Business Approach Comparison Sony PS4 and Microsoft Xbox

[RancidLunchmeat]

It clearly matters to some people, in late 2012 PlayStation 3 became the largest platform of choice for accessing Netflix.

I don't see how you are jumping to your conclusion based upon the facts you are providing, even taking for granted that they are true.

Quite frankly, having used Netflix on a 360, PS3, Roku, WD Live Player, PC, various tablets and various smartphones, the PS3 interface is by far my preference.

But my increased usage of Netflix on the PS3 to the 360 has absolutely nothing to do with the program being behind a paywall on the 360. It has to do with the fact that 1) My 360 is downstairs on my "main" TV where I spend most of my time using it to actually play games or watching TV from my HTPC and 2) My PS3 is upstairs in my bedroom, where I like to casually watch stuff off of Netflix while relaxing prior to sleep and the PS3 is superior to the other devices I mentioned. Sure, I could hook up my second and unused 360 upstairs instead of the PS3 but as I said, the interface on the PS3 is better which is why it replaced my WD Live player.

So, I would be one of those that would contribute to "increased Netflix viewing on the PS3" as well as "decreased Netflix viewing on the 360" and yet it has nothing at all to do with Netflix requiring Live.

Your data doesn't support your conclusion.

 

[RancidLunchmeat]

Free Netflix streaming is available on all phones, tablets, computers, DVD/Blu Ray players and all gaming consoles not named Xbox.

All reasons why it doesn't matter if Live is a requirement on the 360 or the One.

Its a bad policy.

For whom? This thread is about Business Approach and I have yet to read a single person make a Business Case as to why MS should change their policy of actively encouraging Xbox owners to become Live subscribers.

I would probably own a XB1 for either or family room or home theater but won't because that basic functionality cost more money.

Hogwash.

You have many other ways to view Netflix content at "no additional cost to the subscription" if you want. If you wanted a One, you need to purchase Live - and Netflix is the most minor of functionality that is missing from the One if you chose not to purchase Live.

That said I am annoyed my PS4 doesn't do Youtube and MP3s as I feel pretty strongly that any box should be doing all that in 2014.

PS4 doesn't play Youtube or MP3s? So wait a second, you're all complaining about MS changing not one thing from their Live policies from the 360 to the One, yet Sony has removed core functionality available on the PS3 from the PS4?

Right. This makes perfect sense!

Party on dudes.

 

[Nesh]

All reasons why it doesn't matter if Live is a requirement on the 360 or the One.



For whom? This thread is about Business Approach and I have yet to read a single person make a Business Case as to why MS should change their policy of actively encouraging Xbox owners to become Live subscribers.



Hogwash.

You have many other ways to view Netflix content at "no additional cost to the subscription" if you want. If you wanted a One, you need to purchase Live - and Netflix is the most minor of functionality that is missing from the One if you chose not to purchase Live.



PS4 doesn't play Youtube or MP3s? So wait a second, you're all complaining about MS changing not one thing from their Live policies from the 360 to the One, yet Sony has removed core functionality available on the PS3 from the PS4?

Right. This makes perfect sense!

Party on dudes.

They will return and they will not require a paywall

 

[RancidLunchmeat]

On the one hand, the overwhelming majority of console gamers don't want to pay for MS's (deluded) vision.

Deluded vision?

I'll reiterate - this is a Business Approach thread. Clearly, putting online services behind Gold was a boon for MS during the last generation with the 360. So much so that Sony followed suit and put online gaming behind a paywall during this generation.

Subscription based gaming is where it is at. In fact - Subscription based everything is where it is at, it's why there's so much investment in "the Cloud", it's why companies are currently giving away online storage (in limited amounts) in order to get you hooked so they can eventually monetize that service, it's why MS is pushing Office 365, etc.

It makes perfect business sense to lock customers into an on-going membership agreement that facilities and a constant revenue stream rather than relying upon updates or revisions in order to spur new sales.

You all seem to be forgetting that MS didn't even want the One to function without an online subscription, and that would have been all fine and dandy and not a problem if the console was $299 or possibly even $399.

Price is the problem, it's too damn expensive. Not because it's still mostly worthless without a monthly subscription. It's the $499 price tag plus the monthly subscription plus the complication memory architecture and gimped GPU that come together to form a product that is quiet frankly, undesirable.

 

[temesgen]

Hogwash.

Says the guy who makes a blanket statement that everyone wants subscriptions yet as already noted by multiple people none of the competitors charge for this functionality. Name all the dvd/blu ray drives, ip streaming boxes, consoles, phones and tablets doing this... There is one brand, the Xbox brand doing this. If its the right answer why isn't anyone following?

I guess I shouldn't be surprised its being defending in the face of reality though, we have arguments that supply exceeding demand was better than having more demand than supply just a few months ago and before that the insistence that 499 wasn't an issue. Throw basic economics out the window, suspend logic, whats left? Argue that sales numbers for the platforms are now irrelevant? Some now say resolution doesn't matter so why not?

I'd argue that ad revenue is in some ways more important that subscriptions, it has made Google and many others quite wealthy without forcing subscriptions on the consumer. Youtube would never work as a subscription for example. Yes subscriptions are nice and in many business models they make sense but as you wisely pointed out when you have less powerful hardware and higher cost relative to your competitor its not going to be as easy for you to gain market share when the consumer thinks you offer less value and are taking advantage of them.

Subscription for cable, phone, internet all make sense. To access services you've already paid for not so much.

 

[tuna]

PS4 doesn't play Youtube or MP3s?

The browser base Youtube experience on the PS4 is vastly superior to the app based Youtube experience on the PS3.

 

[Brad Grenz]

But my increased usage of Netflix on the PS3 to the 360 has absolutely nothing to do with the program being behind a paywall on the 360. It has to do with the fact that 1) My 360 is downstairs on my "main" TV where I spend most of my time using it to actually play games or watching TV from my HTPC and 2) My PS3 is upstairs in my bedroom, where I like to casually watch stuff off of Netflix while relaxing prior to sleep and the PS3 is superior to the other devices I mentioned. Sure, I could hook up my second and unused 360 upstairs instead of the PS3 but as I said, the interface on the PS3 is better which is why it replaced my WD Live player.

What if you didn't play online games? Would you be paying $60 a year just to keep the Netflix flowing to a second TV (keep in mind "I wait til I find cards on sale for $30 and stock up." is not an answer)? Or would you use the WD Live player in one of the rooms instead? It's easy to claim it has no impact on your decision if it's not a decision you have to make.

The reason more people use PS3 to stream Netflix is just math. All ~25 Million PS3s sold in the US can access the service. Only ~15 Million of the 45 Million Xbox 360s have the Gold service needed on that platform. If that paywall wasn't there the 360 would be the number one client with a bullet. That's 30 million people who know they have a Netflix capable device that MS won't let them use. That's 30 million people who will remember being hostage to a punitive policy for 5 years when they're looking to upgrade.

 

[-tkf-]

Deluded vision?

I'll reiterate - this is a Business Approach thread. Clearly, putting online services behind Gold was a boon for MS during the last generation with the 360. So much so that Sony followed suit and put online gaming behind a paywall during this generation..

The idea that you need to pay for something not gaming related is the issue, and is one of the weak points about gold. Something that is free everywhere else costs money on a Xbox. What people around here forget is that it's not every owner or game that plays online, or is worth playing online. So in the Xbox case you pay for the other services..

That was easier before this round, live was the online service, the other stuff, afaik, came later and it was shoehorn added to the premium service. It's not like the other consoles had something similar. That came, and when it came it became a big plus, the Netflix data speaks the cold hard truth, the ps3 was the winner in online services.

For Sony adding a pay wall to online gaming, was easy. They still out matched the nearest competition, they still offered substantial added value across 3 consoles, they still win on the online services. There was no real alternative.. so it just couldn't hurt them..

 

[Shifty Geezer]

All reasons why it doesn't matter if Live is a requirement on the 360 or the One.

Live isn't a requirement for XBox. You can play offline without it. Wasn't number of gold accounts about 50% of XB360's? So half of owners had no interest in online gaming, but still likely value the media services. PS3 had a similar low PSN account count, which included people with multiple accounts.

For whom? This thread is about Business Approach and I have yet to read a single person make a Business Case as to why MS should change their policy of actively encouraging Xbox owners to become Live subscribers.

It's a pretty straight-forward implication. Less people will chose XB1 over PS4 because XB1 has higher running costs for valued services. Compare the two platforms side by side for the types of people who don't want to play online. Both play local games. Both stream Netflix. Both allow web browsing. One requires an online subscription. By that criteria, it's pretty obvious the better value box.

If you wanted a One, you need to purchase Live

No you don't, making Live an optional extra cost.

PS4 doesn't play Youtube or MP3s? So wait a second, you're all complaining about MS changing not one thing from their Live policies from the 360 to the One, yet Sony has removed core functionality available on the PS3 from the PS4?

Right. This makes perfect sense!

Party on dudes.

Complaints have been made about Sony's reduced media functionality. There's nothing hypocritical about people's stance. There are discussion about apps and features talking about what consoles should and shouldn't do. The point expressed here is that some of the key extra-media functionalities that consumers like about their CE devices has a required subscription on one console and not the other. The business cases are:

1) MS maintains a paywall. Owners of their box who won't pay for Live gaming may still pay for media services, extracting higher revenues, turning a higher profit than if those features were free.

2) MS loses the paywall. Potential owners now don't have to worry about ongoing fees. The potential audience increases significantly who can then be monetised.

If 25 million consumers all with Live accounts is better for MS than 75 million with 25 million Live accounts, than you're right, they should keep everything behind a paywall. If MS want to appeal to the masses though, it makes sense to match the competition. Being the only device in the world where you have to pay them a subscription to use other companies' services clearly puts them at a competitive disadvantage and weaker value proposition that'll negatively affect desirability and adoption. I wouldn't have thought that'd need to be spelled out.

 

[Dave Baumann]

The public are sending MS a message... Live revenue was up 17% last quarter...

 

[Shifty Geezer]

The public are sending MS a message... Live revenue was up 17% last quarter...

Is that just subscriptions or do they include content sales in that? Because the increase in download titles could easily explain that.

 

[Dave Baumann]

That's all Live revenue (bar advertising). Unlikely that its all attributed to game downloads. 17% is probably in the range of $200-$300M.

 

[London Geezer]

The public are sending MS a message... Live revenue was up 17% last quarter...

17% is just a absolute number. Is 17% low or high relative to their expectations? PS+ went up 98% during the PS4 launch - if I remember correctly.

 

[-tkf-]

The public are sending MS a message... Live revenue was up 17% last quarter...

It better be going up, they had a new console launch with plenty of potential customers.

Do we have any hard numbers on subscribers that paid for their online access..

 

[Shifty Geezer]

Unlikely that its all attributed to game downloads.

Of course not, nor was I suggesting as much. It's just that growth of Live revenues doesn't mean the public doesn't have beef with free content being behind a paywall. Your 'the public are sending MS a message' comment isn't connected with a clear message. The real interpretation of 17% Live revenue increases is 'the subset of public who use Live have spoken - they are finding more reason to spend on Live'.

The public is also sending MS another message - 'we're not as interested in buying your console as we are buying other things'.

 

[function]

If you're already paying for Gold because of gaming then it's not an issue to have Netflicks et al behind a paywall.

If you're not going to pay for Gold for gaming however, then who's going to pay for Gold to get access to Netflicks - when they can already get it for free on their TV, their Bluray player, their smart cable box, their PC, their laptop, their tablet, and their PS4?

MS's deluded vision was that they could expand beyond gamers and sell an expensive box with subscription access to everything to everyone. Not just gamers, or early adopters, or tech junkies, but the mainstream media consumer. MS wouldn't allow them to do anything they couldn't already do - like use the internet, or chat, or use facebook, or watch Netflicks ... but MS thought people would be eager to insert MS into a place where they weren't needed or wanted and pay them money year after year after year in exchange for, basically, using Kinect to get at things. And they weren't just expecting a few people to do this, but hundreds of millions of them. For no reason.*

How much of a hit is Xbox One with none gamers? How much of a hit is Xbox One with casual gamers? How much of a hit is Xbox One with core gamers?

None gamers won't want an Xbox One. It's an expensive way to gain nothing.

Casual gamers won't want an Xbox One, as there are dick all Kinect games. It's an expensive way to gain nothing.

Core gamers (people who will accept paying for Gold) are drawn to core games on Xbox One, but put off by the high price caused by Kinect. And why are they put off by the high price caused by Kinect? Because there are dick all Kinect games for them and nothing to suggest that's going to change.

People will only use Xbox for media if someone in the household wants it for games. They need more people to buy it, and that will only happen because of games. At this point, it is incredibly unlikely that MS won't off a Kinectless SKU by the end of the year.

*Just like they expected people to stop buying Android tablets and start paying more for Windows RT tablets, for basically no reason.

 

[London Geezer]

If you're already paying for Gold because of gaming then it's not an issue to have Netflicks et al behind a paywall.

If you're not going to pay for Gold for gaming however, then who's going to pay for Gold to get access to Netflicks - when they can already get it for free on their TV, their Bluray player, their smart cable box, their PC, their laptop, their tablet, and their PS4?

Practically, no one - as Netflix can be accessed for free in a million ways. But the fact remains that MS is selling the X1 as an all in one entertainment device, and putting Netflix behind a paywall is downright counterproductive to that idea, considering not everyone wants to pay for Gold, and considering the PS4 doesn't. What's competition good for if not for these things??

 

[BoardBonobo]

Practically, no one - as Netflix can be accessed for free in a million ways. But the fact remains that MS is selling the X1 as an all in one entertainment device, and putting Netflix behind a paywall is downright counterproductive to that idea, considering not everyone wants to pay for Gold, and considering the PS4 doesn't. What's competition good for if not for these things??

In all the years that MS has been functioning with money in the bank they have never really viewed anyone as competition. They just make their stuff confident in the, slightly deluded, belief that people will just buy it because it's an MS product.

It's no different with the XB1 as is was with the Zune, RT, Winows ME etc etc.

The products they have that are successful are because people are trapped in the rut of all their data being locked into that software be it Windows or Office. Any alternatives have either been bought or put out of business.

They're just trying the same ethos with the XB franchise. If they lock you into using their software then you'll have no way out when a better opportunity presents itself. Their biggest issue though is that they have absolutely no idea of how to deal with the hoi polloi that aren't computer productivity focused.

 

[London Geezer]

In all the years that MS has been functioning with money in the bank they have never really viewed anyone as competition. They just make their stuff confident in the, slightly deluded, belief that people will just buy it because it's an MS product.

It's no different with the XB1 as is was with the Zune, RT, Winows ME etc etc.

The products they have that are successful are because people are trapped in the rut of all their data being locked into that software be it Windows or Office. Any alternatives have either been bought or put out of business.

They're just trying the same ethos with the XB franchise. If they lock you into using their software then you'll have no way out when a better opportunity presents itself. Their biggest issue though is that they have absolutely no idea of how to deal with the hoi polloi that aren't computer productivity focused.

I don't know. I don't have such a strong view. Sure they are aware of the competition, but sometimes decisions are made by the wrong people for the wrong reasons. A bit like Sony has made some weird decisions with the PS4. All minor things like mp3, external storage.
Perhaps it's this 'minor thing' mentality that blocks them - they think it won't matter much in the grand scheme of things, which for Netflix on X1 is probably the case, after all is said and done.
Heck I can access it from my TV directly so last thing I'd want is a device sucking power when I can just watch it straight from my TV.
They've showed to be pretty responsive to criticism with the X1 initial response to DRM etc etc.
There's always hope.

 

[Deleted member 86764]

It seems that Microsoft just really misunderstood the market. They checked their metrics from the 360 and noticed that people spend more time watching TV than playing games and assumed TV>games. They probably thought it as an epiphany - non-gamers watch TV too! Increase market share by giving everyone what they want.

Sounds awful to say it, but I only watch TV to pass the time (with the exception of films). For me, I always enjoy my gaming time so much more. It's just a shame that there aren't more decent games to occupy my time.

It was just a complete misread of the market. I do wonder how much of it was led by Don. Especially considering that guy has gone to work for casual Zinga. A hula hoop may be popular right now, but that's not to say that they're still gonna sell in six months time. Spence has a lot to try and fix, hardware is obviously unchangeable now, but image and direction he definitely can. Seems to have done a decent job of it too.

I'd guess that this generation is going to end with Sony way out in the lead with sales, with Microsoft having made a decent comeback from where they started. Next generation (if there is one), Microsoft will hit hard and fast. With power and features, while making an initial hardware loss. I doubt Sony would ever be able to take that gamble again.