Johnny Awesome
Veteran
I want to acknowledge up front that I know I might be wrong with this train of thought, but wanted all you smart guys to weigh in on it with your informed opinions.
[Btw, I'm assuming no chip shortages in this thought experiment]
My initial reaction 3 years ago when MS and Sony announced their specs for this generation was that MS should have gone in heavier. If I were running MS I would have set out to put an extra $100 of hardware in the box for the same price.
My thinking is simply this: If the goal is to sell 100 million units for MS, then taking an extra $100 loss per unit would have cost them $10 billion, which is far less than the $77 Billion they're spending on Bethesda/ABK. In fact, they can probably afford to do both. Over the course of 10 years they could slowly cost reduce it so they were losing less per box maybe to where they only lost $5 billion overall, but gained more than that back in software royalties or GP subscriptions all while hurting Sony quite a bit.
1st question: What do you think MS could have packed in the box for an extra $100, with the goal of having the box still be no bigger than the PS5 if possible?
2nd question: If this extra hardware meant that all these 30 fps UE5 games coming soon were 60 fps instead or the 60 fps ones had full RT as well, would consumers care enough that MS might have gained lots of market share from this move?
Right now the market is 38m PS5s to 22m X|S , could we be more like 32m to 28m right now? 6 million extra units might be 30 million more software units sold or maybe 3 million GP subs. That isn't really going to replace your $1 billion losses on hardware every year, but market parity outside of Japan would have likely solve their Sony advantage with 3rd party exclusives problem.
TLDR: Can hardware power get you enough extra market share, especially with early adopters, to make it a viable long term strategy?
PS: The only time Xbox was clearly more powerful was the original Xbox and Sony had a massive hardware/software headstart, so I don't consider this a valid example.
[Btw, I'm assuming no chip shortages in this thought experiment]
My initial reaction 3 years ago when MS and Sony announced their specs for this generation was that MS should have gone in heavier. If I were running MS I would have set out to put an extra $100 of hardware in the box for the same price.
My thinking is simply this: If the goal is to sell 100 million units for MS, then taking an extra $100 loss per unit would have cost them $10 billion, which is far less than the $77 Billion they're spending on Bethesda/ABK. In fact, they can probably afford to do both. Over the course of 10 years they could slowly cost reduce it so they were losing less per box maybe to where they only lost $5 billion overall, but gained more than that back in software royalties or GP subscriptions all while hurting Sony quite a bit.
1st question: What do you think MS could have packed in the box for an extra $100, with the goal of having the box still be no bigger than the PS5 if possible?
2nd question: If this extra hardware meant that all these 30 fps UE5 games coming soon were 60 fps instead or the 60 fps ones had full RT as well, would consumers care enough that MS might have gained lots of market share from this move?
Right now the market is 38m PS5s to 22m X|S , could we be more like 32m to 28m right now? 6 million extra units might be 30 million more software units sold or maybe 3 million GP subs. That isn't really going to replace your $1 billion losses on hardware every year, but market parity outside of Japan would have likely solve their Sony advantage with 3rd party exclusives problem.
TLDR: Can hardware power get you enough extra market share, especially with early adopters, to make it a viable long term strategy?
PS: The only time Xbox was clearly more powerful was the original Xbox and Sony had a massive hardware/software headstart, so I don't consider this a valid example.
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