Xbox Business Update Podcast | Xbox Everywhere Direction Discussion

[Charlietus]

Xbox has made a gamble and it has not paid off. If gamepass kept growing to amazing levels everything would be fine, but stagnation in subscribers numbers has led to a problem that can't be resolved anymore: Xbox users buy less games than any other platform. The core users just use gamepass, so now they have to look to other platforms for growth. Cloud gaming not taking off and especially number of consoles sold are precipitating the situation.

Gamepass is profitable, they said so in court. But what about the users that don't buy as many games anymore thanks to gamepass, how does that fit in the equation?

 

[metacore]

What the hell happened? That's a 180 degree turn. Also Tameem Antoniades left Ninja Theory without explanation.

There is a huge difference between the messaging we were getting a few years back compared to the messaging we are getting now from MS.

Similary as Tameem Antoniades, Playground games leaders also left. It looks suspicious when leaders are leaving while from outside things are looking like their beloved should be releasing their best efforts. Similar motions happend before halo Infinity launch.

Also what is happening with the initiative, hyped like it was meant to rival naughty dog and Santa Monica and ... Ten Yeats later... Crystal dynamic to the rescue.

Im sure, Double fine release cadence os also questionable for Microsoft .


Feels like three will be more shocking revelations

 

[Shifty Geezer]

I think one notable problem with these large acquisitions of good indies is the payout to the execs gives them plenty of reason to retire. Just buying an indie with a sack load of money means a massive destabilising push; maybe a load of talent will be shaken loose? You need to wait a while to see if it remains stable. eg. Insomniac, Ted Price is still in control. He clearly loves the work and is happy to continue. But if he decided "that's enough" when Sony's suitcase of cash landed on his lap, he could have left and Sony might have been left with a shell of the studio they paid for.

It used to be that huge publishers offered stability. I feel that's no longer the case and we're better of with lots of independent studios landing publishing deals. For the established indies, they should be able to operate with crowdfunding and whatnot to sustain them in the event major publishers are chasing AAA only. And there's clearly need for smaller publishers to help smaller indies while the giants duke it out chasing the next Big Thing, so the little guys aren't trampled underfoot.

 

[rntongo]

Xbox has made a gamble and it has not paid off. If gamepass kept growing to amazing levels everything would be fine, but stagnation in subscribers numbers has led to a problem that can't be resolved anymore: Xbox users buy less games than any other platform. The core users just use gamepass, so now they have to look to other platforms for growth. Cloud gaming not taking off and especially number of consoles sold are precipitating the situation.

Gamepass is profitable, they said so in court. But what about the users that don't buy as many games anymore thanks to gamepass, how does that fit in the equation?

True. They took a gamble and executed well in some regards and poorly in core fundamental areas. The idea that Game Pass alone would drive growth is starting to look misguided. Sony on the other hand now has a good game subscription services as well as a pipeline of AAA titles that will bring in other sources of revenue. Add to that hw sales from a powerful cheap to make, easy to develop for PS5 pro and you can see just how many unforced errors Phil has brought onto himself and the brand. I suspect the next gamble is going to be an OEM strategy which will only drive consumers towards cheap single fixed systems.

Similary as Tameem Antoniades, Playground games leaders also left. It looks suspicious when leaders are leaving while from outside things are looking like their beloved should be releasing their best efforts. Similar motions happend before halo Infinity launch.

Also what is happening with the initiative, hyped like it was meant to rival naughty dog and Santa Monica and ... Ten Yeats later... Crystal dynamic to the rescue.

Im sure, Double fine release cadence os also questionable for Microsoft .


Feels like three will be more shocking revelations

Good observation. I think this is the most important thing for MS to fix, its studio output, quality and retention of important Studio heads who can actually deliver. Otherwise we could be in the early stages of MS becoming a third party developer and killing the Xbox brand.

 

[DavidGraham]

https://twitter.com/x/status/1787904016044773560

 

[Shifty Geezer]

Needs validating. eg. Comments say Dishonored was Arkane Lyon so shouldn't be crossed off.

 

[metacore]

I think this is the most important thing for MS to fix, its studio output, quality and retention of important Studio heads who can actually deliver. Otherwise we could be in the early stages of MS becoming a third party developer and killing the Xbox brand.

18months contractor policy certainly isn't helping them. Gamedev requires multiple years nowadays, how can you dream about building AAA masterpiece and multiple sequels remembered for ages or successful long running live service when a lo of the staff knows they are in temp gig? MBAs and nebulous power point talking aint gonna fix that.

 

[Cyan]

What the hell happened? That's a 180 degree turn. Also Tameem Antoniades left Ninja Theory without explanation.

There is a huge difference between the messaging we were getting a few years back compared to the messaging we are getting now from MS.

Hi-Fi Rush is the type of game to fill the catalog of gamepass. Shinji Mikami left Tango to create Kamuy a year ago, maybe he had a feeling this could happen. Hi-Fi Rush is the kind of game that gives personality and prestige to your games library, and it was meant for gamepass.

Gamepass numbers seem to be stagnant as pointed out from a fellow forumer in a different post.

That being said, MS lied about how happy they were with the numbers. It's said that the game sold very little 'cos it is a gamepass title, and the calculated sales on Steam range between 300000 to 700000..., so a failure in MS terms. Players numbers on Steam are so low, despite great reviews.

https://steamdb.info/app/1817230/info/

In addition, gamers can acknowledge quality but in this day and age a gem might not mean much. Lots of the Hi-Fi Rush players didn't even complete the first level.

50% of Hi-Fi Rush Xbox players haven't beat the first boss and are missing out on a gem

Hi-Fi Rush has received many nominations for The Game Awards, but according to the data, only 50% of Hi-Fi Rush Xbox players have completed the first mission.

www.trueachievements.com

 

[see colon]

People like to pile up on MS but why would they keep the developer who made redfall running ? The game is a failure at all levels.

Even Tango works with hi-fi rush , its a good game but we really don't know the state of their other games.

Then they are folding over devs into other existing teams.

Redfall wasn't just a commercial failure, it was an embarrassing launch that never truly got fixed. Sure, the performance was patched up, but the gameplay never reached the expected levels. And a year later, the promised DLC that some people paid for in the Bite Back Edition, wasn't ever shown, much less released. Communication out of Arkane Austin has been... Well it hasn't happened. I was one of the few who liked Redfall. I beat it twice, and clocked about 80 hours in it. So I have been following the situation with that game, waiting for the expansion and the new characters. But Austin did very few things publicly, and I assumed something like this was coming for them. I just don't think you can fail on a game launch in terms of technical issues and content, and then fail to release the content already promised for an entire year without any communication and not have consequences.

Hi-Fi Rush is an indie game in scope and price made by a studio with AAA bills, and they recently their founder, Shinji Mikami left. I don't believe Ghostwire Tokyo was a financial success, or especially critically acclaimed.

twitter is on fire

It always is.

What the hell happened? That's a 180 degree turn. Also Tameem Antoniades left Ninja Theory without explanation.

There is a huge difference between the messaging we were getting a few years back compared to the messaging we are getting now from MS.

The video game market, at least in the console space, is contracting. Xbox console sales have slowed considerably, Sony recently amended it's console sales projection down my 4 million units, and their margins have shrunk. Most analysis predicts that sales and player counts will contract next year, as well. Companies have been shrinking their staff and working to remove redundancy throughout the industry.

These cuts are a mix between what has happened (like Redfall) and what's predicted to happen (market contraction).

 

[Johnny Awesome]

I don't think MS was lying about being happy with HiFi Rush at the time, but maybe Tango had other problems. We don't know.

My guess is that if Tango and Arkane were fine they wouldn't have closed them. They knew the PR hit they would take and did it anyway.

 

[Shifty Geezer]

I don't think MS was lying about being happy with HiFi Rush at the time, but maybe Tango had other problems. We don't know.

My guess is that if Tango and Arkane were fine they wouldn't have closed them.

Disagree. The language is "they aren't big enough" and that's a common theme we're seeing with these publishers.

MS's email:

​

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.​

​

No-one seems to care about supporting studios in what should be an inherently risky business. If you're not making max bank, you're not good enough. In the past, 70% of games failed to make money but they were supported by the 30% that did. There was more inevitable risk taking as ideas were explored and punts taken on a game that may not pan out. Now the algorithms have distilled the business into a formulaic way to make the most money, and that's what all the publishers are doing.

 

[Cyan]

Similary as Tameem Antoniades, Playground games leaders also left. It looks suspicious

that doesn't bode well for Hellblade 2, they might be expecting the same fate for Hellblade developers.

https://twitter.com/x/status/1787977411449270600

https://twitter.com/x/status/1788298433922482319

 

[SmooTh]

Inside Microsoft’s Xbox turmoil

Xbox employees are bracing for what follows more layoffs.

www.theverge.com

I understand Hellblade II is another game that Microsoft has been considering for the PS5.

Xbox employees are now bracing for what's next, as it seems unlikely that we've seen the last of Microsoft's gaming layoffs and cutbacks. There are whispers among employees that core Xbox Game Studios are set for cutbacks next.

 

[Seanspeed]

Xbox has made a gamble and it has not paid off. If gamepass kept growing to amazing levels everything would be fine, but stagnation in subscribers numbers has led to a problem that can't be resolved anymore: Xbox users buy less games than any other platform. The core users just use gamepass, so now they have to look to other platforms for growth. Cloud gaming not taking off and especially number of consoles sold are precipitating the situation.

Gamepass is profitable, they said so in court. But what about the users that don't buy as many games anymore thanks to gamepass, how does that fit in the equation?

I think it'd be pretty easy to game the numbers to make Gamepass seem profitable, because you dont have the normal 'cost of development versus sales revenue' equation. I'd bet if we saw how they were reporting GP as profitable, it would not be including the cost of development.

 

[Seanspeed]

Inside Microsoft’s Xbox turmoil

Xbox employees are bracing for what follows more layoffs.

www.theverge.com

Ninja Theory employees are probably terrified right now.

People like to pile up on MS but why would they keep the developer who made redfall running ? The game is a failure at all levels.

Because it's a game they never really wanted to make in the first place, and because they've proven they can make amazing games before like Dishonored and Prey?

It's insane that a studio should be shut down cuz it has one miss. Xbox is gonna run out of studios pretty quickly if there's gonna be some 'one and done' style management.

 

[metacore]

that doesn't bode well for Hellblade 2, they might be expecting the same fate for Hellblade developers.

https://twitter.com/x/status/1787977411449270600

https://twitter.com/x/status/1788298433922482319

As somone on twitter said : it almost feels like its activision that bought xbox

 

[rntongo]

Ninja Theory employees are probably terrified right now.


Because it's a game they never really wanted to make in the first place, and because they've proven they can make amazing games before like Dishonored and Prey?

It's insane that a studio should be shut down cuz it has one miss. Xbox is gonna run out of studios pretty quickly if there's gonna be some 'one and done' style management.

This! After acquisition they should have had them do something they were good at and monitored it. Which is why MS gaming needs a new head who has a great eye for great titles and can ensure studios deliver. I think another thing is Xbox this gen launched without a single plan towards gaming titles besides acquisitions and back compat. The Series X launching without a single showcase title was a huge red flag in hindsight. Its all coming back to bite since they forgot the core things.

that doesn't bode well for Hellblade 2, they might be expecting the same fate for Hellblade developers.

https://twitter.com/x/status/1787977411449270600

https://twitter.com/x/status/1788298433922482319

Yeah everyone is wondering about the lack of marketing for HellBlade 2, seems they didnt allocate much to the title. Hopefully its enjoyable and they put it onto Playstation as well so the studio can earn more revenue. Seems most Xbox owners this gen just use gamepass. Ninja Theory being shut down would be a huge loss.

I think it'd be pretty easy to game the numbers to make Gamepass seem profitable, because you dont have the normal 'cost of development versus sales revenue' equation. I'd bet if we saw how they were reporting GP as profitable, it would not be including the cost of development.

This makes sense honestly. All this comes down to poor leadership from Phil and a lack of focusing on the delivery of system sellers/titles that bring people into the ecosystem. Its going to be even more bloody moving forward unfortunately. I heard there are plans to increase the price of game pass ultimate. If they do so I will stop my membership to be honest. It had enormous potential but the idea that every single title had to be day and date onto Game Pass may have not been economically sound. Especially with a lack of "ecosystem sellers".

 

[SmooTh]

https://twitter.com/x/status/1788356295667466320

 

[function]

Market driven products will always be subordinate to KPI driven decisions in mega corps that don't know what the market wants or how to interpret their fucked up KPIs.

KPIs don't reflect the world, they reflect the desires of the people that set them.

 

[DavidGraham]

Needs validating. eg. Comments say Dishonored was Arkane Lyon so shouldn't be crossed off.

https://twitter.com/x/status/1788303053122060683