aforementioned Pachter Factor episode, the analyst also discussed the recent strategy change that saw Microsoft bringing games like Hi-Fi Rush, Pentiment, Grounded, and Sea of Thieves to rival consoles. According to Pachter, the exclusivity model is just wrong and doesn't work anymore.

Why are they bringing their exclusive titles on other platforms? The reason they're doing it is because the Nintendo model and the Sony model of proprietary titles on proprietary platforms is the wrong model. It's a broken model. Nintendo started this in 1985. It worked for 40 years. Sony emulated that in 1995 with PlayStation, Microsoft emulated that in 2001 with Xbox and for a long time it worked and then it didn't.
Supporting your content by managing the distribution on your platform is like a movie studio owning a chain of movie theaters and the only way you can watch their movie is in their theaters. Now, that'll work and they'll make money, but they won't make as much money as they do if they distribute their movies in six or seven different other ways.

Movie Studios (or platforms that now have movie/production studios) have moved to exclusives on their own streaming platforms. Especially if we look at Netflix which startd as a platform as opposed to a production company at least with their cost benefit analysis they aren't going to release their inhouse content on other services or even theatres.

The complexity with all this is the business calculation is incredibly complex. Going with the above discussion chain for example the calclation for Sony with Spider-Man isn't just how much money Spider-Man makes, it isn't about how many Playstation Spider-Man then just sells either, it's also about how many of those Playstation customers now make them additional revenue via third party software sales and other services. If it were only about Spider-Man (or whatever title) sales then the analysis is simple you go cross platform. But it's incredibly more complex if you are now worried that you're going to be losing that chunk of annual Madden sales if they start buying that from elsewhere.

With Microsoft is I think we can all agree at best they are on the back foot in terms of platform share compared to both Sony and Nintendo and inertia isn't working in their favor. My guess is their decision making is that they can either bleed a slow death essentially as the current "loser" or try a different pivot. But I'm not so sure we should apply what might work better for Microsoft at this juncture to what might work better for Sony or Nintendo.

 

[eastmen]

Movie Studios (or platforms that now have movie/production studios) have moved to exclusives on their own streaming platforms. Especially if we look at Netflix which startd as a platform as opposed to a production company at least with their cost benefit analysis they aren't going to release their inhouse content on other services or even theatres.

The complexity with all this is the business calculation is incredibly complex. Going with the above discussion chain for example the calclation for Sony with Spider-Man isn't just how much money Spider-Man makes, it isn't about how many Playstation Spider-Man then just sells either, it's also about how many of those Playstation customers now make them additional revenue via third party software sales and other services. If it were only about Spider-Man (or whatever title) sales then the analysis is simple you go cross platform. But it's incredibly more complex if you are now worried that you're going to be losing that chunk of annual Madden sales if they start buying that from elsewhere.

With Microsoft is I think we can all agree at best they are on the back foot in terms of platform share compared to both Sony and Nintendo and inertia isn't working in their favor. My guess is their decision making is that they can either bleed a slow death essentially as the current "loser" or try a different pivot. But I'm not so sure we should apply what might work better for Microsoft at this juncture to what might work better for Sony or Nintendo.

Movie studios also owned the thearters for decades before that was broken up by the government. Now they found a new way to keep content exclusive on their platforms.

 

[see colon]

Wait till you see just how much Rockstar is going to make by keeping GTA 6 a timed exclusive to consoles first.

Wait until they spent a tiny amount of money and port it to PC. Rockstar has a history, and their history has shown that ports of their games to new systems are always on the table. Red Dead redemption got a Switch and PS4 last year. Why do they do that? Because it make financial sense to not keep those games exclusive.

Movie Studios (or platforms that now have movie/production studios) have moved to exclusives on their own streaming platforms. Especially if we look at Netflix which startd as a platform as opposed to a production company at least with their cost benefit analysis they aren't going to release their inhouse content on other services or even theatres.

Sometimes. There is a bunch of WB movies right now for free on Tubi, for example. The Batman, Black Adam, and The Suicide Squad are there. The 2 Shazam movies are streaming on Hulu. And while many aren't included in a subscription service, they are available for rent/purchase from Amazon, Google Play, Vudu, Microsoft and other digital storefronts. The same goes for some of Netflix's in house content. Altered Carbon, Code 8, Travelers, Cobra Kai... All available for purchase somewhere, all listed as Netflix exclusives in the Netflix app. The original Star Wars trilogy and prequel trilogy were recently on TNT's streaming app. They are available to buy or rent plenty of places still.

Lots of movies and shows are really timed exclusives or exclusives with some strange caveat. Like "streaming exclusive", even though you can rent it through a VOD service and stream it. But almost all of the Netflix, Disney, HBO/Warner/Discovery, Hulu, Paramount content is available to rent digitally or available physically in stores or from Redbox. Netflix might be the most protective of their content going to other services, though most of it gets physical releases eventually. Meaning, it eventually isn't really exclusive in the way Spider-Man 2 is currently exclusive to Playstation.

 

[arandomguy]

Meaning, it eventually isn't really exclusive in the way Spider-Man 2 is currently exclusive to Playstation.

Obvious caveats here due to the different technologies and mediums here so the analogies can be problematic.

But isn't Spider-Man 2 likely going to be on the PC at a later date? I'm guessing it'll eventually go to devices other than the Playstation 5 as well if we want to count those as separate platforms.

On a related note with what you wrote this does give an interesting thought idea here of what if companies had higher platform pricing variation or even delivery variations. Say Sony would release games on the Xbox even day 1 but they'd cost $120 or something. Or what if they only allowed day 1 rentals on Xbox for a limited time. Maybe they release the demo only via streaming or something. Of course you can substitute any of the platforms involved here.

 

[rntongo]

Wait until they spent a tiny amount of money and port it to PC. Rockstar has a history, and their history has shown that ports of their games to new systems are always on the table. Red Dead redemption got a Switch and PS4 last year. Why do they do that? Because it make financial sense to not keep those games exclusive.

I think you should watch this . I'm not disagreeing with you, but I was talking about something else. Day and date on PC and consoles for all titles is a recipe for disaster. It makes sense for some titles but I think generally PC ports should come later when dealing with games originally built for consoles. There are too many hw configurations, shader issues, memory architecture issues. The example you gave is for a game released over 10 year ago on consoles getting a PC port years later. I think MS's idea that they can make one game run smoothly on multiple platforms on launch date is going to be quite a task and as the video says , we're back to the 90s when MS realized making an Xbox was much much smarter. PC gaming has benefited from console gaming and the reverse is true. But these aforementioned challenges are what MS needs to consider as they adapt their business. Already releasing two separate systems at launch has caused notable issues. If they're not careful playstation may become the best place to play Activision titles.

 

[Nisaaru]

I think you should watch this . I'm not disagreeing with you, but I was talking about something else. Day and date on PC and consoles for all titles is a recipe for disaster. It makes sense for some titles but I think generally PC ports should come later when dealing with games originally built for consoles. There are too many hw configurations, shader issues, memory architecture issues. The example you gave is for a game released over 10 year ago on consoles getting a PC port years later. I think MS's idea that they can make one game run smoothly on multiple platforms on launch date is going to be quite a task and as the video says , we're back to the 90s when MS realized making an Xbox was much much smarter. PC gaming has benefited from console gaming and the reverse is true. But these aforementioned challenges are what MS needs to consider as they adapt their business. Already releasing two separate systems at launch has caused notable issues. If they're not careful playstation may become the best place to play Activision titles.

This isn't about configurations but money. Console games make more money and exclusivity creates huge demand for the PC release before piracy kicks in and levels that.

 

[see colon]

I think you should watch this . I'm not disagreeing with you, but I was talking about something else. Day and date on PC and consoles for all titles is a recipe for disaster. It makes sense for some titles but I think generally PC ports should come later when dealing with games originally built for consoles. There are too many hw configurations, shader issues, memory architecture issues. The example you gave is for a game released over 10 year ago on consoles getting a PC port years later.

I think you should look at my example, because Red Dead Redemption isn't a console game that got a release 10 years later on PC. It isn't available on PC at all. It's a game, made by Rockstar, that was made available on new systems almost 10 years after being released on it's original platforms (360 and PS3 in this case). This is Rockstar's history. GTA San Andreas was once a PS2 exclusive. Then it came to Xbox and PC. Then cell phones. Then 360. Then PS3. Then for PS4, PS5, Xbox One, Xbox Series and Switch. This is their history. They are going to release a game on multiple platforms because it's fiscally responsible to do so.

Obvious caveats here due to the different technologies and mediums here so the analogies can be problematic.

But isn't Spider-Man 2 likely going to be on the PC at a later date? I'm guessing it'll eventually go to devices other than the Playstation 5 as well if we want to count those as separate platforms.

On a related note with what you wrote this does give an interesting thought idea here of what if companies had higher platform pricing variation or even delivery variations. Say Sony would release games on the Xbox even day 1 but they'd cost $120 or something. Or what if they only allowed day 1 rentals on Xbox for a limited time. Maybe they release the demo only via streaming or something. Of course you can substitute any of the platforms involved here.

Yeah, it is different technology and mediums, but you brought up streaming platforms as an example of platforms using exclusive content, and there are plenty of examples of that content being available elsewhere.

Yes, I expect Spider-Man 2 to be available on PC. Just as I expected The Batman to be available other places than Max when it was released "only on Max".

And yes, there will likely be different pricing, though probably not $120 for a PC port. More likely, given the history of Playstation releases, the PC release will be a full priced product released when the PS5 release is at the "Greatest Hits" price point. Horizon Forbidden West, for example, is currently available for $60 on Steam for the complete edition. The base game is $20 on Playstation and the DLC is also $20. God of War is $50 on Steam and $20 on Playstation, and included with some of the PS+ tiers.

 

[Tkumpathenurpahl]

Having games exclusive helps you sell hardware, that you don't make money on. And if you aren't making up those profits with your exclusives, then where are you going to make money?

By attracting millions of players to your platform with exclusive games so you can reap the 30% platform cut of all of the 3rd party content. Such as GTA Online's $1 billion annual income.

 

[rntongo]

This isn't about configurations but money. Console games make more money and exclusivity creates huge demand for the PC release before piracy kicks in and levels that.

Its about both. Rockstar releasing on consoles first creates huge demand for the PC release as you've said and it also gives the developers time to release a better more stable PC version. A win win.

 

[Cyan]

Xbox Moving 'Full Speed Ahead' on Next Gen Console - IGN

Microsoft is moving "full speed ahead" on its next generation console, an internal email from Xbox president Sarah Bond has revealed.

www.ign.com

 

[eastmen]

Xbox Moving 'Full Speed Ahead' on Next Gen Console - IGN

Microsoft is moving "full speed ahead" on its next generation console, an internal email from Xbox president Sarah Bond has revealed.

www.ign.com

Of course they are. They know they need to do something disruptive or they will be giving up the console market.

 

[Cyan]

Of course they are. They know they need to do something disruptive or they will be giving up the console market.

Disruptive is the word, as in revolutionary, it'd have to be something really special and revolutionary or incredibly interesting.

The problem isn't creating a new console, it is the Xbox brand, it's not much loved almost anywhere nowadays -loyal fanbase needs to increment-. The power battle didn't bring success, as shown by the 2 teraflops advantage of the XSX over PS5. Mimicking Sony -or Sony mimicking MS- in the eternal power battle isn't going to move the needle either.

If they launch yet another console before others that reminds me of the erratic behaviour of Sega, and you know how it ended up. Trying something different might help....

 

[iroboto]

Trying something different might help....

The irony of this particular statement in the criticism of Phil Spencer.

 

[Cyan]

Movie Studios (or platforms that now have movie/production studios) have moved to exclusives on their own streaming platforms. Especially if we look at Netflix which startd as a platform as opposed to a production company at least with their cost benefit analysis they aren't going to release their inhouse content on other services or even theatres.

The complexity with all this is the business calculation is incredibly complex. Going with the above discussion chain for example the calclation for Sony with Spider-Man isn't just how much money Spider-Man makes, it isn't about how many Playstation Spider-Man then just sells either, it's also about how many of those Playstation customers now make them additional revenue via third party software sales and other services. If it were only about Spider-Man (or whatever title) sales then the analysis is simple you go cross platform. But it's incredibly more complex if you are now worried that you're going to be losing that chunk of annual Madden sales if they start buying that from elsewhere.

With Microsoft is I think we can all agree at best they are on the back foot in terms of platform share compared to both Sony and Nintendo and inertia isn't working in their favor. My guess is their decision making is that they can either bleed a slow death essentially as the current "loser" or try a different pivot. But I'm not so sure we should apply what might work better for Microsoft at this juncture to what might work better for Sony or Nintendo.

you can never miss Michael Pachter, because he always comes back.

 

[Nisaaru]

Its about both. Rockstar releasing on consoles first creates huge demand for the PC release as you've said and it also gives the developers time to release a better more stable PC version. A win win.

On what do you think these games are developed? PC.

 

[rntongo]

On what do you think these games are developed? PC.

They're developed on GDKs from Sony and MSFT. And PCs as well

 

[Cyan]

The irony of this particular statement in the criticism of Phil Spencer.

what do you mean by that? Honest question. I mean, did he try something different and it didn't work?

 

[eastmen]

Disruptive is the word, as in revolutionary, it'd have to be something really special and revolutionary or incredibly interesting.

The problem isn't creating a new console, it is the Xbox brand, it's not much loved almost anywhere nowadays -loyal fanbase needs to increment-. The power battle didn't bring success, as shown by the 2 teraflops advantage of the XSX over PS5. Mimicking Sony -or Sony mimicking MS- in the eternal power battle isn't going to move the needle either.

If they launch yet another console before others that reminds me of the erratic behaviour of Sega, and you know how it ended up. Trying something different might help....

I think the demo nvidia gave for AI npcs could be a really big step forward. IF ms is able to include zen 5 which is said to have xillian ai cores or implement some of the tech they are working on with snapdragon it could be a large enough leap forward. it would also set itself apart from the other consoles.

The issue with sega was multifold. They dumped the 32x on the market and then not much longer after dumped the saturn on the market and then EA refused to support the dreamcast because one of the executives invested in sony. Then of course it was extremely easy to by pass security on the dreamcst.

MS on the other hand has a huge stable of studios. What 32 and growing ? They have extremely big IP that with a new console built from the ground up using new zen / radeon and other technologies could really set their platform apart when compared to the competition .


Like I said they need to do something different and keeping in lock step with Sony or staying a step behind isn't going to get them out of the hole.

 

[Nisaaru]

I think the demo nvidia gave for AI npcs could be a really big step forward. IF ms is able to include zen 5 which is said to have xillian ai cores or implement some of the tech they are working on with snapdragon it could be a large enough leap forward. it would also set itself apart from the other consoles.

I see no real point wasting chip space on such gimmicks when it could be done by external servers. Do they really need AI stuff for timing sensitive things?

 

[see colon]

I see no real point wasting chip space on such gimmicks when it could be done by external servers. Do they really need AI stuff for timing sensitive things?

AMD is putting AI acceleration into their entire product stack. I can't imagine they are going to ship a product in 2026 or so when a next generation Xbox launches that doesn't have it. Does it need it? Who knows. Will it be fast enough to matter? Again, who knows. Perhaps next gen will have AI accelerated like this gen is RT accelerated.