Xbox Business Update Podcast | Xbox Everywhere Direction Discussion

[AmFreak]

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.

This isn't true. PS5 was only ahead for like the first half year after that they were behind till today. The gap kept widening due to the sc shortages and then was beginning to close when enough supply were available beginning last year. They shipped 22.7m units in 2023, that's their 2nd best calendar year of all time only behind a PS2 one, better than any PS4 year.

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.

XS sales fell dramatically beginning last year when the PS5 supply > demand.

 

[Cyan]

I don't get what the point of an OEM Xbox would be, without subsidizing it via the store (which wouldn't really be doable with an OEM system unless they all had their own stores, defeating the purpose of the brand entirely) the box would be too expensive.

I also don't see why Xbox losing the generation has to mean they change up their entire strategy, my take is things will continue business as usual since Microsoft obviously isn't in any financial trouble and the Xbox division has gone on a spending spree lately. Just because PS is more popular doesn't mean Xbox is a failed project.

maybe they won't leave the console market, but an OEM hybrid machine where they provide the software could help them, DirectX and Windows. They made the same with the MSX (japanese computer with a Microsoft's OS).

A list of arcade machines from the 2000s and so on like the Sega Lindbergh, Taito Type X1, Taito Type X2, Nessica X Live, Sega RingEdge, Sega RingWide 1 and Sega RingWide 2, etc, are just PCs, many of them running Windows embedded. Did people notice they were using a PC when playing them? Obviously not.

 

[Cyan]

https://twitter.com/x/status/1787847169518498199

They were talking marvels about Tango and then....

https://twitter.com/x/status/1649431572137779203

 

[Johnny Awesome]

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?


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.

I get what you meant. I'm not confused. I just don't agree that Xbox One users switched to PS5s. I know about 100 console gamers and not one of them switched teams this gen. Smallish sample size, but I believe it's true We'll just agree to disagree. Sony's sales are decreasing now as well. The console market appears to be shrinking across the board right now.

 

[Nesh]

I get what you meant. I'm not confused. I just don't agree that Xbox One users switched to PS5s. I know about 100 console gamers and not one of them switched teams this gen. Smallish sample size, but I believe it's true We'll just agree to disagree. Sony's sales are decreasing now as well. The console market appears to be shrinking across the board right now.

I know people who used to be XBOX die hards and switched to PS.

Series sales have diminished extremely and below One for a reason, even though they have cheap and premium price points available, and it is not because they gave up on gaming. They are gaming somewhere else.

Same can be said for One which ended up with less units sold worldwide than the 360. People switch either to PS or Switch.

 

[Seanspeed]

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

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.

The industry is not f'ed for any reason other than the ridiculous way it's being run.

Microsoft literally just spent $75,000,000,000(that's $1 billion, 75 times, or well more than France's military budget to put it into perspective) to buy up Activision/Blizzard. To act like they didn't have money to keep these studios is asinine in light of this.

And again, 1st party studios shouldn't need to all be producing big money makers every time, nor should they be at risk of shuttering just cuz of one miss/disappointment when said studios have a history of making great games. It doesn't need to work like that. This is how you run an industry poorly and without any kind of grounded, long-term vision.

But you are right, this is going to be seen as a massive threat to everybody else under Xbox Studios banner right now. Just hate this for everybody involved.

Phil is completely guilty here, by the way. Phil has been the man in charge for a long time(and was head of Xbox Studios even before that). He's a huge reason Xbox has been run so terribly, and it's insanely naive to think he wouldn't have been one of the ones leading the way for something like the Activision/Blizzard acquisition. That's not something you just run over your whole division head like that.

 

[Johnny Awesome]

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.

Your confusing correlation with causation.

 

[Seanspeed]

https://twitter.com/x/status/1787847169518498199

They're just scummy corporate liars. Nothing more than that.

They could have easily kept these studios, while hiring for the ones that might have needed more heads. That said, every studio they have should be pretty well employed by now, minus the regular turnover any place has.

And focusing more on fewer, bigger titles is one of the dumbest things they can do, as it means each of those games becomes ever more riskier a release, not to mention it completely goes against their whole strategy with Gamepass and the goal to release one big Xbox 1st party title every quarter.

Lack of people at any of their studios has not been any sort of cause of issues. They're just straight up lying to everybody.

 

[QPlayer]

The industry is not f'ed for any reason other than the ridiculous way it's being run.

Microsoft literally just spent $75,000,000,000(that's $1 billion, 75 times, or well more than France's military budget to put it into perspective) to buy up Activision/Blizzard. To act like they didn't have money to keep these studios is asinine in light of this.

And again, 1st party studios shouldn't need to all be producing big money makers every time, nor should they be at risk of shuttering just cuz of one miss/disappointment when said studios have a history of making great games. It doesn't need to work like that. This is how you run an industry poorly and without any kind of grounded, long-term vision.

But you are right, this is going to be seen as a massive threat to everybody else under Xbox Studios banner right now. Just hate this for everybody involved.

Phil is completely guilty here, by the way. Phil has been the man in charge for a long time(and was head of Xbox Studios even before that). He's a huge reason Xbox has been run so terribly, and it's insanely naive to think he wouldn't have been one of the ones leading the way for something like the Activision/Blizzard acquisition. That's not something you just run over your whole division head like that.

I understand, so looking at the trend of the last year, all major game publishers are downsizing and laying off their teams, but MS, on the other hand, should keep its unprofitable teams. This is it! oh wait...

Xbox posted record revenue in its latest business report, so I think Spencer, "who is responsible for that," got a lot of credit for his leadership part.

The Xbox division continues to march forward, nothing else has happened but unprofitable teams are being pushed out like all other game publishers are doing these days. Not everyone likes it, but it's a tough business.

 

[Cappuccino]

maybe they won't leave the console market, but an OEM hybrid machine where they provide the software could help them, DirectX and Windows. They made the same with the MSX (japanese computer with a Microsoft's OS).

A list of arcade machines from the 2000s and so on like the Sega Lindbergh, Taito Type X1, Taito Type X2, Nessica X Live, Sega RingEdge, Sega RingWide 1 and Sega RingWide 2, etc, are just PCs, many of them running Windows embedded. Did people notice they were using a PC when playing them? Obviously not.

I don’t think DirectX and Windows really need help, PC gaming has won that war already (partially due to the DirectXbox). So if MS was going to continue in the console space they’d do it to create a successful console, not to boost Windows and DX marketshare.

 

[Cyan]

They're just scummy corporate liars. Nothing more than that.

They could have easily kept these studios, while hiring for the ones that might have needed more heads. That said, every studio they have should be pretty well employed by now, minus the regular turnover any place has.

And focusing more on fewer, bigger titles is one of the dumbest things they can do, as it means each of those games becomes ever more riskier a release, not to mention it completely goes against their whole strategy with Gamepass and the goal to release one big Xbox 1st party title every quarter.

Lack of people at any of their studios has not been any sort of cause of issues. They're just straight up lying to everybody.

uncle Phi does a lot of sweet talk but Xbox is kinda screwed. And now some employees. As a MS fan -specially the pc side of ms- it bothers me, because Tango made a great game, and The Evil Within is well regarded.

I imagine they will publish some of those games under the Bethesda brand but Tango deserved better.

What has Phil done in recent years other than trying to copy Sony's policies? To have a chance against Sony, it is not enough to copy Sony's strategies or modus operandi, you have to do something interesting. They left the Xbox in a difficult situation and I understand it was an uphill battle for him, but what he did was trying to maintain the prestige of Xbox which is tough, but money isn't an issue for MS and they could do something different, and he did what Sony was doing, which would be okay in the X360 days but giving Sony some true competition really needs more than that.

 

[Johnny Awesome]

I know people who used to be XBOX die hards and switched to PS.

When did they switch? What year?

 

[Cyan]

I don’t think DirectX and Windows really need help, PC gaming has won that war already (partially due to the DirectXbox). So if MS was going to continue in the console space they’d do it to create a successful console, not to boost Windows and DX marketshare.

of course it is successful but MS rival isn't Sony nor Nintendo but Valve and the Steam Deck, imho. Xbox is a relatively profitable business but not a primary business for MS.

 

[Seanspeed]

I understand, so looking at the trend of the last year, all major game publishers are downsizing and laying off their teams, but MS, on the other hand, should keep its unprofitable teams. This is it! oh wait...

Xbox posted record revenue in its latest business report, so I think Spencer, "who is responsible for that," got a lot of credit for his leadership part.

The Xbox division continues to march forward, nothing else has happened but unprofitable teams are being pushed out like all other game publishers are doing these days. Not everyone likes it, but it's a tough business.

I've already talked about all this. So much of the layoffs have been happening due to ridiculous expectations. Covid boomed gaming demand significantly, and then once normality resumed, publishers handled it terribly, unwilling to give up the huge boosts in revenue, and so started cost cutting to make up for it. It's such a ridiculous, but typical greedy way to run a business. Reactionary, short-term thinking, worried more about shareholders than sustainability.

And "Well others did it too!" is hardly some rebuttal to anything I said at all. I'm quite well disillusioned with the entire gaming industry at the moment, and Microsoft had every opportunity to not be the same. They dont get any pass at all. Especially when they are literally the most valuable public company in the world and recently demonstrated their willingness to spend money on the Xbox division.

Stop licking the boots of megacorps people. I understand contrarianism and this desire to give benefit of the doubt, but none of these companies have earned any such thing.

This isn't true. PS5 was only ahead for like the first half year after that they were behind till today. The gap kept widening due to the sc shortages and then was beginning to close when enough supply were available beginning last year. They shipped 22.7m units in 2023, that's their 2nd best calendar year of all time only behind a PS2 one, better than any PS4 year.


XS sales fell dramatically beginning last year when the PS5 supply > demand.

I've explained how much people have misunderstood the 'chip shortages' thing so many times, I'm really loathe to do it again. I'll just simplify it and emphasize that the main problem for bigger companies was demand, not some situation where manufacturing lines were sitting empty or anything. Fabs were working 100%, and the ones who really suffered from shortages were smaller companies. Consoles are something where you need to get your orders in way ahead of time. They were being taken care of, even if they didn't have the ability to expand production much, though that's also risky in and of itself since if demand lowers in the future, you're now left with overcapacity.

 

[QPlayer]

There are many big-name games in development that will be released within a year, which will be presented at the Xbox Showcase in a month. Then everyone will calm down when they see these games.

Like I said, it's a business, but I can understand those who were affected by the closure of these studios for some games.

 

[AmFreak]

Your confusing correlation with causation.

1-2 weeks ago i was walking in a park, and man the park was crammed, i also bought ice cream and there was a big queue outside of the shop. If you asked me, it had something to do with the unusual sunny and hot weather for that time of the year ... alas, if you only had been there too.
I asked you to provide an explanation what happened instead, it's right their in your quote.
What i got back instead was an 08/15 keyboard warrior emergency quote and "wrong, because that's not happening in my bubble".
But whatever it's obvious you have made your bed and are ready to die in it, while not even able to get simple facts straight - as i have said a few posts above your 1st reply 2023 was the 2nd best selling calendar year PS hardware ever saw, above every PS4 year, so it's not true that Sony's sales are also decreasing now.

 

[Johnny Awesome]

1-2 weeks ago i was walking in a park, and man the park was crammed, i also bought ice cream and there was a big queue outside of the shop. If you asked me, it had something to do with the unusual sunny and hot weather for that time of the year ... alas, if you only had been there too.
I asked you to provide an explanation what happened instead, it's right their in your quote.
What i got back instead was an 08/15 keyboard warrior emergency quote and "wrong, because that's not happening in my bubble".
But whatever it's obvious you have made your bed and are ready to die in it, while not even able to get simple facts straight - as i have said a few posts above your 1st reply 2023 was the 2nd best selling calendar year PS hardware ever saw, above every PS4 year, so it's not true that Sony's sales are also decreasing now.

I think you just can't accept that I have a different view of things. Agreeing to disagree seems to be something you have a problem with. I'll move on.

 

[eastmen]

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.

Not sure why you think a future kinect would cost $100-$150. That was the price of kinect in 2013 we are in 2024.

Also why would it need to be included in the price . I could just be an optional add on

 

[eastmen]

uncle Phi does a lot of sweet talk but Xbox is kinda screwed. And now some employees. As a MS fan -specially the pc side of ms- it bothers me, because Tango made a great game, and The Evil Within is well regarded.

I imagine they will publish some of those games under the Bethesda brand but Tango deserved better.

What has Phil done in recent years other than trying to copy Sony's policies? To have a chance against Sony, it is not enough to copy Sony's strategies or modus operandi, you have to do something interesting. They left the Xbox in a difficult situation and I understand it was an uphill battle for him, but what he did was trying to maintain the prestige of Xbox which is tough, but money isn't an issue for MS and they could do something different, and he did what Sony was doing, which would be okay in the X360 days but giving Sony some true competition really needs more than that.

We can't see what else tango was working on and if anything was going right. Hi-fi rush was great but perhaps the next game was a cluster and there was no righting it.

 

[Nesh]

When did they switch? What year?

Some last gen some this gen and those that own a Series now are pissed off at MS