Xbox Business Update Podcast | Xbox Everywhere Direction Discussion

[Seanspeed]

Microsoft will always need hardware. Even if Xbox's console install base is small, they are banking on growing the market via cloud, and those cloud servers are Xbox hardware, for better or worse. If they are going to offer a console experience via the cloud, then the cloud will be made up of the console.

Microsoft also has a history of success releasing it's software on rival platforms, from Office on Mac, Arrow Launcher on Android, Monster Truck Madness on GBA, and Age of Empires on DS, to the more recent examples like them publishing Ori on Switch. It's worked out for them in the past, why wouldn't they want to keep doing it?

I mean, there's no strict need to have 'Xbox hardware' to do cloud gaming. You can do cloud gaming with PC systems. I think like every single 1st party release from them since 2016 has had a PC version, along with a bunch of titles before that as well. It would be a break of continuity for users, and it might mean losing older backwards compatible stuff, but it's all doable without any specific Xbox hardware. Heck, they could even just keep the existing Xbox cloud infrastructure, while also having PC hardware for any future generation games. There's no strict need for all the hardware for Xcloud to be homogenous.

And if Xbox's big gambit for the future really is cloud gaming, well....that doesn't really change the end conclusion too much here - that's still a recipe for disaster.

As for putting their games on other non-Microsoft platforms, it's not really something they have much history doing before recently, outside very select titles. The reason they shouldn't do this is because it clearly makes buying an Xbox, already in a losing position in the market, even less appealing. Exclusives have always been a seriously major factor in what console gamers choose to buy. If I can buy a console that both has its own unique exclusives and all the Xbox games, why on earth would I buy an Xbox? I'd just be limiting myself. I know we're not quite there yet, but it seems like that's the direction things are heading.

Thing is - it takes a huge amount of effort(and thus money) to put together and maintain a dedicated, new generation hardware platform. If they're not really getting any kind of healthy returns from it, and keep going with the 'we dont care how many we sell' mindset as sales keep cratering, then is it really financially responsible to keep spending all this money on that side of things? How does it make sense? It's been said plenty up til now, but Xbox is not going to succeed without some sort of clear direction. And consumers are absolutely picking up on this confusing, murky, directionless situation with Xbox right now. It does not inspire confidence. Not that I think giving up on dedicated console hardware is the answer personally, but it would at least give them some focus and help them run a lot leaner.

 

[see colon]

You're right actually!! For as long as the Xbox has existed there's been a diversionary goal. Today its a focus on play anywhere through cloud, streaming, multiplatform, even if the core gaming experience is left behind. Only exceptions were with the OG Xbox where Seamus Blackely and Ed Fries shielded the division and large parts of the Xbox 360 where the diversionary goals werent allowed to set the agenda.

But OG Xbox only existed because Microsoft saw the future of living room computing. They've never been focusing on the present, but the future, except for their naming schemes which seam to have no regard for the future.

I mean, there's no strict need to have 'Xbox hardware' to do cloud gaming. You can do cloud gaming with PC systems. I think like every single 1st party release from them since 2016 has had a PC version, along with a bunch of titles before that as well. It would be a break of continuity for users, and it might mean losing older backwards compatible stuff, but it's all doable without any specific Xbox hardware. Heck, they could even just keep the existing Xbox cloud infrastructure, while also having PC hardware for any future generation games. There's no strict need for all the hardware for Xcloud to be homogenous.

Any hardware used for Xbox streaming will be "Xbox hardware" by definition, even if it's derived from PC. Microsoft's play is for content and control of access* to that content, and that is achieved for them by owning the pillars of access. The IP, even if they publish or license it for use on other platforms, is theirs to control. And their hardware and it's OS, be it located in the users house or the cloud, is an important part of that. They don't want you to only stream first party games. They want you to stream every game. Because then they can control your access to every game. And they will be effectively renting that access to the user, while renting access to the servers to the publishers of those third party games.

*This is the goal of essentially ever media company at this point. We've reached the point in the digital media space where we have shed a real free market and are in a feudalistic system, where the lords own the pathways to access media.

 

[Johnny Awesome]

It's the same old story. Doom and gloom. Xbox has been dying for 23 years. Except it hasn't. It's still here with the best lineup of games this year.

 

[rntongo]

But OG Xbox only existed because Microsoft saw the future of living room computing. They've never been focusing on the present, but the future, except for their naming schemes which seam to have no regard for the future.

You're right but there's been a disconnect between the most senior leadership and the gaming engineers who love gaming. The whole living room computing is what Seamus Blackely and Ed Fries used to sell the idea to Bill Gates and Steve Ballmer. The fear that the Sony Playstation was going to take over the living room(which wasnt true because the PC and the playstation were two different types of computing platforms that could coexist and Seamus/Ed knew this). But the actual reason was because developing low level APIs for gaming for multiple hw configs wasnt as efficient as making them for one fixed system. As well as the benefits/synergies from pursuing the latter to pushing forward the former. It was about building the best gaming experiences in the most efficient way in turn also helping gaming on PC. Ed Fries made sure the Xbox and early Xbox 360 were insulated from future diversionary goals although they were always creeping up. He left a few years before the launch of the 360 iirc and eventually those people similar to Don Mattrick rose to the top and reignited the fake reason(taking over the living room). Thats why you saw the Xbox One being marketed as a home entertainment system. But the launch line up was impeccable. So it just goes to show that its around this time Xbox's diversionary goals started coming to the fore. The public got a clear view of a great launch line up, drm, telling consumers who want to game to eff to the 360, weak hardware, etc. A combination of good and bad. Phil has at least focused on gaming since its now obvious that gaming can bring in real money but its still not a focused company when it comes to gaming.

 

[Seanspeed]

Any hardware used for Xbox streaming will be "Xbox hardware" by definition, even if it's derived from PC. Microsoft's play is for content and control of access* to that content, and that is achieved for them by owning the pillars of access. The IP, even if they publish or license it for use on other platforms, is theirs to control. And their hardware and it's OS, be it located in the users house or the cloud, is an important part of that. They don't want you to only stream first party games. They want you to stream every game. Because then they can control your access to every game. And they will be effectively renting that access to the user, while renting access to the servers to the publishers of those third party games.

*This is the goal of essentially ever media company at this point. We've reached the point in the digital media space where we have shed a real free market and are in a feudalistic system, where the lords own the pathways to access media.

Sure I agree with basically all of that, but my point is that they dont need to create their own semi-custom processor for this or anything, let alone a full system setup ala console. If the argument is that they 'might as well release a console' cuz they're already creating the hardware for Xcloud, I'm saying this doesn't have to be the case.

Maybe it'll still be worth it to them, but again, if streaming is their big goal, I dont think there's any hard need for a console as part of this strategy.

 

[Seanspeed]

It's the same old story. Doom and gloom. Xbox has been dying for 23 years. Except it hasn't. It's still here with the best lineup of games this year.

Bit of a strawman there. Xbox as a platform has absolutely been on a decline for a good while though, with that decline becoming worryingly steeper lately. I dont think this is really arguable without completely deluding yourself.

 

[eastmen]

Microsoft will always need hardware. Even if Xbox's console install base is small, they are banking on growing the market via cloud, and those cloud servers are Xbox hardware, for better or worse. If they are going to offer a console experience via the cloud, then the cloud will be made up of the console.

Microsoft also has a history of success releasing it's software on rival platforms, from Office on Mac, Arrow Launcher on Android, Monster Truck Madness on GBA, and Age of Empires on DS, to the more recent examples like them publishing Ori on Switch. It's worked out for them in the past, why wouldn't they want to keep doing it?

not to mention that its never been easier or cheaper to make a console. Take the newest AMD APU make a few modifications add super fast gddr ram and ship it.

 

[Sonic]

not to mention that its never been easier or cheaper to make a console. Take the newest AMD APU make a few modifications add super fast gddr ram and ship it.

I truly hope strix halo ends up being a success for AMD so they give us more powerful APU's to purchase as time goes on. I oft wonder if contractual obligations to Sony and/or MS prevents them from releasing a more powerful APU than what we find in consoles. For example is AMD not allowed to release strix halo until PS5 pro comes out?

 

[Frenetic Pony]

not to mention that its never been easier or cheaper to make a console. Take the newest AMD APU make a few modifications add super fast gddr ram and ship it.

I have just realized, putting comments together, that this new "console" generation may not be a "console" at all. 0 subsidy, just semi custom Xbox branded HW that you're going to be charged full price for. Basically competing with ROG Ally, and probably a gaming mini PC, rather than competing directly with Nintendo or Sony. Considering I suspect Steamdeck 2 could also come out in 2026 it'll be interesting to see.

 

[eastmen]

I truly hope strix halo ends up being a success for AMD so they give us more powerful APU's to purchase as time goes on. I oft wonder if contractual obligations to Sony and/or MS prevents them from releasing a more powerful APU than what we find in consoles. For example is AMD not allowed to release strix halo until PS5 pro comes out?

AMD can release whatever they want when they want. the reason why APU's have been pretty stagnant is that RDNA 3 and 3.5 kinda suck. They aren't really a step up from RDNA2. The majority of the gains in the apu are coming on the zen side. AMD just delayed all their zen 5 stuff due to some kinda of performance issue

I have just realized, putting comments together, that this new "console" generation may not be a "console" at all. 0 subsidy, just semi custom Xbox branded HW that you're going to be charged full price for. Basically competing with ROG Ally, and probably a gaming mini PC, rather than competing directly with Nintendo or Sony. Considering I suspect Steamdeck 2 could also come out in 2026 it'll be interesting to see.

They will still price competitively imo.

valve is likely waiting for zen6 and rdna 4 15 watt apus. That should allow them to play all xbox series and ps5 game at 1080p and just use whatever amd upscaling version up to the screen resolution they need

 

[see colon]

Sure I agree with basically all of that, but my point is that they dont need to create their own semi-custom processor for this or anything, let alone a full system setup ala console. If the argument is that they 'might as well release a console' cuz they're already creating the hardware for Xcloud, I'm saying this doesn't have to be the case.

Maybe it'll still be worth it to them, but again, if streaming is their big goal, I dont think there's any hard need for a console as part of this strategy.

Yeah, they might not put a ton of effort into it, but I fully expect that whatever their hardware solution is, they will sell it in a box to consumers. People are expecting Xbox to give up on hardware, but they have to make hardware for their cloud ambitions regardless. So it seams silly to not sell that to the end user.

Although... And I hadn't considered this until right now, I guess I could see a future where the local set to box is more of the S tier of hardware, and the cloud is the X tier. Much like nVidia is selling access to 4090 tier performance via Geforce Now, XCloud could be their high end solution.

 

[eastmen]

Yeah, they might not put a ton of effort into it, but I fully expect that whatever their hardware solution is, they will sell it in a box to consumers. People are expecting Xbox to give up on hardware, but they have to make hardware for their cloud ambitions regardless. So it seams silly to not sell that to the end user.

Although... And I hadn't considered this until right now, I guess I could see a future where the local set to box is more of the S tier of hardware, and the cloud is the X tier. Much like nVidia is selling access to 4090 tier performance via Geforce Now, XCloud could be their high end solution.

If they are making a higher end piece of hardware there isn't a real reason not to sell it to consumers. There will always be those who want the best

 

[Frenetic Pony]

AMD can release whatever they want when they want. the reason why APU's have been pretty stagnant is that RDNA 3 and 3.5 kinda suck. They aren't really a step up from RDNA2. The majority of the gains in the apu are coming on the zen side. AMD just delayed all their zen 5 stuff due to some kinda of performance issue


They will still price competitively imo.

valve is likely waiting for zen6 and rdna 4 15 watt apus. That should allow them to play all xbox series and ps5 game at 1080p and just use whatever amd upscaling version up to the screen resolution they need

Zen 6 only comes with RDNA5, both in 2026, kinda where Xbox seems to be targeting their handheld and whatever else. Also "priced competitively" but with what? If they think they can make money just selling a ROG Ally like handheld gaming PC I can see them doing it, and it's the only thing I can think of that fits with "we'd consider having other game stores on the next xbox".

 

[Seanspeed]

If they are making a higher end piece of hardware there isn't a real reason not to sell it to consumers. There will always be those who want the best

There is a huge reason - costs. Y'all are acting like putting out a new generation of console is simply putting together some components in a box and selling it. It's way more complicated than that. It's a hardware platform and far more than just the component costs. Not that the R&D for the hardware itself wont also be a big expense, especially if they're going with semi-custom processors and all instead of just something off-the-shelf. Microsoft doesn't do this stuff on shoe string budgets. Just look at how much they spend simply designing a fairly standard controller!

All these expenses and continuing lifetime support of such a hardware platform need to be outweighed by what it helps to bring in. And I think that'll be in great danger if Xbox gives up on this generation now and bleeds out ever more market and mindshare. Few people are gonna care for some new Xbox that comes out that literally doesn't have any new games for it that cant be played on some existing console. All the people they're losing aren't gonna come back for that. It does absolutely nothing to address why people are leaving whatsoever.

 

[rntongo]

not to mention that its never been easier or cheaper to make a console. Take the newest AMD APU make a few modifications add super fast gddr ram and ship it.

The software stack, making large orders, designing a hw system that will last 7-8 years to match longer SDLCs while still being profitable and something developers want to use. Making the right tech IP choices(memory size and bandwidth, disk throughput, acceleration for ML, Raytracing, etc) when codeveloping APU with AMD. All these things in the real world play a factor which makes much harder than simply taking the newest AMD APU. In some ways its simpler today in other ways its even harder. Thats why you see Nintendo delay the Switch 2 for example. They need to release a system they're going to milk for the next 8 years while giving consumers and software developers what they want.

 

[eastmen]

Zen 6 only comes with RDNA5, both in 2026, kinda where Xbox seems to be targeting their handheld and whatever else. Also "priced competitively" but with what? If they think they can make money just selling a ROG Ally like handheld gaming PC I can see them doing it, and it's the only thing I can think of that fits with "we'd consider having other game stores on the next xbox".

AMD is more than willing to custimize what zen goes with what rdna.

MS is in a unique postion where they have a minimum spec to hit which is the series s specs for a handheld. Then all their library is compatible. So we can see it priced close to the steam deck. The major issue for MS isn't the cpu or gpu portion but the bandwidth.

 

[see colon]

There is a huge reason - costs. Y'all are acting like putting out a new generation of console is simply putting together some components in a box and selling it. It's way more complicated than that. It's a hardware platform and far more than just the component costs. Not that the R&D for the hardware itself wont also be a big expense, especially if they're going with semi-custom processors and all instead of just something off-the-shelf. Microsoft doesn't do this stuff on shoe string budgets. Just look at how much they spend simply designing a fairly standard controller!

They are going to do that that for any hardware they deploy for streaming.

 

[iroboto]

Bit of a strawman there. Xbox as a platform has absolutely been on a decline for a good while though, with that decline becoming worryingly steeper lately. I dont think this is really arguable without completely deluding yourself.

Truthfully, I'm not seeing his delusion.
Marketshare is less, but the platform continues to grow in revenue, not shrink, even more so with the recent acquisitions.

Going as far back as x360 days, when people felt 360 was on top of the console industry. You've made a strong statements that the platform in decline, for some time now, and going steeper - but these graphs here, I'm having a hard time seeing it.

https://twitter.com/x/status/1420857528599121921

When hardware revenue goes away, which it will eventually, Xbox is still looking healthy. I'm okay if you want to debate the numbers, that's fine, people are okay to disagree. But calling people deluded, when the graphs look like this, is an unnecessary personal attack. I don't take an issue with your arguments, but your words. I've seen delusion, delusion is talking about hidden GPUs, things that don't actually exist. Things that break the laws of physics and pure magic. He doesn't have a deluded view of Xbox's position right now. But using those types of words to stop him from posting I have an issue with. Please refrain from the behaviour of shutting down discussion if you can't actually counter his arguments.

 

[QPlayer]

Truthfully, I'm not seeing his delusion.
Marketshare is less, but the platform continues to grow in revenue, not shrink, even more so with the recent acquisitions.

Going as far back as x360 days, when people felt 360 was on top of the console industry. You've made a strong statements that the platform in decline, for some time now, and going steeper - but these graphs here, I'm having a hard time seeing it.

https://twitter.com/x/status/1420857528599121921

When hardware revenue goes away, which it will eventually, Xbox is still looking healthy. I'm okay if you want to debate the numbers, that's fine, people are okay to disagree. But calling people deluded, when the graphs look like this, is an unnecessary personal attack. I don't take an issue with your arguments, but your words. I've seen delusion, delusion is talking about hidden GPUs, things that don't actually exist. Things that break the laws of physics and pure magic. He doesn't have a deluded view of Xbox's position right now. But using those types of words to stop him from posting I have an issue with. Please refrain from the behaviour of shutting down discussion if you can't actually counter his arguments.

Impressive!

 

[Frenetic Pony]

Microsoft might be better as a game publisher/dev anyway. They've never been much of a hardware company. EG Xbox has apparently never reached the bar of "decent" marketing in Europe. Little advertising to be seen, little translation into Europe's many languages, etc. etc. Nintendo and Sony beating Xbox in Europe handily for 20+ years appears to be from a lack of trying.

Microsoft has never had to rely on hardware for money, and so has never had any motivation to really develop expertise there. They've been in the business so long they've occasionally gotten lucky, but considering how often their various hardware divisions are in the doldrums it appears luck is all that was.