I mean, the next gen prices are still speculation. I don’t think they’re far off (especially with the “Premium” comment from Sarah), but they are currently just speculation. And with current Gen console prices lined with the competition, I’d say they’re definitely keeping pace. Arguably better. The Switch 2 still costs more than the Series S. Nintendo has also now raised the price of the Switch 1 consoles. And then games are now more expensive on Nintendo than anywhere else (Xbox could justify $80 games with their game budgets more than Nintendo can for Mario Kart world (other than, “It’s Mario kart and we’re Nintendo, so people will buy it anyway.”)). The Xbox consoles have increased more in price than Playstation, but Sony is also spreading the cost elsewhere with hardware and to Sony’s credit they seem to have the better production pipeline costs wise and I imagine more stock saved up. Though we also see stuff like them lowering storage on the PS5 slim in order to keep the cost increase down.
I think all consoles are focused on breaking even. Microsoft was the last one taking a loss to begin with. The Series X probably cost more to make than the PS5 based on internals and the Series S we know they lost quite a penny on for each sale. I think that’s definitely stopping. In general the good guy routine or Xbox being the “cheapest” option is out and granted that strategy never worked like they probably wanted.
Next Gen is next Gen, we don’t fully know what costs will be. They certainly don’t look good, but there might be plans to meet the target profit margins and give gamers options. Like the potential OEMs or cloud solutions or maybe they’ll continue producing Series X and S consoles for the foreseeable future. Considering how long cross Gen lasted this time around, it wouldn’t be a bad strategy to position the Series console a viable option for both new and existing gamers. Especially if next Gen starts 2027 at the latest. They could produce series consoles and keep them as a option for two or three years.
This is it. I really think if the next gen consoles are expensive they will have options. I mean Samsung and Apple sell thousand dollar plus phones every year and they sell between 250 to 300 million phones a year and people buy them. I know phones are a little different but to me it looks like Xbox is trying to expand the market for all. I’m sure NextGen we will have Samsung, LG and many more making Xboxes at different price points.
Besides whom knows how the economy might be then. Everything right now is going through the roof.
Phones are often given out with deals and people trading in, so at least in the US I know I’ve seen people online often talk about how they get a new phone yearly almost for free.
I know for me I change as little as possible as they are quite expensive. But considering people’s lives revolve around their phones, I’m guessing it makes it more justifiable.
I think the Xbox hardware team makes great designs that are powerful yet silent, but maybe the focus should be on reducing cost as much as possible as well. Stuff like Sony did recently like reducing the cost of the SSD slightly and using cheaper plastic isn’t really something I think people will care about if they still get to pay less in the end. Use a smaller, cheaper chip and OC the heck of it with a cheap yet efficient cooling solution to maximize what the chip can do and save money there as well.
I feel like the people at MS wanna do things right by the consumers in some way, but at the same time are up against other, more ruthless competitors. At the end of the day the playing field isn’t even so I think they need to adapt to that and I feel like consumers would react positively to that. Or maybe I’m just naive!
The point is the phones still cost a hefty deal whether given through deals or freely the companies are still getting their money and they aren’t subsidized. You are right phones do tend to revolve around people’s life and in that manner, I will say consoles can be built to such level or close. Xbox is clearly hoping for the Full screen mode to become more like the app store or google Play store making it almost like an OS for gaming. Sarah Bond’s background is in the Smartphone business making me believe the Xbox handheld that is being done internally will be something new that might start a new class of devices.
People will bitch if Xbox uses cheap material, they already do with series S even when it was the cheapest.
A bit pointless but does anyone know what margins Sony and Nintendo expect from their gaming studios. Just for reference againt what Xbox is expecting from its stuidos
Sony in their business meeting talked about 10% or more. Nintendo has usually been pretty high.
Nintendo FY25 Margin Breakdown
• Gross Profit Margin: 61.0% (up from 57.1% in FY24)
• Operating Profit Margin: 24.3% (down from 31.6%)
• Net Profit Margin: 23.9% (down from 29.3%)
Maybe but I think it’s very doable considering the many streams of revenue Xbox has now like Game Pass, multiplatform software sales. Game Pass Cloud has now left beta, and it seems they are now pushing it, Game Pass alone if it hits a certain number could mitigate those margins.
Not to mention offloading some of the burden of selling consoles to OEMs like ASUS, Lenovo, MSI, etc.
Microsoft is taking a page out of Google’s playbook. Sell your own hardware (Xbox), allow OEMs to sell ‘Xbox’, and make money from Xbox store, Game Pass subscriptions, and Xbox accessories across all devices.
I also think they should tap in to their back catalog even more. Call of Duty alone has multiple games that could use the remaster treatment.
Finest Hour, Big Red One, United Offensive, and even the original are not currently available on Series S/X. They could also repackage the COD: Modern Warfare 1 +2 remastered campaigns with Modern Warfare 3 and release it on multiple platforms including the Switch 2. The same could be done with World at War, and the early Black Ops titles.
Then you have Halo, Gears and Fable. And please give Nightdive Studios the keys to remaster Fallout 1 + 2/Tactics for modern platforms, complete with controller support.
Agreed. Just look at how much google generates from the Playstore just from its partners like Samsung. We’re talking 30% they just might be over that once all this starts fitting in.
Indeed, you have them promising 75-day one game Pass titles on Ultimate that’s going to be good enough for a lot once Game Pass becomes more widely discoverable through OEMs and partners, that 30 dollars will be like a phone bill for some.
That’s a a very wide valley (between Sony and Nintendo). I can somewhat see where the 30% margin target is coming from.
Still, I’d probably personally target Xbox for a more reasonable 20%. Hopefully that’s more in line with reality and the 30% number is more like the “sticker” margin, but Microsoft is just generally trying to improve profit margins in gaming and 30% is the long term stable goal. And they’d be more than happy with a solid 20%.
It’s not an impossible target and it is very possible. Nintendo has gotten there and higher in some instances. Also, if it wasn’t feasible they would never have bought ABK
Nintendo FY25 Margin Breakdown
• Gross Profit Margin: 61.0% (up from 57.1% in FY24)
• Operating Profit Margin: 24.3% (down from 31.6%)
• Net Profit Margin: 23.9% (down from 29.3%)