I think there is some element of truth to this when you factor in the idea that Microsoft seems to be moving away from the walled garden approach and heavy into the Netflix model with Game Pass.
That is to say that the revenues from Xbox Live and the 30% cut of sales of third party games and their DLC could be secondary to Game Pass subscriptions.
Console sales seem to hit a ceiling. 125 million PS4s soldâŚit didnât even reach the PS2âs 155 million. Making money from 155 million users results in a lot of money but it is dwarfed when you look at the industry on the whole. There is an estimated 1.75 billion PC gamers out there. There are 2.2 billion mobile gamers out there.
So when you look beyond your own walled garden, there is so much more potential in making money.
300 million subscriptions isnât possible even if you added up the PS4 and Xbox Oneâs userbases. But 300 million GP subscriptions would far outweigh a 30% cut you get from sales of games on your platform.
But Microsoftâs plan here hinges completely on having a console. So while I think they are rightly focused on Game Pass to make their money, the console is a critical component of this.
This is because the console is the basis for serverblades which will allow GP to played on hundreds of millions of devices. What is also needed are things like controllers, to allow people to play these games. Controllers are incredibly important because in many respects controllers define a platform. When a person streams a Game Pass came to their new TV, and it tells them to press the Y button, the developer and the user needs to have some sort of standard. So having a console and a controller helps define these hardware standards.
If MS plays their cards right I can see the Series consoles selling well past 80 million units, which will provide great secondary revenue from the sales of third-party games and DLC. So I donât see the new model replacing the old model but I do see the new model being the primary focus.
So thereâs an element of truth in what youâre getting at but the reality is that hardware will play a fundamental role going forward.
I think Microsoft wants to do⌠everything, really.
Theyâd love to have Game Pass on Playstation, obviously. Same goes for Switch.
But they also have no intention of ending hardware creation. Xbox, Game Pass, and all of the IP that go with that are all part of Microsoftâs brand. They want Game Pass to be everywhere, but they also want to be able to optimize their games around a central hardware platform in Xbox.
Thereâs more to Xbox than Game Pass and there always will be.
With MS wanting to get GP on PS5, that would signal the end of Xbox. No one in their right mind would buy an Xbox when you could buy a PS5 and then have all of Sonyâs and MS games on it. MS would know that the end result of GP on PS is the end of Xbox, yet they were happy to try and get the deal done. That tells me that they would be happy to walk away from the hardware buisness if GP becomes.big enough.
To people thinking itâll ever go to ps5, go watch that Xbox documentary and tell me why theyâd just give up. You want to play their games? You can buy and Xbox, a PC, or stream literally anywhere but the switch and PlayStation. Theyâre not changing this just because Phil was talking about a hypothetical scenario with gamepass on other closed systems. Heâs never even actually talked them about it officially.
You still need Xbox hardware to run the games on the PS5 via streaming. Developers need to still target Xbox hardware.
Just because MS is getting in hardware to run cloud gaming doesnât mean they would make a console especially if it sells SFA. Both Google and Nvidia donât have a console yet have game streaming. In the future MS could well run the game streaming for Sony.
You know if Game Pass ever became big enough to abandon the Xbox hardware, it actually makes a case for having hardware even more at the same time. In this scenario Game Pass and the Xbox would be at the iPhone+(Apple Apps) level of popular.
They mentioned in their earnings call how theyâre investing in specialized Xbox hardware and machine learning. Seriously itâs not gonna happen.
Consoles are selling better than ever and as long as this continues Xbox will never get out of the hardware business and become a publisher like EA. These console manufactures make billions with their ecosystem and the mandatory MP fee.
I get that, but if Sony put gamepass on PS, who would buy an Xbox over a PS? If you get a Xbox you can play Xbox exclusives and third party. If you buy a PS you get all Sonyâs exclusives, all Xbox exclusives and all the third party games. So if no one is buying your console, do.you think MS is going to spend the hundreds of millions to develop a new console? If MS isnât selling many consoles, and therefore reducing by a massive amount the take from third party game sales, which are used to help cover the hardware loss, they will have to charge a higher price for their console, which means they will be harder to sell. MS arnt stupid, and they would know the hit the xbox would take by putting GP on PS, so in my mind it tells me they would get out of hardware if it means a bigger GP.
I donât think GP will be on PS.
And if at some date playstation pulled gamepass off? It would be hugely detrimental to the business. The rumors are also that xbox would wants to be on the switch but the hardware isnât anywhere close to being powerful enough. The only version I see Microsoft offering PS/Nintendo is the cloud version not natively running games
Weekend Era, is this you?
I hope not. The only way Iâll be fine with MS going 3rd party is if nintendo decide weâll start making real consoles again and have ms as the driving force behind software and infrastructure but nintendo make the hardware . So no chance of that happening and a fantasy land.
Like I said, consoles would still be a massive revenue stream, just not the primary. Neither Nvidia or Google I have tens of millions of consoles in peopleâs homes right now.
Iâve been thinking more and more about, and despite Grubb saying he thinks MS still wants Game Pass on PS5 it doesnât make sense at all.
Even if MS were to stay making consoles for much longer and not becoming publisher only, putting Game Pass that includes everything they offer on PS5 really will only make more people flock to PS5 and not bother with an Xbox at all.
Also, especially, what about being competitors? If MS puts everything on Sony platformsâŚhow exactly are they competing against them then? They arenât. And we do want an industry where these two compete against each other so they keep pushing to do even better, not become âlazyâ. I donât know, maybe weâre all stuck in the past, thinking in the old fashioned way?
Grubb reasoned that all these different streaming services are on different platforms too, like how you can have Apple Plus while your device isnât by Apple. Heâs not wrong about that I guess.
MS makes PCâs now with the surface line, They will do the same thing with Xbox, make premium hardware to show off the platform but still allow it on other devices
The key difference is that any pc out there means an OEM license fee for MS, it wouldnât be the same if they publish games on PS, only the death of Xbox, because all the juice from store will go to Sony.