Xbox Business Update Podcast | Xbox Everywhere Direction Discussion

[Cyan]

can't help it but wonder what are the sales of Xbox in other countries but the sales of Xbox in Spain in december, for instance, are abysmal. I kinda knew it but it managed to surprise me because the clone of the Spectrum sold more. (info taken from Gameractor)

• PS5: 71.000 (2.300 the Pro model).
• Nintendo Switch: 29.000.
• Spectrum: 5.500.
• Xbox Series (both SKUs): 3.500.
• PSVR2: 2.400.
• Meta Quest 3: 1.300.
• ROG Ally: 600.

Sales comparison from november 2023 vs november 2024:

	2023	2024
Playstation 5	109.000	121.700
Nintendo Switch	58.000	44.400
Xbox Series	14.500	6.650

 

[IQandHDR]

Might be that since Xbox in not in a "walled garden" anymore (unlike the PS) the incentive to buy is gone.

 

[Charlietus]

What I don't understand the most about this strategy is how will they retain the console game pass subscribers. The great majority of game pass users are on console (75% is probably low balling it) and if they don't sell as many consoles anymore, are they so confident that they can transfer those subscribers to new devices?

 

[iroboto]

If everyone has a PlayStation no one will buy an Xbox.

As the percentages gets more lopsided so becomes the victory. I forget the term for it in war. The more evenly matched the game is, the more the losses both team incur become substantial.

The more lopsided the game is, the more 1 team will overrun the other pushing the losses to the other side. Like 10 men vs 1 man there will be no losses on the 10 men side. But 2v2 there should be equivalent losses. Something like that.

You’re seeing a similar effect here. If all of your friends are on PS, and the consoles share 97% of their library, the decision is already made.

 

[iroboto]

What I don't understand the most about this strategy is how will they retain the console game pass subscribers. The great majority of game pass users are on console (75% is probably low balling it) and if they don't sell as many consoles anymore, are they so confident that they can transfer those subscribers to new devices?

In short ,we have to assume, yes. The retention rate is going to be pretty high because there is no competing service.

Xbox has quickly migrated to a subscription console. If you’re into gamepass and you need a console, you will have an Xbox.
The major benefits that Xbox provides here is that online play is now included in all gamepass subs.

So from a value perspective, it’s quite cheaper than PlayStation. In short, the success of Xbox will change directly with the value proposition of game pass. If MS keeps knocking out bangers every month on gamepass, people will start to switch over or find a way to get access to gamepass. They will also likely have the option to buy all these titles on PS5, but cost will eventually become a factor if you want to play them all.

Hardware sales isn't really indicative of success anymore. F2P games has really altered the market. Console sales used to matter a lot because there was an average attach rate (of titles bought) with each console sold. F2P games took that attach rate way down.

Which is why MAUs matter. If you look at MAUs and just see where everyone is putting their time, it’s in the forever titles. People can buy any console and just play Fortnite, COD WZ, Roblox, apex, R6, Genshin, etc. all for free, with no online sub required.

The platform owners are praying that people spend money on MTX and season passes to make it back, but the ROI isn’t as high as someone buying titles. But that’s also why we no longer see subsidies on console hardware. They have no way to get that money back. And that’s also why the prices of consoles are no longer coming down, it’s not just hardware costs, Sony and MS no longer want to take a loss on F2P titles. They will now sell the consoles as a profit, to get something, and some small % of these F2P users will purchase a pass etc. and they get a small amount from that.

 

[rntongo]

What I don't understand the most about this strategy is how will they retain the console game pass subscribers. The great majority of game pass users are on console (75% is probably low balling it) and if they don't sell as many consoles anymore, are they so confident that they can transfer those subscribers to new devices?

Thats why I'm saying MS may be looking to completely become a 3rd party publisher in the future. When Satya said they're redefining what it means to be an Xbox fan, it was a very loaded statement. Forget about the box and think about the gaming experience is what its driving at. And with the implications to their ecosystem, it can roll down all the way to "being an Xbox fan is playing games made by MS anywhere". Remember they have some odd plan of having Steam store on Xbox. They're just preparing incase the gaming service doesnt work out they can simply become a publisher and put their games everywhere which they are doing now regardless. Otherwise if things work out they can maintain a gaming service with a gaming store available on any hw platform and leave hw to the OEMs.

So basically they're looking to jump out of whatever they are doing now regardless. MS Gaming should be able to generate revenue from having their games on Playstation, Nintendo and Steam even if GamePass fails so you're going to see their games on every platform and store. I just dont see console owners moving over if Xbox hw changes radically. Satya must be banking on redefining the Xbox fan base in ways they(the fan base) are not yet even thinking about.

 

[rntongo]

can't help it but wonder what are the sales of Xbox in other countries but the sales of Xbox in Spain in december, for instance, are abysmal. I kinda knew it but it managed to surprise me because the clone of the Spectrum sold more. (info taken from Gameractor)

• PS5: 71.000 (2.300 the Pro model).
• Nintendo Switch: 29.000.
• Spectrum: 5.500.
• Xbox Series (both SKUs): 3.500.
• PSVR2: 2.400.
• Meta Quest 3: 1.300.
• ROG Ally: 600.

Sales comparison from november 2023 vs november 2024:

	2023	2024
Playstation 5	109.000	121.700
Nintendo Switch	58.000	44.400
Xbox Series	14.500	6.650

And this is the second half of the gen. Base consoles are going to become cheaper sometime during the gen, what I'm wondering is how as a developer you can justify putting in as much effort in a system thats selling this bad. Especially a system who's primary aim is to drive subscriber growth.

 

[Dominik D]

can't help it but wonder what are the sales of Xbox in other countries but the sales of Xbox in Spain in december

Don't know about Spain, but console = PlayStation was so ingrained in Polish psyche that even when Xbox (any edition) had great games, people wouldn't buy it on principle. So now that Xbox struggles thanks to abysmal strategy and overspending on acquisitions sales are pretty much nonexistent. On the other hand the only thing that seems to help with Nintendo sales in Poland is that Nintendo base is so devoted, most people have more than one console from each generation (many of my friends have 3 Switches for instance).

 

[QPlayer]

And this is the second half of the gen. Base consoles are going to become cheaper sometime during the gen, what I'm wondering is how as a developer you can justify putting in as much effort in a system thats selling this bad. Especially a system who's primary aim is to drive subscriber growth.

Aim this question at the PS5pro, which as you can see in the graph above, was a total failure, bringing in 3% of the sales of the base console in the main season after its release... No one will buy this at such a high price in average seasons.

Xbox Series has a user base of around 35-40 million, which is more than enough for a developer/publisher.

 

[QPlayer]

Truth be told, I've been tracking Xbox store inventory for the past month and interestingly, there's been significant demand for the Series X. When it was available, the stock was bought up within days, e.g. on Amazon. It's a constant bestseller at Walmart and they buy over a thousand copies every day according to their listing, and that's just the white Series X.


Taking into account that all stock in Europe was sold out, little was delivered directly here. For example, I read in several places on the forums that people would like to buy it, but it is not available... It is as if MS has accounted for the amount that can be sold for the holiday season. By doing so, they have now lost new potential Gamepass subscribers. It is also interesting that this ad was only published on December 19th.

Is it really strange what they want? And it's really interesting, how do they want to transfer a significant base Xbox Gamepass subscribers to a new system, and even more so, when?

 

[Shifty Geezer]

Don't know about Spain, but console = PlayStation was so ingrained in Polish psyche that even when Xbox (any edition) had great games, people wouldn't buy it on principle. So now that Xbox struggles thanks to abysmal strategy ...

If the Polish wouldn't buy an XB even with good reason, is it really abysmal strategy to abandon that market?

 

[QPlayer]

If the Polish wouldn't buy an XB even with good reason, is it really abysmal strategy to abandon that market?

I'm from Hungary, it's true that it's a smaller market, but it's still big enough to support this language in popular games for years. The Series console can be said to be popular here, but mostly because of Gamepass. Based on feedback, many people were looking for the Series X in the November-December season, but it was not available... They could have sold much more than the delivered quantity... Strange.

 

[rntongo]

Aim this question at the PS5pro, which as you can see in the graph above, was a total failure, bringing in 3% of the sales of the base console in the main season after its release... No one will buy this at such a high price in average seasons.

Xbox Series has a user base of around 35-40 million, which is more than enough for a developer/publisher.

Fair point about the install base hadnt really considered that. For the pro its just starting out and there could be variability in terms of markets where some markets sell more of them. But generally you see a decrease in Series console sales globally. But you’re right the user base is large enough.

Another benefit for devs to put in work on the pro is the fact you simply build the game on the base PS5 and have it running on the pro. Just Spruce it up here and there and there are major development R&D benefits to working with robust/material Raytracing and AI accelerators now with such a stable hardware platform. By the time the PS6 launches devs that put in time with the PS5 pro would benefit from this.

 

[rntongo]

Truth be told, I've been tracking Xbox store inventory for the past month and interestingly, there's been significant demand for the Series X. When it was available, the stock was bought up within days, e.g. on Amazon. It's a constant bestseller at Walmart and they buy over a thousand copies every day according to their listing, and that's just the white Series X.


Taking into account that all stock in Europe was sold out, little was delivered directly here. For example, I read in several places on the forums that people would like to buy it, but it is not available... It is as if MS has accounted for the amount that can be sold for the holiday season. By doing so, they have now lost new potential Gamepass subscribers. It is also interesting that this ad was only published on December 19th.

Is it really strange what they want? And it's really interesting, how do they want to transfer a significant base Xbox Gamepass subscribers to a new system, and even more so, when?

Series X has always had huge demand, what you’re saying isnt new its been like this since launch day. I got mine the day they were released Nov/ December 2020 and used to similar stockouts on Amazon, Walmart, Microsoft store, etc over the years. Series S on the other hand just never had that kind of demand. I pretty sure MS cut back production numbers of Series S to match projected demand of the X.

 

[QPlayer]

Either way, here's a breakdown of demand and sales over the past two months. It is known that the number of hardware sold decreases year by year, but this is actually true for the products of the other two manufacturers as well. Nevertheless, in November this year and now in December, it was observed that except for the Walmart store chain, only moderate quantities of the Series X were delivered to even the largest Amazon. This is strange because the new driveless version was launched in October with a more favorable price. And what is visible? There was and is a constant shortage of stock of the Series X consoles. However, if a shipment appears for a few days, it will be purchased almost immediately.

Just a specific point of interest. I've been tracking American Amazon supplier stocks of the new Series X for the past two months, and when shipments arrived and were available, this console immediately jumped into the top segment of the overall bestseller category within a week. In comparison, the constantly available PS5pro was only able to enter the hundred bestseller list once or twice, and only at the very bottom!

What can be concluded from this? Well, if you have a store whose main income depends on a certain product (in this case, Microsoft's Xbox consoles, which are indirectly linked to Gamepass subscriptions), then don't you try to get as much as possible to the stores and promote that product in the holiday season?

The driverless Series X was launched in October, and several exclusive games were released at the same time, but, based on demand, they did not produce enough from the this console for the main season, almost nothing for Europe. It's like they weren't expecting these consoles, even though there's apparently a demand for them and they could potentially increase Gamepass subscriptions. They started to build a new system in the background, which is planned from 2025, but until then, what's the point of holding back a product that can be called successful, even if moderately?!

Not consistent business. I don't think it's even out of the question that Nadella and Spencer could have battles in the background inside the house.

 

[Seanspeed]

It's been explained multiple times why people choose console over PC. It's not just price.

It's also been explained multiple times how such a 'console but with Windows' is just a PC with a frontend launcher.

Much like SteamOS or Steam Big Picture Mode, right? Almost like the idea of a 'Steam Machine' or even a more specific fixed spec hardware(ala Steam Deck) could be introduced with a console-esque form factor as a very direct competitor. All with likely better features and interface than anything Microsoft/Xbox will come up with since Steam has been doing this for a long time now and is actually really damn good at it.

Basically, and I've been stressing this for quite a while now - if Microsoft goes this route, they'd be trying to swerve from competition they weren't winning against, but were doing ok with(until they gave up) into a space where they'd likely get trounced much harder by a far more entrenched and dominant company in the space and that can basically do anything Xbox does and better. If MS/Xbox couldn't handle competing against Playstation directly, Valve will be a much bigger nightmare for them.

By giving up on exclusives, Microsoft have left themselves insanely vulnerable no matter what they do now if they want to continue in the hardware space.