Xbox Business Update Podcast | Xbox Everywhere Direction Discussion
- Thread starter iroboto
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interesting perspectives here.
The way I see it, is this trying to get the word out that they may already be owning an xbox today with the devices that they have. So that they can jump straight into the ecosystem without needing to buy the hardware.
Considering most people want to play xbox games, or use game pass but don't want to buy a console to do that, I think that makes a lot of sense where MS is headed. That doesn't mean they are exiting the console business.
That won't happen until the console portion of their business is a meagre amount to the rest of the platform. Right now console represents the largest portion of xbox's revenues, it's not going anywhere for a long time.
The way I see it, is this trying to get the word out that they may already be owning an xbox today with the devices that they have. So that they can jump straight into the ecosystem without needing to buy the hardware.
Considering most people want to play xbox games, or use game pass but don't want to buy a console to do that, I think that makes a lot of sense where MS is headed. That doesn't mean they are exiting the console business.
That won't happen until the console portion of their business is a meagre amount to the rest of the platform. Right now console represents the largest portion of xbox's revenues, it's not going anywhere for a long time.
This strategy is a good way to eventually cement MS Gaming as a software and services business and move away from hardware. Xbox hw will be similar to the surface line and the focus now will be on pushing their software and services on as many devices as possible. Looking at the COD sales on playstation as well must be encouraging because MSFT makes money from that as a third party developer.
So these ads are the clearest indication yet that Xbox hardware is going to be very very niche if not eventually disbanded. We're possibly only going to have one more gen of hardware from MS if we're not yet on the last one. Its a good strategy. My only concern is MS may try to force its game store onto Sony and Nintendo's hardware once its hw business is no longer consequential to them.
So these ads are the clearest indication yet that Xbox hardware is going to be very very niche if not eventually disbanded. We're possibly only going to have one more gen of hardware from MS if we're not yet on the last one. Its a good strategy. My only concern is MS may try to force its game store onto Sony and Nintendo's hardware once its hw business is no longer consequential to them.
I would drive that line of thinking a little further and just see inevitability that Console hardware is going away and unless there is a massive technology switch that is super cheap and affordable. As long as there is a drive for more power and more graphical fidelity for games, these system power and cost to drive these graphics will go way above the mainstream console pricing.
From a software development perspective I dont see this. There's always going to be a case for launching day and date on multiple platforms and a case for launching on a specific platform either fully or timed exclusivity(More so the latter moving forward). Its just such a relief developing using tools that work, whose documentation and product support is good with fixed hardware/single target spec. I had to develop an Android application for work sometime this year and it wasnt the best experience considering how fragmented it is compared to iOS even though I prefer Java/Kotlin to Swift. iOS development is still superior(even though today there are also a lot of devices). The same thing is true for game development, game developers will continue gravitating to where they can make the most money as well which have the best experience, so Sony who releases one target spec at the beginning that is the base for developing over an 8 year period.
During the 360 gen MS had the best dev environment and support but under Phil they've made the business decision to step away from this and focus on being a Gaming Service company. I can see MS Gaming moving to put their focus on supporting multiplatform development instead of Xbox hw especially now with them coming out to say Xbox is not the Series X or S but even a PC running PC Gamepass store. But that comes with inherent pros and cons which are not trivial. Sony especially under Mark Cerny designs the hardware thinking about the Software developer first working backwards. With this approach even if living room console hardware goes away it will just move to the cloud. But most consumers are still going to be doing AAA gaming on console hardware either at home or in a cloud computing center. As opposed to say building a PC. As this gen stretches out we're going to see more people buy the base PS5 as its price goes down. And MS is making a clearer business move to compete as a successful third party developer that will profit from this regardless.
Again I think this is where the Software Development Cycle comes into play now that games take longer to develop, and generations lasting longer, console makers can spend more at the beginning of the gen and recoup the costs as well as make profits. Sony's PS5 has been profitable since around a year after launch and you can see with the pricing of the Pro they're pushing more aggressive margins. All this at a time when they faced severe hw bottlenecks due to a global pandemic at the start of the gen. Thats why I think the next gen playstation will release quite later than people think especially now there's a pro. By December 2028 the technological gap between the PS5/pro and the PS6 will be unfathomable and much more economical for them to do than if they release it in 2026 or 2027. Add a guaranteed cross gen period which will boost PS5/pro game sales from 2028 till 2030 and Sony can easily recoup the cost of R&D for the hw. MS is primarily going to focus on Gaming as a service during this period and its already making them good money. And they can even possibly create a great SDK for multiplatform development. In all this I think its not a zero sum game. MS Gaming will be monetarily successful as well as Sony will make more money selling hardware, cloud gaming. Console hardware even for consumers isnt going away anytime in the next 16 years
Devices not in that ad include Nintendo and Sony platforms. That's the rub, that Microsoft makes these ads and this all devices marketing, but at the same time try to say the Xbox console is relevant. They did this recently with the Indiana Jones reveal where they tried to only show it was coming to PS5 for a split second at the end of the reveal. Or how about when they started the year saying oNlY fOuR games are going to PS5, and they're not tentpole franchises (ie not Starfield), but by the end the year they're telling Bloomberg there's no red line for games releasing on other platforms. And so on.
I stated before Microsoft strings consumers along until they abandon and pivot. It should be clear now. Why buy an Xbox console when everything (including Nintendo and Sony platforms) is an Xbox? Gamepass? What about when Gamepass is on all devices to increase that MAU number they so clearly only care about?
Consider this, on every platform other than Xbox you get all the perks of that respective platform (games actually released on that system on time, lead platform development, "exclusives", etc), and you get Xbox content. It is only on Xbox where you just get Xbox. There's no and when it comes to Xbox. They're accelerating plans to make nothing exclusive and available everywhere, again in the name of the MAU. And they're no stranger to dropping consumer products, making the consumer's investment a waste.
Therefore, if a user must have a console, it should be anything but an Xbox. You still get everything Xbox (coming soon TM), in addition to everything on your chosen platform.
Spot on!! In as much as I didnt want this to be the case I think you're right but its at least good they're showing a clearer direction. They can pull it off successfully and make Xbox one of the best Gaming Services as long as they stay focused on that goal.
And why should they? This is an ad to bring awareness to the xbox platform, not the opposing platforms. This is for the larger market on mobile devices at a young age who haven't a clue what xbox is or whether they should care about it, and now they are learning that they can access xbox content from the devices that they have.
The ad has nothing to do with anything else really. Why are we bringing up news articles and interviews with Phil Spencer to an ad? The ad is targeted to people who have 0 insight into the xbox ecosystem, why would it matter what Phil says when people have no interest in the service to begin with.
The issue I see, is that many of you don't actually see the challenge that MS faces. Had it just sat there in the console industry trying to same thing repeatedly, it would die a slow death. It's a pointless endeavour for them to chase the console market which is shrinking btw. Yea, are most definitely leaving the console market, but so will everyone else. MS getting out of the gates early to set the direction of where their service is headed. Whatever the future is, they're going to get there first. Certainly they won't get there playing 3rd wheel in the console industry.
Games showing up on a rival platform is hardly means that PS and Nintendo is an Xbox.
Xbox is a platform full of services and features that their competition is no where close in terms of quality or value for service.
Let me know when you can play off your mobile device on the go anywhere in the world. Continue playing off your laptop at an airport lounge. Get home and flip on a PC or console and continue there on any of these systems. No? If not, I don't see how that's the Xbox experience.
Because that's where the next generation of gamers are, they are meeting them where they are, and they are using small devices and PCs, and laptops. The console business is very dated and heavily attached to a much older crowd. This new generation of gamers isn't going to fork over $1000+ for a console. These guys are used to playing all their games for free. They're used to sub services. One thing they aren't used to, is a big black box, stuck to their TV, having to pay $100 per title, and for internet multiplayer.
For all the domination everyone talks about. Console games are nowhere. These companies need money to make money. At least MS has a strategy for growth beyond consoles.
You may not agree with MS, but I can assure you sitting around in 3rd place trying to take over first place in an industry on its way to death because prices cannot come down isn't the answer either.
New article following the campaign
www.rollingstone.com
You guys are welcome to disagree but there’s a reason why everyone is just doing remakes and remasters. The young generation has no connections to these old franchises we grew up with. There’s a reason why Sony just remade everything while chasing GaaS.
There’s a reason why Sony is dumping all their titles onto PC. That’s where all the kids are. Roblox, Minecraft, DOTA, League, Fortnite, valorant, counterstrike, world of Warcraft, these are all games that play better or can only be played on mouse and keyboard.
Heck; there’s even a huge list of world of Warcraft classic roadmap just to bring to new kids into the game. You bet MS is going to resurrect the entire blizzard line to cash in on the next gen - Warcraft 3 was just updated on PC!
Because that’s where the new customers are. The old group, we are all becoming geezers, and not all of us will be shifty. But the reality is they got you already, you’re locked in. No money in the world will make anyone switch from PS to Xbox unless you wanted gamepass. This ad isn’t to convince the hardcore market to switch brands.
But it is most definitely going to cause a stir. It’s a long time coming for Xbox to market like this.
It’s setting the tone of where Xbox is headed. People are going to talk about this. It’s controversial. And they are spending a crazy amount of money on this.
The future of Xbox is pc and cloud.
Xbox CEO Says There Will 'Definitely' Be Future Consoles
The executive tells Rolling Stone that cloud streaming is the priority, but so are handhelds and home consoles
www.rollingstone.com
You guys are welcome to disagree but there’s a reason why everyone is just doing remakes and remasters. The young generation has no connections to these old franchises we grew up with. There’s a reason why Sony just remade everything while chasing GaaS.
There’s a reason why Sony is dumping all their titles onto PC. That’s where all the kids are. Roblox, Minecraft, DOTA, League, Fortnite, valorant, counterstrike, world of Warcraft, these are all games that play better or can only be played on mouse and keyboard.
Heck; there’s even a huge list of world of Warcraft classic roadmap just to bring to new kids into the game. You bet MS is going to resurrect the entire blizzard line to cash in on the next gen - Warcraft 3 was just updated on PC!
Because that’s where the new customers are. The old group, we are all becoming geezers, and not all of us will be shifty. But the reality is they got you already, you’re locked in. No money in the world will make anyone switch from PS to Xbox unless you wanted gamepass. This ad isn’t to convince the hardcore market to switch brands.
But it is most definitely going to cause a stir. It’s a long time coming for Xbox to market like this.
It’s setting the tone of where Xbox is headed. People are going to talk about this. It’s controversial. And they are spending a crazy amount of money on this.
The future of Xbox is pc and cloud.
You guys have phones, right? I keep saying this when people bring up trend chasing and GAAS, developers and publishers are going where the money is, because that's how they eat.
Because it's a half truth. Everything is an Xbox, so we're bringing our content to those other devices you own like your Nintendo and Playstation consoles. The full truth that they are clearly aiming for, have communicated, have made moves towards, and won't just say it until they've wrenched the last bit of money they need out of existing Xbox console owners is all Xbox content will be everywhere. That is why I mentioned Phil's bloomberg comment, because in the span of just a year a few games going to other platforms becomes there's no red line what we'll put on other devices. So you don't need to buy an Xbox console when you can spend that money on the Xbox platform instead (PC, Nintendo, Playstation, phone, tablet, etc), and get all the same benefits plus what the other devices offer over and above Xbox.
They didn't have a problem selling consoles during the Xbox 360 generation. There were plenty of exclusives and it was the lead development platform. With Xbox Series they bought up a bunch of studios and games to have the same exclusive pipeline and lead platform to drive console sales and drive up all variants of game pass. But they pivoted to putting that content everywhere instead. It's great for making money as long as the vacuum of the console sales stagnating (because now there's no value in the console) doesn't overtake those glorious MAU numbers.
Yes 1000%, but you missed the quotes around Xbox. PC gets Xbox content day and date, and the Xbox content everywhere strategy definitely applies to PC for what's left on the console especially if the rumors are true about the functionality of the next Xbox console. That console will complete the transition to making the Xbox console an expensive paperweight compared to a PC.
By the way, I couldn't care less about PCMR mentality even with owning a fully capable PC. I am simply calling out the logical conclusions if Microsoft was 100% honest. I also specifically mentioned consoles earlier because not everybody can buy a bunch of devices. So I specifically said if a consumer was buying a console/device, they should buy anything but an Xbox console for the most value now and beyond.
They're basically putting in place everything needed to end Xbox hw sales by saying "Xbox isnt even hw that we make, it could be a firestick from Amazon, a PC from Dell". If thats not entirely clear yet for some then I dont know what will make it so. Maybe that day Phil will come out and say Xbox hw console is only a niche and will be targeted towards hardcore gamers. Otherwise the rest can simply subscribe to Gamepass and play on any "Xbox"(Meta Quest, Samsung TV, PC) or buy Xbox games to play on Playstation and Nintendo. Xbox hw is basically taking the Surface line approach if its not entirely disbanded by next gen.
And that's where you're wrong. Nintendo and PS will never be an xbox. It has no guarantees on content. Whether MS ports their titles to their console will always be a decision to be made. They are porting titles today, sure, for the population of gamers that will still buy these types of games, But it holds no guarantees for the future.
Is it no wonder that Indiana Jones is going over? Whose the target demographic for that one? 35+ year olds, hell, that might be too young to be honest. 40+ is probably scratching the surface if you were old enough to catch The Last Crusade in the theatres.
Each platform will be determined on a case by case basis if they should receive the title. MS is still in full control over their own curation which includes when they want to or not want to keep titles exclusive. Thus why Nintendo and PS will never be the Xbox platform. Because they frankly are not.
And the console market has dramatically shifted since then. There is no more competing for people, it's locked in now. Library lock in is real, this is why steam continues to trounce all other stores despite the fact that Epic has been giving away games and providing all sorts of incentives for developers to bring titles to their store.
There's no value in the xbox console for _you_. That's very different that there's no value for a console.
The console is designed to be a mainstream appliance to play games. That's all it does, once the price points for a console reach beyond the mainstream the likelihood for the next generation of console either takes significantly longer or it doesn't come at all. To Xbox, its importance is being devalued, but that doesn't mean it's removed from the list of components. If people continue to buy consoles, they'll continue to make them.
If you had 100% of the customer base buying your console for your content. Then by expanding your content to other devices and the consumers stop buying your console, then how else to look at it but to see the console as inferior to the other devices. They put up with it to get to your content. So as long as people feel that way about Xbox's console - then that was the way their console was headed regardless, it was a losing business. So once again, I'm not sure how trying to prop up a dead appliance would be a better idea than what they are doing now.
The reality is that consoles still represent the bulk of Xbox's revenue and profits. This won't be going away anytime soon. Moving to Sony means no game pass. If you want game pass on a mainstream device, there is only xbox. This is clear as day what the 'This is an Xbox' ad is supposed to be about. Xbox the platform means Gamepass. And there is no Game Pass without being on an Xbox platform. Did you also notice that Steamdeck was left out too?
There is a whole generation of kids who have grown up on sub services: from TV shows and music and other sub services; are expecting a large instant library of games waiting for them as soon as they sign up. This is the fastest and most effective way to onboard new players and to lower as much friction as possible for people getting into your ecosystem. It's certainly a lot easier than asking someone to buy a $1000 console and then pay $100 per title that you're not even sure you like.
Leaving xbox means, having to buy all your games, which brings me back to, who buys games today on PS? Adults, typically, considering their the only ones with a mid-gen refresh - some high income adults.
That's not the group that Xbox is targeting anymore.
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I wonder if, in an economy of scale, at some point completely ditching the console hardware from R&D to marketing is more or less lucrative than switching to a game pass only on the competitor's console (including platform fee) and building data centers around the world filled with Xbox compatible hardware.
Absolutely and MS would be all over that if Sony would let them!
If MS goes full third party I dont see why this wouldnt be possible. Sony was thinking of a partnership with Amazon a while ago iirc so its possible. I just dont see Sony doing it in the next decade though.
MS already has data centers everywhere. It’s their core strategy. As per the graph above, Sony only has like 14% of the industry revenue, and while still being the leader by a significant deviations, they have very low margins on that revenue. It’s not a growth area for MS unless Sony is willing to give MS decent margins for gamepass and that is not likely to pass.
Sony is more likely to make their own sub service before adopting gamepass.
There cloud strategy will be a struggle for them. They can only borrow their infrastructure globally, which means margins on streaming will be less so they’ll need to get creative here on how to proceed.
Spot on!
It would be harder for them than say Amazon and MS but considering the long term prospects and current trends I can see Sony investing in cloud computing infrastructure. MS has a huge advantage here BUT there's a huge trend moving to at least a hybrid approach away from relying on hyperscalers. The cost of compute has gone down significantly actually and considering Sony has a great software team and are not building general purpose software applications I dont see a reason for them to rely on hyperscalers. They can save by building out their own gaming cloud infrastructure actually at a minimum a hybrid approach.
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