Prioritizing game exclusivity on console - as a hypothetical Xbox strategy

[Shifty Geezer]

...hardware sales are trending below their worst ever console (Xb one)

XB One sold 57 Million. OXB sold sold 24M.

There are a alot of big ticket negatives on the table about the XBox business, and more importantly ROI, and the benefits are all in the future and very uncertain. Moving to a multi platform launch model brings in many much needed dollars to the ecosystem that can help trun the tide of red into black at the cost of brand advocay. I can imagine the bean counters are viewing that as a very small price to pay compared to the current state of the business.

Curiously, the extra revenue of PlayStation will barely make a dent in the cost of AB. Even at $1 billion extra revenue, it could take decades to cover that expense. It's very hard for me to see the plan for AB other than MS had cash and could afford it and so why not? But obviously to maximise their revenue from software production, they need to reach as large a market as possible if that software production isn't going to drive revenue in other ways.

I wonder what their hope was? Driving GP subs to 100 million by the library?

 

[BoardBonobo]

XB One sold 57 Million. OXB sold sold 24M.

Curiously, the extra revenue of PlayStation will barely make a dent in the cost of AB. Even at $1 billion extra revenue, it could take decades to cover that expense. It's very hard for me to see the plan for AB other than MS had cash and could afford it and so why not? But obviously to maximise their revenue from software production, they need to reach as large a market as possible if that software production isn't going to drive revenue in other ways.

I wonder what their hope was? Driving GP subs to 100 million by the library?

By worst console I meant in terms of public perception and delivery, what is the public perception of the current XBox too make it trend below the XB One? The OBX did remarkably well in comparison considering the market it launched into as an unknown contender.


I think they (XBox) were willing to try anything to stop GP subs stalling but MS aren't as willing to at the end of the day. Unless GP is the first place new, current, and returning gamers head too, ahead of Steam, Epic, et al. I don't see how they could ever hope to make it work. And now they failing to hit subscriber targets it looks like a much less secure proposition overall.

 

[iroboto]

From the first word to the last, this is the most desperately sad fanboy fapping bollocks I think I’ve ever read.

This place is no better than than the lowest neogaf fap fest, if this is the acceptable face of discourse.

Keep politics out of gaming unless it’s my sad loser/misogynistic pro witless fuck rantings, oh and XBOX4EVA, slurp slurp.

I notice that the blatant racism and misogyny is now normalised and common place here and it’s only when it’s challenged, that it’s deemed to be political and brushed under the carpet.

The funniest thing is when you attempt to justify it by bringing it up in business conversation.

Is this place low rent Neogaf now?

one of the pillars here is to comment against the argument and not the poster. And as we move into a new B3D we ask members try to be civil when speaking to each other. As the saying goes, even enemies can show respect for each other.

There is always a way where we can write something that will cause a fight, and other ways where we won’t. Sometimes it’s just best not to engage, some strategies include writing your draft but not hitting submit until waiting 3 hours before determining if you still want to go through with it. A lot of times we write with our emotions on our sleeves and after some time to calm down, we can write a version that would represent what we want better.

In this case, I can’t see anything here that would progress things forward in the way you want here. There are many ways to avoid getting into a fight, and to see these as opportunities for showing different perspectives and educating people on things they don’t know.

In the end there will always be people that love things and hate things. You cannot stop that from happening. But we can stop the poor way we treat each other over it, and have respect for people when we post about it.

I’m not a big believer in swinging tools around to make things happen, I believe in the posters here of being able to make quality posts and have restraint where necessary.

TLDR; B-Nice, Im politely asking you to be nice.

 

[Johnny Awesome]

Are MS still making a loss on each XBox sold? It was ~$200, has that changed at any point? If they are then that's probably had a big deciding factor in this. They've run up an $80 billion acquisition hole that needs to be filled, hardware sales are trending below their worst ever console (Xb one), and their biggest releases have not exactly set the world alight nor have they been system sellars. Whatever is happening with GamesPass doesn't seem to be enough, the idea of just borrowing games, whilst you can afford ro pay for the subscription, instead of owning them hasn't really had major, to the point where it makes a difference, takeup or impacted Steam, Epic, or Sony et al.

There are a alot of big ticket negatives on the table about the XBox business, and more importantly ROI, and the benefits are all in the future and very uncertain. Moving to a multi platform launch model brings in many much needed dollars to the ecosystem that can help trun the tide of red into black at the cost of brand advocay. I can imagine the bean counters are viewing that as a very small price to pay compared to the current state of the business.

I doubt that MS is or ever was losing $200 per console sold unless you include marketing and development costs. No one really knows though. Once again, the devil is in the details. Sony might say they don't lose money on PS5s, but they might not be including other costs that MS was when that statement was made. Manufacturing costs after development has been paid for is very different than the total cost of getting it into the hands of a gamer and everything in between. I have no doubt that Sony has an advantage over MS due to volume and their relationship with TSMC, but it's probably not more than $50, maybe $100 due to the development costs being spread over more units.

GamePass is a success with 30+ million subscribers, but it would obviously be better for MS if there were 100 million subscribers.

ABK cost MS $69 billion, but they generate $8 billion in annual revenue. Hard to say how much profit that ends up being.

Take a game like Indiana Jones and let's assume that they can sell 5 million copies on PS5, which would be a moderately successful game. That's probably another $200 million in revenue for MS. Probably pays for the development cost. That can add up over time.

It can be frustrating for some people, but you have to consider the culture at MS when they make big moves:

1) They are the biggest company in the world.
2) They hate that they missed out on being top dog in some tech industries over the last 30 years (smart phones, social media, streaming, search engines in particular).
3) Xbox division is dwarfed by Office, Enterprise, and Cloud Services divisions.
4) If gaming explodes, they don't want to miss out again on another huge tech industry.

They look at Cloud gaming with 1 billion users as the end goal @ $200 per year per user (w/dlc, mtx etc...) ie. 200 billion in revenue. That would double their size. If that happens, then ABK is chump change. They'd gladly buy another $69 billion worth of companies to make this happen (ie. Sega, Capcom, Ubi etc...). It's worth it to MS to risk 6 months profit to attempt what they are attempting.

What if all their Cloud stuff comes to nothing? They dump ABK for $30 billion or something and call it a day. Move on to something else. [Btw, IIRC ABK had $20 billion in cash/assets when they were acquired, so the true cost was lower than $69b]

That doesn't mean they aren't trying to maximize their investment in ABK, but it's more complicated than just saying "OMG $69b! How are they going to make that up?!?"

 

[BoardBonobo]

I doubt that MS is or ever was losing $200 per console sold unless you include marketing and development costs. No one really knows though. Once again, the devil is in the details. Sony might say they don't lose money on PS5s, but they might not be including other costs that MS was when that statement was made. Manufacturing costs after development has been paid for is very different than the total cost of getting it into the hands of a gamer and everything in between. I have no doubt that Sony has an advantage over MS due to volume and their relationship with TSMC, but it's probably not more than $50, maybe $100 due to the development costs being spread over more units.

That came from Microsoft's VP of Xbox business development Lori Wright. During the trial between Epic and Apple. They said that Microsofy has never earned a profit on a console. And then during a WSJ interview Spencer confirmed that Microsoft loses around $100 to $200 every time it sells the $500 Xbox Series X or the smaller, $300 Xbox Series S.

GamePass is a success with 30+ million subscribers, but it would obviously be better for MS if there were 100 million subscribers.

I would measure success as being when there are enough subscribers, on a constant uptake, to make the service profitable. Given the massive costs of developement and infrastructure maintennance I doubt 30 million is enough to make much a dent in that.

ABK cost MS $69 billion, but they generate $8 billion in annual revenue. Hard to say how much profit that ends up being.

They did have that revenue, when they were multi-platform, how much of that has now been forecast to be lost now that they have lost access to their largest market? Probably another reason the MS mothership has stepped in to curb costs. As you highlighted yourself:

Take a game like Indiana Jones and let's assume that they can sell 5 million copies on PS5, which would be a moderately successful game. That's probably another $200 million in revenue for MS. Probably pays for the development cost. That can add up over time.

Five games in on this scale and you are a billion+ out of pocket, along with the additional ticket item sales that are generated from items like skins etc

It can be frustrating for some people, but you have to consider the culture at MS when they make big moves:

1) They are the biggest company in the world.
2) They hate that they missed out on being top dog in some tech industries over the last 30 years (smart phones, social media, streaming, search engines in particular).
3) Xbox division is dwarfed by Office, Enterprise, and Cloud Services divisions.
4) If gaming explodes, they don't want to miss out again on another huge tech industry.

They look at Cloud gaming with 1 billion users as the end goal @ $200 per year per user (w/dlc, mtx etc...) ie. 200 billion in revenue. That would double their size. If that happens, then ABK is chump change. They'd gladly buy another $69 billion worth of companies to make this happen (ie. Sega, Capcom, Ubi etc...). It's worth it to MS to risk 6 months profit to attempt what they are attempting.

What if all their Cloud stuff comes to nothing? They dump ABK for $30 billion or something and call it a day. Move on to something else. [Btw, IIRC ABK had $20 billion in cash/assets when they were acquired, so the true cost was lower than $69b]

That doesn't mean they aren't trying to maximize their investment in ABK, but it's more complicated than just saying "OMG $69b! How are they going to make that up?!?"

Microsoft are Microsoft, their attitiude and approach to various markets hasn't changed much for quite some time now. They are successful when they have concentrated on their core software capabillities but when it comes to innovating and entering new markets where they can't buy a ready made solution they have never performed very well e.g. all the markets they missed out on, or at least attempted break. Though the Surface is a moderativley successful product in a niche market. The Zune, Windows Phone, their constant attempts to force people into using Edge, etc. These were\are just bad.

Gaming has already exploded in terms of revenue growth, and Spencer has already admittd they missed that by borking the XBox One generation. I get a feeling they are going to shift investment and risk over to AI now, it would be the smart thing to do before they miss that as well. And to do that it makes more sense to move XBox to being a publisher and not a platform, that way they can just rake in profits to fund lots of other things instead.

 

[Johnny Awesome]

That came from Microsoft's VP of Xbox business development Lori Wright. During the trial between Epic and Apple. They said that Microsofy has never earned a profit on a console. And then during a WSJ interview Spencer confirmed that Microsoft loses around $100 to $200 every time it sells the $500 Xbox Series X or the smaller, $300 Xbox Series S.

Yes, but what does that include and is Sony including the same things when they state their profits/losses on hardware? Details matter.

I would measure success as being when there are enough subscribers, on a constant uptake, to make the service profitable. Given the massive costs of developement and infrastructure maintennance I doubt 30 million is enough to make much a dent in that.

We've already heard statements that GP is profitable.

Microsoft are Microsoft, their attitude and approach to various markets hasn't changed much for quite some time now. They are successful when they have concentrated on their core software capabilities but when it comes to innovating and entering new markets where they can't buy a ready made solution they have never performed very well e.g. all the markets they missed out on, or at least attempted break. Though the Surface is a moderately successful product in a niche market. The Zune, Windows Phone, their constant attempts to force people into using Edge, etc. These were\are just bad.

Now you know why.

Gaming has already exploded in terms of revenue growth, and Spencer has already admittd they missed that by borking the XBox One generation. I get a feeling they are going to shift investment and risk over to AI now, it would be the smart thing to do before they miss that as well. And to do that it makes more sense to move XBox to being a publisher and not a platform, that way they can just rake in profits to fund lots of other things instead.

Console gaming really hasn't exploded. That's the point. Even if you add MS and Sony together, I would hardly call it an explosion.

 

[cheapchips]

Console gaming really hasn't exploded. That's the point. Even if you add MS and Sony together, I would hardly call it an explosion

Indeed. Xbox's now stalled cloud strategy was all about breaking out of that 200m-ish unit market.

 

[iroboto]

Indeed. Xbox's now stalled cloud strategy was all about breaking out of that 200m-ish unit market.

still very beta I believe. It's the most basic cloud strategy there is. They really need a real one to expand outside of the existing xbox ecosystem.

 

[eastmen]

whatever the statement is , i hope its extremely clear. IF they are gong third party so be it , but make it clear and if they are going to stay making exclusives for the xbox then make it clear. The way they dance around everything is what allows all these rumors to linger.

Also it would be hilarious if they went through all the court shit about making indiana jones xbox exclusive only to turn around and release it on other platforms. But from working at Ms it wouldn't surprise me honestly

so of course its still not clear low

 

[cheapchips]

still very beta I believe. It's the most basic cloud strategy there is. They really need a real one to expand outside of the existing xbox ecosystem.

Bond did call out double digit growth on cloud, but hard to know what that means. Could just be more Xbox GPU subscribers using streaming, rather than new customers.

 

[ZebMacahan]

I just watched this video, he talks about MS 18-6 policy and how that effects development. Firing senior artist close to deadlines etc. No wonder MS cant deliver anything decent. The same policy applies for 343 industries as well, right?

 

[cheapchips]

I just watched this video, he talks about MS 18-6 policy and how that effects development. Firing senior artist close to deadlines etc. No wonder MS cant deliver anything decent. The same policy applies for 343 industries as well, right?

Yes, Infinite saw complaints about the 18/6 contractor rule appearing on Glassdoor and the like. It's going to be more of an issue for some teams than others. They don't all have same same need or reliance on contractors that probably should be perms after a certain point.

 

[Johnny Awesome]

Meh. Sour grapes. There's always some disgruntled guy. Sounds like he has a bad attitude.

PS: MS has published MANY good/great games this gen, but we should probably keep that debate out of this thread.

 

[Seanspeed]

Meh. Sour grapes. There's always some disgruntled guy. Sounds like he has a bad attitude.

PS: MS has published MANY good/great games this gen, but we should probably keep that debate out of this thread.

A lot of the better stuff MS has technically published this gen came from projects that were already heavily on their way before being acquired. Wasteland 3, Deathloop, Grounded, etc.

And I wouldn't be so quick to dismiss this as just some disgruntled person. They were a contract worker, so knew their time was impermanent, so it's not like they quit/got fired and are unhappy because of that, they genuinely just have gripes with the development environment this contract practice puts in place.

It honestly makes a lot of sense, too. Maybe it'd work better when games still only took 2-3 years to make, and you could bring on an artist or whatever for a temporary period of 12-18 months til completion of the game, but now? 4-5 years is standard, and a game like Forza Motorsport took almost seven years to make. It's ridiculous to bring in temporary workers only for a short 12-18 months and then rotate them out. It's so insanely wasteful in terms of development efficiency.

It's totally normal for larger projects to require temporary workers nowadays, but most studios who do this try and hire on people to at least get the game done, not rotate them out constantly so they can skimp on the pay and benefits.

It sounds like a horrible practice for modern AAA development. And it wouldn't at all surprise me if it has been at least a factor in Xbox not delivering games as people expect them to.

 

[QPlayer]

Meh. Sour grapes. There's always some disgruntled guy. Sounds like he has a bad attitude.

PS: MS has published MANY good/great games this gen, but we should probably keep that debate out of this thread.

I thought the same thing. Nevertheless, Halo Infinite was released with a high-quality campaign, and the multiplayer section, which had a difficult start, was brilliantly fixed over time. The basics of Forza Motorsport gameplay are VERY strong, there is something to polish it, the cases of the two games are similar in this. However, bugs aside (which plague many other games on both major consoles these days!), FM is already one of the best multiplayer racing game out there.

However, this thread is not for this place.

 

[Nisaaru]

I thought the same thing. Nevertheless, Halo Infinite was released with a high-quality campaign, and the multiplayer section, which had a difficult start, was brilliantly fixed over time. The basics of Forza Motorsport gameplay are VERY strong, there is something to polish it, the cases of the two games are similar in this. However, bugs aside (which plague many other games on both major consoles these days!), FM is already one of the best multiplayer racing game out there.

However, this thread is not for this place.

I don't see how Infinite had a high quality campaign...

The only quality I acknowledge to the game is that the environment was the largest Halo environment ever. Boss fights felt completely unpolished awful to me and they expect people to use the silly grab hook in CQC. I forgot the plot while playing so I can't even recall anything which happened. The gameplay felt so meaningless and lacked the situational tense magic of the classic games but that is lacking since Halo4. The game felt like a production snapshot which needed another year or so to polish and actually fill up the holes to give it some "identity". The released game is aimless.

 

[Johnny Awesome]

Not according to critics. It scored 87 at metacritic, which is a good metric when talking about the game in the context of whether or not MS is publishing good games. Personal opinions don't really matter.

I think GTA games are shit, but I would never come into an industry thread now where we're talking about whether or not GTA sells systems and claim that it's crap so isn't good enough to sell systems.

According to critics Halo Infinite is a good game. User scores are lower at 7.8 (which is still good), but some of that had to do with the lack of features at launch and people don't generally go back and change their scores now that the game is much improved.

If you want to say Halo Infinite is shit, I would save that for the Halo Infinite thread in the games forum. It improves the signal to noise ratio.

 

[Nisaaru]

Not according to critics. It scored 87 at metacritic, which is a good metric when talking about the game in the context of whether or not MS is publishing good games. Personal opinions don't really matter.

Well, I just told my honest opinion about its PvE and I've considered Halo1-3/ODST/Reach great games I've played multiple times. There is a reason why the game made no real waves.

You give far too much credit to so called critics which are commercially motivated and who knows how many user votes on metacritic are really users and not astroturfed.

 

[Johnny Awesome]

Well your arguments failed so you attacked the data. Good job.

 

[Shifty Geezer]

Well, I just told my honest opinion about its PvE and I've considered Halo1-3/ODST/Reach great games I've played multiple times. There is a reason why the game made no real waves.

You give far too much credit to so called critics which are commercially motivated and who knows how many user votes on metacritic are really users and not astroturfed.

We can't argue effectively on business strategy based on individual opinion. It needs a collective measure of something substantial. Metascores provide just that and, with the same critics working on the same content, we have a reasonable comparison between platforms and titles based on those critics, regardless how they operate. If they collectively give a game 8/10 on week, and a different game 4/10 the next, those measures are 'calibrated' to the normal operations of those critics.

If you don't want to use Metacritic et al, you need to provide a better source of data than just personal opinion as no console business is going to be operated on what Nisaaru thinks.