Business Approach Comparison Sony PS4 and Microsoft Xbox

[NathansFortune]

Even if Xbox One doesn't make Microsoft a lot of money, they'll just have to suck it up like Nintendo have for many of their consoles and Sony did for PS3.

Abandoning a platform that is owned by millions of customers isn't an option. You don't get to 'DO OVER' unless you're going to refund all those people - that's if you want them to have faith in your next product and buy it.

I honestly do not think Xbox One is in any danger, not unless it utterly crashes and burns in the next couple months and sales basically drop to Wii U levels. I just don't see it.

It's not about abandoning the product, but ceasing their involvement in the market. So Xbox One would continue to be present but beyond the 3-4 year period no successor would be announced and that would be the end of Xbox.

A much likelier scenario is that Xbox as a division is sold or the valuable parts are sold piecemeal to publishers and interested tech companies.

Microsoft's initial involvement in the market was to frustrate Sony and defend the PC against the hot thing which was consoles for the primary viewing screen in the home. Since then consoles, PCs and handhelds have all been under siege from tablets and smartphones. So much that PC shipments dropped by a record amount last year and MS have no recovery strategy because Windows 8 and RT were steaming piles of dog crap. In all their haste to cockblock Sony, MS let their old enemy, Apple, kneecap their most important market.

Getting back to the point, it is clear that home consoles are no threat to PCs and that it is not a particularly profitable area without striking lucky like Nintendo. The pressure within MS (and now from the board as well via Mason Morfit) is to dump Xbox and concentrate on enterprise services which are incredibly lucrative. The new CEO was against the Nokia devices division purchase, he was previously head of enterprise services and turned that into MS's golden goose. He is not a devices guy, and now the composition of the board is moving against devices also.

What it means is that Microsoft's continued involvement in home consoles is not guaranteed like it is for Sony or Nintendo. There are few to no benefits for Microsoft as an enterprise services company being involved in something consumer oriented like Xbox. They previously tried to hitch Azure point of sales services to Xbox games but that didn't work out and I don't think giving away free Azure server time to game developers/publishers is a big deal. The question really is when are MS going to leave, not if they are.

 

[liolio]

I disagree completely, I don't expect MSFT to deal with Xbox as a brand as they did with the first xbox.

First whether the xbox disappoint or not they will have to introduce others products in the living room, I think of smart TV, hdmi stick, possibly going as far as "gaming enabled STB".

From there the importance of Xbox goes down, not irrelevant by any mean, yet it goes down. The possible adoption of a common 3D API across all their products should make it easier to support the XB1 through its life even if it were not to reach 360 level of adoption (too early to tell imho).

Whatever happens I can't think of anything "radical" happening to the XB1, they will support it. I think eol, doom and gloom is out of the picture. If it comes down to that it won't be an "end of the line" but more the end of their exclusive commitment to xbox as their sole solution in the living room.

Quite a difference to me.

 

[AlNom]

hdmi stick

Wireless HDMI Only a matter of time I suppose.

 

[Deleted member 11852]

It's not about abandoning the product, but ceasing their involvement in the market. So Xbox One would continue to be present but beyond the 3-4 year period no successor would be announced and that would be the end of Xbox.

I can't foresee any future where Microsoft would freely walk away from being one of the few companies - Sony, Microsoft, Apple - who have a recognisable connected media device connected to the TV. It's a market Google want to be in and it'll be hell in Redmond before Microsoft walk away from a competitive brand advantage over Mountain View.

 

[thatdude90210]

I can't foresee any future where Microsoft would freely walk away from being one of the few companies - Sony, Microsoft, Apple - who have a recognisable connected media device connected to the TV. It's a market Google want to be in and it'll be hell in Redmond before Microsoft walk away from a competitive brand advantage over Mountain View.

It's a market Google is already in, hello Chromecast. They've already sold millions. It's a market that companies like Roku & Apple are getting into at a much lower price point than a $500 device. The living room that MS wanted to own when Xbox started is no longer the same living room today. That original MS vision is outdated.

Edit: and what's worst is that the $500 media box is useless as a media box without a monthly subscription. That's ridiculous for media function in the face of cheap media boxes. The world is different, yet MS is still following the same playbook.

 

[Deleted member 11852]

Unlike an AppleTV, PlayStation or Xbox, Chromecast isn't a standalone device, nor does it have an exploitable ecosystem. I don't know how GoogleTV is doing and they killed the Nexus.

 

[DrJay24]

I'm not sure what an exploitable ecosystem is, but as a consumer I love the Chromecast. I have two now and might get a third. They sure beat firing up a high power console, and the tablet interface beats a controller or voice.

 

[liolio]

I can't foresee any future where Microsoft would freely walk away from being one of the few companies - Sony, Microsoft, Apple - who have a recognisable connected media device connected to the TV. It's a market Google want to be in and it'll be hell in Redmond before Microsoft walk away from a competitive brand advantage over Mountain View.

I would argue on the topic of MSFT brand advantage against Google in the living room. It is not simply how Google "works", Google often shows the path with pretty awesome devices but they have others Brands doing the jobs for them, that is the beauty of their model: Samsung, LG even Sony and many others.
Now I don't think that giving up on the xbox is a good idea nor that MSFT is considering it seriously now, it fits a niche pretty well, now in the gran scheme of thing like if smart tv /etc. gains tractions with gaming as marketed functionality I don't think Xbox as brand is going to have much relevance. Plain simple it will be an OS battle.

 

[Deleted member 11852]

I'm not sure what an exploitable ecosystem is, but as a consumer I love the Chromecast. I have two now and might get a third. They sure beat firing up a high power console, and the tablet interface beats a controller or voice.

Live and PSN. I.e, monetisation.

I would argue on the topic of MSFT brand advantage against Google in the living room. It is not simply how Google "works", Google often shows the path with pretty awesome devices but they have others Brands doing the jobs for them, that is the beauty of their model: Samsung, LG even Sony and many others.

Not Microsoft, Xbox. Xbox is in our popular culture. Unlike Chromecast, GoogleTV or Nexus. Some forms of brand awareness you just can't buy.

 

[liolio]

Not Microsoft, Xbox. Xbox is in our popular culture. Unlike Chromecast, GoogleTV or Nexus. Some forms of brand awareness you just can't buy.

But Google does not "care" about its own devices. It is difficult to buy Nexus devices in France and elsewhere, most people do not know about those devices, they go with Samsung (foremost), Htc, Asus, Acer etc.
Some customers are mildly aware of the fact that they all run Android.

When it comes to the living room, I don't think that Xbox beats Samsung, LG, SOny (insert brands here) which are quite famous brands for TV (and much more, BRD players, phones, etc.) , the basis of modern living room.

 

[Deleted member 11852]

But Google do not "care" about its own devices. It is difficult to buy Nexus devices in France and elsewhere, most people do not know about those devices, they go with Samsung, Htc, etc.

And that's why they tried GoogleTV. The idea being you leverage the brand awareness, not to mention the convenience of being embedded, within the TV itself.

When it comes to the living room, I don't think that Xbox beats Samsung, LG, SOny (insert brands here) which are quite famous brands for TV (and much more, BRD players, phones, etc.) , the basis of modern living room.

And with TVs and BRD players, there is no monetisation beyond the sale, where margins are often thin. The aim is to have people reliant on you, paying you for content or subscriptions so you have a steady income.

It's why cable and satellite companies subsidise the equipment, why phone companies subsidise the handset, why consoles are/were subsidised. You get the user in your ecosystem (Live, PSN, iTunes), and they buy stuff (you monetise) until they have so much stuff they are then a 'loyal' (or locked in) customer. The first is good, the second is a pretty good alternative.

 

[djskribbles]

XB1 Titanfall for £350 at ASDA Direct and Amazon

http://www.eurogamer.net/articles/2014-04-11-amazon-asda-drop-titanfall-xbox-one-bundle-to-349

MS has to drop the price now. Will probably announce at E3. Wonder what Sony will do. I'm guessing they might bundle a game for free, maybe KZ SF. Or they might do nothing at all.

 

[DrJay24]

Sony should bundle Towerfall and confuse people.

 

[BoardBonobo]

MS has to drop the price now. Will probably announce at E3. Wonder what Sony will do. I'm guessing they might bundle a game for free, maybe KZ SF. Or they might do nothing at all.

I think MS has already dropped the price. They just can't admit it in public as that is an admission of bigger issues. Though I read an article on Appy gamer where an MS employee blurted out that 'it's not that the sales of the XBox One are below expectations it's just a realignment to the market structure'.

The reason it was noted is that the question hadn't even been asked! I guess the guy was just nervous or on a caffeine jag. Though how anyone 'blurts' a sentence that long is anyone's guess.

 

[Rangers]

With the introduction of Amazon Fire, which has a mic in the remote you speak into for voice search, which is said to work quite well, I'm wondering again if MS should just put a mic in the controller for voice control, and accomplish what seems to be the most compelling aspect of Kinect for .1% of the hardware cost.

I think voice can clearly have a place on console because of the absence of a keyboard.

Something like searching for a new demo release, that's easily accomplished on 360 through a few fast menu clicks. So voice search might have utility there but it might be limited. But for something like the famous "Xbox record that", it would work great.

In fact it would work way better than Kinect simply because of the proximity to the user. I know when I use voice search on my phone, I tend to speak directly into the mic, and it seems to help.

It would help to have a natural voice recognition system in place rather than relying on strict commands, as well. This shouldn't be difficult, given rumors of Cortana, and Siri and Google Now already doing it.

Then I propose a camera pack in rather than sold seperately, is worthy to have. especially with twitch TV and all. I would suggest packing in a decent, cheap webcam in every X1. This should be massively cheaper than Kinect. You can then do the nifty recognize your face log in stuff as well. You have a communication device for skype, twitch TV, etc.

You only lose motion control, and motion control games, then. Which currently, motion control outside a gaming environment is useless. And within a gaming environment, hardly seems to be lighting the world on fire.

 

[SedentaryJourney]

Not that I agree, but some people seem to think Skype is a killer app. Who knows what else would be dropped because of this. AR would probably see a huge blow without mandatory Kinect.

Also it's a big FU to the NSA. (Couldn't resist )

 

[Rangers]

My preference would be to still include a webcam in every console...just not full on Kinect. It would be much cheaper. And still help differentiate imo.

For reference the PlayStation camera retails for $69, and there's two of them, I guess for Move, spatial recognition or whatever. And that should be a highly profitable price.

So a single webcam should be pretty cheap, $30 or less I guess.

 

[DrJay24]

$59

 

[BoardBonobo]

Not that I agree, but some people seem to think Skype is a killer app. Who knows what else would be dropped because of this. AR would probably see a huge blow without mandatory Kinect.

Also it's a big FU to the NSA. (Couldn't resist )

My TV has Skype built in. Not that we use it, we've got tablets, phones, even the Vita has been used for annoying relatives at inconvenient times!

 

[London Geezer]

Sony should bundle Towerfall and confuse people.