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[kruis]

Can’t say I agree OP. I think they’ve taken losses for 20 years but desperately want to be the only choice in people’s living rooms. That was why the console was created and that’s why o think they’re sticking with it.

MS went into console gaming because they didn't want to be left out in the battle for the living room, then they believed the games console was going to be a family's primary media-center/streaming box, then they thought the real future of gaming was a subscription model combined with cloud gaming and they believed that Netflix, Amazon and Google were going to be their main competitors in that space instead of Nintendo and Sony. Well, Amazon and Google have either mostly or completely left the games market and Netflix is busy developing crappy games nobody is playing. So MS is the only company left standing on that battlefield and it turns out this is mostly an imaginary market. So MS invested tens of billions of dollars and now they're once again losing to Nintendo and Sony when it comes to selling console hardware and their studios aren't churning out profitable games. What now?

 

[normalguy09x]

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.

These are good points, interesting read.

 

[MALpractice311]

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.

Wouldn't they actually have to, you know, publish games to be a game publisher? I thought the primary issue with XSS and XSX sales was due to their complete lack of exclusive games.

 

[ANDS]

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.

Are you though? I mean, I'm not at all a market analyst or know ANYTHING about how product integration works among some of these beasts, but MS isn't interested in being a software company, they are a service company and consoles are a service delivery platform. It keeps people in the ecosystem. APPLE develops games not because it wants to be a software developer, but because they want you to buy an iPhone and stay in the APPLE walled garden. An AXBOX is a MS delivery system that keeps you jacked in.

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.

SEGA also wasn't as diversified a company as MS is.

 

[VAVA Mk2]

Regardless of how you feel about XBox, losing them would be bad for consumers as Sony wouldn't have direct competition in home console space (Nintendo?). They would get lazy and raise prices as history has shown when there are less competitors in a market.

 

[Heisenberg007]

Can’t say I agree OP. I think they’ve taken losses for 20 years but desperately want to be the only choice in people’s living rooms. That was why the console was created and that’s why o think they’re sticking with it.

I've 2 counter-arguments to your very good point:

(1) They did seriously considered and, reportedly, finalized their decision to kill Xbox in 2015 before Phil Spencer showed them the dream.
(2) Considering they are once again pacing to be outsold by nearly 3:1 by PlayStation, even they know that they are not the only choice in people's living rooms. In fact, they are not even the second choice for that matter.

 

[sankt-Antonio]

23 studios should make MS the industry leader. That they cant release quality fp games on the regular is baffling to me.

 

[solidus12]

But Colteas said that Xbox is winning despite the deal getting blocked !!

 

[ergem]

50-60 million consoles in a generation is very profitable. We don’t need to buy into MS bullshit of buying the whole industry.

MS can still increase their market share by simply playing fair.

Now if they’re greedy that they can only consider it worthy of a business if it they can corner the market, it’s their problem. Any profit-loving corporation would kill to be in MS position right now.

 

[zomboden]

Regardless of how you feel about XBox, losing them would be bad for consumers as Sony wouldn't have direct competition in home console space (Nintendo?). They would get lazy and raise prices as history has shown when there are less competitors in a market.

People underestimate competition so much. Without competititon Sony doesn't have the incentive to do anything. They can get by with bare minimum because there's no other options.

I hope that Xbox will make some moves soon to counter act the lead that PS5 is taking lately. This activision deal ain't it.

 

[HeisenbergFX4]

i always forget which heisenberg is the nutty one

 

[Deleted member 471617]

Oh shit..............im still on IconEra. lmao

 

[Bumblebeetuna]

“It MiGhT sOuNd a BiT dOoM aNd GlOoM”

That’s literally all you post with regard to Xbox, is negativity and doom and gloom.

Also, please pick a side on some of these topics. One minute GamePass numbers must be dwindling and not growing, the next minute GamePass is so big and affecting software sales so much. One minute DF is unreliable and trash, the next minute oh they said without any shred of evidence that Xbox software sales are down 80%, it must be true.

UK boxed sales split

You can cherry pick all of the irrelevant and unproven numbers you want, none of them make MS as much money as controlling hardware and software.

 

[The_Mike]

• 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.

CMA doing everything they can to not make xbox grow.

More serious though, while people compare xbox to playstation with how far they are behind.

Yes, xbox is behind by alot, but where's the other competitors?

Nintendo are doing their own thing, not really a competitor to the other two, and more a suppleant.

Apple failed their project.
Google failed their project.
Sega failed decades ago.

If xbox fails, it would be a huge hit for console players.

Sony would get away with doing alot of anti consumerism since they would have monopoly.

Say hello to 80 euro games and bad online service if they didn't get competition from xbox one.

People laugh at switch online, but I doubt that Sony would have been more different today in regards of online.

Yeah, you would save 30 bucks a year, but would have so many headaches.

 

[Astray]

Thank you for adding this to the thread.

I really liked your point about them not coming back and people not trusting them once again. The finality of this decision will weigh heavily for sure.

You can look at it this way: They can keep try all the times they want (because they are a megacorp), but they can only quit once. That's a decision they can never take back.

Like if Sega comes back with a console, I'd be very hesitant to invest there unless they show they are in it for the long haul, same for Google as well.

I think that, if MS really decides that it will leave the hardware business, all they gonna do is simply not make a new one, up the price of the current one as to not lose more money on it(AND stop production, obviously) and just ride the Series for a few years until it finally pulls the plug, as any company pulls the plug on old products. And not do that suddenly.

I agree that the servers will never go down immediately, but there will be an expectation that they stay up for at least half a decade, so the decision to leave will have its own costs too.

I kinda started to think there's less and less reason to even have a physical Xbox console if they're going to have so few Xbox exclusive titles that take advantage of the hardware in unique ways.

How can any of the Xbox studios take advantage of the hardware in unique ways when there's nothing unique about it this gen?

It's basically just a spec upgrade over last gen, even has the exact same UI controller etc with minimal change.

Lack of brand identity leads to a lack of vision and creativity when designing hardware.

 

[Heisenberg007]

CMA doing everything they can to not make xbox grow.

More serious though, while people compare xbox to playstation with how far they are behind.

Yes, xbox is behind by alot, but where's the other competitors?

Nintendo are doing their own thing, not really a competitor to the other two, and more a suppleant.

Apple failed their project.
Google failed their project.
Sega failed decades ago.

If xbox fails, it would be a huge hit for console players.

Sony would get away with doing alot of anti consumerism since they would have monopoly.

Say hello to 80 euro games and bad online service if they didn't get competition from xbox one.

People laugh at switch online, but I doubt that Sony would have been more different today in regards of online.

Yeah, you would save 30 bucks a year, but would have so many headaches.

I agree, competition is good.

Also, I wouldn't include Apple and Google on this list because they never really introduced a high-end console. They were never direct competitors.

And a good point regarding new the lack of new entrants. I think the console industry is just a very competitive one where established players are easy to prevail. The infrastructure and investment required to become a new player in the industry is also enormous, so most companies just go the route of a third-party publisher and utilize these platforms' userbases to earn profits. It's just less risky that way.

 

[Heisenberg007]

50-60 million consoles in a generation is very profitable. We don’t need to buy into MS bullshit of buying the whole industry.

MS can still increase their market share by simply playing fair.

Now if they’re greedy that they can only consider it worthy of a business if it they can corner the market, it’s their problem. Any profit-loving corporation would kill to be in MS position right now.

In absolute numbers, yes, 50-60 million consoles sold is a pretty good number. But I'd reiterate what I said above: one needs to look at the profitability and operating expenditures, because there are many variables involved that determine the profitability.

For example, what if the software attach rate is abysmal on those 50-60 million consoles? (not saying it is, but a hypothetical example). What if the hardware itself is sold at a big loss per unit?

In such cases, 50-60 million consoles may not be profitable at all.

 

[Heisenberg007]

Except that happened before the CMA's announcement

The situation hasn't changed today either.

 

[supernova8]

How can any of the Xbox studios take advantage of the hardware in unique ways when there's nothing unique about it this gen?

Not talking about this gen, I'm talking specifically about the Series X. Don't tell me a talented studio couldn't pull off something absolutely spectacular if they were able to go all in on everything Series X has to offer (and pretending in an alternate world the Series S doesn't exist lol). If Xbox doesn't have any talented studios then.... that's their problem. They seemingly pissed away their relationships with Bungie and Epic (or rather Cliffy Wiffy B).

If Naughty Dog can pull off Uncharted 4 and God of War on PS4 (which looked amazing and don't even deserve to run on that shit hardware), then we should be seeing some absolute graphical/technical bangers on Series X.

 

[Griffon]

People not counting nintendo as being in the same arena are misguided.

Nintendo and Sony are competing for your money and time just the same. It doesn't matter how many TFLOPs the Switch has.

 

[Astray]

Not talking about this gen, I'm talking about the Series X specifically. Don't tell me a talented studio couldn't pull off something absolutely spectacular if they were able to go all in on everything Series X has to offer (and pretending in an alternate world the Series S doesn't exist lol).

If Naughty Dog can pull off Uncharted 4 and God of War on PS4 (which looked amazing and don't even deserve to run on that shit hardware), then we should be seeing some absolute graphical/technical bangers on Series X.

But then you would have to make it run on the Series S too, and that's looking like it would be a struggle.

Look at it this way, Redfall is releasing in like a week, and we never saw any native Xbox footage of it, series X or S, kinda makes you think tbh.

Compare this to the PS5 consistently punching above its weight thanks to hardware decompression of assets and shared memory pool.

Even setting graphics aside, a big part of what makes each next gen fresh and exciting is new developments in non-graphical areas, the switch being portable and dockable at the same time, the PS5 having advanced haptics and triggers (which actually can elevate gameplay when done right, Ratchet and Astro's playroom are my favorite games of this gen).

Microsoft just hasn't delivered the canvas for the devs to be the best artists they can be on it.

 

[supernova8]

But then you would have to make it run on the Series S too, and that's looking like it would be a struggle.

Look at it this way, Redfall is releasing in like a week, and we never saw any native Xbox footage of it, series X or S, kinda makes you think tbh.

Compare this to the PS5 consistently punching above its weight thanks to hardware decompression of assets and shared memory pool.

Even setting graphics aside, a big part of what makes each next gen fresh and exciting is new developments in non-graphical areas, the switch being portable and dockable at the same time, the PS5 having advanced haptics and triggers (which actually can elevate gameplay when done right, Ratchet and Astro's playroom are my favorite games of this gen).

Microsoft just hasn't delivered the canvas for the devs to be the best artists they can be on it.

I understand what you're saying but I don't think it's a hardware issue (aside from the issue of the Series S, which I also mentioned and agree with you on), I think it's more of a people (read: talent) issue.

I'd wager that Insomniac or Naughty Dog, given the time and resources, could build games that really take advantage of Series X and look amazing, potentially doing some stuff even the PS5 can't do (every machine has strengths and weaknesses) given that the Series X (on paper) has more sandal-flops than PS5.

 

[reksveks]

The situation hasn't changed today either.

I don't think shareholders care about Xbox

 

[SHA]

Can’t say I agree OP. I think they’ve taken losses for 20 years but desperately want to be the only choice in people’s living rooms. That was why the console was created and that’s why o think they’re sticking with it.

Each of those 20ms made their choices for a reason, it's kinda hard to change what they aimed for, it isn't like the ps3 when they made dramatic changes through the end of generation , the main issue we have, delays, shipping incomplete story campaigns, charging 50 bucks for a title worth no more than 20 bucks , this seriously worse than the 10 dollars price tag but nobody mentioned or talked about it, if a game worth no more than 20 and they charge 50 then what's the point of all the marketing bs , people don't forget and usually want a refund if they feel they've been cheated.

 

[gow3isben]

People so salty in this thread lol

But I don't think this will happen. Some of the higher ups may get sacked though.

 

[balls of snow]

But can they implode after I get all the western rpgs that 69 billion $$ can provide.
All you had to do was care about releasing games ms.

 

[justiceiro]

I was not gonna make fun of op, but since he said he's fine with it...

Lmao, talk about missing the point. The weakest part of Xbox ecosystem is it's games, and you want them to rely sorely on it? As long Sony and Nintendo block game pass in their platform, Xbox will be around.

 

[VAVA Mk2]

People underestimate competition so much. Without competititon Sony doesn't have the incentive to do anything. They can get by with bare minimum because there's no other options.

I hope that Xbox will make some moves soon to counter act the lead that PS5 is taking lately. This activision deal ain't it.

This is easily seen in the Apple-Samsung duopoly in the US for smartphones or the quality of Madden since EA has had exclusivity for NFL license for years and the series has gotten shittier since its golden days in the early to late 2000s.

 

[Comandr]

For someone like me, who is primarily a PC gamer, Microsoft dropping the Xbox console would only make them more attractive. You can already play virtually every new Xbox game on PC anyway. For someone like me there has never been less reason to own an xbox console.

Then you factor in game pass, cloud streaming to other consoles becoming a greater focus. If gamepass is Xbox’s future, then getting it into the hands of Sony and Nintendo console owners seems like the much bigger pool to play in. If you can’t beat ‘em, join ‘em, huh?

 

[Daneel Elijah]

I understand what you're saying but I don't think it's a hardware issue (aside from the issue of the Series S, which I also mentioned and agree with you on), I think it's more of a people (read: talent) issue.

I'd wager that Insomniac or Naughty Dog, given the time and resources, could build games that really take advantage of Series X and look amazing, potentially doing some stuff even the PS5 can't do (every machine has strengths and weaknesses) given that the Series X (on paper) has more sandal-flops than PS5.

I refuse to believe that Xbox do not have people as talented as Sony in their studios. They just are not given the time and ressources needed to do their jobs. And having to make games for Series X, S and PC day one is not helping. Direct X has always been said to not be as close to the metal than Sony Playstation is. This, and some of Sony choice of hardware features like cache scrubbers means that there is some advantages to work on the PS5 compared to Xbox.
It is natural to believe that as Sony worked hard to differenciate their console while making it easy to work for( the IO system and the Dual sense have features that offer clear gains on their competition while still being easy to use) Microsoft did the same. In 2020 they touted VRR, sample feedback streaming among other things for their "Velocity architecture". We are on 2023 and while we got some games from Sony like Demon's Souls we are still waiting for Xbox to do the same. Outside of Hellblade 2 I do not see a game that will even try to push the Series X like Sony is hopefully trying to do with whatever Naughty Dog, Insomniac, Santa Monica... are. They favor multiplayer games and those do not push consoles the same way. Not to say that the Series X is bad, just that Sony did a good job making the console that would make their studios and their partners happy. Microsoft was more wide in their objectives, with different price points and their cloud initiatives diluting their focus if you see what I mean by that.

 

[DJ12]

CMA doing everything they can to not make xbox grow.

Come on now, they made one decision yesterday Microsoft have been stopping xbox growth for a decade at least

 

[NickFire]

I refuse to believe that Xbox do not have people as talented as Sony in their studios.

I can't believe it either. My guess its a corporate culture / management issue resulting in the different outputs. No other way to explain it because they can afford to hire the best talent available with ease.

 

[twilo99]

I'd love for Microsoft to leave the console biz! Imagine there only being a single, monolithic company - the magnificent Sony.

That would make a lot of people very happy.

 

[twilo99]

The situation hasn't changed today either.

Not sure how the market sees the deal
Not going through as a positive, I guess that cash can be put to better use elsewhere?

 

[Flutta]

Xbox Loses As Much As $200 On Every Xbox It Sells, Phil Spencer Says

Microsoft expects to make back the money through sales of games and accessories.

www.gamespot.com

Make it back through game sales?

Phil thinks he can have game sales when he’s training his customers to rent shit.

What a

Also this kinda explains why they have more pad designs then they have game releases.

 

[Pantz]

What if... Sega buys Xbox?

 

[MALpractice311]

That would make a lot of people very happy.

Sadly, you're probably right. As disappointed as I have been with Microsoft, post-Xbox 360, I don't want them to abandon the console game. I just want them to get their ever-loving shit together. People have very short term memories of what peak arrogant Sony was like during most of the PS3 generation. Imagine that level of arrogance exponentially greater if Microsoft were to bow out.

 

[Cyberpunkd]

Shareholders agree with you.

Shareholders don’t give a shit about Microsoft wanting to be an entertainment company, they want them to push cloud for enterprise applications, which they do and it’s working very well.

 

[Crayon]

If it's really true that they lose 200 bucks on xsx and PS5 sells for a profit, Sony engineered circles around them.

 

[DJ12]

Sadly, you're probably right. As disappointed as I have been with Microsoft, post-Xbox 360, I don't want them to abandon the console game. I just want them to get their ever-loving shit together. People have very short term memories of what peak arrogant Sony was like during most of the PS3 generation. Imagine that level of arrogance exponentially greater if Microsoft were to bow out.

Kutiragi is gone, let it go.

 

[Heisenberg007]

What if... Sega buys Xbox?

That will happen only on a yadsendeW.

 

[Heisenberg007]

If it's really true that they lose 200 bucks on xsx and PS5 sells for a profit, Sony engineered circles around them.

It is. The stats come directly from the horses' mouths. PS5's came from Sony's CFO, Hiroki Totoki. Xbox's came from Phil Spencer.

 

[Heisenberg007]

Not sure how the market sees the deal
Not going through as a positive, I guess that cash can be put to better use elsewhere?

Yup. Also when you spend $70 billion on a division that is in the last position and then you make most of those games exclusive, you buy an asset and cut its biggest revenue source. It's just not a good investment, and shareholders seem happy it's off the table.

 

[balls of snow]

I wonder if the next and possibly last xbox is just a windows pc packaged up with gamepass. Open source that shit, able to run steam epic game store etc as well as xbox own marketplace. Its the smart play and you keep in lock step with playstation.
Essentially ms goes all in on pc gaming.

 

[Daneel Elijah]

If it's really true that they lose 200 bucks on xsx and PS5 sells for a profit, Sony engineered circles around them.

It is not entirely Xbox fault. AMD tech do not go as high as Nvidia do and they were afraid of being beaten by Sony so they HAD to do what they had done in making the Series X so costly to make. The Series S has the opposite problem: they have to be at a certain point tech wise relative to the Series X (and the PS5) and do it cheap enough regardess of the price too. One console can't be too weak, the other can't be too costly. So they had to loose money on the two consoles, limiting the economies of scale in the process too. This is a mess and some people even speculated that they can't control how many they make each of those consoles separatly( as in their wafers do both consoles at the same time for example)

I wonder if the next and possibly last xbox is just a windows pc packaged up with gamepass. Open source that shit, able to run steam epic game store etc as well as xbox own marketplace. Its the smart play and you keep in lock step with playstation.
Essentially ms goes all in on pc gaming.

I would love for that to happen but it would mean the end of having a reasonable price. A Xbox Series X with Windows, Steam... would cost how much in 2020? 750? 800? 999? How many people would be willing to pay for that? The advantage would be the option to go crazy with a 1000$ or 2000$ PC day one. But I do not see Microsoft trying that in the future, sadly. And this would be the end of the hopes of having ten of millions of sales like older Xbox generations.

 

[MALpractice311]

Kutiragi is gone, let it go.

You don't think there is some other Japanese exec out there gunning to be CEO of SIE with ideas/attitude similar to Kutaragi? I'll never forget arrogant Sony. Just like I'll never forget arrogant MS that wanted the X1 to be always online, have no used games, and not allow you to trade games with friends.

 

[StreetsofBeige]

Relax OP.

Xbox isn't going anywhere, GP is still the best sub value out there, and MLB The Show has been on GP for 3 years in a row. So even Sony supports Xbox's game library.

 

[Madserb2023]

I think the goal with Microsoft as they are fundamentally a software company is to eventually make Xbox a service rather than a piece of hardware. Not having exclusives to the hardware is conducive to that. Starfield would only be for the Xbox and not PC if their aim was to sell hardware. The reason the PS5 is outselling the Xbox is because you can only play certain games on there. I got a PS5 to play Ragnorok. I will get Nintendo's next hardware to do the same. If I could play Tears of the Kingdom on PC at 4k/60 (legally) I would not touch their hardware. Microsoft is seeing the result of this but this is the intended goal. They aren't stupid.

 

[DJ12]

You don't think there is some other Japanese exec out there gunning to be CEO of SIE with ideas/attitude similar to Kutaragi? I'll never forget arrogant Sony. Just like I'll never forget arrogant MS that wanted the X1 to be always online, have no used games, and not allow you to trade games with friends.

I think playstations has been run by playstation America for the last two generations and they've knocked it out the park both times.

 

[Boss Mog]

There's a lot of fair points made by the OP but he forgot one thing and that's that XBOX isn't MS's primary source of revenue and they have near infinite money so they can stay in the game even if they're losing money hand over fist right now. They're in it for the long run.