I'm sure that's what it might have looked like to Nintendo after the WiiU or Sony after the PS3 but it was in fact not the case. Throwing money into a hole would be in my opinion burning your existing platform and player base to chase a theoretical one while simultaneously destroying the value proposition of your ecosystem.
I mean by that is that you’d have the option for both the traditional console or the native mobile Option. MS has play anywhere so I think they’d want to continue that.
Their sales as so shockingly bad I just think MS will be a multi platform publisher with their focus on services.
The issue is the digital lock in. We haven't had that in Wii U and PS3 era. PS4 era was the worst one to lose - because people now stick to their COD, Fortnite, FIFA on those platforms, some additional purchases and have no reason to migrate.
The problem is that in the modern era people have digital libraries - so they won't go and buy a new platform for a sequel. They can always wait - as their own platform will have some other games to play. Multiplatform releases will erode Xbox as a brand for sure - and without Xbox, Microsoft has no consumer facing products - people don't rush to Windows Store on PC, people don't rush to buy Xbox even. Who will subscribe to Game Pass then? On mobile it will take years to reach App Store or Google Play in MAU. And their Xbox Store is more likely to be used by those who use Xbox.
I think this would only be at issue with regulators depending on the purchase. And for 3rd party game makers that's probably a shortlist of EA, T2 or Epic, whose big properties would remain multi regardless.
Digital libraries were certainly a thing when switch launched in 2017. They create more friction to switching sure but people are entering the console space all the time too. It's not just the same set of consumers.
The thing is that Switch is the only console sold due to exclusives. The only one. Not to mention Switch swallowed Nintendo DS community that was pretty distinct as no other handheld existed at that time.
Yeah, putting the Fallout franchise in the "niche" category struck me as well. It's certainly not on the blockbuster status of Call of Duty or Minecraft, but it's also a much more well-established and popular franchise than something like Psychonauts.
Fallout 76*, not so much the Fallout franchise.
The way forward seems very obvious to me:
With this stretegy, there is no reason for anyone playing on Nintendo systems to own an Xbox.
Two reasons come to mind: power and GP.
Giving up AAA market on plate to Sony will be disastrous. People don't buy Series S because its GPU is like PS4 pro which released in 2016, its just not proper next gen console. It shows there is huge number of people willing to pay more for premium consoles and AAA games upfront.
Source on this ?
Well technically european market is the example? Despite the existence of Game Pass, Series consoles are far behind than Playstation.
Pressure is on Phil to demonstrate continued revenue growth now that MS has invested over $80B into the division. He needs quick revenue wins and that’s why they are porting old games to competitor platforms. At the same time, he’s spinning fantasies of “disrupting play store” on mobile, when they can’t even compete with Steam, which is operating a platform on an OS they actually own
. He needs to keep spinning fantasies to the higher ups, to justify continued support. At some point, this will all catch up to him.
AA games don’t really drive console sales but they have driven great engagement on GP. But it’s hard to directly monetize engagement, so they’re going to do that in competitor platforms, while advertising that all these great games are much cheaper on GP.
So they'll pull a Sega and say no Night Games™ for Switch. If you want Starfield, Hellblade or Halo you still have to get an Xbox (or PC/phone). Maybe Switch gets a chibi Halo Tactica though.
GP hasn't been a thing to help them much with the games being exclusive now, why would it help when they are dropping games on another console? Anyone who owns a Nintendo in this situation and wants a second console will go to PS since it would be the only console that has games that are missing.
By this definition, Nintendo should also be porting their games to other consoles as there's revenue to be made.
Nintendo games are the primary sales driver for Nintendo consoles, same can't be said of PlayStation and Xbox. They follow a different strategic model where 1st party is more additive.
Singular AA games on their own don't drive console sales, but a large number of them with variety among them may create a more favorable image of the brand in the long run and lead to better hardware sales in combination with great bigger games.
Additive or not, 1st party it's a reason for an audience to choose a console over another. PS and Xbox have almost identical libraries, if 3rd parties were the only reason they sell, the gap shouldn't be 2:1 now. We also have clear evidence on sales charts of how their big games help to move consoles, or Spider-Man is not a system seller now?
The line continually moves, people lost it over Xbox and later PS supporting a PC strategy too originally and now that's pretty much something only deranged platform diehards angst over. I see this as another step for Xbox (a step they'd started previously going by reliable insiders but drew back on when the shifted focus to GP started) and in time will probably be normalized like PC was. That doesn't mean PS will follow their lead again (and definitely not anytime soon imo) but it's a fun possibility to consider longer term.
If we're going to consider possibilities in long-term scenarios, at some point the market will also require Nintendo to make more money from their own IPs and if they're not able to make that inside their own console they'll pursue other ventures.
Sure, Nintendo's not blind to the potential precariousness of platform resets and they are making forward looking moves too. That's why they are (quite successfully) diversifying their IP outside gaming with films and parks. At some point we'll probably face if the console model in general is still viable and what shape gaming ecosystems should take.
MM was $104m in profit ($156m dev vs $260m rev)? Or are there newer figures somewhere?
www.installbaseforum.com
While individual games like Miles Morales earn high profits, the amount of money Sony spends is also extremely high, which is one of the reasons why they started porting their games to PC after a couple of years. Sony doesn't need to port a small selection of their older games to Switch or Xbox right now, but I think they might consider doing so if AAA development costs continue to rise.
Also, from their IR 1st party software overall is pulling a thin margin, we talked about that with their previous report and how Bungie would hopefully improve that. Spidey's really the exception, not the rule.
MM was $104m in profit ($156m dev vs $260m rev)? Or are there newer figures somewhere?
Insomniac Games Leak: Multiple Software Unit Sales and Profitability for Past and Future Releases (Read Threadmark)
This information is from a ransomware attack at Insomniac Games which has had information that contains but is not limited to Wolverine, PC ports for future games, and info that can dox employees at Insomniac. Miles Morales Lifetime Units Total Revenue Total Costs Total Profit ROI Break-even...
Doubling revenue on just 5m (30%) more units though? Something's not adding up?
The last 4.2m copies that were sold allegedly made almost $300m in net(!) revenue. That's an average of $70 per copy sold, while the game has been on (deep) sale several times. The numbers truly don't add up at all.
My only thing is that you can’t have ARM and x86_64 on the same and working flawlessly together.Discussion Point #1: Xbox Rumored to Port Multiple Games to PS5 and Switch
Sources
Jeff Grubb: Sea of Thieves
Nate Drake: Critically acclaimed title (Hi-Fi Rush speculated)
Windows Central: Some Back Catalog games
Over the weekend, Nate Drake said that he had heard an Xbox game that was in the GOTY conversation the year it was released would be ported to a competitor platform in 2024. It was then quickly speculated to be Hi-Fi Rush which then sparked more discussion on what it even means to have this game ported at all. Was it because of Tango wanting more Japanese players to interact with their work, was Hi-Fi Rush just the right fit for Switch, or was it indicative of a broader change in Microsoft's exclusive strategy. Since then, more insiders have come out and claimed even more titles would be ported from Xbox's back catalog, including Sea of Thieves to PS5 and Switch, one of Microsoft's few recent successes as both a new IP and GAAS. Windows Central claims it's heard some games are being ported this year.
Discussion Point #2: Xbox Next Gen is a hybrid ARM console
Sources
Tom Warren
Last year when Microsoft's documents leaked in error during the FTC ABK trial, we learned about Xbox's Gen 10 plans and roadmap. Here they are again if you forgot
One key aspect about the specs sheet is Microsoft deciding between an x64 CPU and ARM64. Why this is important is technical but in a cliff notes summary, x64 and ARM are two different architectures in computing, with no cross compatibility between the two. ARM64 is more used in mobile devices, like phones and your Nintendo Switch, while x64 is primarily laptops and PC. You have a Windows, or know what 32-bit and 64-bit programs are? You're on that architecture, along with recent AMD powered consoles like XB1, PS4, XBS, and PS5.
Microsoft's goal for Gen 10 Xbox is to be a hybrid platform that can use the native power of the console combined with online connected cloud power to create new, real time experiences. With the recent developments of AI in the software space like Nvidia's DLSS upscale tech or Microsoft's own investments into AI in general, there is a sense that Xbox is going to be transitioning into a more Microsoft friendly device. That meaning Xbox will be closer to the goals and aspirations and tech that Microsoft is invested in than ever before. Windows has been ported to ARM, the new Surface lineup in 2024 is going to be AI powered with an ARM CPU according to Windows Central. Xbox in 2028 releasing as an x64 high powered high-cost device sounds counter to what Microsoft is in the moment pivoting towards.
What would this mean for the gaming market? In short, Gen 10 Xbox would be starting from the back foot. No current Xbox, Xbox 360, Xbox One, or Xbox Series game has been for ARM, only x64. Backwards compatibility would require emulation to work, like it currently does on Windows 11 platforms. Native ARM development would mainly come from new games released, not legacy titles.
From a hardware standpoint, it also looks like Xbox will be going for a lower powered solution, likely to avoid $100's in losses on hardware like with Series S and X and to push for the ideal that Microsoft will be able to capitalize on their cloud power solution. We could be looking at a console that won't do native 8K gaming in 2028, but rather 4K native with AI upscale. It's unlikely to hit the Series S price of $299, even the Switch 2 is speculated to be $399, so would Microsoft stick with a two SKU X|S plan if instead the console can be natively weak like the S, but when connected to Xbox servers sees increased performance and image quality like the X? This could also open Microsoft up to a more mobile platform rollout where instead of releasing a new generation every 7 to 8 years, they instead update the hardware every 4 to 5, packing new AI hardware and somewhat more powerful native specs.
Current Xbox Series sales are not pretty. Ampere estimates it was outsold 3:1 by PS5, Series X was just discounted to a steep $349 price back in December after posting an over 20% drop YOY in the US this past November, and Series S at $299 isn't helping much. Microsoft just went through a massive acquisition for Activision Blizzard King in the hopes of expanding into mobile and growing Game Pass and other gaming revenue Xbox already generates. A shift in exclusivity (which as of now is still in rumor land, not official) and hardware design along with the recent acquisitions are saying loudly that Xbox is changing. It's been changing since 2016 with the reintroduction of its library to PC and the Play Anywhere initiative, and Game Pass in 2017, a popular subscription that has an estimated +30M subscribers after the recent Xbox Live Gold conversion, and promoting Steam releases in addition to the Windows Store.
Turning a business into a more open platform and converting popular pay to own licenses into recurring subscription services is what Microsoft did after 2014 when Satya Nadella took over as CEO. Xbox has been slowly converging inwards towards a Microsoft device in a Microsoft ecosystem, when generations before, the mindset was Xbox being an underground club, some third cousin that sat under the Windows division, doing its own thing so long as it made money. A more multiplatform game approach with a likely lower powered hardware offering would be the culmination of a soon to be 10 year transition for Xbox.
What do you guys think about the discussion points? I tried laying out the reports as well as my own take on the matter.
Hybrid is referring to cloud compute enhancements, not arm and x86 at once.
That’s what I said
Since both of these are on PC too, I think MS needs to adapt the console strategy a bit in the future. The next Xbox "console" will be strictly worse than a PC and have no advantages compared to other consoles since it will have no console exclusives and 3rd party support will dwindle even more, however if the console is more windows-like and lets you install Steam and mods, itll have a niche I think.
