Xbox Business Update Podcast | Xbox Everywhere Direction Discussion

[Shifty Geezer]

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.

Possibly. Dunno how we could show that. Would be present in MAU's not decreasing but IIRC MS no longer shares that metric for consoles. Indeed, they don't separate consoles from PC at all save hardware, right?

While PS5 sales went through the roof after supply outstripped demand XBox sales fell completely apart. This is as much evidence as you can get.

You'd need to compare with total console sales of previous generations. It could be that less people are buying a console, so lots of PS upgraders but XB owners not buying Series. You might not have switching. However, in that scenario you have to question the health of the XB platform. Are all those XBO owners still active and buying software like they used to? Probably can't see that info in the financials either.

 

[cheapchips]

Oh I don't know, kinect could be used for a lot of great things like head tracing and face over ip.

Neither is really worth $100-$150 mandated ticket price on MS's next console is it?

Although having said that, doesn't the mini version in Hololens have BOM of around $30?

That's still a lot to force onto a consoles BOM for limited excitement.

 

[AmFreak]

Hardly. Higher PS5 sales and lower Xbox sales do not necessarily mean that people are switching. I don't know anyone who switched and don't think it's happening much. We can agree to disagree.

It's not about people buying an XBox Series and then throwing it away to replace it with a PS5. It's about people who would have bought an XBox in earlier generations, but this gen instead are buying a PS5. People that come from the XBox One. XBox sales tanked with PS5 supply outstripping demand, XBox day to day sales are now far worse they were last gen or the gen before that, while PS5 day to day sales are ~PS4 in the same year. So where did all the XBox buyers suddenly go? Did they all evaporate coincidentally at the same time Sony could finally ship enough supply?

You'd need to compare with total console sales of previous generations. It could be that less people are buying a console, so lots of PS upgraders but XB owners not buying Series. You might not have switching. However, in that scenario you have to question the health of the XB platform. Are all those XBO owners still active and buying software like they used to? Probably can't see that info in the financials either.

Less people are buying consoles, but that doesn't mean Xbox One owners aren't switching to PS5 s. above. Xbox is practically walking dead in continental Europe with PS5:XS day to day sale ratios of >10:1 in some countries now. And even in their prime market the US where their day to day sales last gen and this gen before Sony could deliver enough PS5 supply weren't that far from parity we now regularly see ratios of 2:1.

 

[Shifty Geezer]

Less people are buying consoles, but that doesn't mean Xbox One owners aren't switching to PS5 s. above.

But it doesn't mean they are either. It could be a case that PS owners are buying PS5, and XB owners have given up console gaming. Or switched to Switch or PC. Or are happy to play on XBO still. For evidence, we'd need numbers. We might be able to get current console userbase and compare that to other points in history to see how this generation is faring. An obvious proof XB owners are switching is if PS5 sales at this point matches XB360 sales at their 3 year marks. But PS5 sales are down, and we don't know what XB sales even are, there's no direct correlation showing XB users are migrating. That migration clearly happened last gen.

 

[Seanspeed]

XBox sales tanked with PS5 supply outstripping demand

To be clear, when PS5 was actually supply-limited, Xbox's were still selling well enough. Their sales didn't fall until more recently when supply normalized for most everything, but that's actually the misleading thing - supply got better largely cuz all the frenzied Covid demand went away in general. Hence why PS5 is also going from selling similar to PS4 to dropping behind in pace. They still have generally higher demand via momentum no doubt, but I think it's misleading to paint it like Xbox sales had already fallen so much while PS5 was still selling gangbusters. There was a coinciding lowering of demand for both, it's just Xbox is getting hit harder cuz it had no real momentum to speak of.

Which kind of makes it all the more tragic, cuz Covid helped prop up Xbox sales even though they really had fairly little to offer. That was a very fortunate grace period they were granted to get their stuff in order so they could actually come away from that in a good spot without much damage taken, but they just haven't.

 

[DavidGraham]

Microsoft shuts down 4 Besethda studios.

https://twitter.com/x/status/1787835954373230806

 

[Seanspeed]

https://twitter.com/x/status/1787835350745842153

Scumbags. They spent all that money on Activision/Blizzard and are now closing two of the better and more unique studios they have in order to tighten the pursestrings.

F*** Microsoft for this. It's EXACTLY what I warned up when Microsoft started buying up all these great studios, especially all of Bethesda publishing. They deserve all the failure that will inevitably come, and we're gonna be in for a shock in the next 5-10 years as more and more people will lose their jobs in order to pay for Call of Duty, and Microsoft's output gets worse.

 

[Seanspeed]

Full garbage PR statement from MS/Xbox:

Today I’m sharing changes we are making to our Bethesda and ZeniMax teams. These changes are grounded in prioritizing high-impact titles and further investing in Bethesda’s portfolio of blockbuster games and beloved worlds which you have nurtured over many decades.

To double down on these franchises and invest to build new ones requires us to look across the business to identify the opportunities that are best positioned for success. This reprioritization of titles and resources means a few teams will be realigned to others and that some of our colleagues will be leaving us.

Here are the changes going into effect:

Arkane Austin – This studio will close with some members of the team joining other studios to work on projects across Bethesda. Arkane Austin has a history of making impactful and innovative games and it is a pedigree that everyone should be proud of. Redfall’s previous update will be its last as we end all development on the game. The game and its servers will remain online for players to enjoy and we will provide make-good offers to players who purchased the Hero DLC.

Alpha Dog Studios – This studio will also close. We appreciate the team’s creativity in bringing Doom to new players. Mighty Doom will be sunset on August 7 and we will be turning off the ability for players to make any purchases in the game.

Tango Gameworks – Tango Gameworks will also close. We are thankful for their contributions to Bethesda and players around the world. Hi-Fi Rush will continue to be available to players on the platforms it is today.

Roundhouse Games – The team at Roundhouse Games will be joining ZeniMax Online Studios (ZOS). Roundhouse has played a key role in many of our recent game launches and bringing them into ZOS to work on The Elder Scrolls Online will mean we can do even more to grow the world that millions of players call home.

With this consolidation of our Bethesda studio teams, so that we can invest more deeply in our portfolio of games and new IP, a small number of roles across select Bethesda publishing and corporate teams will also be eliminated.

Those whose roles will be impacted will be notified today, and we ask that you please treat your departing colleagues with respect and compassion. We will provide our full support to those who are impacted in today’s notifications and through their transitions, including severance benefits informed by local laws.

These changes are not a reflection of the creativity and skill of the talented individuals at these teams or the risks they took to try new things. I acknowledge that these changes are also disruptive to the various support teams across ZeniMax and Bethesda that bring our games to market. We are making these tough decisions to create capacity to increase investment in other parts of our portfolio and focus on our priority games.

Bethesda remains one of the key pillars of Xbox with a strong portfolio of amazing games and thriving communities. As we look to the future, there is an impressive line-up of games on the horizon. In 2024 alone we have Starfield Shattered Space, Fallout 76 Skyline Valley, Indiana Jones and The Great Circle, and The Elder Scrolls Online’s Golden Road. As we align our plans and resources to best set ourselves up for success in this complex and changing industry, our teams across Arkane Lyon, Bethesda Game Studios, id Software, MachineGames, ZeniMax Online Studios and the Bethesda publishing and corporate teams will be well-positioned to build new IP, explore new game concepts, and expand on our existing franchises.

Cannot express enough how peeved I am that they closed Arkane Austin in particular, though I was a fan of Tango, too.

 

[QPlayer]

Ok, next podcast is coming

 

[Shifty Geezer]

It's not just MS. It's a fundamental problem with these megapublishers. There was one recently, Roll7 closed by Take Two. It never made a bad game and could have operated just fine making a living for 50 or so folk while providing the world with great games, but that's not good enough for TT.

I think the law needs safeguards that where a self-contained studio can operate as an independent organisation (obviously those bought by pubs), when the parent company wants to close them, the employees should be allowed to just respawn into the independent organisation to preserve their jobs. All those studios should be able to say "Screw you" and go back to being independent. Otherwise we have the metaphorical equivalent of huge dogs eating up smaller dogs and shitting them out the back. That's not good for anyone.

 

[babybumb]

Game pass was supposed to support niche titles.. All bets are off now. MS management is claerly taking a dim view on loss leading.

 

[Shifty Geezer]

I can't tell if the employees are being absorbed into Bethesda to work on the major IPs or if they are just being let go.

 

[Shortbread]

With the ever-growing / beyond skyrocketing cost of developing a game, one bad game can mean disaster for even veteran development houses with prior great IPs.

 

[AmFreak]

But it doesn't mean they are either. It could be a case that PS owners are buying PS5, and XB owners have given up console gaming. Or switched to Switch or PC. Or are happy to play on XBO still. For evidence, we'd need numbers.

Xbox sales tanked the moment Sony could deliver enough PS5 supply, meaning people that would have bought an XBox before where now buying a PS5 instead. If you don't think that's true, explain why Xbox sales tanked in parallel with the PS5 supply increase.
You act like i argued every single Xbox One owner not buying an XS switched to PS. Ofc some will have abandoned gaming, some will have switched to PC or Switch, but these people didn't wait for a PS5 supply increase to do that and it's also not the most likely path for these people, that's the one you didn't mention in your listing.

And yes this isn't 100% evidence, but it's, as i said in my first post, as close as you can get. The numbers you want don't exist, Ms doesn't know when someone buys a PS and Sony doesn't know that someone was on XBox before. The only thing you could get would be some estimates or a survey, but this isn't 100% evidence either.
What Sony revealed a year ago was that 30% of PS5 owners never owned a PS4, this is another strong indicator of Xbox users switching even before the supply was solved, but ofc no 100% evidence, because they all could have come from non gaming, PC or Switch instead ...

We might be able to get current console userbase and compare that to other points in history to see how this generation is faring. An obvious proof XB owners are switching is if PS5 sales at this point matches XB360 sales at their 3 year marks.

PS5 ww is far ahead of the 360 at this point in time, by ltd and ytd.

But PS5 sales are down, and we don't know what XB sales even are, there's no direct correlation showing XB users are migrating. That migration clearly happened last gen.

Down from what? If they reach their (somewhat doubtful) corrected forecast they are at PS4 level. Year to Year they have increased massively.
And that we don't know what Xbox sales are is wrong, we don't have the same picture as PS5 or Switch, because of no data from Ms, but the picture is clear with the tidbits we get.

 

[Seanspeed]

Game pass was supposed to support niche titles.. All bets are off now. MS management is claerly taking a dim view on loss leading.

Xbox was also literally just talking about how they wanted to invest in Japan. Phil is a massive joke of a corporate huckster and always was. Smarmy fake 'I'm a gamer like you" weasel. How he still has his job is beyond me. He's completely incompetent.

 

[Seanspeed]

With the ever-growing / beyond skyrocketing cost of developing a game, one bad game can mean disaster for even veteran development houses with prior great IPs.

For 3rd party publishers, sure. But being 1st party used to mean at least some decent protection from that, because you didn't have to justify your existence purely on sales. Just helping fill out a nice library of 1st party exclusives helped sell consoles.

Of course, that goes away if you stop making your games exclusive to your console....

 

[Scott_Arm]

The games industry is absolutely f'ed. The economics don't work. No idea why anyone would accept employment from any of these big publishers. I think it'd be better to go down with the ship making something at an indie studio. At least in that case your employment is tied directly to the success of your game instead of being torpedoed by your overloads after releasing a successful/well loved game. The unfortunate thing is a game like Alan Wake 2 can be a money loser.

 

[MCharta]

They had benefit of the doubt and they do that...
Now i expect a slaughter in 2/3 years at activision/blizzard

 

[Scott_Arm]

They had benefit of the doubt and they do that...
Now i expect a slaughter in 2/3 years at activision/blizzard

Unfortunately the console market growth has dried up, and Microsoft's piece of that market has basically frozen in time. The original purchase of Activision started during an expectation of massive industry growth. Now that billions of dollar deal doesn't work for them, and they're just going to slash and burn good people. They needed a large number of studios to add diversity to their game library, and now they're cutting the diversity. Red Fall was a horrendous game. That closure is potentially a good choice. It's likely that the staff at that place basically hates working there, and a lot of the people who made previous successful games like Prey may not even be there anymore. It could be a place that couldn't be fixed. The Tango closure doesn't make any sense. The whole point of having studios like that was to add games like Hi-Fi Rush, and to cut it after one game, whatever the financial situation, doesn't make any sense.

 

[QPlayer]

Xbox was also literally just talking about how they wanted to invest in Japan. Phil is a massive joke of a corporate huckster and always was. Smarmy fake 'I'm a gamer like you" weasel. How he still has his job is beyond me. He's completely incompetent.

This is not Spencer, but MS.

They probably drew a line below which a game cannot go in terms of the number of copies sold