Middle Generation Console Upgrade Discussion [Scorpio, 4Pro]

[Deleted member 11852]

Interesting, of all the commentary I've ever posted on this board, I didn't think you'd get worked up about this one lol. I think we're at an impasse due to conflicting ideologies, so I'll address that gap.

I read about 5% of the posts to this board through lack of time, interest, willpower or ignore lists but the fanboy shit posting on these forums is ramping to absurd levels.

This is also cynicism, and you can always respond to any of my commentary this way, and frankly I've no way to work with it.

It's not cynacism it's realism or being devoid of hopeless fanboy optimism. There are reasons Microsoft absolutely refuse to be transparent about Xbox's profitability and you can be sure it's not because the numbers are crazy good. That is what investors want to see and Microsoft would be dumb to not publish crazy good financials.

In March 2016 Phil made the commentary:

He did. Phil is such a good block for sharing this informatiom. It's not like it's his job to present his business unit in the best possible light. But his statement is far from true. People using the platform does not mean people are actively investing in games. People will play COD and Battlefield, a single investment, for months and months. Destiny is the game.

In the article Why Wallstreet loves Subscription Models the 3 reasons they put up are:

I'm not responding to any of this because Xbox is not a subscription model business, it's a publishing and licensing model business buoyed by subscriptions. No different to Sony and Nintendo. The economics is well understood, at least by Sony and Nintendo. Maybe Microsoft don't get it, maybe that's why they dont share their console finances.

Trying to drag this back on track of generational console cycles, this will result in sales evolutions rather than revolutions. Generational consoles may be good for consumers (in theory at least, we'll have to see what the reality is for the industry at large) but new console launches always spur a rash of spending on new games for the new consoles as well. With generational consoles you don't have to buy new games you can play your existing games at better settings. The margins on hardware are generally thin, the margins on software is fat and juicy and your trading fat and juicy for thin. That's far from sustainable.

Let's see how long traditional console multiplayer subscriptions last, particularly when software is running on both Xbox and PC where people are not accustomed to paying for multiplayer.

 

[mrcorbo]

IIRC (and I may not!) the losses on PS3 in the first years were billions, such that future profits only enabled it to break even.

Some numbers here: https://forum.beyond3d.com/posts/1408685/

Need to dig through some old CarlB posts to see if I can find some of his analysis from that time.

 

[iroboto]

It's not cynacism it's realism or being devoid of hopeless fanboy optimism. There are reasons Microsoft absolutely refuse to be transparent about Xbox's profitability and you can be sure it's not because the numbers are crazy good. That is what investors want to see and Microsoft would be dumb to not publish crazy good financials.

He did. Phil is such a good block for sharing this informatiom. It's not like it's his job to present his business unit in the best possible light. But his statement is far from true. People using the platform does not mean people are actively investing in games. People will play COD and Battlefield, a single investment, for months and months. Destiny is the game.

It's extremely difficult to respond to this because we're clearly coming at this argument from two different point of views. I'm doing what I think is looking at what MS has done, what MS is doing, and what MS will be doing and trying to weave together some commentary around it.

I write and make commentary about it because most of the posts that I see here tend to bias towards, MS can do nothing and MS will do nothing to turn this around, it's time to exit the console industry. I'm writing to show these people, that MS has some sort of strategy in place to continue their business in the console space and how they might achieve it. I often see people take offence to these ideas because I often imply that MS will attempt to one up their competitors in a specific area, which people don't like hearing, and thus write it off as fanboy theory. I often imply they will attempt to one up their competitors, because naturally, if you don't, your business will die, and so the decisions they make must be better than the value proposition existing currently.

Your opinion that XBOX is dead; that it's time to exit the console industry and Phil Spencer is around to keep the lights running. And people/myself debate this slant, I don't feel is the same thing as rabid fanboy garbage, or delusional. It's clear to other folks and myself that MS are taking actions to stay in the game (within what they can control in the time frames that are both reasonable and purposeful), because if they wanted to exit, they would have made different moves to leave by now. Why bother with everything they are doing.

I'm not responding to any of this because Xbox is not a subscription model business, it's a publishing and licensing model business buoyed by subscriptions. No different to Sony and Nintendo. The economics is well understood, at least by Sony and Nintendo. Maybe Microsoft don't get it, maybe that's why they dont share their console finances.

And the move to Game Pass doesn't support your argument. What if MS no longer wants to play the game the same way? The market will either respond in kind or not, and there is no reason for them to follow a path that has been ridden for generations time. They've used EA Access as a guinea pig to see how the market would respond, would they continue down this path if it was a colossal failure?

If you want to show me that Phil is just a talking head doing nothing you're going to have to show me steps that indicate XBOX is exiting the market. Because from your tone, about profits, this is exactly what you're saying. And if they are staying in game, you should provide a reason for them to lock up all their money there, because if there is never a return on investment on XBOX, then why haven't they chopped it, what intrinsic value does XBOX the brand have such that they are willing to keep it and re-brand so much to XBOX.

 

[Deleted member 11852]

Your opinion that XBOX is dead; that it's time to exit the console industry and Phil Spencer is around to keep the lights running.

Sorry, what? When have I ever said or insinuated such views?

And the move to Game Pass doesn't support your argument. What if MS no longer wants to play the game the same way? .... They've used EA Access as a guinea pig to see how the market would respond, would they continue down this path if it was a colossal failure?

Yeah. IF. EA Access is not a guinea pig at all unless Microsoft only intend for Game Pass to include Microsoft-published games, otherwise this is a very different model again as Microsoft will have the be the licensor of other publisher's games. Look at the economics of Netflix and Spotify to understand how volatile this business model is.

If you want to show me that Phil is just a talking head doing nothing you're going to have to show me steps that indicate XBOX is exiting the market. Because from your tone, about profits, this is exactly what you're saying.

I've never said any such thing, nor can I control if you imagine some narrative rather than just take my comments at face value, because I have no axe to grind here. I use plenty of Microsoft products and like then, I dislike much about PlayStation 4. I call things as a I see them and I certainly don't feel the need to defend a corporation's motivations or decisions regarding a plastic box I own.

 

[Scott_Arm]

If Microsoft was going to exit the console business, why would they release Scorpio? Now would be the time to get out.

 

[Deleted member 11852]

If Microsoft was going to exit the console business, why would they release Scorpio? Now would be the time to get out.

Well two things, we don't know what Scorpio is yet. I'm not ruling out Scorpio being some hybrid PC console designed as much to help Windows as Xbox. Second, I've never expressed any view that Microsoft should exit the console business, quite the reverse. This would be bad. Products get better through competition.

 

[iroboto]

Sorry, what? When have I ever said or insinuated such views?


Yeah. IF. EA Access is not a guinea pig at all unless Microsoft only intend for Game Pass to include Microsoft-published games, otherwise this is a very different model again as Microsoft will have the be the licensor of other publisher's games. Look at the economics of Netflix and Spotify to understand how volatile this business model is.



I've never said any such thing, nor can I control if you imagine some narrative rather than just take my comments at face value, because I have no axe to grind here. I use plenty of Microsoft products and like then, I dislike much about PlayStation 4. I call things as a I see them and I certainly don't feel the need to defend a corporation's motivations or decisions regarding a plastic box I own.

Fair enough, I may have been mixing up your sales figures about xbox with the narrative, and so I apologize. I'm generally cool with what you write, I generally feel you never had any hard bias towards anything really, except the whole financials and xbox bit, I couldn't figure that part out. But again, I do feel like you could use some flexibility Part of it is hard to read at least intention wise, I'm not perfect.

I don't care that people can be biased, or have preferences, it's only natural. But eventually when I read enough of a train of thought heading one way, I'll naturally gather that's where people are headed in their minds. Not because they're interested in seeing a company fail or what not, we are too mature for that here at B3D, but we are invested in being correct about our analysis of the situation we are discussing.

edit: the reason why we should never rely on memory, the quote I was thinking of was this:

Nor does Xbox seem particularly vertically integrated into anything else Microsoft is doing. To me, the Xbox and why Microsoft continue to participate in the console market, remains one of the great mysteries of life. You can't deny their contributions to console gaming and I don't want to see them leave the console market but I just don't get why they're still here.

Clearly I remembered only the negative, combine that with the sales data talk (lack of provided by MS) and you could see where I was going.

 

[Deleted member 11852]

Scorpio will bring a degree of vertical integration between Xbox and Windows. I'm fairly confident Microsoft are in the black overall (after thee consoles) but not by much and certainly not proportionate to fifteen years+ investment and effort in this market. But I'm equally sure Microsoft are absolutely not going to cede any more markets if there is any chance they can turn a profit. Windows (licensing) is a diminishing market, as in MS Office. They've lost the phone market having owned it a few decades back. They simply can't afford to walk away from any more markets, that's the opposite of diversification.

But understanding the economics of the markets Microsoft are in, I can't see generational consoles being more profitable for them. It defies everything that is known about the economics of consoles and licensing and publishing business models. If they were in a position of strength it may be different but they're not. They can't force the changes that give them leverage. Blurring the lines between two distinct markets? Hmmm. We'll see.

 

[wco81]

Microsoft's reason for getting into the console business are no longer relevant to them now.

Plus a lot of the executives who pushed for and approved them getting into the business are gone now.

 

[Shifty Geezer]

perfect to create some intimacy.

If an official logo, it's...daring. Why a Scorpion? Why Scorpio? Scorpio sounds like a Bond villain or criminal organisation and that logo kinda suits. Techno-terrorist organisation travelled back in time to undermine society? Fine as a random project name but not IMO consumer friendly, not even for a niche. 'Scorpion' doesn't really smack of powerful gaming hardware.

 

[-tkf-]

If Microsoft was going to exit the console business, why would they release Scorpio? Now would be the time to get out.

IMHO, I think there is more to being in the console business than just games, remember when Sony wanted to take over the living room? It could be just as much a question of making sure they are in the market so that Sony doesn't do something crazy like make a deal with Apple or Google, and IMHO they (Microsoft) are not doing a bad job.. Well at least not anymore since TVTVTV with DOGS.

 

[wco81]

Maybe somebody on the team was a Scorpio.

Or maybe someone had visited some place with scorpions. Or maybe they think the association of something which could be lethal would confer the notion of power.

Not dissimilar to the way some cars have been named, like a Cobra or a Stingray.

 

[Scott_Arm]

IMHO, I think there is more to being in the console business than just games, remember when Sony wanted to take over the living room? It could be just as much a question of making sure they are in the market so that Sony doesn't do something crazy like make a deal with Apple or Google, and IMHO they (Microsoft) are not doing a bad job.. Well at least not anymore since TVTVTV with DOGS.

Yah, I'm not the one arguing they're going to leave the business. It makes little sense to me. People said they wanted out of the console space during the 360 era. But then they released Xbox One, with huge investments in the hardware. Then they said they would get out of the console business again, but now they're releasing a mid-gen console. Now some posters are saying they want out of the console business in the thread about the mid-gen console. I can understand someone arguing they may no longer want to "win" the console space, but it seems fairly obvious they don't want out of it.

 

[Deleted member 7537]

If it hadn't been for the enormous success of the PS4, MS probably would be considering exiting the business. But right now the console market is as strong as ever with both PS4 and XBO outselling their predecessors. It is true MS is pushing with very low prices and that is hurting their revenue but there are still big bucks to be made.

Will Scorpio give them that revenue to keep pushing? Maybe. But the shift from "hey buy an Xbox and you'll be able to play exclusive X" to "hey buy an XBOX or a W10 device and..." reflects that MS is moving to a more flexible approach to the business. Maybe Scorpio is the first step to "Surface like" approach. Where MS builds high end premium devices to play games, but you'll still be able to play the same games on other devices.

 

[Scott_Arm]

If an official logo, it's...daring. Why a Scorpion? Why Scorpio? Scorpio sounds like a Bond villain or criminal organisation and that logo kinda suits. Techno-terrorist organisation travelled back in time to undermine society? Fine as a random project name but not IMO consumer friendly, not even for a niche. 'Scorpion' doesn't really smack of powerful gaming hardware.

We have codenames for all our products at work, and some groups make all kinds of internal materials like posters to put up around the office. I wouldn't read too much into it. I've never seen the point of it myself, but i guess it's fun.

 

[Arwin]

My take is that Microsoft (finally) realised that as iOS, Android and Windows are three competing platforms, and Windows is the most under threat of the three and losing the most ground, Microsoft's only way back up or otherwise slow down the descent is to unify their platforms. If you can have games and other software and run that in a coherent way on your work laptop, console, surface product and what not, people are more likely to buy one of your product and buy software that runs on those products, and if you can keep using this software even when you buy new, faster iterations of hardware within the same platform, people stay with you longer too.

If they don't do this however, it should be obvious to them that any new product Apple or Google releases that expands those competing platforms to new devices, Microsoft's platform comes under threat further. So even if you weren't paying attention to Microsoft's platform developments in the last few years, it should be obvious that there is no where else to go, and the only reason Microsoft didn't get there sooner is because a certain Microsoft boss was being silly and stubborn (or greedy).

 

[wco81]

Yah, I'm not the one arguing they're going to leave the business. It makes little sense to me. People said they wanted out of the console space during the 360 era. But then they released Xbox One, with huge investments in the hardware. Then they said they would get out of the console business again, but now they're releasing a mid-gen console. Now some posters are saying they want out of the console business in the thread about the mid-gen console. I can understand someone arguing they may no longer want to "win" the console space, but it seems fairly obvious they don't want out of it.

It's not necessarily that they're going to leave. It's something that activist investors have pushed MS to do, to spin off the business or get out, because it's a small part of their revenues and profits.

Plus the people running the company may no longer have the ties or the belief in the potential of the console market.

When they introduced the X1, they were talking about shipping over 200 million and they thought the Kinect Two was going to be the next big thing, the secret to cracking the living room and creating a market as big as mobile, if not bigger.

 

[Deleted member 11852]

If an official logo, it's...daring. Why a Scorpion? Why Scorpio? Scorpio sounds like a Bond villain or criminal organisation and that logo kinda suits.

We have codenames for all our products at work, and some groups make all kinds of internal materials like posters to put up around the office. I wouldn't read too much into it. I've never seen the point of it myself, but i guess it's fun.

Likewise, but it is unusual for internal codenames to be used openly and publicly. Microsoft are doubling down on using Scorpio, though.

 

[Rangers]

Microsoft's reason for getting into the console business are no longer relevant to them now.

Plus a lot of the executives who pushed for and approved them getting into the business are gone now.

Well they are coming out with brand new hardware in 8 months, SOOOOO. They'll be presumably supporting that hardware at least some years after it launches, at a minimum.

And they just launched the S, which Phil considered a "hardware launch" (since it's just a revamped One I wouldn't call it that).

Xbox launched in 2001, so for 16 years, almost two decades, people have been saying they're getting out. If it happens it happens. Til then...

There are more activist investors on the other side who think Xbox is a good idea. They will force MS to stay in even if MS wants to leave

 

[Rangers]

Back to Scorpio, given the power, I'm excited for what kind of UI shenanigans they can pull. Lack of power runs up and down the console, a lot of features lagged on Xbox One quite a bit, like snap. But XBO was underpowered for games. You could not dedicate a lot of resources (CU's) to the UI when games did not have enough when it was clawing to barely straggle along with PS4 ports and avoid even worse "XBOX VERSION OF GAME X SUCKS" headlines. Matrick's brand of "power doesn't' matter, anything will do" load of crap hit real world hurdles immediately.

Now you're gonna have resources out the butt, including likely 12 GB of GDDR5, 6+ teraflops of more advanced Vega architecture, 320 GB/s of memory bandwidth. it's kinda exciting.

If MS packages/markets this right it can be really awesome. I hope it does not look like boring old Xbox One form factor either. I find XBO form factor very boring. Lets say even PS4 is much better, because it's not just a box. Put some kind of shape too it, a badass logo, so forth and so on. Make it COOL.

I notice this for so long, whether it's movies or game graphics, so much it comes down to if the creators have a sense that they need to make us realize "this is cool" or not. An artistic touch. Like a director who adds cool little signature bits to his films, just because.

I've been using my Alexa quite a bit lately. At first I was a bit underwhelmed and still am, but still the amount of things you can do with is pretty neat. I think MS needs to go big on voice control this time, with the mic in controller idea.