Xbox Business Update Podcast | Xbox Everywhere Direction Discussion

[Jay]

The view that total exclusivity is required to drive hardware sales is not based on any hard data. It's based on the sentiments and anecdotes of forum dwelling gamers.

It's not that sentiment counts for nothing, but MS have much more data than us. You can obviously question whether they've interpreted it properly!

Personally I think there's more than just exclusively, total or otherwise.
But it does count for a lot.

You could argue it has been partly proven.
Regardless what may think of xbox, hardware is decent, gp decent, prices decent. Missed compelling mass market exclusives. That's changing though, but hasn't really happened yet.

Xbox has had some exclusives but things like pentinant and hi fi rush is a big deal for the overall echo system, but not type of exclusive that would be considered console sellers. And the games haven't had a good release cadence.

And to bring it back to thread topic, I think that's one of the reasons there was the initial backlash. Not really given the exclusives from all those studio purchases a chance to see what would happen as they've not really released much yet.

 

[dobwal]

IMO - Xbox moving to ARM isn't out of the question, although I'm not sure it's something that would be ready for their next round of console hardware.

MS has been exploring ARM CPUs in xbox consoles since at least the design stage of the xbox one. I wonder whats been stopping them from making the leap.

 

[QPlayer]

Personally I think there's more than just exclusively, total or otherwise.
But it does count for a lot.

You could argue it has been partly proven.
Regardless what may think of xbox, hardware is decent, gp decent, prices decent. Missed compelling mass market exclusives. That's changing though, but hasn't really happened yet.

Xbox has had some exclusives but things like pentinant and hi fi rush is a big deal for the overall echo system, but not type of exclusive that would be considered console sellers. And the games haven't had a good release cadence.

And to bring it back to thread topic, I think that's one of the reasons there was the initial backlash. Not really given the exclusives from all those studio purchases a chance to see what would happen as they've not really released much yet.

Microsoft needs brand exclusives because of the brand name and its own Xbox console. But their games that really make a lot of money are already multiplatform. Microsoft's biggest games right now are Overwatch 2, Diablo 4 and Minecraft.

 

[Jay]

Microsoft needs brand exclusives because of the brand name and its own Xbox console. But their games that really make a lot of money are already multiplatform. Microsoft's biggest games right now are Overwatch 2, Diablo 4 and Minecraft.

Every single game you mentioned was 3P multi plat before being bought.

Not saying you can't make more money on title being everywhere.
But that's not the only revenue driver.
30% from 3P titles which is dependent on how many consoles you have sold for example.
Gamepass is only on xbox (console version) so that's dependent on how many consoles are sold also.

I'm not suggesting pulling titles, just that there is value in console and making it appealing and by extension exclusives.
Otherwise could argue just drop the console and go total 3P multi plat.

 

[iroboto]

Every single game you mentioned was 3P multi plat before being bought.

Not saying you can't make more money on title being everywhere.
But that's not the only revenue driver.
30% from 3P titles which is dependent on how many consoles you have sold for example.
Gamepass is only on xbox (console version) so that's dependent on how many consoles are sold also.

I'm not suggesting pulling titles, just that there is value in console and making it appealing and by extension exclusives.
Otherwise could argue just drop the console and go total 3P multi plat.

Yea I can’t ever see them leaving the console market. They spent billions of dollars and decades to staying in. They aren’t about to get up and leave. It costs multi billions to break in and not even a guarantee of success.

They will find a way to profit from their ecosystem and find a way to profit from their store or something. People will buy from the Xbox store if they start allowing digital licenses be played on cloud, that has to be their +1 over Steam. If so, Suddenly my xbox library is going to be useful anywhere I go.

 

[cheapchips]

They will find a way to profit from their ecosystem and find a way to profit from their store or something. People will buy from the Xbox store if they start allowing digital licenses be played on cloud, that has to be their +1 over Steam. If so, Suddenly my xbox library is going to be useful anywhere I go.

'Your Xbox library everywhere' seems like something they should be offering but for some reasons still haven't. Is it just on the back burner because the streaming console stalled? Did they run into too many licencing hurdles?

 

[Shifty Geezer]

The view that total exclusivity is required to drive hardware sales is not based on any hard data. It's based on the sentiments and anecdotes of forum dwelling gamers.

It's based on 40+ years of the console business and Nintendo surviving in this space since the 70s because of their exclusives. Coupled with common sense. How do you sell your console over your rival's if both have exactly the same content? You either compete on price or something else. Now if you have no bigger library than theirs but they have more games than you, you are disadvantaged. PS2 really showcased how the strongest library helps snowball a platform. Because cross-platform was rare, devs would target just one console, the largest, giving it the best library, giving it the most reason to own, giving it the largest userbase...

Things are a bit different now as cross-platform is more usual than not.

What exactly is the logic saying exclusive games isn't going to drive hardware sales, in the absence of any hard data?

 

[cheapchips]

What exactly is the logic saying exclusive games isn't going to drive hardware sales, in the absence of any hard data?

I'm not making any sort of slam dunk argument that exclusives don't matter here, just that the impact is through our lenses, which isn't normal.

There's a few actual datapoints which are interesting counterpoints, one of which I can't find, which is bloody annoying!

That was one of the FTC case charts showing the weekly split of Xbox/PS hardware sales going back years. The impact of exclusives didn't result in much of a hardware tail beyond the first week. You could certainly counter than by saying it's the overall library that people are buying, and that's what's driving the average split of sales.

The other thing you can actually look at is penetration of first part software sales. The biggest PS5 title this gen is Spider-Man2 and only 20% of PS5 owners have bought it. Demon Soul is around 2%, Reternal's probably a bit lower. Don't think we have PS5 only figure for the cross gen stuff but they're all lower than Spider-Man 2 with PS4 included. Even Mario Odyssey is only around 20% of Switch owners.

The other thing would be why did either current gen home console sell anything at all at launch? Lots of reasons but exclusives weren't it. The lineups for both were lacking any exciting exclusives unless you really liked Demon Souls with (much!) better graphics.

Switch was even worse. The best game was cross gen.

I don't think I'm overthinking it? My feeling is that if MS have timed or subscription exclusively for it's games, coupled with compelling hardware, they'll do just fine.

 

[iroboto]

'Your Xbox library everywhere' seems like something they should be offering but for some reasons still haven't. Is it just on the back burner because the streaming console stalled? Did they run into too many licencing hurdles?

They pivoted away and moved it to steam. The desperately need an overhaul on their windows side licensing. The mixing of windows store with Xbox store is the main culprit. Ideally they will relaunch on windows with a proper Xbox store

 

[Shifty Geezer]

The other thing you can actually look at is penetration of first part software sales. The biggest PS5 title this gen is Spider-Man2 and only 20% of PS5 owners have bought it. Demon Soul is around 2%, Reternal's probably a bit lower. Don't think we have PS5 only figure for the cross gen stuff but they're all lower than Spider-Man 2 with PS4 included. Even Mario Odyssey is only around 20% of Switch owners.

We've had that discussion on the value of exclusives and the sales rate. Most games sell to a tiny percentage. the value of exclusives isn't in the title itself, but the value of the brand and its identity. The console that has more games and more talk about it (driven by its games) gets more sales. I think that's historical at this point.

As I say, given two consoles largely identical both playing Fortnite and COD and the other big 3rd party IPs, which one do people pick up? In the past, the one with the broader library. Presently, the one who's ecosystem you are already entrenched in. If you're not in an ecosystem though, which one is the more likely. The one with more friends playing, the one with more attention, the one with that edge. Maybe only 20% of PS5 owners cared to buy for SM, heck less than that, but that 10% who got a PS5 because of SM go on to expand the reach and appeal of the whole platform, so people only buying a console for Fortnite and COD etc will be more influenced to get PS5 than XB.

You need a way to stand out. Sometimes that's hardware like Wii or Kinecy. Sometimes that services like the original XBox Live (also let's not ignore the impact of the exclusive Halo there!). In the absence of these, with two boxes that are just PCs in hardware, it's branding and library, so exclusives.

 

[Johnny Awesome]

If exclusives were the whole story, the WiiU would have been a smashing success.

Branding on a good hardware platform with friends is my answer. Exclusives are a big part of branding, but not the only thing.

I think we have to be careful not to look at the market in 2024 through a 2001 lens.

Digital ecosystem lock down is HUGE now. There was really no chance MS was going from 120/60 million PS4/XboxOne to better than 110/70 and they're on track for 130/50, which is disappointing for fans, but not as disastrous as many make out.

110/70 may have been possible had Forza, Halo and Starfield been 9s instead of 8.5s. Games still matter. 9s create envy. 8.5s don't.

 

[Seanspeed]

If exclusives were the whole story, the WiiU would have been a smashing success.

Branding on a good hardware platform with friends is my answer. Exclusives are a big part of branding, but not the only thing.

I think we have to be careful not to look at the market in 2024 through a 2001 lens.

Digital ecosystem lock down is HUGE now. There was really no chance MS was going from 120/60 million PS4/XboxOne to better than 110/70 and they're on track for 130/50, which is disappointing for fans, but not as disastrous as many make out.

110/70 may have been possible had Forza, Halo and Starfield been 9s instead of 8.5s. Games still matter. 9s create envy. 8.5s don't.

The Wii U only got its best exclusives far too late, and by then the damage had been done.

Also, when we talk about the importance of exclusives for Sony/MS, it's on the automatic assumption of the 3rd party market being there still. Meaning, the exclusives become the biggest differentiating factor, as you will otherwise still have a large selection of great 3rd party games no matter which system you pick. The Wii U did not have that. It should hardly be surprising to realize that all of Nintendo's best successes, the NES, the SNES, the Wii and the Switch - all had excellent 3rd party support for the time.

I also completely disagree that Microsoft had 'no chance' to do better than they did with XB1. I'd say that from what I observed, there was genuinely a lot more positivity towards the Xbox brand going into late 2020 than there had been in quite a while. Gamepass was heating up as the 'best deal in gaming', the Xbox Series X was actually a great piece of hardware, the Series S provided a novel low cost entry point for a new generation, and people generally seemed to believe in Phil and Xbox's ability to turn the corner now that they got a reset from the XB1 debacle.

But then MS didn't deliver on the games. And all the potential momentum they might have had an opportunity to build blew away in the wind. I dont even think most gamers right now dislike Xbox, there's just this constant taste of 'disappointment' in everybody's mouth from the brand, and that is almost entirely because of lackluster game releases, be it quantity or quality. It's been an issue since like 2012.

 

[Johnny Awesome]

I didn't say MS had no chance, just that it was super hard. On the top end if they executed perfectly they might have sold 70 million units. Now they're on track for 50 million.

They have a much better lineup of 1st party games than Sony this year, like they did in 2021. When you see what's coming to GamePass in 2024 it's off the chains really.

 

[Nesh]

I remember how Sony went legally down on Bleem! and destroyed them. These platform holders won't bother with emulation on older generations, but if there is commercial benefit by someone else or disastrous results on current business, there will be implications.

 

[Cyan]

I remember how Sony went legally down on Bleem! and destroyed them. These platform holders won't bother with emulation on older generations, but if there is commercial benefit by someone else or disastrous results on current business, there will be implications.

did you mean to write this post in this thread? Still, now that you mention it, Nintendo is suing the creators of a famous Switch emulator.

https://twitter.com/i/web/status/1762576284817768457

We shall see how this pans out, but I doubt it is as bad as it was in the era of Nintendo DS emulators.

 

[Seanspeed]

I didn't say MS had no chance, just that it was super hard.

Yea, I agree with that. It wouldn't have been easy. I dont think the deck was quite so stacked against them, though. I think there's a lot of clear things we can point to that they messed up on all on their own.

 

[Cyan]

Peter Moore thinks MS is debating whether Xbox has a future or not.

Microsoft Will Be Debating Right Now Whether Xbox Consoles Have a Future, Says Peter Moore

And he should know, he used to run Xbox.

sea.ign.com

 

[Johnny Awesome]

He's grandstanding as usual. I can't believe this is even news.

 

[pharma]

Xbox Reportedly “Flatlining” in Europe, Publishers Question Support, More PS5 Ports Coming

Microsoft has vowed to continue on with Xbox hardware, but that promise may run into some harsh business realities.

wccftech.com

According to GameIndustry.biz’s Christopher Dring, who’s proven to be a reliable source of industry new in the past, he’s heard from a “very prominent” publisher and another indie pub that Xbox Series X/S performance is “flatlining” in Europe. It was already not good last year, with some European retailers dropping Xbox Series X/S altogether, but it’s said to be even worse this year, to the point publishers are beginning to question why they’re bothering to support Xbox.
...
Microsoft can say they want to keep making hardware all they want, but if publishers stop being interested in putting their software on your platform, that’s where reality comes into play. That’s when things started to get scary for Nintendo during the Gamecube era. That’s what happened to Sega before they were forced to abandon hardware. “PC, PlayStation, and Xbox” being the standard platforms for all third-party games just isn’t something Microsoft can count on forever. With the purchase of Activision Blizzard, Microsoft is now one of the biggest third-party publishers in the world, and it’s going to be hard to escape gravity pulling them further in that direction.

 

[Shortbread]

Xbox Reportedly “Flatlining” in Europe, Publishers Question Support, More PS5 Ports Coming

Microsoft has vowed to continue on with Xbox hardware, but that promise may run into some harsh business realities.

wccftech.com

I was watching Michael Pachter's podcast and he was talking about how it's all about GamePass for Xbox, yet I've actually been hearing that Microsoft's been putting less focus on GamePass.

Um, GP sales and growth have flatlined at this point. I wouldn't be surprised if Microsoft pulls an Epic, and goes after Sony for walling off the PlayStation ecosystem and wanting GP on there.