Prioritizing game exclusivity on console - as a hypothetical Xbox strategy

[QPlayer]

They now have nearly 60 first party studios, we'll see how those many exclusive games boost Xbox sales.

 

[iroboto]

I think it would take several consecutive years of GOTY nomination worthy titles to start making some major strides in the console space.

 

[Johnny Awesome]

You're probably right. 2:1 marketshare discrepancy is hard to climb out of now that it's difficult to differentiate on hardware.

Look at Apple after all these years they still aren't #1 in PC or Phone and no one would call them a failure.

Maybe it's the console war mindset that is everyone's problem. Maybe it's fine that Xbox is 50% of PS and still ticking. If you're in NA or UK buy what your friends have. Otherwise buy a PS and stop whining about Xbox.

 

[Shifty Geezer]

Look at Apple after all these years they still aren't #1 in PC or Phone and no one would call them a failure.

Major difference there though is they price higher so never will be. Like Nintendo, they are happy with their niche with big margins rather than fighting over market share and needing to reach the lower tier consumers. Seems XB is thinking along those line regards their gaming, just wanting to get a highly profitable business and thinking the best way to do that is GP rather than consoles.

Maybe it's the console war mindset that is everyone's problem. Maybe it's fine that Xbox is 50% of PS and still ticking. If you're in NA or UK buy what your friends have. Otherwise buy a PS and stop whining about Xbox.

I guess long term concern is what if MS leave the console space? Will Sony have it to itself, alongside whatever Nintendo are doing? What would that do the sector? Or will mobile manage to offer enough competition via TV streaming etc.?

 

[Johnny Awesome]

They won't leave the business if it means losing 25+ million GP boxes.

 

[Shifty Geezer]

Sure, but I think what MS really wants is all those user to stream via mobile to TV without needing an Xbox. Or even on PS and Nintendo! If next gen, XB buyers think, "hang on, I can play the same games on my other devices and I don't need an XBox any more," then GP carries on but XB fizzles out.

 

[iroboto]

Sure, but I think what MS really wants is all those user to stream via mobile to TV without needing an Xbox. Or even on PS and Nintendo! If next gen, XB buyers think, "hang on, I can play the same games on my other devices and I don't need an XBox any more," then GP carries on but XB fizzles out.

Im sort of in the mind set that it is inevitable with each coming generation. We either extend the life of existing consoles significantly, consoles break free of their cooling and price restrictions, or some new technology comes by that allows consoles to be smaller, cooler, and cheaper while producing better graphics.

There has to be an eventuality coming here, the writing is on the wall if consoles want to continually push the boundaries of graphics.

I think a lot of people are holding out hope that consoles will be able to be this cheap device that can sit in front of your TV, but it’s pretty clear that isn’t our direction anymore; we are now only getting larger, with more heat, and more expensive. The only players that are going to get it all, are PC players and they will have to pay an extravagant price for it.

I think it’s pretty clear what MS long term strategy is going to be, and a lot of people don’t like it (likely bias) so to reverse positions, my question would be, what will Sony do to keep pushing the graphical envelope while keeping costs down for consumers?

 

[cheapchips]

Spencer had this to say on cloud gaming /console. Think you can read that in a doomist way for dedicated consoles or not, like most things.

On cloud gaming, one thing that has been interesting — you've watched us. Early on, we talked about Xbox Cloud as a way to get onto mobile gaming. And globally, there are a lot of people who play cloud gaming on mobile today. But in a place like the US, the way people use cloud primarily is on Xbox consoles. They use it to look at games and to browse games that they might want to download to play through Xbox Game Pass, or even purchase outright. That's sparked innovations that we didn't plan. When we watch what customers are doing, and listen to the feedback that they're giving us, we think about as other things we can do with Xbox Cloud, and for the Xbox console experience.

"We have no plans to bring Xbox Game Pass to PlayStation or Nintendo." Xbox CEO Phil Spencer on console hardware, the future of Activision-Blizzard, and much more

In our exclusive interview with Microsoft Gaming CEO Phil Spencer, we got a glimpse of the future of Xbox, and Microsoft's evolving strategy going forward.

www.windowscentral.com

 

[iroboto]

Spencer had this to say on cloud gaming /console. Think you can read that in a doomist way for dedicated consoles or not, like most things.

"We have no plans to bring Xbox Game Pass to PlayStation or Nintendo." Xbox CEO Phil Spencer on console hardware, the future of Activision-Blizzard, and much more

In our exclusive interview with Microsoft Gaming CEO Phil Spencer, we got a glimpse of the future of Xbox, and Microsoft's evolving strategy going forward.

www.windowscentral.com

Yea this is an interesting intersection of the natural advantages of cloud mixed in with business model that this became the innovation for xcloud.

Where I think most people aren’t looking, is nvidia and Geforce Now. It’s price point performance is incredible and with game pass as now being supported; honestly this 3070 will be the last GPU I ever purchase. It’s going to be GeForce now for me once this goes out of date.

 

[cheapchips]

@iroboto MS are looking. It's been rumoured a few times that they will stream PC gamepass games, they have Windows 365 or whatever it's called and also said this to WinCental in the above interview.

We're also looking about what it means to stream PC games, we think that's an important part of our future in that space. I'm very bullish on where we can go with cloud, but it doesn't diminish the local run time experience that we want to have on Xbox consoles and Windows PCs. Every one of those games people want to stream, people also want to play locally. We have to build the tools for developers in order to build both.

 

[Deleted member 11852]

@iroboto MS are looking. It's been rumoured a few times that they will stream PC gamepass games, they have Windows 365 or whatever it's called and also said this to WinCental in the above interview.

Which will not please Steam or Nvidia, who compete in different ways. You may recall the original objections to the Microsoft Activision acquisition, where there were objections not only on the console space (from Sony and Nintendo), but also in the PC space. Amazon, Epic, Google (Stadia, RIP), Nvidia, and Valve were consulted.

Microsoft being the platform (Windows) owner, where the APIs are proprietary, a massive publisher, a cloud service operators and game streaming provider is not going to be good news for anybody in the PC space when cloud becomes the norm.

Microsoft has other business areas that are important to gaming. One is Xbox
Cloud Gaming, Microsoft’s current cloud gaming service, which is powered by custom Xbox Series X hardware. Another is Azure, a leading cloud platform (ie a network of data centres and cloud computing infrastructure) that offers a wide range of services across several industries, including gaming. Another is Windows, the leading PC OS. Many people play games on a PC rather than a console, and most of them use Windows OS. Because of its popularity, game developers generally make PC games that are designed and optimised for
Windows OS.

One body owning all the pieces? Yeah.. that's not good for competition in the PC space.

 

[see colon]

One body owning all the pieces? Yeah.. that's not good for competition in the PC space.

Valve sells custom Steam PC hardware with a custom Steam OS on a Steam store where they also sell Steam VR hardware and Steam games that are hosted on Steam servers.

 

[Deleted member 11852]

Valve sells custom Steam PC hardware with a custom Steam OS on a Steam store where they also sell Steam VR hardware and Steam games that are hosted on Steam servers.

Valve doesn't own linux, nor the platform libraries (DirectX APIs), or SDK (VisualStudio) on which most of the games are developed. It's shocking how few games still have native linux/SteamOS support. Valve also not have a global server infrastructure like Azure, nor do they have infrastructure to stream games. Microsoft and Valve are miles apart in having the fundamental technology pieces.

Valve's advantage is in the Steam platform, which is all software. It would be much easier for Microsoft to develop the Microsoft/Xbox Store into a credible competitor to Steam, than it would be for Valve to build an OS, with propriety APIs and an SDK for which 95% of all games are developed, and setup tens of billions of global server infrastructure.

Fortunately for Valve, Microsoft stores have been awful for three decades.

 

[eastmen]

Sure, but I think what MS really wants is all those user to stream via mobile to TV without needing an Xbox. Or even on PS and Nintendo! If next gen, XB buyers think, "hang on, I can play the same games on my other devices and I don't need an XBox any more," then GP carries on but XB fizzles out.

It depends.

Sony and Nintendo would want 30% of the monthly sub. So what is more expensive giving your competition 30% of a portion of your sub base every month or releasing new consoles ?

With the console you can make money on accessories , the console itself (after awhile at least) and non sub games from third parties. A game pass sub on a ps6 doesn't do that for them.

 

[see colon]

It depends.

Sony and Nintendo would want 30% of the monthly sub. So what is more expensive giving your competition 30% of a portion of your sub base every month or releasing new consoles ?

With the console you can make money on accessories , the console itself (after awhile at least) and non sub games from third parties. A game pass sub on a ps6 doesn't do that for them.

A cheap dedicated streaming box with first party controllers solves this.

 

[eastmen]

A cheap dedicated streaming box with first party controllers solves this.

Does it though? First you wouldn't be able to buy a 3rd party game that MS doesn't support streaming for right? So there is a part of a revenue stream gone.

Why would you buy an xbox streaming box vs a fire stick ? or the built in xcloud in your tv? There are so many other options for streaming hardware that while I am sure a streaming stick would be popular I am also sure that a lot of the base of people who buy xbox's would skip over it for other hardware. I have some fire sticks in the house , why would I buy an xbox streaming stick and then xbox accessories for it when I can just buy amazon accessories for my fire stick ?

There will always be people out there who want the best possible experience and that is dedicated hardware. The question is how many xbox buyers fall into that category ? With MS not offering a console option it can bleed users to new playstation hardware and nintendo hardware. Remember during the hearings MS said the most popular way to use xcloud was to demo games and play them while they downloaded. So we would be a long road away from a streaming stick being viable as an alternative

The other question is what will happen each year from now on. Every year we are going to see more and more games heading to xbox and a lot of them are likely eclusive. MS has what 60 first party studios now? Even with the few game series like COD that have to stay exclusive that is what 3 studios on cod , a studio on diablo ? What else ? I am sure they will still have 50 studios to create games that can be exclusive titles to xbox. So the xbox as a platform has a good chance of growing year in and year out.


At the end of the day what really is the cost to MS to take a new AMD APU make a few modifications and put it in a box and ship it vs how much money it will bring in for them ?

 

[Johnny Awesome]

I think MS has at least one more generation of console hardware in them. They are betting that cloud will work itself out by 2035 and then no need for local hardware anymore. It might take longer. Their long term goal is probably 500 million Xcloud GP subscriptions or something.

 

[eastmen]

I think MS has at least one more generation of console hardware in them. They are betting that cloud will work itself out by 2035 and then no need for local hardware anymore. It might take longer. Their long term goal is probably 500 million Xcloud GP subscriptions or something.

that or they hope after the next console generation they have enough pc penetration with game pass that it woud be viable to just have streaming and then local pc copies for the more core gamer

I still think the cost of putting an amd apu in a box and shipping it is a fraction of what they actually make by having that platform and so we will see xboxs for a while yet to come.

 

[Johnny Awesome]

New Xbox strategy topic:

I think another thing that gets lost sometimes is that not all gamers have equal $value to MS, Sony, and Nintendo. I think MS is doing a better job getting more revenue/gamer out of fewer gamers than Sony is. Who cares about the guy who buys one game a year at a discount for $40, compared to the GPU subscriber that also buys MTX and generates $250 US annually in revenue? I realize those are two extremes and many people fall in the middle, but IMO MS gets closer to the 2nd scenario than Sony and that's why they generate more profit per console sold. It's probably why the S doesn't have a disc drive. They get grandma to buy the S for little Jimmy for Christmas and then pretty soon mom and dad are getting games digitally instead of used at the store or getting GP for little Jimmy. At the end of the day profit is what matters to MS, Sony and Nintendo, not how many cheapass gamers they can get to buy a console.

 

[Deleted member 11852]

I think another thing that gets lost sometimes is that not all gamers have equal $value to MS, Sony, and Nintendo. I think MS is doing a better job getting more revenue/gamer out of fewer gamers than Sony is. Who cares about the guy who buys one game a year at a discount for $40, compared to the GPU subscriber that also buys MTX and generates $250 US annually in revenue?

What are the exact Microsoft and Sony revenue numbers you're looking at? For Sony we have exact net profits as well.