Xbox Business Update Podcast | Xbox Everywhere Direction Discussion

[iroboto]

The console market is far too small and useless such that they would force them to open up their stores for MS. Less than 200M is nothing honestly. Apple and android devices are in the billions.

Plans change all the time. The further out the rumour is, the more subject to change it is. Keep that in mind. It’s 2024, it’s a long way out for this rumour to hold true.

 

[Shifty Geezer]

Yeah, consoles are such a niche, you can't mess around with it without breaking it completely. Consumers have enough choice to go PC if they don't want a console now - get all the same games pretty much and cross play.

 

[Cyan]

it's still very early. The rumours seem to be correct and I kinda agree that new approaches might help Xbox.

Only some doubts remain, like what meant Phil Spencer when he said that they are going to create the most powerful hardware to date. I always thought that was a hint to keep core console fans happy, and that they'd create a desktop console and a console/PC handheld hybrid.

Only two questions remain for me, if Xbox goes OEM -which I'd love-, how are they going to keep a reasonable price? I mean 3D0 was a good console but the prices were high 'cos hardware manufacturers coulnd't sell it at a loss.

Second question, but minor, are they going to compete with PS6 and Switch 2? In price?

I'd love to have an OEM Xbox hybrid, but yeah, I wonder about the prices.

 

[iroboto]

it's still very early. The rumours seem to be correct and I kinda agree that new approaches might help Xbox.

Only some doubts remain, like what meant Phil Spencer when he said that they are going to create the most powerful hardware to date. I always thought that was a hint to keep core console fans happy, and that they'd create a desktop console and a console/PC handheld hybrid.

Only two questions remain for me, if Xbox goes OEM -which I'd love-, how are they going to keep a reasonable price? I mean 3D0 was a good console but the prices were high 'cos hardware manufacturers coulnd't sell it at a loss.

Second question, but minor, are they going to compete with PS6 and Switch 2? In price?

I'd love to have an OEM Xbox hybrid, but yeah, I wonder about the prices.

As far as I can see, you guys are the first guys saying they are going OEM.

I’ve never heard of such rumour on the inter webs and none of my sources have ever suggested either. I have some idea of what may come down the pipeline but they have also shelved many ideas worked on, and on occasion resurrected shelved projects and assigning it to other teams.

We are way too far out to know what they are doing and any rumour talk today is useless unless there is momentum for delivery this year.

 

[rntongo]

As far as I can see, you guys are the first guys saying they are going OEM.

I’ve never heard of such rumour on the inter webs and none of my sources have ever suggested either. I have some idea of what may come down the pipeline but they have also shelved many ideas worked on, and on occasion resurrected shelved projects and assigning it to other teams.

We are way too far out to know what they are doing and any rumour talk today is useless unless there is momentum for delivery this year.

IIRC DF suggested the same, that OEMs may be a plausible explanation for the expected large generational leap. Maybe MS'll reveal more in the coming months. Already we see business shifts to provide their titles on other gaming platforms. For this gen timed exclusives make sense considering the hw sales are not where they expected. Satya Nadella also personally hates the idea of exclusives but they dont exist for no reasons(and he may be overlooking these reasons). Its a difference in ideology between Sony and MS execs which will define their business strategy. Both can succeed and both have to adapt as the market and technology changes.

You can see Playstation is bringing old titles to PC to increase revenues and this is working well, this is them adapting while maintaining the benefits of having fixed hw on which devs can optimize. You can see Sony as well testing out with the Playstation portal which essentially is a cloud gaming device that augments your console by turning it into a server. We've seen MS do the same with their Xbox cloud gaming where they instead have dedicated servers carrying out the task. My money is on Sony's model working out quite well but it doesnt mean MS's approach cant work as well or even better. The question is does MS have the clarity and focus to pursue clear objectives? I guess we'll know in the coming months.

But Jez is as insider as it gets. He's seen games like Contra, Perfect Dark, Indiana Jones before anyone else and he was right when they launched, if he suggests something its worth taking it and scrutinizing it. Only issue with him is that he will praise everything even when things are so bad they warrant constructive criticism.

 

[QPlayer]

As far as I can see, you guys are the first guys saying they are going OEM.

I’ve never heard of such rumour on the inter webs and none of my sources have ever suggested either. I have some idea of what may come down the pipeline but they have also shelved many ideas worked on, and on occasion resurrected shelved projects and assigning it to other teams.

We are way too far out to know what they are doing and any rumour talk today is useless unless there is momentum for delivery this year.

Actually, this is not a rumor, but we simply came to the conclusion that this might be the most likely option. This follows from at least three factors.

1. They said their next hardware will make the biggest technological leap yet. This statement assumes that high-end hardware components are used. Furthermore, such an announcement will be made at the beginning of 2024, which assumes that they have changed strategy and this is the priority, so the new Xbox will appear relatively soon in 2025 or 2026. We know very well what can be achieved at the hardware level within a year or two. For 5-600$, this biggest technological leap doesn't really correlate with the previous method.
2. If you look at the previous model and look at the hardware sales, it is clear that they need to change. The traditional closed console ecosystem is apparently not delivering the expected results.
3. They talk about the fact that they want to reach more players and more marketplaces, meanwhile Xbox as hardware is important to them.

 

[QPlayer]

Otherwise, they can easily go for the OEM business model, so that the CPU will be their own unique development, which they can produce at a favorable price, for example, on Intel's production lines. Because of this specialized CPU, they can preserve and control the hardware capabilities of the next Xbox. And the OEM model ensures that these Winboxes, equipped with different VGAs and RAMs, are sold in different price categories.

 

[eastmen]

Actually, this is not a rumor, but we simply came to the conclusion that this might be the most likely option. This follows from at least three factors.

1. They said their next hardware will make the biggest technological leap yet. This statement assumes that high-end hardware components are used. Furthermore, such an announcement will be made at the beginning of 2024, which assumes that they have changed strategy and this is the priority, so the new Xbox will appear relatively soon in 2025 or 2026. We know very well what can be achieved at the hardware level within a year or two. For 5-600$, this biggest technological leap doesn't really correlate with the previous method.
2. If you look at the previous model and look at the hardware sales, it is clear that they need to change. The traditional closed console ecosystem is apparently not delivering the expected results.
3. They talk about the fact that they want to reach more players and more marketplaces, meanwhile Xbox as hardware is important to them.

1) Yes it will be the biggest technological leap according to them. The time line for such a console hasn't expired yet. MS has traditionally announced new hardware at e3 /june showcase and the game awards.

2) I don't fully agree with this. All console manufacturers have had issues at some point. Some have bounced back.

3) yes cloud / pc / xbox

Otherwise, they can easily go for the OEM business model, so that the CPU will be their own unique development, which they can produce at a favorable price, for example, on Intel's production lines. Because of this specialized CPU, they can preserve and control the hardware capabilities of the next Xbox. And the OEM model ensures that these Winboxes, equipped with different VGAs and RAMs, are sold in different price categories.

I don't see a situation where OEM hardware with windows for gaming is going to work out for MS. It will only drive costs up for the consumer since there isn't a store to subsidize costs of the hardware. It may be great short term for gamers but it will just be abandoned like plays for sure , windows game store or any host of other products MS has tried. The cost of a windows liscense wont make up for all the money they will loose on the hardware and cut of games and accessories.

 

[Johnny Awesome]

It's simple to me: Keep bringing out machines 1 year after Sony so that they are usually ahead in power. Rolling generations with continual support for 3 or 4 configurations so that you meet gamers everywhere along the price curve from $199 S, $399 X, to $599 X Pro. 32 studios cranking out 5 AAA games every year Day 1 on GP/PC and 2 or 3 years later on Sony/Nintendo.

Xbox fans will live with Halo being on PS three years later as long as they get it on powerful hardware Day One on GP. Let MS make tons of money on PS to fund GP games for Xbox users.

 

[Charlietus]

It's simple to me: Keep bringing out machines 1 year after Sony so that they are usually ahead in power. Rolling generations with continual support for 3 or 4 configurations so that you meet gamers everywhere along the price curve from $199 S, $399 X, to $599 X Pro. 32 studios cranking out 5 AAA games every year Day 1 on GP/PC and 2 or 3 years later on Sony/Nintendo.

Xbox fans will live with Halo being on PS three years later as long as they get it on powerful hardware Day One on GP. Let MS make tons of money on PS to fund GP games for Xbox users.

One year in modern times doesn't give you much in terms of performance/$.

And the marketplace is about to get even more competitive with the launch of the switch 2 and the PS5 pro, it's going to be a bloodbath. If I were Microsoft I would try to launch 1 year before the competitors, trying to match them on features.

 

[Charlietus]

Also, as an aside, I think that generations are dead, and should be dead. At this point they hurt game creators, publishers, console manufacturers and so on.

Consoles like the PS5 or the series x are good enough to make any game that developers want, and I can't see why a PS6 game couldn't be scaled back to a PS5. We have had games exclusive to PS5 that with the right cuts could have run on PS4, but they had to be exclusive to push the "next gen".

If there are PS6 exclusive games, they better have features that can't be scaled to run on a PS5 (like machine learning AI or something) and they should keep selling games to the last gen until people don't use it anymore.

Why did Sony kill the manufacturing of PS4 in 2020 again?

 

[QPlayer]

Also, as an aside, I think that generations are dead, and should be dead. At this point they hurt game creators, publishers, console manufacturers and so on.

Consoles like the PS5 or the series x are good enough to make any game that developers want, and I can't see why a PS6 game couldn't be scaled back to a PS5. We have had games exclusive to PS5 that with the right cuts could have run on PS4, but they had to be exclusive to push the "next gen".

If there are PS6 exclusive games, they better have features that can't be scaled to run on a PS5 (like machine learning AI or something) and they should keep selling games to the last gen until people don't use it anymore.

Why did Sony kill the manufacturing of PS4 in 2020 again?

An important technological difference between the current and the next hardware may be local AI, which requires a modern NPU. Ok, this doesn't rule out the possibility that a previous generation port could not appear without AI functions when dumbed down, but depending on how much this new technology is used, the previous hardware may still have limitations.

I know many people don't believe it, but I am convinced that AI will play an important role in the next generation of games, and there are already examples of this today, such as AI-based upscaling/frame generation applications on PC side. But this is just the beginning.

 

[Charlietus]

An important technological difference between the current and the next hardware may be local AI, which requires a modern NPU. Ok, this doesn't rule out the possibility that a previous generation port could not appear without AI functions when dumbed down, but depending on how much this new technology is used, the previous hardware may still have limitations.

I know many people don't believe it, but I am convinced that AI will play an important role in the next generation of games, and there are already examples of this today, such as AI-based upscaling/frame generation applications on PC side. But this is just the beginning.

Ai will be important for sure, but realistically, how many games will use it in the first 5 years? 0.5% maybe? Current gen features are getting used sparingly even now, so I have no hope for next gen features to be used much at the start.

 

[Johnny Awesome]

One year in modern times doesn't give you much in terms of performance/$.

And the marketplace is about to get even more competitive with the launch of the switch 2 and the PS5 pro, it's going to be a bloodbath. If I were Microsoft I would try to launch 1 year before the competitors, trying to match them on features.

Oh. I forgot one thing 1 year + an extra $50 loss on the hardware than Sony is willing to stomach. That should be enough. Launching ahead of Sony is a complete disaster for MS. They can never be behind Sony technologically except that one year each time. That way they are ahead 75%+ of the time. Probably 80% most of the time. Something that hardcore Xbox fans will be fine with as they know their shiny new machine is right around the corner. When I say rolling generations, I essentially mean that generations are dead.

One thing we learned this gen is that it's almost impossible for MS to steal PS ecosystem fans. That's why launching early is a bad idea. They will continually be behind the power envelop if they do that and it would be a PR disaster. This is especially true when PS is the lead platform. Imagine the 1 year gap + extra loss is enough for 33% more power. That's enough so that even the most unoptimized 3rd party games will run at least as good on Xbox as they would on the latest PS hardware, with 1st party Xbox games like Gears 6 and Fable actually showcasing the new hardware. The other thing that launching a year later gets them is Sony has to work out the software kinks for the 1st year and Xbox benefits from the knowledge gained. By the time any new ML or whatever tech gets implemented in a 1st party Sony game, the new Xbox will be out and able to take advantage of it from a game-dev standpoint.

 

[Shifty Geezer]

One thing we learned this gen is that it's almost impossible for MS to steal PS ecosystem fans.

I agree that it's almost impossible, but I don't think this generation proves it. There was nothing particularly compelling about XBS that'd be expected to pull PS players away from PS. Both consoles were well suited to provide an upgrade path, with arguably Sony having a better software reason for XB players to switch which is why they've won players from XB. Plus reigning market leader bonus.

 

[QPlayer]

Oh. I forgot one thing 1 year + an extra $50 loss on the hardware than Sony is willing to stomach. That should be enough. Launching ahead of Sony is a complete disaster for MS. They can never be behind Sony technologically except that one year each time. That way they are ahead 75%+ of the time. Probably 80% most of the time. Something that hardcore Xbox fans will be fine with as they know their shiny new machine is right around the corner. When I say rolling generations, I essentially mean that generations are dead.

One thing we learned this gen is that it's almost impossible for MS to steal PS ecosystem fans. That's why launching early is a bad idea. They will continually be behind the power envelop if they do that and it would be a PR disaster. This is especially true when PS is the lead platform. Imagine the 1 year gap + extra loss is enough for 33% more power. That's enough so that even the most unoptimized 3rd party games will run at least as good on Xbox as they would on the latest PS hardware, with 1st party Xbox games like Gears 6 and Fable actually showcasing the new hardware. The other thing that launching a year later gets them is Sony has to work out the software kinks for the 1st year and Xbox benefits from the knowledge gained. By the time any new ML or whatever tech gets implemented in a 1st party Sony game, the new Xbox will be out and able to take advantage of it from a game-dev standpoint.

Their goal is clearly to launch hardware that is much more powerful than the PS5pro, so this justifies your point. But it is inevitable that games are still the most important thing. They must keep their first-party games that define the Xbox brand exclusively on their own platform for at least one year.

Interestingly, The Coalition announced at the beginning of the year that the new game will be introduced this year, or so it was hinted at. Question, will they bring it to the Series consoles as well, or only to the next Xbox, thus encouraging customers to buy the new console?

 

[eastmen]

Ai will be important for sure, but realistically, how many games will use it in the first 5 years? 0.5% maybe? Current gen features are getting used sparingly even now, so I have no hope for next gen features to be used much at the start.

Modders have implemented it into skyrim very quickly. I would assume MS could get it into starfield , fable , avowed , next gen elder scrolls and more pretty quickly. They have developed their own API for it. If a system launches in 2025 with amd ai cores and rdna 5 with more ai hardware in it they could have a bunch of first party games support.

Their goal is clearly to launch hardware that is much more powerful than the PS5pro, so this justifies your point. But it is inevitable that games are still the most important thing. They must keep their first-party games that define the Xbox brand exclusively on their own platform for at least one year.

Interestingly, The Coalition announced at the beginning of the year that the new game will be introduced this year, or so it was hinted at. Question, will they bring it to the Series consoles as well, or only to the next Xbox, thus encouraging customers to buy the new console?

I think for a new coalition game they need the hardware to drop in price. I think $500 for a 4 year old console is too much at this point in time. The series x needs to be $400 esp if the ps5 pro comes this fall at $500.

 

[Johnny Awesome]

I agree that it's almost impossible, but I don't think this generation proves it. There was nothing particularly compelling about XBS that'd be expected to pull PS players away from PS. Both consoles were well suited to provide an upgrade path, with arguably Sony having a better software reason for XB players to switch which is why they've won players from XB. Plus reigning market leader bonus.

Actually, there's no evidence Sony pulled many Xbox customers away and I don't know anyone who switched either way. Many Xbox One users haven't upgraded to a Series console yet. The digital ecosystem lock-ins are a real thing. There are slowly some new entrants (teens, for instance) that can be swayed and likely a very slow bleed to PC, but for the most part gamers are buying the same console they did last time.

 

[Nisaaru]

Many Xbox One users haven't upgraded to a Series console yet.

I doubt that.

 

[QPlayer]

Modders have implemented it into skyrim very quickly. I would assume MS could get it into starfield , fable , avowed , next gen elder scrolls and more pretty quickly. They have developed their own API for it. If a system launches in 2025 with amd ai cores and rdna 5 with more ai hardware in it they could have a bunch of first party games support.


I think for a new coalition game they need the hardware to drop in price. I think $500 for a 4 year old console is too much at this point in time. The series x needs to be $400 esp if the ps5 pro comes this fall at $500.

$500?? Nah... $700.