Business Strategy and Retail Pricing for Xbox One X [2017] *spawn*

[dobwal]

I see you ate up their marketing already. I think the majority of gamers would be happy to get 1080P games at this point, the native res of most TVs. They are only projecting 50% market share for 4K by 2020. I think we will see the PS5 around then.

And? At the end of 2005 there were like 15 million HDTVs out in the wild and it took about 5 years to get to that point. That was hardly used as argument against the 360 and PS3.

It's projected that there will be 60 million 4K TVs worldwide by the end of 2017. By the time the XBOX is two years old that number will be over 100 million.

Do you think gamers buy GPUs and CPUs for their PC displays or the other way around? Why do you think console gamers are any different?

You only have to look to places like here and Neogaf to see consoles can readily drive TV sales amongst the gaming crowd. How many of us really cared about HDR until it was touted as impactful on the visuals of games and gained support on the PS4 and XB1S?

 

[Johnglen]

After reading about the new assassins creed being checkerboarded 4k (yawn) and basically the same between x1x and pro I don't know what the hell ms is doing anymore. If they can't get even a tiny advantage in a game they have the marketing rights for, then it wouldn't surprise me if the games that Sony has marketing rights for are actually better on the pro. So up until now we are in the "no graphically impressive exclusives" and "no difference in important multi platform games" situation. After this year's E3 my only explanation about every ms debacle is that they are leaving the console industry and don't care anymore.

 

[Shifty Geezer]

dont you think that when you launch a new console it revitalises the sales of that console's brand? Maybe because it isn't a new full-fledged generation

Yes! Look at 4Pro - it's 25% of sales. Anyone would have been off their rocker to think 4Pro would outsell PS4. Same with XB1X.

 

[Jay]

After reading about the new assassins creed being checkerboarded 4k (yawn) and basically the same between x1x and pro I don't know what the hell ms is doing anymore. If they can't get even a tiny advantage in a game they have the marketing rights for, then it wouldn't surprise me if the games that Sony has marketing rights for are actually better on the pro. So up until now we are in the "no graphically impressive exclusives" and "no difference in important multi platform games" situation. After this year's E3 my only explanation about every ms debacle is that they are leaving the console industry and don't care anymore.

So far taking into account it's an alpha:
1X = 2160cb full 4k framebuffer with dynamic res (although solid at moment)
4Pro = unknown. But I doubt it will be 2160cb, possibly 1800cb dynamic res then upscaled.

Couple questions:

1. So would your feelings be the same if 1X was native 4k, and 4pro was 1800p upscaled?
2. Is it only the way it renders that matter, or effects and texture quality etc?
3. We don't know how the 4pro currently compares good or bad, does that matter?

Reasons I ask is because you've made some judgments based on checkerboarding, without any comparisons.

 

[Johnglen]

The judgements that I have made are based on my comparison of pro games, that I own, and I DO see a difference between native and checkerboarded 4k, I am sorry but I do. The few, mostly remasters of last gen games, that are native 4k on the pro look sharper than even the best checkerboarded games(like horizon) . I don't mean that they look better, obviously, but I see a difference in resolution and clarity.

MS failed to have even one graphically impressive game ready for x1x launch (well forza 7 looks good, but it's another forza game) and now it seems that the big 3rd party games won't be native 4k, thus making ms statements about x1x even more ridiculous. They should have gone with higher end components, if they were going to price this thing 500$ . Seems to me that the Xbox division has no help from central MS.

 

[Jay]

The judgements that I have made are based on my comparison of pro games, that I own, and I DO see a difference between native and checkerboarded 4k, I am sorry but I do. The few, mostly remasters of last gen games, that are native 4k on the pro look sharper than even the best checkerboarded games(like horizon) . I don't mean that they look better, obviously, but I see a difference in resolution and clarity.

MS failed to have even one graphically impressive game ready for x1x launch (well forza 7 looks good, but it's another forza game) and now it seems that the big 3rd party games won't be native 4k, thus making ms statements about x1x even more ridiculous. They should have gone with higher end components, if they were going to price this thing 500$ . Seems to me that the Xbox division has no help from central MS.

That's cool.
I'm not saying you can or can't see the difference with checkerboarding.
I'm saying that they will be checkerboarding at different resolutions and then one will be adding upscaling to it.
So we don't know how image quality compares. It may be identical, could be a big difference for some like you who is more bothered by it. And I do believe you and not deeming if it bothers you or not.
It could actually bother you a lot more on the 4pro, but you've not seen it to know yet.

But I don't see adding more TFlops and increasing the price by another let's say $100 would help the business case for the 1X, at that point it really would be encrouching on PC.
I believe it's already been mentioned that they may not be making a profit on it as it is, so it's not like their not giving you the best tech for the price.

 

[liolio]

What I get from their strategy is that:
1) they want to bury the X1 which did not meet theirs expectations without making a "original" xbox out of it
2) deliver a powerfull system that put pressure on competing manufacturer next generation of product. With such power it my be year before Sony can present a significant improvement over the scorpio. Somehow MSFT set a short generation hoping to regain ground they lost.
3) It is foremost about the US

The limitation/pitfall:
1) game development has completely converge between PC and consoles, you are bound than ever bound by the lower common denominator (as there are less and less room to custom fit a product for the said lowest common denominator THOUGH the lowest common denominator can mostly do everything the higher end products can: it is just a matter of quantity not quality). We are also getting into diminishing return. Altogether it is tough to properly advertize the benefit of the new product to casual eyes.
2) momemtum is on Sony side, had MSFT launched a "completely" new product the launch could have been more disruptive (again there are no exclusive content anymore). I'm not sure MSFT plan to reverse the momemtum in EU and elsewhere.
3) Sony can ignore msft effort to set a "stealthy" new generation and plan for a new system in say 2 year with an unveiling next year which could steal the X1x thunder while (if) it started to revert the trend in MSFT favor. Somehow the X1 did not meet their expectation but it was not an "original" XBox either, the X1x is imho a riskier product.
4) financial, but MSFT act often as if in a communist wonderland: massive investments (x1s and x1x) and another product sold at a significant loss. What are the return on investment? I guess securing a strong and leading market (US), so a defensing (and I would bet costly) strategy.
5) the elephant in the room is that MSFT is also losing traction on PC gaming (I speak about their store) hence the effort in the console realm. MSFT has no strategy to make money out of the sales made on PC (huge volume). They could promote Windows gaming on ARM (and ~closed version of Windows, X86 emulation won't cut it for recent games) but they need a selling point versus the tradition PC environment. It has potential but ultimately it goes against some massive amount of money interests with blocking power or that can significantly derail such plans.

 

[Johnglen]

Wth , ms isn't loosing money on either the s or the x, where did this come from ? Their aren't even subsidizing the hardware one bit. The Xbox division has been profitable since 2007 , I know it's a popular myth to say that ms' gaming division is loosing money but that hasn't been true for ages.

 

[liolio]

Wth , ms isn't loosing money on either the s or the x, where did this come from ? Their aren't even subsidizing the hardware one bit. The Xbox division has been profitable since 2007 , I know it's a popular myth to say that ms' gaming division is loosing money but that hasn't been true for ages.

The precise details on the XBOX and related product is well hidden into a massive division accountability (many company only dream to be that big), I feel. Now they certainly did not loose money every years but if you look at the whole venture... well... it can't be argue for a lack of detailed data (which would/could bother investors).
MSFT supposedly made a massive deal with AMD, what is the ROI (o for the whole Xbox)? Sure now they have a healthy number of Gold suscribers + whatever they get on games but imho as far as the rules of economic are concern they are far from profitability standard a normal corporation (Sony too throughout the PS3 era).

 

[goonergaz]

More performance and capability but also more cost. PS4 Pro is more powerful and capable than X1/PS4 but it necessarily costs more to manufacture.

ah well you were talking about market at the star of the sentence so ass-u-me'd you still were - hence my confusion

 

[Johnglen]

Actually the Xbox division was always short charged because it was in a sector with many products that were loosing tons of money. There's literally no reason for the Xbox division to not be profitable, decent amount of consoles sold, millions of gold subscribers, hardware that isn't subsidized and hasn't been since the launch of the xbox360. Honestly this "Xbox is losing money" is a narrative that Sony fans are trying to push and has no basis in reality and logic. The Xbox division lost serious money only during the first Xbox days, even the money ms lost during the rrod they regained with Kinect' initial huge success and the insane profits the division had for 2-3 years, between 2008-2010 .( when the Xbox division was making almost a billion in profit each year according to ms' financial statements)

 

[DrJay24]

And? At the end of 2005 there were like 15 million HDTVs out in the wild and it took about 5 years to get to that point. That was hardly used as argument against the 360 and PS3.

It's projected that there will be 60 million 4K TVs worldwide by the end of 2017. By the time the XBOX is two years old that number will be over 100 million.

Do you think gamers buy GPUs and CPUs for their PC displays or the other way around? Why do you think console gamers are any different?

You only have to look to places like here and Neogaf to see consoles can readily drive TV sales amongst the gaming crowd. How many of us really cared about HDR until it was touted as impactful on the visuals of games and gained support on the PS4 and XB1S?

I'm guessing from your tone you do not agree, but your data doesn't really contradict me.

100m 4K TVs WW is not much. My point was most gamers have 1080P TV now, right? Of those gamers, 30m have an XB1 and are getting many 900P games. I was pointing out that those gamers are far more concerned about getting to 1080P than some hypothetical gamer with a new 4k TV get a native 4k output. Basically, let's not cater to the minority. It's not like the XBX is going to come out and every XB gamer is going to suddenly run out and buy a XBX and new 4k TV right? That is a long slow transition.

The priority of MS and Sony should be an optimal 1080P image. Worry about the small 4K owner second. Sure they will be in a pissing match to check the 4k box, but that might not benefit anyone but marketing.

 

[mpg1]

Microsoft and Sony effectively have a duopoly in the console market now (yes Nintendo is there but is not in direct competition).

Either one of them would be incredibly dumb to forfeit their positions in that market now. They can still genenerate massive revenue and good profits simply by not fucking up.

 

[Cyan]

And? At the end of 2005 there were like 15 million HDTVs out in the wild and it took about 5 years to get to that point. That was hardly used as argument against the 360 and PS3.

It's projected that there will be 60 million 4K TVs worldwide by the end of 2017. By the time the XBOX is two years old that number will be over 100 million.

Do you think gamers buy GPUs and CPUs for their PC displays or the other way around? Why do you think console gamers are any different?

You only have to look to places like here and Neogaf to see consoles can readily drive TV sales amongst the gaming crowd. How many of us really cared about HDR until it was touted as impactful on the visuals of games and gained support on the PS4 and XB1S?

Consoles were driving HDTV sales back then, yes. It was slow but unstoppable. I think there were deals were you got a Samsung TV if you bought a Xbox 360 for instance -iirc- and consoles really pushed HDTV sales until its massive adoption. It was kinda slow though.

When the X360 came out I played PGR3 on my PC 4:3 monitor and the official VGA cables were out of stock because they couldn't meet the demand. In fact I had to wait a month to find a VGA X360 cable, and it was from a Chinese manufacturer. The cable was very bad quality, the colours were so dull compared to other VGA cables I got over time, but being able to play at HD resolutions typical of the PC instead of playing on my old CRT TV that I used for the OG Xbox, was night and day for me.

It wasn't until 2007 when I purchased a proper Samsung HDTV. It turned out to be a very good TV. I gave it to my mother and she still has it in her room and save for not keeping the image settings once you turn it off -it goes back to default, which didn't happen before- it works like a charm.

 

[Cyan]

I'm guessing from your tone you do not agree, but your data doesn't really contradict me.

100m 4K TVs WW is not much. My point was most gamers have 1080P TV now, right? Of those gamers, 30m have an XB1 and are getting many 900P games. I was pointing out that those gamers are far more concerned about getting to 1080P than some hypothetical gamer with a new 4k TV get a native 4k output. Basically, let's not cater to the minority. It's not like the XBX is going to come out and every XB gamer is going to suddenly run out and buy a XBX and new 4k TV right? That is a long slow transition.

The priority of MS and Sony should be an optimal 1080P image. Worry about the small 4K owner second. Sure they will be in a pissing match to check the 4k box, but that might not benefit anyone but marketing.

1080p owners can take 1080p 60fps for granted on all XBOX games, so that's good news for them too. But I guess it is the same with monitor size, once you have a 4K TV or monitor it is difficult to want to use a 1080p one. Meanwhile, as long as you have a 1080p monitor, the experience is going to be great

 

[mpg1]

Long interview on Giantbomb with Phil Spencer:

 

[dobwal]

I'm guessing from your tone you do not agree, but your data doesn't really contradict me.

100m 4K TVs WW is not much. My point was most gamers have 1080P TV now, right? Of those gamers, 30m have an XB1 and are getting many 900P games. I was pointing out that those gamers are far more concerned about getting to 1080P than some hypothetical gamer with a new 4k TV get a native 4k output. Basically, let's not cater to the minority. It's not like the XBX is going to come out and every XB gamer is going to suddenly run out and buy a XBX and new 4k TV right? That is a long slow transition.

The priority of MS and Sony should be an optimal 1080P image. Worry about the small 4K owner second. Sure they will be in a pissing match to check the 4k box, but that might not benefit anyone but marketing.

The point is that 4K's market share isnt going to serve as no more of an impediment than the limited HDTV market share did to the 360 and PS3. Not only will the 4K market share (projected 60 million in 2017) will be 4 times as large as the HDTV market share (15 million) in 2005, the average price ($600) of an 4K tv will be ~3 times less than the average price ($1500-$2000) of an HDTV in 2005 to 2006.

The PS360 sold 10 of millions every year in its early life in a much tougher market (limited penetration and high HDTV prices). So if the XBOX fails it will come more from a lack of notable Xbox first/second party titles and/or too high of a price then a market lacking in 4K penetration.

 

[RancidLunchmeat]

Now they certainly did not loose money every years but if you look at the whole venture... well... it can't be argue for a lack of detailed data (which would/could bother investors).

@liolio likes his money as I like my women.

http://www.businessinsider.com/xbox-one-x-price-explanation-phil-spencer-e3-2017-6

"No," Xbox leader Phil Spencer told me in an interview this week, after I asked him if Microsoft makes any money selling the Xbox One X at $500.

 

[Johnglen]

Yep they aren't turning a profit ON HARDWARE and they are also not losing any money, again on hardware, so no subsidizing here.

 

[Nesh]

MS is trying to play it smart with the pricing. XB1S is weaker but cheaper than competition, the X may be more expensive but its substantially more powerful.
PS4 and PRO sit right in the middle. MS is marketing the consoles as a value for money propositions where S is a powerful yet affordable games machine with a 4K BR player and X is also everything the S is but a surprisingly slick and affordable 4K gaming/BR device that no PC can much at the same price point. Sounds perfect for the premium user and the market that invests now at 4k sets.
There is no 4K BR enabled PS4, and Pro in the eyes of the consumer is that of a mediocre 4K solution with mixed results.
After Sony's successful start that nailed the gaming/features/performance/price balance and becoming dominant they kind of laid back. They dont touch the small details and features like MS does at this point to improve the value. Apart from having more exclusive games, both consoles dont sound as a clearly better proposition like they once did.
I understand that Sony has no reason to try more and they are focusing in games but I wish they would delight the customer with a few surprises