Xbox Business Update Podcast | Xbox Everywhere Direction Discussion

[cheapchips]

The difference with a rolling generation console is that if MS's 'forward compatibility' works nicely, the developer could target only the 2026 model. Subsequent years automatically benefit from higher variable res / fps.

Working on a title for release in 2034? That minimum profile is the 2029 Xbox.

It's much cleaner than the PC's gazillion permutations (even if developers and consumers seem to cope with that reasonably well)

 

[rntongo]

So COD Black Ops 6 is coming direct to Game pass. This is great news, but I wonder how this will affect the anti competitive agreements they have with Sony which let the acquisition pass through. Its going to be quite interesting to see how all this plays out and how it affects the business side for such a popular title.

 

[Cyan]

Just because you got ripped off on your first PC doesn't validate what you're saying. The consoles are still amazing value and producing very good visuals for $400. Almost no one playing HB2 is disappointed in its visuals. Wait until GTA6, Gears 6, Fable, and whatever Naughty Dog are working on come out. People won't be complaining about X and PS5 power at that point. The problem is that it takes 5-6 years to make a AAA game now. If new consoles were super custom proprietary hardware that a ton of people around here are clamoring for, AAA games would take 8 years to make.

ripped off is relative, it's just that a single MB of memory did cost 30$ back then. A 16GB computer at the time would cost 500000$ nowadays. A Pentium 100 was 300$ which isn't that much taking into account it ran many games via software, even 3D games, decently enough, and could emulate SNES or Megadrive.

Except if you mean my preferred console this gen, the Xbox Series S, the other consoles cost a bit more than that.

Your love for Xbox makes you realise that it's not that the games are bad, which isn't a problem, nor it is where MS could make money ... The problem is that Xbox gives losses .... It is something that seems that this doesn't end up entering other people's heads.

Xbox (console), is HAVING LOSSES. And this includes games sales and royalties. They say there is more than 30 billion losses in the last 20 something years in the division.

The Microsoft Gaming Division is something else though, Minecraft is a gold mine, but 95% of the benefits are generated outside of the Xbox console. And now with Activision there is more income, but all of it outside of the Xbox platform ...

They say that thanks to third-party games they can generate a 30% extra revenue, but it doesn't matter, since it doesn't compensate even for the expense that the division has.

 

[Cyan]

Most games are made for 3 consoles (soon 4) and often an entire spectrum of PCs at the moment.

that's how it's always been with computers, a myriad configs, something that MS should avodi. From the times of MSX, that oem computer with a Microsoft OS which was huge success in Japan and also succeeded in Europe, computers that were meant for kids and had good games, or the Sharp XC-68000 -another japanese machine-, there has always been a plethora of software and stuff on those computers for which people created programs and games galore, and of course there is a lot of trash on those, but also many good games.

I guess the idea of Microsoft integrating Epic Store and a indie platform like itch.io is to have something similar, but maybe better made.

This is one of the best games of the MSX, Penguin Adventure. I can imagine how this game gave good 8bits and Nintendo 8bits vibes to anyone that had this game.

 

[eastmen]

We know the team are working on forward compatibility, without really knowing what that entails. For Xbox profile games, at a minimum, you could have OEMboxes staying at higher res in dynamic resolution games. It could also run at higher average fps in 120 VRR performance mode. That's all has a quite a 'Pro' appeal.

It also sets the stage for generation-less Xbox hardware. A 2/3 year revision has the same value as the more expensive OEM variants that proceeded it.

On top of that, OEM boxes could perform better in Windows / alt store mode.

Plenty of selling points from that without diluting Xbox mode with PC-like settings.

Yes but depending on what an oem xbox ships with there could be a lot of settings that need to be check on. Also if you have 5-10 different oem configurations coming out a year that adds up to a lot of work.

steam deck works because its a singular target they are trying to hit. They run their game on steam deck and thats it. No need to do anything else.

You can do a generation-less xbox much better if microsoft produced a single xbox every 2-3 years or two xboxs every 2-3 years than you can with multiple developers all putting out multiple versions of the console every year.

Which is not necessarily much work. Look at Chromebook, only a couple boards come out each year.

Also they could let the player choose, play the console version, or play the PC version with mods and settings on the same machine.

PS. also you could play online multiplayer games on the console mode without some shitty third party rootkit.

But what is a chromebook used for ? No one is testing software on chromebooks because the majority of their use is cloud programs or office suite programs.

We are talking about hundreds of even thousands of games that will need to be verified to work and at what settings and the new ones getting added all the time.

 

[RobertR1]

OEM’s will need to make profit on the hardware from day 1 which just makes them expensive consoles.

It’s a losing battle.

 

[Johnny Awesome]

Xbox (console), is HAVING LOSSES. And this includes games sales and royalties. They say there is more than 30 billion losses in the last 20 something years in the division.

Lol. Made up numbers.

Besides, that's like saying Sony lost 20 billion on hardware over 30 years to make 40 billion on software and royalties so they should get out of the hardware business. It's nonsense.

 

[cheapchips]

Yes but depending on what an oem xbox ships with there could be a lot of settings that need to be check on. Also if you have 5-10 different oem configurations coming out a year that adds up to a lot of work.

The only work is checking that the OEM device can run the '2026' Xbox game VM. Game developers never have to do anything but target that official VM. OEMs get to pimp better res/fps.

This is almost entirely the model for Steamdeck-a-likes. None of them that much of a performance benefit, but it's enough to make them premium. Plus bits like largers screens or smaller form factor.

 

[eastmen]

The only work is checking that the OEM device can run the '2026' Xbox game VM. Game developers never have to do anything but target that official VM. OEMs get to pimp better res/fps.

This is almost entirely the model for Steamdeck-a-likes. None of them that much of a performance benefit, but it's enough to make them premium. Plus bits like largers screens or smaller form factor.

You can run into issue with games that will have inconsistent fps / resolution because of that. Also depending on ram speed and amount you can run into other issues

 

[see colon]

So COD Black Ops 6 is coming direct to Game pass. This is great news, but I wonder how this will affect the anti competitive agreements they have with Sony which let the acquisition pass through. Its going to be quite interesting to see how all this plays out and how it affects the business side for such a popular title.

If the offered Sony a deal to put it on PSN+, then it isn't anti-competitive. The problem for Sony is, Microsoft has the smaller install base. The "cost", in terms of lost sales is much less than what it would be on Playstation. I don't think Sony would be willing to pay the cost to grow PSN+ like Microsoft is willing to. Plus, if it's on Gamepass, then it's on Geforce Now.

 

[rntongo]

If the offered Sony a deal to put it on PSN+, then it isn't anti-competitive. The problem for Sony is, Microsoft has the smaller install base. The "cost", in terms of lost sales is much less than what it would be on Playstation. I don't think Sony would be willing to pay the cost to grow PSN+ like Microsoft is willing to. Plus, if it's on Gamepass, then it's on Geforce Now.

I see, okay then the next question in all this is how is it going to make money? Campaign sales will go down if all someone has to do is pay a monthly subscription for either Gamepass or Playstation plus or Geforce Now. Will this be able to bring in as much or more revenue than before?

 

[see colon]

I see, okay then the next question in all this is how is it going to make money? Campaign sales will go down if all someone has to do is pay a monthly subscription for either Gamepass or Playstation plus or Geforce Now. Will this be able to bring in as much or more revenue than before?

A game like COD, or sports games that have yearly releases, are the perfect game for Gamepass. Sure, someone can just pay for a month and play the campaign. But COD is a multiplayer game, with near endless progression. People play COD all year long and then jump to the next one. If they hate it, they dip back to a favorite, like BLOPS2 or something. But if they are all on a subscription service, you can't dip back back if you aren't subscribed. $16.99 a month is a small amount at once, but it's $192 a year. That's 2.75x the base cost of a $70 game.

Again, I think a "fair market price" for the game to be on PS+ would have to recoup the losses from sales. I don't think Sony would pay that price to grow PS+. The relative cost to Microsoft is lower, because they have a smaller installed base. It's "cheaper" for them to put it on Gamepass than it is for Sony to do the same.

And Geforce Now has Gamepass integration, and links with Steam and GOG. You don't really get anything with a Geforce Now subscription except the service (which had a free tier last time I used it). The games have to be bought from a compatible storefront or subscription. If people are subbing to Gamepass and streaming via Geforce Now, or buying the game and streaming it, it doesn't really matter. It's still a sale or a sub, and that means money for Microsoft.

 

[rntongo]

A game like COD, or sports games that have yearly releases, are the perfect game for Gamepass. Sure, someone can just pay for a month and play the campaign. But COD is a multiplayer game, with near endless progression. People play COD all year long and then jump to the next one. If they hate it, they dip back to a favorite, like BLOPS2 or something. But if they are all on a subscription service, you can't dip back back if you aren't subscribed. $16.99 a month is a small amount at once, but it's $192 a year. That's 2.75x the base cost of a $70 game.

I agree with you but the subscription also includes other titles so I dont think its fair to compare the cost of a COD title to the yearly cost of a Gamepass sub since there are a lot of costs related to bringing in other titles besides COD. With that it doesnt entirely add up to me but we can wait and see. I'm sure MS has done tremendous work to do the math behind it. but...

Again, I think a "fair market price" for the game to be on PS+ would have to recoup the losses from sales. I don't think Sony would pay that price to grow PS+. The relative cost to Microsoft is lower, because they have a smaller installed base. It's "cheaper" for them to put it on Gamepass than it is for Sony to do the same.

And Geforce Now has Gamepass integration, and links with Steam and GOG. You don't really get anything with a Geforce Now subscription except the service (which had a free tier last time I used it). The games have to be bought from a compatible storefront or subscription. If people are subbing to Gamepass and streaming via Geforce Now, or buying the game and streaming it, it doesn't really matter. It's still a sale or a sub, and that means money for Microsoft.

..IIR part of allowing the acquisition to go through was to ensure the same exact game is made available to Sony. The cost of putting the game onto Gamepass isn't really there for MS but they have an obligation to ensure Sony gets the same title. I dont know how this will work out if they're compelled to provide the title to Playstation Plus. If they offer exact feature parity it could grow Playstation plus subs as well as Gamepass subs. So the question is will the two platforms see enough subscriber growth such that they're earning more than when people were buying $70 copies of the title?

 

[see colon]

The cost of putting the game onto Gamepass isn't really there for MS but they have an obligation to ensure Sony gets the same title. I dont know how this will work out if they're compelled to provide the title to Playstation Plus. If they offer exact feature parity it could grow Playstation plus subs as well as Gamepass subs. So the question is will the two platforms see enough subscriber growth such that they're earning more than when people were buying $70 copies of the title?

The cost for Microsoft is the revenue lost from the sale, plus whatever they have to pau Ubisoft to stream the games. They simply have to make a reasonable, good faith offer to Sony to do the same. But, again, a comparable offer for the lost revenue would be more costly for Sony, because they have a larger market share. Plus, Microsoft seams much more intent on growing Gamepass than Sony seams intent on growing PS+.

 

[rntongo]

The cost for Microsoft is the revenue lost from the sale, plus whatever they have to pau Ubisoft to stream the games. They simply have to make a reasonable, good faith offer to Sony to do the same. But, again, a comparable offer for the lost revenue would be more costly for Sony, because they have a larger market share. Plus, Microsoft seams much more intent on growing Gamepass than Sony seams intent on growing PS+.

Exactly, which is why I see this is murky water because Sony has more to lose from a loss of individual sales. And MS doesnt necessarily gain from Gamepass if they are compelled to provide the same product on PS+. Its very murky water and we're going to find out at the end of the year.

 

[Cyan]

Lol. Made up numbers.

Besides, that's like saying Sony lost 20 billion on hardware over 30 years to make 40 billion on software and royalties so they should get out of the hardware business. It's nonsense.

aside from the USA, in many countries Playstation is selling a 5:1 ratio (or more) than the Xbox. It's not that I want Xbox to disappear, only two mysteries remain, Phil Spencer said that they'd create the most powerful hardware ever and Sarah Bond talked about new hardware being released later this year. New OEM? New Xbox?

Xbox isn't driving subscriptions nor sales. OEMs ,where the traditional model couldn't work -3DO, now Xbox-, could drive gamepass subscriptions immensely. Let them have Steam and so on in a good oem machine, and many people will end up subscribing to gamepass in less than 5 days.

This is traditionally a two players market, and nowadays this means Sony and Nintendo.

 

[see colon]

Exactly, which is why I see this is murky water because Sony has more to lose from a loss of individual sales. And MS doesnt necessarily gain from Gamepass if they are compelled to provide the same product on PS+. Its very murky water and we're going to find out at the end of the year.

Kind of. Sony would only get 30% from each copy sold, so they could only lose 30% of the sale price. Microsoft would be on the hook for the other 70%. I'm sure Microsoft's lawyers have looked at this Gamepass move, and I'm sure that they will have offered Sony a "fair offer", and I'm sure Sony is less motivated to take that offer. Sony would also have to negotiate the streaming rights from Ubisoft.

I'll say this again, the dumbest part of the whole deal was the concession from was the streaming rights. Ubisoft payed Microsoft for these rights, and Microsoft pays Ubisoft some of that money back to get the rights back. I cannot think of any way Microsoft didn't make money from this deal.

 

[MfA]

We are talking about hundreds of even thousands of games that will need to be verified to work and at what settings and the new ones getting added all the time.

Games with years of development, already targeting 3 (soon 4) consoles to begin with and often PCs.

You already can't afford to program in a fragile way on a multiplatform title.

 

[Johnny Awesome]

Xbox isn't driving subscriptions nor sales. OEMs ,where the traditional model couldn't work -3DO, now Xbox-, could drive gamepass subscriptions immensely. Let them have Steam and so on in a good oem machine, and many people will end up subscribing to gamepass in less than 5 days.

Of course it is. Xbox is the REASON for GP being at 30 million subs. Killing Xbox would kill GP. The problem with GP adoption for MS so far as I see it:

1) PC adoption is too low. Xbox GP is likely 20+ million of the 30 million subs. PC should be at least 10 million higher by now (ie. 40 million total subs).
2) The desire to have GP is strong among the existing Xbox fan base, but not strong enough to drive hardware sales to people who aren't already in the Xbox ecosystem.

The solution to both of these problems is: More AAA content. I believe that Starfield's release began a stream of AA+ content (8/10 stuff) that is evolving into AAA content.

Starfield and Forza Motorsport were a good start, followed by Diablo IV, Hellblade 2, FS2024, Ara, Towerborne, Avowed, Indiana Jones, CoD Black Ops, and Starfield Shattered Space. That's a stellar 1st party lineup this year. If GP continues to have years like this then MS just might get subscriber growth going again.

Btw, people talk about "black hole" games like CoD, but I know some GP users where GP IS the black hole. They couldn't even imagine going back to buying individual releases. MS needs to hook more subscribers like that.

 

[iroboto]

Of course it is. Xbox is the REASON for GP being at 30 million subs. Killing Xbox would kill GP. The problem with GP adoption for MS so far as I see it:

1) PC adoption is too low. Xbox GP is likely 20+ million of the 30 million subs. PC should be at least 10 million higher by now (ie. 40 million total subs).
2) The desire to have GP is strong among the existing Xbox fan base, but not strong enough to drive hardware sales to people who aren't already in the Xbox ecosystem.

The solution to both of these problems is: More AAA content. I believe that Starfield's release began a stream of AA+ content (8/10 stuff) that is evolving into AAA content.

Starfield and Forza Motorsport were a good start, followed by Diablo IV, Hellblade 2, FS2024, Ara, Towerborne, Avowed, Indiana Jones, CoD Black Ops, and Starfield Shattered Space. That's a stellar 1st party lineup this year. If GP continues to have years like this then MS just might get subscriber growth going again.

I'm in the mindset that the solution to both these problems is to provide decent perks for these live service titles on gamepass. Then you'll see more people buying in because it hits what they spend the most time on, and they get the added benefit of trying these other titles.

If the perks are good enough, people will sign up on their own. Making more AAA content isn't necessarily going to drive tons more adoption, it will help, but only so much.