MS rumored to be planning XBox One with no optical drive for 2019

Discussion in 'Console Industry' started by mrcorbo, Nov 18, 2018.

  1. Silent_Buddha

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    It's been on a steady decline.

    http://dashboards.trefis.com/no-login-required/qsk75Qpi

    Most are forecasting that the decline is likely to start accelerating despite console hardware sales improving. The release of the new console generation gave it a bit of a bump, but it's been all downhill from there despite strong hardware sales.

    IE - more consoles are sold, less used games are traded at Gamestop.

    Regards,
    SB
     
  2. Tkumpathenurpahl

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    Perhaps the unknown nature of a discless device is reason to try it out at the tail end of the XBoxOne's life? If they invest in a shrunken SoC for an ultra slim iteration, setting aside a portion of those SoC's for a discless SKU may be a risk worth taking in order to establish whether there's a market for a discless console.

    The biggest hurdle to that which I can see is that retailer's aren't going to be too keen to push a console which doesn't stand to give them recurring revenue. I'm convinced that's a big part of why Sony won this generation so early: their console stood to benefit everyone in the established gaming ecosystem, whereas Microsoft's didn't, it was so different to established norms, and gave them absolute control of used games in order to gain themselves a further cut of retailers' profits.

    In spite of undoing those plans, it couldn't have been an easy process, trying to reestablish amenable links with singed retailers in the few months leading up to launch.

    So I think this is the risk: will retailers see a discless SKU as a possible impediment to their profits? They seemed to with the PSPGo, which was stocked, but never promoted.
     
  3. Silent_Buddha

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    The pain for retailers is lessened due to the sale of cash cards/gift cards. As we see on Amazon's monthly sales charts for video games, cash cards/gift cards are generally at the top of the charts. They also have a benefit over physical games in that they take up less space = less costs associated with storing them. They also have the benefit of not being tied to a game (IE - no guesswork required as to how many to order).

    So while revenue potential might be lower, risk potential (loss potential) is also significantly lower.

    The one major downside for traditional video game retailers is that it makes it easier for non-traditional video game retailers (convenience stores, super markets, etc.) to get in on the action. But video game retailers will still have an edge as they're likely to be the ones carrying the consoles (low margin) and accessories (high margin) and thus will be associated in consumers minds with video game purchasing. Video games themselves are low margin products for video game stores relative to accessories, so there is unlikely to be much of a loss there, except in cases where they deal in a lot of used games which are high margin for the used game store, but no margin for the developer/publisher.

    Short note on PSPGo, main reason for fairly wasn't the digital nature but the lack of day and date releases for new games. Why buy it if you can't play the newest games on it?

    Regards,
    SB
     
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  4. AlBran

    AlBran Just Monika
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    Thanks.

    So we might infer that used games sales is potentially becoming less of a concern to some significant portion of the market.

    Newer generations of gamers are perhaps also tending towards digital-only given the nature of mobile/video streaming, and not even thinking about discs.
     
  5. Silent_Buddha

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    [edit] Originally quoted myself, but seemed better to change it to a reply of this. :)

    One thing I should add to this. Despite used game revenue declining, Gamestop overall revenue is unaffected for the most part with some growth. IE - they are slowly shifting away from too much reliance on used game sales.

    Regards,
    SB
     
    #145 Silent_Buddha, Dec 9, 2018
    Last edited: Dec 9, 2018
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  6. AlBran

    AlBran Just Monika
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    Folks are buying online a lot more these days too, and there are clearly ways to optimize company overheads that way (e.g. Amazon).
     
  7. BRiT

    BRiT (╯°□°)╯
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    That's good for the developers and publishers, right? So it's good for the industry which is good for consumers, right?
     
  8. Shifty Geezer

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    Though nice data, we need to ensure it's from less 2nd hand disc sales overall and not people moving away from GameStop to different platforms such as eBay. In isolation, we can't fairly extrapolate market behaviour from this one datapoint.
     
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  9. Silent_Buddha

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    Very true. Everything is tentative, but it does also correlate to an increased shift to digital sales for publishers. So as less people buy physical goods, the pool of physical goods will start to contract. It's obviously not a 1:1 correlation, as people who tend to buy used will tend to buy physical. But people that used to trade in physical copes of games for credit towards new games will no longer be doing so if they shift to getting their new games digitally.

    Ebay is unlikely to affect this significantly, IMO, as they've been around for well over a decade now and their influence is already established. Amazon could possibly be affecting it to some degree, but there's a lot more hassle in trading in your used games at Amazon than at Gamestop. Additionally, the chart shows that the declined in the used games market started well before Amazon introduced their game trade in service. Similarly (at least in my area), many local used game stores have gone out of business as the pool of used games has started to dry up.

    Regards,
    SB
     
  10. MrFox

    MrFox Deludedly Fantastic
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    Numbers and trends don't show acceleration or plateau. Some types of games have no reason to be collected in physical form anymore, it's not just about the value of resale. You'll see the most hardcore proponents of non-drm distribution buying a 50/50 mix of online and physical. The VHS didn't kill theater, netflix didn't kill dvd. But nobody would buy reality TV dvds anymore. They still buy the pixars and star wars and marvels. People used to buy anything and everything, now they buy only the ones that really matter. Other distribution models are added to the mix.

    Lots of games change hands among friends, family and coworkers. Someone finishes a game, talks about it at lunch, and a coworker borrows it, then others hear about it and buy it, the borrowing was free publicity. There's a misunderstanding about games/films/music collectors. Many collect the important ones, resell the ones which don't stand the test of time, and it's not for materialistic reasons but because they have a culture of sharing what they loved. The business impact is complicated to figure out. The cultural backlash of removing it is not. The anger is predictable.
     
  11. AlBran

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    Arguably a market that GameStop wouldn't give a shit about anyway if it doesn't generate them any more revenue than digital/cards. It may not go away completely, but they can just reduce the amount of stock/shelfspace in favour of cards/digital keys.
     
  12. iroboto

    iroboto Daft Funk
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    Those free to play titles... lots of players, don’t need to buy used. Just need a way to get VBUX. Which I guess would favour more games like this. Games that never intend to ship on disc.
     
  13. lefantome

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    You can have both now because some companies want to push it hard because in the long run it will be great for them.

    Remember when you could play online for free?

    But Xbox Live Gold was making lots of money and Sony did the same trying to justify it by giving away successful AAA games.
    Now we have to pay on all platforms and we get small or mediocre games that are yours as long as you keep paying for it.

    Those passes hurt a lot small games and even AAA because people had a huge backlog and therefore they were not interested in buying new games.
    This changed but now passes are appealing again and publishers want to have their own passes (EA is the first because among publishers they have by far the worst game output, same for Microsoft among platform holders)
     
  14. Jay

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    Gamestop may not care but the consumers who are looking for the cheapest way to play games will.

    The trend may be towards digital, this is a fact we've known for a while. But who are the ones still buying and trading physical is the more important question, when talking about how well a discless sku would do in the ultra budget consumer market.

    I've always felt Gamestop played the whole MS digital strategy wrong. It was clear even back then that there would be a shift towards digital.
    I think they should have embraced it, if you don't have a fast isp or caps etc, you go into the store and they provide a service to download it for you. They would then still get a cut and traffic of people coming into the shop. Then there's things like digital trading which they could've provided. Anyway, this doesn't have anything to do with the thread.
     
  15. shiznit

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    I don't understand prioritizing a cheaper Xbox One S, it's already dirt cheap second hand and still a poor value compared to the PS4. I would focus on a cheaper X to place decent visuals into the hands of more people and accelerate restoring the Xbox brand going into next gen.
     
  16. Shifty Geezer

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    UK games market 80% download.

    https://www.eurogamer.net/articles/2019-01-03-uk-video-game-sales-now-80-percent-digital

    However, that's revenue including DLC for disk games. Sales of FIFA were 25% download, so discs still very much favoured. OTOH you see widespread adoption of download - consumers are engaged with it - but OTOH you still see major titles, the ones presumed of value to the laggards, being disk-centric.

    Meanwhile, the comments on this story and Game Pass show people really value it.
    https://www.eurogamer.net/articles/2019-01-02-life-is-strange-2-coming-to-xbox-game-pass-this-month

    I think a download only SKU with a month's Game Pass will be pretty compelling. It'll reach the penny-pinchers ad offer them superb value in Game Pass, and very likely lock them into an ongoing subscription and ecosystem. That'll only increase in value with cross-platform (PC and mobile-streaming) access. I think it's a very strong play by MS. May not reach the super budgeted 2nd hand disc users, but they probably aren't worth much as customers anyway.
     
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  17. iroboto

    iroboto Daft Funk
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    Game Pass has finally hit value imo. It continues to gain steam going into 2019. Combined with Games With Gold as well as EA Access you’re pretty much covered. Not all your games are going to be the latest and greatest but given how long it can take us to move through different titles and yet all sorts of things, I have an easier time giving up on “day one” $80 titles and wait for them to be on sale while focusing on subscribed titles.

    It’s quite a reasonable advantage to pay for imo. The ability to not feel compelled to buy games day one because you’re lacking titles to play And being able to try titles you’d normally never pay for.

    Looking at tomb raider ! Also wish I waited on RDR2.

    So I agree such a SKU could do well. If it comes in as the same price as the 1S but 6 months of game pass that would be interesting. Very curious to see how they market this.
     
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