cheapchips
Veteran
He's not, he's running Microsoft Gaming. We'll see what that turns out to be. Not the glorious reality where everyone realises that AA games are the best games, sadly, so plan B is in effect.
Xbox leadership and the Xbox brand evaluation *spawn
- Thread starter BitByte
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He's not, he's running Microsoft Gaming. We'll see what that turns out to be. Not the glorious reality where everyone realises that AA games are the best games, sadly, so plan B is in effect.
Johnny Awesome
Veteran
Everyone wants it to be a AA world, but really it's a AAA world. 
Sony and Nintendo certainly believe that.
Sony and Nintendo certainly believe that.
How would have "not relying on GP" looked different in practice?
I doubt it would have given me a Halo I would consider worth my time. Would they have been able to sell more consoles without it? Somebody here posted that they sold less to build up the cloud service. Possible in the beginning but mid to long term?
But I'm not sure if Flight Simulator would exist on consoles without GP. Maybe not at all.
They focused too much into getting the content into Gamepass that made sense financially for the expansion of the subscription service and focused less in expanding the library of exclusives that people wanted to play. This meant, not building a reputation and content on the exclusives that retained a strong fanbase on the XBOX identity that the 360 initially relied on, which are heavy duty titles. But attracting consumers that were more attracted on the subscription service value itself. That led to abandoning the focus in making the titles themselves financial successes and trying to make Gamepass work. With smaller titles it was easier to financially manage Gamepass and increase content, while big AAA titles were financially risked to support Gamepass. To make sure Gamepass worked they also expanded it to PC with day 1 releases.
These were the economics that for Sony made no sense in releasing Day 1 in Plus and PC
These are concessions made to alleviate the pressures of a shrinking market. The video game console market isn't growing, in fact, most speculation is that it will shrink this year. The reason why Sony is following Microsoft's lead, even though Playstation is the leading console brand, isn't because Xbox is making poor choices and Playstation wants to follow them off a cliff.
These werent concessions. They were the vision that someday gaming would become subscription based and Microsoft would lead the market like Netfilix.
The plan and implementation begun years before the market started experiencing diminishing growth
I wasn't keen on sharing that article as I'm not sure of Brendon Sinclair's credentials. He came from a news editor at GameSpot and I don't know if he has a business background. The guest article at EG was from someone more explicitly versed in the business of Businessness.
Last gen was 170 million with Sony taking 2/3rds. Gen before that, 170 M, Sony taking half at ~85M. If Sony can take a larger share of a smaller market, they are still quids in. Their revenue is up up up on all those previous generations too, so I can't see them being particularly worried. Obviously reaching wider is better - there's only so many home units you can sell, particularly now the minimum price is capped high - but it's not like the console market is going to dry up next gen. Which may fuel MS's thinkings - leave consoles to Sony and look for revenue elsewhere. Basically you want to have a 'PSN' service that is selling to all and sundry. Sony's online gaming tax is very lucrative but that's something MS can exert anywhere. The cost to woo people onto a subscription based on games is far higher and less profitable than this.
How are their margins?
Charlietus
Regular
What would those be?
Probably not great (don't know what the reference for 'okay' is), but whatever they are, they have to better than requiring to spend hundreds of millions on content to get game subscribers. Also much better operating income than previous generations with more consoles
Charlietus
Regular
The margins aspect was a bit blown out of proportion. If you go look at they're financial report, you will see that they are still paying the Bungie acquisition (big mistake from Jimbo, what a blunder), that the yen is weak so conversion rate is inconvenient and materials for the PS5 have gone up in cost. Only one of those is they're fault, the rest is out of they're control. It would be impossible to have great margins, 6% at least isn't catastrophic.
6% as of their latest report.
It’s quite terrible when they were expecting them closer to 20%.
Sony being the leader by a country mile continues to follow all of MS’ “missteps” and poor leadership choices. It doesn’t make any sense unless things are bad. 6% margin is pretty bad when you own 75% of the market and have all the positive press, killer exclusives, etc.
The only difference I’ve seen between the two is that MS always makes the move first because they are in the shitter already and Sony is following suit because being that leader has bought them more time. If their traditional model was dominating, then they would never be required to move anything to PC. They wouldn’t even think about releasing a gamepass cloud streaming model. But continue to.
The only commonality between the two, is that the majority of the top ten played games are, forever titles. F2P forever titles that don’t need powerful consoles, are largely free 2 play and suck up the market like crazy. People are buying consoles, without the needing to subscribe and can play fortnight, apex legends and warzone all freely.
PlayStation Decade-Low Profit Margins Worry Analysts Amid Runaway Game Budgets
Sony's recent scaling back of PS5 sales targets made headlines, but their razor-thin profit margins may be the bigger issue.
wccftech.com
The traditional model doesn't have to be broken to warrant other moves as well. The traditional model quite frankly crap business, but it was they best any of these companies could do. Even Nintendo has had its back up against the wall with consoles and has had to use magic. Adding PC isn't turning their back on consoles. And Sony added a 'GamePass' game streaming business before MS did! What they haven't done is push it as the future while letting their console business flounder.
It can also be argued they aren't getting a handle on costs. F2P don't appear to hurting as revenue from digital is pretty much the highest it's ever been, both digital software sales and DLC:The only commonality between the two, is that the majority of the top ten played games are, forever titles. F2P forever titles that don’t need powerful consoles, are largely free 2 play and suck up the market like crazy. People are buying consoles, without the needing to subscribe and can play fortnight, apex legends and warzone all freely.
PlayStation Decade-Low Profit Margins Worry Analysts Amid Runaway Game Budgets
Sony's recent scaling back of PS5 sales targets made headlines, but their razor-thin profit margins may be the bigger issue.
Maybe costs on delivering those are extra high for someone reason? Or there's costs elsewhere?
However, this is an Xbox thread.
I don't think Sony are following MS. I think both are very different companies with different options. There are various threads looking at the different aspects of the different companies. Is there a crossover discussion to be has like "why don't consoles make lots of profit?"?
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Johnny Awesome
Veteran
Things I would have done differently if I were Phil:
1) Given the S more memory
2) Made sure that Halo and Forza were 9/10s, not 8.3/10s.
3) Lost another $50 on the X to virtually guarantee every 3rd party game looked/played at least as well on X as on the PS5. Xbox brand = POWER and there shouldn't have been any doubt.
4) Not diverted as many chips to xCloud so that they could have sold more Xs when the PS5s were in short supply.
Even though I like Phil, sometimes I think he doesn't have enough of a killer instinct. MS needs to create more ENVY in the marketplace. Envy for powerful hardware. Envy for GP value. Envy for AAA games.
I still don't think GP offerings have hit the critical ENVY mass that is needed to make people really feel like they're missing out by not having it. 2024 and 2025 might get them there.
I agree that the F2P black hole games are a real issue, but Sony faces the same issue. They have Spider-Man, GoW, and FF to carry them through. MS has a ton of 8.3s and I've enjoyed them a lot, but not enough 9s.
from a traditional console viewpoint, it sounds reasonable, but nowadays I am not sure that's the culprit. Square Enix is an example of a company who went from being exclusive and suffering financial trouble to becoming multiplatform.
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Square Enix plans to “aggressively pursue” multiplatform game releases
Square Enix has gotten bit by the multiplatform bug, too.
www.theverge.com
Playstation is an odd case. It was about to disappear in 2011 even when back then the Playstation 1/2 glory days were recent (they went from an arrogant Sony saying "the generation doesn't start until we say it does" -Kaz Hirai- at the beginning of the PS3 generation to feeling humbled), and they never managed to convert those sales in huge profits.6% as of their latest report.
It’s quite terrible when they were expecting them closer to 20%.
Sony being the leader by a country mile continues to follow all of MS’ “missteps” and poor leadership choices. It doesn’t make any sense unless things are bad. 6% margin is pretty bad when you own 75% of the market and have all the positive press, killer exclusives, etc.
The only difference I’ve seen between the two is that MS always makes the move first because they are in the shitter already and Sony is following suit because being that leader has bought them more time. If their traditional model was dominating, then they would never be required to move anything to PC. They wouldn’t even think about releasing a gamepass cloud streaming model. But continue to.
The only commonality between the two, is that the majority of the top ten played games are, forever titles. F2P forever titles that don’t need powerful consoles, are largely free 2 play and suck up the market like crazy. People are buying consoles, without the needing to subscribe and can play fortnight, apex legends and warzone all freely.
PlayStation Decade-Low Profit Margins Worry Analysts Amid Runaway Game Budgets
Sony's recent scaling back of PS5 sales targets made headlines, but their razor-thin profit margins may be the bigger issue.
In that sense, Nintendo has beaten Sony, MS and Activision to a pulp, having a lot more profit than those combined. In fact, the combined profit of Sony the last 20 years (even when breaking record sales in the PS4 era) is much less than Nintendo the last year.
agreed. A sale is a sale. Users don't have to be forced to buy a certain device that they might never use just to play a game, or a couple of games. This works for the core fans of a console or core fans of PC. Nobody was crying when developers started to port PC exclusives to consoles and make them work with a gamepad -Diablo, The Witcher, Doom 3, Half Life, Age of Empires, etc etc-.
The Xbox debacle has nothing to do with gamepass nor pc ports, 'cos who prefers a console is going to get one, and who prefers a PC will get one regardless.
From personal experience, I purchased a 2nd hand Nintendo Gamecube from a friend to play F-Zero and RE4. It was the saddest consoles I've ever had. I played it very few hours even if I had those two games. If I could go back I wouldn't get the GC. After some time those games were running better via emulation.
Nintendo didn't win me over as a client back then.
Fault and responsibility might be tow different things, but just because something isn't their fault, doesn't mean that it's their responsibility to know it. They Yen has been on the decline since 2012. PS4 launched in Japan during a recession and those woes haven't gone away. And while that may have gotten worse, Sony did adjust pricing of PS5 to compensate for the declining value of the Yen. The Bungie bungle... I assume we can agree that is their fault. But the fact the the PS5's BOM hasn't decreased like other generations have... Microsoft literally said this was going to happen when talking about why they launched Series S. That the idea that a console being launched at $500 and dropping down to $300 in a few years isn't a thing that can happen, because the cost per transistor has been flat, so even with process shrinks you aren't saving money, because it's the same amount of transistors.
These things might not be Sony's fault, but it's their responsibility to know what is happening. And if your local economy has been in recession 10 years and you haven't accounted for that, or your competitors are making statements about transistor cost that have been widely reported, and you haven't figured it out yet... Well I don't know what to say.
Square Enix is a third party company that relies on it own games to bring money, not a console owner. It is not a relevant example to compare with either Sony, Nintendo or MS
