Video Game Market Analysis Thread

[ThePastyBandit (Dean)]

Level up: how PlayStation infiltrated youth culture

People really need to read this article.

I started Xbox marketing strategy thread on here, asking what the plan was as I didn’t see one. I kept getting told it was gamepass & I kept arguing there was no marketing strategy behind it. Only for responses to keep telling me they’d leave it to the “experts” as they knew best.

I tried to argue that some YouTube adds and word of mouth isn’t enough to create any momentum.

In my opinion Xbox need to not try to be wishy washy and include everyone, they need to have a plan to market a specific audience.

Back in the 90’s Sony knew to hit the young adult market and that probably still holds much sway on the console they buy today. Back then the clubbing scene in the U.K. bouncing so Sony attacked the nightclubs sponsoring events that young adults were into and began sponsoring the champions league

Xbox in my opinion needs to get serious in europe by appointing a department to work in the europe

They need to market heavy in the age bracket they want to catch and get the brand everywhere possible put it in the consciousness of the youth. I’ve said multiple times they need to get into sponsoring football (soccer) teams. They need to find the zeitgeist of gen z. Sony found that with the club scenes in the 90’s.

Remember sega and Nintendo were entrenched in europe as well but Sony found a way.

Then they need to advertise the old fashioned way for game pass to parents that’s tv adds showing the value that games pass brings

On top of this they need the games. The need the platformers to get the kids at an early ages & they need licensed games to capture the eye of the casual teens to young adults.

Games like avowed, hellblade what they have coming aren’t going to turn heads, they may upon release if they are great but that’s not going to capture the minds of teens, they need to see something in pop culture that will grab them. COD is a very good start but that’s not going exclusive.

Then they need the hellblades to be good on top of them.

Even with all this, it’s not going to be overnight but it will turn they need to get that swell of acknowledgment building as the latter years of ps3 did

& then finally they have to come out of the gate for the next gen on fire.

That means the console can’t be a carbon copy of what the ps6 will be & if it is in my opinion they need to launch it early as they did the Xbox 360. So when the ps6 arrives people think it’s not worth changing back to PlayStation.

It can be done it just needs the will, the planning, the commitment and the patience

Xbox is an oil tanker & won’t change over night they just need to get it moving in the right direction before next gen

[BRiT]

Too many “needs to” to be taken seriously.

[Cpt_Haddock (Peeeter)]

@BadNews

yeah, Spain, but apparently Microsoft is doing awful there. I am not even talking about sales, but they’re doing stuff like using Spanish (mexican) instead of Spain’s. That’s a big no-no in that market because they don’t like that type of Spanish.

Could be worse, Starfield got fully translated to Spanish (Castilian, from Spain), but:

Desincronización labial en Starfield, otro de los clásicos de los juegos de Bethesda

Imagine in a such long game, every character talking while not moving their lips, or moving their lips without talking for seconds.

[IrishXbox]

@Staffy

Agreed. The hardware and software staff indeed deserve better. I honestly don’t know what to say about the chip shortage either, I kinda doubt that’s still an issue for them. We can’t do much other than keep supporting Xbox, buying their games and hoping things pick up. Cannot imagine they are too happy with this. Even if Europe isn’t exactly Xbox minded, there are plenty fans.

We can’t do much about it, other than hoping it picks up again.

I’m getting tired of the chip shortage and COVID being still being used To me it’s just being used as an excuse to try and cover up poor console sales in 2023.

Far more plausible was the notion that XBox has been holding back fire to get the ABK deal over the line and starting to see on Amazon it much, much easier to buy a brand-new XBox Series X. So it looks like it was true

XBox really has to do far better with their promotions and PR it’s the one sector of the XBox dept that’s been so poor for years and needs to be addressed and fixed.

All that said I do feel sorry for the XBox Team and no matter what some say I bet the Team is disheartened a little. No one really expected the Series consoles to have sold less than the XBox One three years into their life cycles if people are honest with themselves. More so after the XBox team addressed many of the issues of the XBox One with no Kinect, better hardware than SONY and a huge investment in their In-House and 1st Party portfolio that really started when the One X was coming out.

I’m very critical of XBox PR/Promotion because it sucks and deserved to be called out for not being up to the job but the team can’t catch a break sometimes the hard-working XBox staff deserve to have seen better console sales for all their effort and hard work and really gets to me to see the likes of IGN come down hard on Starfiedl and now COD because XBox bought the studios its so lame and pathetic.

I hope the team will have a good black Friday and a great Christmas sales period have to credit Amazon with some fabulous Series X deals online at the mo. So hope the system sells millions over the next few weeks.

[ThePastyBandit (Dean)]

@BRiT

Too many “needs to” to be taken seriously.

How witty of you

[Zappy5]

@ThePastyBandit

… grab them. COD is a very good start but that’s not going exclusive. Then they need the hellblades to be good on top of them. Even with all this, it’s not going to be overnight but it will turn they need to get that swell of acknowledgment building as the latter years of ps3 did & then finally they have to come out of the gate for the next gen on fire. That means the console can’t be a carbon copy of what the ps6 will be & if it is in my opinion they need to launch it early as they did the Xbox 360. So when the ps6 arrives people think it’s not worth changing back to PlayStation. It can be done it just needs the will, the planning, the commitment and the patience Xbox is an oil tanker & won’t change over night they just need to get it moving in the right direction before next gen

I mean much of this is true at least partially but it more or less diverges from Microsoft’s plan and mission. They want people in the ecosystem but want to broaden it out.

I was thinking about next gen and I wonder whether instead of the two box sku plan they should instead make one premium console box and their second sku is a mobile/handheld device that can also be docked to a screen. They’d need to market it right. No point pretending you will definitely be able to natively play all games on it. Instead explain that you can play some or most games natively but where devs can’t offer that option the device can stream them.

I think such an approach would set them apart. The handheld could be a secondary device for Xbox owners too. You could have games when played on the main box that utilise the second screen. Or it doubles up as an emergency controller. If there is a way they can open up that handheld so it could access other streaming services then even better.

[Zappy5]

@IrishXbox

…he issues of the XBox One with no Kinect, better hardware than SONY and a huge investment in their In-House and 1st Party portfolio that really started when the One X was coming out. I’m very critical of XBox PR/Promotion because it sucks and deserved to be called out for not being up to the job but the team can’t catch a break sometimes the hard-working XBox staff deserve to have seen better console sales for all their effort and hard work and really gets to me to see the likes of IGN come down hard on Starfiedl and now COD because XBox bought the studios its so lame and pathetic. I hope the team will have a good black Friday and a great Christmas sales period have to credit Amazon with some fabulous Series X deals online at the mo. So hope the system sells millions over the next few weeks.

You are ignoring that their major problem is the loss they make on hardware and the fact they are constrained by that. As Phil internal emails say they could have sold 2-3M more in 2021 but would have incurred a loss that is unacceptable to wider Microsoft.

Their main issue is not a lack of demand but deliberately not cashing in on the highest periods of demand because they couldn’t afford to lose the money per unit.

[Mort]

@Zappy5

You are ignoring that their major problem is the loss they make on hardware and the fact they are constrained by that. As Phil internal emails say they could have sold 2-3M more in 2021 but would have incurred a loss that is unacceptable to wider Microsoft.

Their main issue is not a lack of demand but deliberately not cashing in on the highest periods of demand because they couldn’t afford to lose the money per unit.

@Zappy5

You are ignoring that their major problem is the loss they make on hardware and the fact they are constrained by that. As Phil internal emails say they could have sold 2-3M more in 2021 but would have incurred a loss that is unacceptable to wider Microsoft.

Their main issue is not a lack of demand but deliberately not cashing in on the highest periods of demand because they couldn’t afford to lose the money per unit.

I can’t really wrap my head around why you would design a product you can’t afford to sell.

[Zappy5]

@Mort

I can’t really wrap my head around why you would design a product you can’t afford to sell.

Because you design it years in advance and nobody could have foreseen the huge silicon cost rises in the production year and the difficulty with production.

Also consoles are more or less designed to be sold at a small loss to max spec vs price but of course you don’t need much for that to get wildly out of whack. Covid really stuffed them.

[Mort]

@Zappy5

Because you design it years in advance and nobody could have foreseen the huge silicon cost rises in the production year and the difficulty with production.

Also consoles are more or less designed to be sold at a small loss to max spec vs price but of course you don’t need much for that to get wildly out of whack. Covid really stuffed them.

Yeah I guess they were unlucky in that regard. Still, Sony managed to make a product with the same performance and not have any of those issues, why is that? Or do they just eat the losses?

Also, with the price increase on the consoles this should be less of a problem now right?

[pg2g]

@Mort

Yeah I guess they were unlucky in that regard. Still, Sony managed to make a product with the same performance and not have any of those issues, why is that? Or do they just eat the losses?

Also, with the price increase on the consoles this should be less of a problem now right?

Sony’s chip is smaller and runs at higher clock rates. Price per chip is basically a function of cost of wafer and chips you get per wafer (which is impacted by yield and size of chip). Also consider that Sony raised prices before Microsoft did, and the peformance isn’t the same despite how come of the games come out (but that’s another discussion).

I wonder if Sony sees quicker return on users due to software sales or some other difference.

[CallMeCraig]

@Mort

Yeah I guess they were unlucky in that regard. Still, Sony managed to make a product with the same performance and not have any of those issues, why is that? Or do they just eat the losses?

Also, with the price increase on the consoles this should be less of a problem now right?

When Sonys product mix shifted from PS4 to PS5 their profit margins pummeled down to now 5 percent. This seems to indicate a noticeable loss on hardware. So yeah, they eating it up.

[strawman]

@Mort

Yeah I guess they were unlucky in that regard. Still, Sony managed to make a product with the same performance and not have any of those issues, why is that? Or do they just eat the losses?

Also, with the price increase on the consoles this should be less of a problem now right?

Sony also loses money on HW. One of Sony’s execs commented during the last financial call that the goal of shipping 25M consoles this financial year eats into their profit margins (technically speaking, selling hardware at break/even point would also lower the margins, but I suspect he meant selling at a loss).

Sony lost $1.7B on console hardware in 2019. Some of it was R&D for Playstation 5, but I imagine most of it was due to subsidizing PS4 hardware. So it’s not like it’s a thing unique to this console generation.

[BRiT]

@Mort

Yeah I guess they were unlucky in that regard. Still, Sony managed to make a product with the same performance and not have any of those issues, why is that? Or do they just eat the losses?

Also, with the price increase on the consoles this should be less of a problem now right?

Different accounting schemes are in play whenever talks about selling the console for a loss happen. Sony’s public statements seems to base it off the bill of materials costs, while Microsoft includes all the R&D and Product Maintenence such as online infrastructure and dashboard and firmware updates and new feature additions. They are not the same statements.

[BRiT]

The other aspect I forgot to mention, in order to produce those few extra million SOCs needed, they would have required a substantial extra payment for fabrication allocation. Due to the pandemic, those charges were obscene, well above and beyond normal costs. The fabs were pretty much auctioning off allocation to the highest bidders. This was surge pricing taking to the extreme.

These additional charges have a drastic impact on costs to produce.

[Zip]

@BRiT

The other aspect I forgot to mention, in order to produce those few extra million SOCs needed, they would have required a substantial extra payment for fabrication allocation. Due to the pandemic, those charges were obscene, well above and beyond normal costs. The fabs were pretty much auctioning off allocation to the highest bidders. This was surge pricing taking to the extreme.

These additional charges have a drastic impact on costs to produce.

Yeah, that’s a commonly overlooked expense.

[Mort]

@pg2g

Sony’s chip is smaller and runs at higher clock rates. Price per chip is basically a function of cost of wafer and chips you get per wafer (which is impacted by yield and size of chip). Also consider that Sony raised prices before Microsoft did, and the peformance isn’t the same despite how come of the games come out (but that’s another discussion).

I wonder if Sony sees quicker return on users due to software sales or some other difference.

@CallMeCraig

When Sonys product mix shifted from PS4 to PS5 their profit margins pummeled down to now 5 percent. This seems to indicate a noticeable loss on hardware. So yeah, they eating it up.

@strawman

Sony also loses money on HW. One of Sony’s execs commented during the last financial call that the goal of shipping 25M consoles this financial year eats into their profit margins (technically speaking, selling hardware at break/even point would also lower the margins, but I suspect he meant selling at a loss).

Sony lost $1.7B on console hardware in 2019. Some of it was R&D for Playstation 5, but I imagine most of it was due to subsidizing PS4 hardware. So it’s not like it’s a thing unique to this console generation.

@BRiT

Different accounting schemes are in play whenever talks about selling the console for a loss happen. Sony’s public statements seems to base it off the bill of materials costs, while Microsoft includes all the R&D and Product Maintenence such as online infrastructure and dashboard and firmware updates and new feature additions. They are not the same statements.

Thanks, it makes a bit more sense to me now.

[IrishXbox]

@Zappy5

You are ignoring that their major problem is the loss they make on hardware and the fact they are constrained by that. As Phil internal emails say they could have sold 2-3M more in 2021 but would have incurred a loss that is unacceptable to wider Microsoft.

Their main issue is not a lack of demand but deliberately not cashing in on the highest periods of demand because they couldn’t afford to lose the money per unit.

I am not buying that at all, sorry. Console companies other than Nintendo sell their hardware at a loss or at least cost look to make it up on software sales and development and 3rd party fees and royalties.

XBox had no issue selling the hardware and trying to meet demand in the 1st year and going in the 2nd year when the talk was sales equal to or better than PS5. In 2021 the talk was on the likes of Restaera of MS doing a deal with AMD to make sure it had better production than the PS5

XBox lost so much ground with looking to get the ABK deal over the line it seems

[IrishXbox]

@CallMeCraig

When Sonys product mix shifted from PS4 to PS5 their profit margins pummeled down to now 5 percent. This seems to indicate a noticeable loss on hardware. So yeah, they eating it up.

I would say SONY lose more on the harwdare given the sales and price cuts. It would explain why SONY looked to increase the costs of the PS+.

I think some are just trying to make excuses for Xbox’s poor hardware sales. SONY might lose money on hardware but none of us know what SONY charges each 3rd party just to be allowed to be a PS5 developer before you move on to the royalty fee on each unit of software sold

It was said that the PS1 cost SONY over $500 to actually make but SONY sold it for below $300 a massive loss on each unit sold but made up the difference thanks to 3rd party fees development fees and software sales royalties.

Xbox 360 was incurring a big loss to XBox for each unit sold let’s remember

[Anecronomicon]

The commonly accepted ‘facts’ floating around in various gaming discussions is MS loses money on the Series X whilst Sony makes a small profit on the PS5.

This seems… fantastical & highly unlikely. Unless MS engineers don’t know what they’re doing or MS gets fleeced with each component for the hardware, the reality of the market says both systems probably cost a similar amount to manufacture.

Beyond all the spin & pr speak, I think what’s really going on is Xbox can absorb lower hardware sales better because of their presence in pc gaming (Starfield being a perfect example). Sony meanwhile absolutely needs to shift its hardware because that’s where their ecosystem is. They’re very good at it & have huge mindshare (& marketshare obviously) but the truth is they’re more beholden to their hardware sales than Microsoft is.

Obviously Xbox should be doing better though, i.e. that’s a fact. It is a concern going forwards as well because the Series consoles shouldn’t “sell worse” than the Xbox One. If they do, then MS will have a smaller pool of console players going into next gen. Maybe they intend offsetting this with pc gaming & a focus on services but Xbox as a console needs more people to buy into the hardware & games on it. Otherwise it’ll be constantly seen as an afterthought for third party devs.