Xbox Business Update Podcast | Xbox Everywhere Direction Discussion

[Charlietus]

That will need differentiating, which presumably, if true, means the base MS XB will be the low spec machine and the higher tier machines will be pricey with hardware margins.

But they said that the next Xbox will be the biggest leap ever. I think at least on device from Microsoft will be relatively high end.

 

[Cappuccino]

they are doing something else outside of the traditional console model.

This is a prime example of what I was talking about. This isn’t ‘true’ at all, it’s rumored born from made up internet speculation. It’s only ‘true’ if MS actually announces it or there is a seriously reputable leak.

The only documented change is moving away from consoles entirely and towards just being a publisher. All this about an ‘open console’ is speculation and frankly I still don’t see how it would be profitable without the console ecosystem subsidizing the hardware.

 

[IQandHDR]

That will need differentiating, which presumably, if true, means the base MS XB will be the low spec machine and the higher tier machines will be pricey with hardware margins.

Wouldn't people just do as they do now and buy a PC instead?
But then again, I am not in the target group for a console

 

[rntongo]

But MS cannot subsidize such a machine if people can just ignore the MS/Xbox store and just buy games from Steam instead, which is what tons of people will do, since you can actually buy Steam keys from all sorts of sellers who offer competitive discounts and whatnot all the time, making it pretty much an objectively cheaper way to buy games. Plus Steam is just very likely gonna be way better than the Xbox interface.

And this ignores that Valve can offer this same sort of hardware offering at the same value themselves, but with that likely superior Steam interface instead, including a SteamOS front end for a very console-like experience for those who prefer that.

Basically, the avenue that Microsoft could go down here would be one where their lunch could easily be eaten by a major competitor. Same thing with handhelds, as that's an area where such competitors already exist and again, can likely do it better than they can in terms of the user experience.

I really think MS need to drop the pretense that they can keep up this 'console' hardware strategy at all.

100% agree with this. They seem to be moving in a direction towards a platform very similar to Steam. But they are maintaining the line they are still in the console space while preparing to leave it(marketing moving away from their own hardware to branding any computing device as an Xbox). This incongruence may affect how consumers perceive the brand and may atrophy a lot of their hardcore loyal fanbase.

And I'm still confused how they would benefit from having Steam available on the Xbox OS. Wouldnt this just take away sales from GamePass?

That will need differentiating, which presumably, if true, means the base MS XB will be the low spec machine and the higher tier machines will be pricey with hardware margins.

Yup this was what I was saying earlier on as well. Makes much more sense.

This is a prime example of what I was talking about. This isn’t ‘true’ at all, it’s rumored born from made up internet speculation. It’s only ‘true’ if MS actually announces it or there is a seriously reputable leak.

The only documented change is moving away from consoles entirely and towards just being a publisher. All this about an ‘open console’ is speculation and frankly I still don’t see how it would be profitable without the console ecosystem subsidizing the hardware.

To be very fair Jez's article is pointing to this being true and Jez is as insider as you can get.

 

[Shifty Geezer]

But they said that the next Xbox will be the biggest leap ever.

I don't buy that. It's not possible, in terms of raw power. Best case, the on-screen will be...no, it's just not going to happen. All the ML in the world won't make the transition from what we have to photorealism bigger than the jump from 2D to 3D, or PS1 to PS2/XB. it's just PR with no capacity to deliver as silicon progress has stalled and there's no paradigm that'll take up the slack (unless MS introduce a quantum computer or biological processors or something )

I think at least on device from Microsoft will be relatively high end.

Are they going to take massive losses on the hardware? I presume not. Ergo an affordable price necessitates compromised hardware. If MS pitches high end, there's also nothing their HW partners can do to compete except ultra high end. That is, let's say MS has a $600 console that's maxing the hardware capable at $600, sold at cost. Dell wants an Alienware Xbox. They can't put in the same $600 hardware as MS and sell it at a higher price to make it a sane business. They'll need to charge more to allow for profit margins, which means putting in better specs to justify them. So say $700 of hardware for an $850 machine.

Whatever price MS targets, their 'partners' will be $150+ more expensive, so MS's design has to be $150 below what they are charging, as it were.

Unless there's some profit sharing model. That might work. It'd then be down to the IHV to sell at whatever price they want, taking whatever losses they choose, to secure a slice of this pie. That's quite reasonable but would shift the risk onto the IHVs. Bit of a gamble really. Not sure I'd take that and have cut-throat competition for a market that's not looking all that great ATM.

Wouldn't people just do as they do now and buy a PC instead?
But then again, I am not in the target group for a console

It's been explained multiple times why people choose console over PC. It's not just price.

 

[Charlietus]

I don't buy that. It's not possible, in terms of raw power. Best case, the on-screen will be...no, it's just not going to happen. All the ML in the world won't make the transition from what we have to photorealism bigger than the jump from 2D to 3D, or PS1 to PS2/XB. it's just PR with no capacity to deliver as silicon progress has stalled and there's no paradigm that'll take up the slack (unless MS introduce a quantum computer or biological processors or something )

Are they going to take massive losses on the hardware? I presume not. Ergo an affordable price necessitates compromised hardware.

"Our new Xbox has 30 times the AI acceleration of the series x, the biggest leap of any Xbox console ever". They are going to deliver on those promises, even if they get a bit cheeky.

Are they going to take massive losses on the hardware? I presume not. Ergo an affordable price necessitates compromised hardware.

That's the thing. I don't think they care anymore about affordable prices. The high end Xbox from Microsoft could make the PS5 pro blush.
If they make a low end device, they aren't taking a loss on it. And it still could be costly to deliver something on par or slightly better than a Series X (at least 500$ if I were to guess).

 

[rntongo]

I don't buy that. It's not possible, in terms of raw power. Best case, the on-screen will be...no, it's just not going to happen. All the ML in the world won't make the transition from what we have to photorealism bigger than the jump from 2D to 3D, or PS1 to PS2/XB. it's just PR with no capacity to deliver as silicon progress has stalled and there's no paradigm that'll take up the slack (unless MS introduce a quantum computer or biological processors or something )

Honestly the jump from PS1 to PS2 was just too immense, I dont see this happening as well at all, sounds like marketing speak. Its not just even about hardware, its just that the games are much more complex and take much longer to make, by the time new techniques and methodologies of taking advantage of the hardware are realized, its the end of the gen. We're only half way this gen so games will start looking better but beating that jump from PS1 to DreamCast/PS2/Xbox is just so hard. You had shorter intervals between which games could be developed, released and refined. The jump from GTA Liberty City to Vice City was unbelievable in just a span of ~1 years. The jump from Vice City to San Andreas was unbelievable, the size of the map and what you could do in just ~2 years. Today it takes a single game 3-10 years to be made.

One thing though is growth in architectural improvements from AI and Raytracing accelerators+a large amount of memory could provide a theoretical jump in fidelity unlike one we've seen but that wont be realized until the SDLC catches up to the hardware, in another gen during a cross gen period. So we're only going to realize the jumps after significant time has passed. On the other hand MS may use certain hardware spec figures from a high-end OEM Xbox Hybrid to market it as the highest jump from generation from generation without an empirical visual test to back it up. They could use things like framerate instead of visual fidelity to push such a marketing line and justify a significantly more expensive machine.

 

[IQandHDR]

It's been explained multiple times why people choose console over PC. It's not just price.

This was in aspect to the "higher tier machines will be pricey with hardware margins."
(That just read like a PC to me)

Hardware costs are going up, so consoles will be forced closer to PC prices, hence why some people are suggesting that consoles are on their last legs.

 

[Shifty Geezer]

That's the thing. I don't think they care anymore about affordable prices. The high end Xbox from Microsoft could make the PS5 pro blush.
If they make a low end device, they aren't taking a loss on it. And it still could be costly to deliver something on par or slightly better than a Series X (at least 500$ if I were to guess).

Where do the IHVs fit in with this? What's their business model for designing, producing and selling XBoxes?

 

[Shifty Geezer]

This was in aspect to the "higher tier machines will be pricey with hardware margins."
(That just read like a PC to me)

Hardware costs are going up, so consoles will be forced closer to PC prices, hence why some people are suggesting that consoles are on their last legs.

Yes. And it's been explained by various folk over the years why even at the same price for the same hardware, they'd still choose console. Once a PC works like a console and is a viable replacement, it has become a console.

 

[Charlietus]

Where do the IHVs fit in with this? What's their business model for designing, producing and selling XBoxes?

I'd take a guess and think that Microsoft isn't going to produce that many boxes. They seem okay with getting more paying customers anywhere, so low numbers wouldn't be a problem for them.

IHVs will see good incentives from Microsoft to adopt the platform, but then they would compete with their existing gaming products. So I'm not sure what they get from it that they don't already get.

To me it seems that this is a way for Microsoft to get out of the competition with Sony and Nintendo, while still giving fans a way to get their preferred brand. What I don't see is a successful product

 

[QPlayer]

It’s only ‘true’ if MS actually announces it or there is a seriously reputable leak.

Hahaha

You probably don't know the time-honored classic: "All MS rumors are true"

 

[QPlayer]

Yes. And it's been explained by various folk over the years why even at the same price for the same hardware, they'd still choose console. Once a PC works like a console and is a viable replacement, it has become a console.

I am convinced that many people will soon replace their oversized desktop computer with a much nicer and less space-consuming solution. In fact, this is one of the main reasons for the growing popularity of handheld computers in addition to their ease of use.

MS will probably manufacture the APU itself for the mentioned Xbox PCs. It will be a CPU and NPU combo, with relatively fixed specifications, and this will serve the OEM manufacturers, who can build their own memory or VGA configuration around this central processor. It is also conceivable that MS will have a version including a GPU for their own high-end variant.

 

[Cappuccino]

In fact, this is one of the main reasons for the growing popularity of handheld computers in addition to their ease of use.

Handhelds are gaining in popularity but they are a rounding error compared to ‘oversized’ gaming PCs.

One of the biggest advantages to gaming PC is their modularity: it’s a big upfront cost but you can upgrade it down the road unlike a console which is fixed forever until the new one comes out.

I feel that people who think fixed hardware PCs will be a huge success just don’t understand why people buy PCs (or consoles), especially since I doubt a theoretical ‘XboxPC’ would even be particularly cheap compared to a similarly specced PC.

 

[arandomguy]

Handhelds are gaining in popularity but they are a rounding error compared to ‘oversized’ gaming PCs.

One of the biggest advantages to gaming PC is their modularity: it’s a big upfront cost but you can upgrade it down the road unlike a console which is fixed forever until the new one comes out.

I feel that people who think fixed hardware PCs will be a huge success just don’t understand why people buy PCs (or consoles), especially since I doubt a theoretical ‘XboxPC’ would even be particularly cheap compared to a similarly specced PC.

I feel people who participate in these online discussions often have skewed perception of how representitive they are of the market. If you look online commentary you'd feel that retail DIY sales of PC components that go into those so called "oversized" gaming PCs drive the market.

~50% of discrete GPUs go into fixed hardware laptops. That 50% for desktop is split between prebuilts, boutique builds, and retail DIY with the ability to upgrade and interest in the buyer of doing so going down with each of those groups. Even for retail DIY I think the "enthuasist" crowd in these discussions way over estimate the frequency of which people outside of group actually upgrade if at all.

 

[Cyan]

I feel people who participate in these online discussions often have skewed perception of how representitive they are of the market. If you look online commentary you'd feel that retail DIY sales of PC components that go into those so called "oversized" gaming PCs drive the market.

~50% of discrete GPUs go into fixed hardware laptops. That 50% for desktop is split between prebuilts, boutique builds, and retail DIY with the ability to upgrade and interest in the buyer of doing so going down with each of those groups. Even for retail DIY I think the "enthuasist" crowd in these discussions way over estimate the frequency of which people outside of group actually upgrade if at all.

yup, the next computer I plan on having is going to be a mini PC, so I don't expect a lot of upgradeability -except for an external GPU-. Tbh, I don't plan on upgrading my current full desktop PC either, mainly 'cos of the mobo and the Ryzen 3700X CPU.

If it had a more modern CPU I'd think about upgrading my desktop PC adding a Celestial, Druid or nVidia GPU. But I am limited to DDR4 with my mobo and my CPU can't run some raytraced games smoothly enough to hit 60fps at least.

 

[Cyan]

I am convinced that many people will soon replace their oversized desktop computer with a much nicer and less space-consuming solution. In fact, this is one of the main reasons for the growing popularity of handheld computers in addition to their ease of use.

MS will probably manufacture the APU itself for the mentioned Xbox PCs. It will be a CPU and NPU combo, with relatively fixed specifications, and this will serve the OEM manufacturers, who can build their own memory or VGA configuration around this central processor. It is also conceivable that MS will have a version including a GPU for their own high-end variant.

I think it would be a win if this were to happen, both for Microsoft and for consumers. I don't understand how anyone could find any flaw with what we'd have in a single device:

Xbox console games (retros included) + Windows games (all digital stores)

Different ranges, both expensive and cheap.

What's the problem?

 

[Cyan]

This is a prime example of what I was talking about. This isn’t ‘true’ at all, it’s rumored born from made up internet speculation. It’s only ‘true’ if MS actually announces it or there is a seriously reputable leak.

The only documented change is moving away from consoles entirely and towards just being a publisher. All this about an ‘open console’ is speculation and frankly I still don’t see how it would be profitable without the console ecosystem subsidizing the hardware.

they just seem to be doing what Valve is doing with SteamOS right now, or viceversa. Maybe Valve are vigilant of what MS is doing and thought that their Steam machines strategy could work better this time while competing against MS -it's all about the OS and drivers-, but maybe that's just me.

Valve might have seen what MS is doing and trust the rumours and decided to open their OS to more devices.

The rumours and leaks seem to confirm the OEM strategy 'cos of 2 reasons; traditional console model not working for MS and a console without exclusives isn't considered a console --which means ...,by publishing their games somewhere else they aren't building a console.

 

[Nisaaru]

I am convinced that many people will soon replace their oversized desktop computer with a much nicer and less space-consuming solution. In fact, this is one of the main reasons for the growing popularity of handheld computers in addition to their ease of use.

MS will probably manufacture the APU itself for the mentioned Xbox PCs. It will be a CPU and NPU combo, with relatively fixed specifications, and this will serve the OEM manufacturers, who can build their own memory or VGA configuration around this central processor. It is also conceivable that MS will have a version including a GPU for their own high-end variant.

If that happens it would be about creating a closed system like Apple which just boots Windows+store. Surely not impossible as MS's goal is to lock down the PC. The question is if the customers will accept this.

 

[Shifty Geezer]

If the only difference is OS, surely it'll be possible and okay to install other OSes, potentially undermining the ongoing revenue. That additional risk will want profit margins on the HW also as you don't want to be giving HW away at cost and not getting the ongoing revenue with it.