They’re making money from the Activision deal. That’s what’s swaying the balance towards multiplat right now. Without AB, the numbers Xbox is doing would not look good at all. It’s not about any particular Xbox ‘business strategy’ which is working for them, it’s simply about them inheriting AB’s profits.
As a consumer I’m more interested in rising costs tbh, i.e. specifically the position of dominance Sony & Nintendo find themselves in within the console space will be bad news going forward if they stay true to their usual ‘convictions’, i.e. which is to increase hardware prices, always. And before someone says “why don’t you go PC!”, have you seen the cost of graphics cards now? I mean there’s no ‘safe haven’ anymore. Everything costs more.
That’s why losing Xbox from the console space would be very bad news. Aka they make cheap affordable living room gaming, i.e. something which can’t be found elsewhere.
I’m not a big fan of twitters ZhugeEx (only based on his drive by humour posts) but when he’s posting in his professional capacity he is usually bang on and his comments are pretty accurate on this situation.
Firstly he points out, and not for the first time, that Xbox has been for a long time focussed on multiple point of entry with console being just one.
He then goes on to say this:
Which pretty much lays out the current value position for people who take the console entry point into the Xbox ecosystem with (like it or not) one of the main points being exclusive games.
With the way they’ve chosen to implement and communicate their new 3rd party publishing strategy they have effectively completely removed that incentive to use the console entry point into their ecosystem and replaced it with nothing.
I said before that introducing PS ports would be a difficult type rope to walk marketing wise to keep both existing console customers and new PS ones happy. Now I’m no Charles Saatchi but I don’t think announcing that your previously announced as an Xbox/PC exclusive big holiday release is going to PS after a tiny 3 month exclusive period in a flashy just one more thing announcement at a show in any way does that.
Just off the top of my head and with zero though a more positive way to message it would have been PS release date as part of the slide and one more thing first DLC free on Xbox platforms and GPU?
And there’s no problem with not liking the direction Xbox is going with their strategy. I bought a Series X when they had a different strategy, and they changed it. That’s fine, I understand it, but I have every right to complain about it.
Maybe they can focus on the actual games as opposed to tying themselves to a particular brand/console and what they perceive its success should look like?
Why do you all, who so lovingly make this statement constantly think you’re making a clever point? Yeah they bought ABK to improve their standing and make money… And now that they’ve accomplished that they’ve improved their standing are making more money.
Do you believe others aren’t aware of this, do you believe you are making a salient point. That this is some little known fact?
The part you & others seem unaware of is the part where Xbox isn’t making money right now because of their own strategy. I repeat myself here but the money they’re making is simply due to the acquisitions. But let’s not pretend they’re embarking on a great new business venture with huge potential via multiplatform releases.
They want their cake & they want to eat it too, which means keeping 50 million (or thereabouts) Xbox console users in their ecosystem whilst selling Xbox games on rival platforms as well. We’ll see what tune people will be singing when those Xbox console owners gradually go elsewhere, i.e. like over to PlayStation where they’ll get Sony’s games as well. The value proposition of Xbox is reflected in its current plummeting sales, i.e. by making the Xbox hardware less appealing, people are not buying the consoles.
Some people seem to think Xbox can get the best of both worlds going forward, i.e. keeping loyal console owners who’re investing in the hardware, games & services, whilst also selling games to PS5 owners as well.
I don’t think so. Those ‘loyal Xbox console owners’ will become PS6 owners within 5 years.
A thing I was thinking about with this strategy is stalling xbox console sales worth losing the 30% cut from store purchases. I am still confused about that part because with less console sales and smaller install base does this strategy make more money than potentially losing install base and missing out on 30% cut from GaaS. I think there’s a big risk with people migrating to playstation results in the GaaS players moving because their friends are on Playstation.
Anyway, that’s something Microsoft has to think about with these moves because I am unsure if Playstation sales offset revenue generated from people making purchases from the Microsoft store
First sentence, you’re off to a terrible start since acquisitions have been a stated part of their strategy for years now. Rest of the post is non-sense and baseless predictions.
I think people are sleeping on a good portion of XB1 users migrated to Playstation because they had enough waiting for exclusives. I think same thing will happen next gen with this strategy because people are okay with waiting 4-12 months for an exclusive. Plus, gamepass subs have stalled and I think people are okay with not spending $500 on a console + $18/month for gamepasss ultimate. They will opt for a playstation console because good chance its where they have friends playing, crossplay is a thing with most MP games, and they’ll have access to Playstation and Microsoft games even if Microsoft games are delayed
unsure how many of these users are xbox gamers, but that’s a pretty big number. THat’s 15million users that skipped PS4 gen. Plus this doesn’t account for multiconsole owners that might’ve dropped xbox
That was way before the change in strategy though - so Xbox was already very much in 3rd place, and if it had carried on as they were they’d just bleed users every generation and eventually be so far behind they became irrelevant.
If we were still looking at a market share like the 360’s, Xbox could have looked to make most of the acquisitions exclusive without losing money - but with the smaller install base of Xbox now (the last generation really was the one not to lose), they’d lose a ton of money if they made ABK and Bethesda fully exclusive to Xbox and PC.
The games across the huge numbers of studios cost too much to make to be offset purely by Xbox/PC buyers and Game Pass subs - so they have to diversify, otherwise they lose money and risk shutdown by MS anyway, as it would take years for a full exclusive strategy to have an impact and as we’ve seen gamers are pretty sticky to their ecosystem.
I think the new strategy is hoping that gamers are sticky to Xbox too (which let’s face it, we’ve come through some pretty lean years so most of us aren’t going anywhere) while making enough money elsewhere to keep the behemoth running.
It’s the cost of the ABK acquisition in many ways - Xbox is now huge, ABK generates lots of cash but much of it from PlayStation, and so Xbox can’t afford to turn off the taps.
I’d have loved for this generation to be the one Xbox tore ahead of PlayStation and we got all the games, thinking Game Pass and Bethesda would tempt players over as would the more powerful Series X - but I was very wrong, the Series consoles have fallen behind the One generation and the PS5 is storming ahead despite a very weak few years (and an incredibly weak outlook for the next few years).
With that lack of catching up, without ABK Xbox would be slowly drifting towards lower numbers each generation anyway - at least this way the PS money helps these games still get built so we can enjoy them on Game Pass…
However it won’t sunshine and roses “if” everything under the sun is ported, which by the way Tom stated things seems like a couple of games won’t. That’s the death sentence in a way if that was the case.
Also, yeah am thinking the next gen hardware start will be significantly hurt by the ports happening right now, if folks think it ain’t then you don’t understand how casuals gamers play.
But i think we need to see by the start of the new year or fiscal year to know exactly if this strategy will hamper things on the hardware front, especially with the Holidays coming up.
So Xbox have better start communicating and market things if they wish to achieving something for their core audience during said period, otherwise all i can say is that Satya is once again thinking short term can be long term and we all know how windows phone became what it was.
The thing is we’re all speculating to me some of this moves make sense if the idea is truly to open the ecosytem and bring down the walled gardens. The console is also sold at a loss with Phil spencer putting the loss between $100 to $200 which I imagine they wouldn’t want to keep incurring especially with their intention to drop paying for online.
Right now the only place you can play Game Pass natively is either on an Xbox console or a really capable PC which makes consoles still necessary as the bulk of their subscribers are here and dropping leaves just PC. The other console manufacturers have no intention of playing ball with Game Pass as that will eat into their margins.
This brings up a proposition on how do you fix it and they can go the hardware or software way or both. The software way would be to introduce an OS for all their OEM partners or any company interested, The hardware way is simple. So maybe this so called hand held or hybrid will be a console with Xbox store as it’s main store while opening the platform to every PC store and even publisher to have their own store on the platform. A few years ago many of the publishers tried on PC to have their own stores but it didn’t work out so well, Xbox might be able to make that work on a console platform. Also, others like Amazon could pick up the OS for their own hard wares. It would also limit the dependency on Steam if you can buy directly from the publishers and give the platform the capability to play all games since they are not inclined to the Xbox store.
Equating prior acquisitions with the Activision-Blizzard acquisition is silly.
It’s the first acquisition in which the revenue of the acquired entity was substantial enough to impact the strategy of Xbox going forward. They made something like seven or eight billion dollars a year. It’s huge.
And how can any prediction based on Xbox’s declining hardware sales be ‘nonsense’? It’s a reality. The time for copium was 2 years ago. 12 months ago people here were arguing about how the ABK deal could turn things around for the consoles. It hasn’t. Gamepass has stagnated as well.
So no, the money Xbox now sees is via a hybrid approach in which they combine third party multiplat releases, Gamepass & hardware all together. It’s just not sustainable long-term. Come Christmas I suspect Xbox hardware sales will be irrelevant to the point of actively harming the brand, then what?
Agreed, and this is in my opinion the biggest challenge/problem MS is facing right now.
Xbox sales are like half as much as PS5 or a bit lower than half, that’s probably sustainable and correct enough, let’s say Sony’s console sells 120m , that’d be around 55-60m for Xbox, i can see them being ok while releasing their games on PS for extra revenue.
The problem is the sales trending last 12-18 months, Sony shipped 7M consoles last 2 quarters, while MS didn’t reach 2M, with the console getting outsold 3 or even 4 to 1, that doesn’t seem sustainable anymore.
And looking at a future generation, most people expected Elder Scrolls, Fallout, Doom, Etc to be only on Xbox Series back in 2020-2022, now we all know these are multiplatform, so with sales being that low and a future Xbox not being as attractive as Xbox Series was when it released, i don’t see how would it be smart for MS to release another typical powerful console anymore.
They need a comeback somehow sales wise before the generation end, CoD is probably their last bullet, i don’t see sales getting much better even with the game being on Gamepass, but we’ve seen much weirder stuff on the market so who knows, but the console being outsold 3-4-5 to 1 can’t continue if they want to continue in the traditional console market
