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[Opinion] April 2023 is the beginning of the end for Xbox as we know it.

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Heisenberg007

Gold Journalism
It might sound a bit doom and gloom, and if someone disregards it or mock me for it, that's fine. People also laughed when I said that ABK will be blocked. But I wanted to put my thoughts on the record by saying that the downfall of Xbox (as we know it) has just gotten into 5th gear.

Will Microsoft just wrap up the Xbox division? No.

But I do think they will abandon their consoles very, very soon. After that, they will primarily become a game publisher. With the resources, studios, and IPs available to Xbox Game Studios, they can be a reasonably good multiplatform publisher, adding operating profit to Microsoft's balance sheet.

Here are a few of my logical reasons why I think Xbox would be abandoning its console in the next few years:
  • Microsoft loses up to $200 per Xbox console sold. On the other hand, PS5 has been selling at a profit for nearly 2 years now.
  • The idea of selling a console at a loss is not an uncommon one. Because console platform holders recover money by selling first- and third-party games on their platform. Unfortunately, the Xbox user base now does not buy as many first or third-party games.
    • Third-party games.
      • For example, Resident Evil 4 Remake sold 74% on PS5 and only 26% on Xbox Series S|X in the UK. However, the console sales split in the UK market is relatively equal: PS5 (56%) and Xbox (44%).
    • First-party games.
      • Digital Foundry mentioned that Xbox games have decreased in sales by up to 80%. Microsoft also has confirmed that Game Pass cannibalizes game sales. And since all first-party games launch on Game Pass day one, their game sales continue to decrease.
  • Talking of Game Pass, it has been 464 days since Microsoft last shared the Game Pass subscriber count.
    • Microsoft had earlier stopped sharing console sales numbers in Oct. 2015 because of poor console sales.
    • Then the argument was that console sales do not matter, and Game Pass subscribers are all that matter. Now, Microsoft has stopped sharing that as well.
    • Before Microsoft stopped sharing Game Pass numbers, Game Pass had "missed its subscription target" for 2 consecutive years. Then it all went quiet.
  • Talking of console sales, Xbox is being outsold by PS5 by nearly 3:1 now. PS5 has started averaging 24 million consoles per year recently. Xbox Series X|S is averaging 8.5 million consoles per year. And this is after investing more than $10 billion dollars in the division, only for acquisition.
If Microsoft stops selling consoles, they will immediately increase its profitability. The only reason why Microsoft has kept Xbox alive is the hope that one day Xbox will capture the market share and contribute to Microsoft's profits. That's the reason Microsoft invested in Xbox. But the results did not improve.

Microsoft outright said that they needed Activision Blizzard King to compete. Now that the acquisition has been blocked, how will they compete?

I believe Microsoft will soon realize that this is not working, and Xbox won't be able to capture the PS5 market share. Consequently, they will shift its business model to becoming a third-party publisher and put its games on Nintendo and PlayStation as their combined user base is ~200 million gamers who spend the most money on buying games.

This strategy will also enable Microsoft to acquire more companies and publishers without strict scrutiny.

Lastly, Microsoft's involvement with Cloud gaming and Game Pass will make it easier for Microsoft to shift to this new model.

April 2023 is the beginning of the end for the Xbox console hardware. We're witnessing history in the making.
 

killatopak

Gold Member
Awkward Jesse Pinkman GIF by Breaking Bad
 

oldergamer

Member
It might sound a bit doom and gloom, and if someone disregards it or mock me for it, that's fine. People also laughed when I said that ABK will be blocked. But I wanted to put my thoughts on the record by saying that the downfall of Xbox (as we know it) has just gotten into 5th gear.

Will Microsoft just wrap up the Xbox division? No.

But I do think they will abandon their consoles very, very soon. After that, they will primarily become a game publisher. With the resources, studios, and IPs available to Xbox Game Studios, they can be a reasonably good multiplatform publisher, adding operating profit to Microsoft's balance sheet.

Here are a few of my logical reasons why I think Xbox would be abandoning its console in the next few years:
  • Microsoft loses up to $200 per Xbox console sold. On the other hand, PS5 has been selling at a profit for nearly 2 years now.
  • The idea of selling a console at a loss is not an uncommon one. Because console platform holders recover money by selling first- and third-party games on their platform. Unfortunately, the Xbox user base now does not buy as many first or third-party games.
    • Third-party games.
      • For example, Resident Evil 4 Remake sold 74% on PS5 and only 26% on Xbox Series S|X in the UK. However, the console sales split in the UK market is relatively equal: PS5 (56%) and Xbox (44%).
    • First-party games.
      • Digital Foundry mentioned that Xbox games have decreased in sales by up to 80%. Microsoft also has confirmed that Game Pass cannibalizes game sales. And since all first-party games launch on Game Pass day one, their game sales continue to decrease.
  • Talking of Game Pass, it has been 464 dayssince Microsoft last shared the Game Pass subscriber count.
    • Microsoft had earlier stopped sharing console sales numbers in Oct. 2015 because of poor console sales.
    • Then the argument was that console sales do not matter, and Game Pass subscribers are all that matter. Now, Microsoft has stopped sharing that as well.
    • Before Microsoft stopped sharing Game Pass numbers, Game Pass had "missed its subscription target" for 2 consecutive years. Then it all went quiet.
  • Talking of console sales, Xbox is being outsold by PS5 by nearly 3:1 now. PS5 has started averaging 24 million consoles per year recently. Xbox Series X|S is averaging 8.5 million consoles per year. And this is after investing more than $10 billion dollars in the division, only for acquisition.
If Microsoft stops selling consoles, they will immediately increase its profitability. The only reason why Microsoft has kept Xbox alive is the hope that one day Xbox will capture the market share and contribute to Microsoft's profits. That's the reason Microsoft invested in Xbox. But the results did not improve.

Microsoft outright said that they needed Activision Blizzard King to compete. Now that the acquisition has been blocked, how will they compete?

I believe Microsoft will soon realize that this is not working, and Xbox won't be able to capture the PS5 market share. Consequently, they will shift its business model to becoming a third-party publisher and put its games on Nintendo and PlayStation as their combined user base is ~200 million gamers who spend the most money on buying games.

This strategy will also enable Microsoft to acquire more companies and publishers without strict scrutiny.

Lastly, Microsoft's involvement with Cloud gaming and Game Pass will make it easier for Microsoft to shift to this new model.

April 2023 is the beginning of the end for the Xbox console hardware. We're witnessing history in the making.
Gimme a break, no it's not the end. Pretty silly to even post this, but somewhat expected
 

RagnarokIV

Member
I'd love for Microsoft to leave the console biz! Imagine there only being a single, monolithic company - the magnificent Sony. Without someone to keep them in check, they'd only ever offer the best value console with no stupid shit like gamepass. They'd also stop focusing on blockbuster AAA games and give us more stuff of variety like Tokyo Jungle, Gravity Rush and SOCOM again.
 

Heisenberg007

Gold Journalism
I'd love for Microsoft to leave the console biz! Imagine there only being a single, monolithic company - the magnificent Sony. Without someone to keep them in check, they'd only ever offer the best value console with no stupid shit like gamepass. They'd also stop focusing on blockbuster AAA games and give us more stuff of variety like Tokyo Jungle, Gravity Rush and SOCOM again.
Never said it's good. Just an observation and a prediction based on what I'm seeing.
 
lol 😂, even though I’m not a fan of Xbox, they have spent too much money just to throw it all down the drain, obviously things can’t go on like this forever, but I do think they will try one more time with a new Xbox console to compete with the ps6.
 

Heisenberg007

Gold Journalism
lol 😂, even though I’m not a fan of Xbox, they have spent too much money just to throw it all down the drain, obviously things can’t go on like this forever, but I do think they will try one more time with a new Xbox console to compete with the ps6.
I don't think that's throwing down the drain. Think of it more like trimming the fat and making the Xbox business by cutting out the unprofitable areas (hardware) and focusing on more profitable areas (software).
 

Skifi28

Member
The only issue I see after the cockblock they suffered is if Microsoft as a whole decides that gaming is not worth it anymore unless they can buy three quarters of the market and eventually become a monopoly like they usually aspire to. Otherwise, xbox is doing fine and has no reason to even scrap the consoles. Whatever loss the hardware is responsible for are probably made up with digital games and subscriptions. I have no idea what vision Phil sold to Nadella when the asquisition spree started, but I guess in the coming months we'll see what their plans for gaming really are.
 
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feynoob

Banned
Unfair to call it clickbait; I presented my arguments, backed by data and reasons. You're free to ignore it however. ❤️
It's clickbait, because we don't know what Xbox has in store.

Give it 2-3 years and post this again. By that time, Xbox will have issues, if they don't address any of your concerns.

As of now, there is time. And anything can happen during these times.

All you need to look at is Bethesda acquisition before and after for Xbox.
 

ANDS

King of Gaslighting

This is navel gazing at its worst. Particularly in taking ANYTHING MS has said to get their AB deal approved at face value.

Unfair to call it clickbait; I presented my arguments, backed by data and reasons. You're free to ignore it however. ❤️

You have data and you have reasons but you have spurious conclusions that ignore the countless arguments that go in the OPPOSITE direction (like how XBOX isn't just some vestigial piece of MS or how stupidly difficult it would be to sell off the division).
 
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Heisenberg007

Gold Journalism
The only issue I see after the cockblock they suffered is if Microsoft as a whole decides that gaming is not worth it anymore unless then can buy three quarters of the market and eventually become a monopoly like they usually aspire to. Otherwise, xbox is doing fine and has no reason to even scrap the consoles. Whatever loss the hardware is responsible for are probably made up with digital games and subscriptions. I have no idea what vision Phil sold to Nadella when the asquisition spree started, but I guess in the coming months we'll see what their plans for gaming really are.
Considering Phil says that they don't see Sony as their main competitor, that strongly implies that they aren't that interested in the console business.

They see a subscription-based model (like Netflix) that can get them recurring revenue and is powered by first- and third-party games, available on all platforms, screens, and devices a much more profitable business model. At least, that seems to be their aim.

Consoles do not come into that equation, in my opinion.
 

Pelta88

Member
The Activision acquisition answered a question I've been asking since late 2013...

Do XBOX guys actually care? I've been an XBOX gamer since 2001. We've all seen the ups and downs but in 2013 there was a well documented shift in mindshare, momentum and sales. But what ran parallel to that shift in the market was the emergence of a different type of XBOX fan. An XB fan who for some strange reason, would refuse to criticize their leadership / Phil Spencer. Elevating dude to something other than a suit that spews nonsensical PR. For years I was convinced that XBOX guys didn't care about the state of XBOX gaming and cared more about meaningless sound bites...

That is, until Microsoft unveiled it's new gaming strategy of buying publishers outright. At that point I saw XBOX guys change the narrative of "not caring." For the first time they started expressing and being vocal about the truth, which is that XBOX is in desperate need of games. It was like a revelation. A shift in gaming culture. A collective admission that Phil is hysterically bad at his job. But... It will be ok because now XBOX owns COD and success is now guaranteed.

But the acquisition failed. And for me, it's going to be interesting to see if they retreat back to XBOX is great because Phil Spencer said so. Or live in their truth and demand better.
 
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Darsxx82

Member
I love it when someone takes off their mask and shows their wishes. This type of thread is so expected after yesterday as who was going to be the author. Of course it was an opportunity that the fan of PS and console warriors could not miss.

The funniest thing of all is that before yesterday the narrative was that the purchase of ABK was also a sign that MS was going to become a 3rd party 😂😂. Not even the fact that MS announces that a new console is in development changes that narrative, which, as I say, is based on an internal desire.
 
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One of two things will happen:

1. Phil or one of the Xbox higher ups will be fired.

2. Xbox will leave the console business and become a 3rd party publisher.

I just can’t see them continuing down the same path because clearly it isn’t working. Hardware is down 30% and a 3%-4% growth in revenue is nothing to celebrate, when you consider the amount of money they have invested with there last billon dollar investment seeming to fall apart. It don’t take a rocket scientist to see they have major issues to fix.

23 studios but nothing to show for it, it’s puzzling that Phil and the same team is still employed after all these setbacks.
 
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Skifi28

Member
Considering Phil says that they don't see Sony as their main competitor, that strongly implies that they aren't that interested in the console business.

They see a subscription-based model (like Netflix) that can get them recurring revenue and is powered by first- and third-party games, available on all platforms, screens, and devices a much more profitable business model. At least, that seems to be their aim.

Consoles do not come into that equation, in my opinion.
Perhaps not directly, but you need a medium to reach those subscribers. It's quite clear that mobile phones and TVs are not quite there yet despite "3 billion users" or whatever executives likes to parrot. So that basically leaves PC and Consoles in the here and now as their main way of getting subscribers. Dropping consoles would lose them over 15 million subs (can't remember the exact number so do feel free to correct me on that) which would decimate gamepass. Maybe in 5 years.
 

Heisenberg007

Gold Journalism
I love it when someone takes off their mask and shows their wishes. This type of thread is so expected after yesterday as who was going to be the author. Of course it was an opportunity that the fan of PS and console warriors could not miss.

The funniest thing of all is that before yesterday the narrative was that the purchase of ABK was also a sign that MS was going to become a 3rd party 😂😂.
Care to comment on the thread with your own reasons so we can have a rather productive discussion?

Feel free to present your arguments -- ideally, with the same level of detail, stats, and reasons -- why Xbox is likely to continue with the console hardware. That'd actually more fruitful of a discussion than whatever your comment will lead to.
 

Heisenberg007

Gold Journalism
One of two things will happen:

1. Phil or one of the Xbox higher ups will be fired.

2. Xbox will leave the console business and become a 3rd party publisher.

I just can’t see them continuing down the same path because clearly it isn’t working. Hardware is down 30% and a 3%-4% grow in revenue is nothing to celebrate, when you consider the amount of money they have invested with there last billon dollar investment seeming to fall apart. It don’t take a rocket scientist to see they have major issues to fix.

23 studios but nothing to show for it, it’s puzzling that Phil and the same team is still employed after all these setbacks.
I can see that happening. But Phil should not be fired because of ABK. It was Microsoft as a company buying ABK. Blaming it on all on Phil is not fair to him.

He can, of course, be fired for poor performance in the last few years. But firing primarily for ABK is unfair to Phil.
 

Heisenberg007

Gold Journalism
This is navel gazing at its worst. Particularly in taking ANYTHING MS has said to get their AB deal approved at face value.



You have data and you have reasons but you have spurious conclusions that ignore the countless arguments that go in the OPPOSITE direction (like how XBOX isn't just some vestigial piece of MS or how stupidly difficult it would be to sell off the division).
I'm all ears listening to arguments from the other side. That's what would make it a discussion, right? That's the entire point of posting it and sharing it with other fellow forum members.

And just to clarify again, I am not saying that they will sell off the division. I'm only saying that they will keep XGS and continue making games, but they will be more like Sega than Nintendo. Sega didn't sell its gaming division. It's more profitable than ever.
 
We need a strong Xbox to keep PlayStation in check.
This isn’t true because when was the last time Xbox was a strong contender? … During the 360 days?

The PS4 was arguably Sonys most successful console when you combine there output of quality games and consoles sold and during this time the Xbox One wasn’t doing anything to compete.

I can see that happening. But Phil should not be fired because of ABK. It was Microsoft as a company buying ABK. Blaming it on all on Phil is not fair to him.

He can, of course, be fired for poor performance in the last few years. But firing primarily for ABK is unfair to Phil.
Never said Phil should be fired because of just the ABK. The narrative for Xbox has not changed since he has been there, Xbox game pass is the best thing he created for them but even that isn’t working out because of poor management. They would not even need game pass if things were managed correctly.

I am 100% sure Xbox would prefer selling games for $70 like the competition instead of begging for $10 a month. But they can’t because consumers don’t believe in there ability to release high quality first party games like Sony and Nintendo which is why game pass was created.
 
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