After this week, what do you think the future of Xbox will be?
- Thread starter Typhon
- Start date
Perhaps the traditional console isn't viable for MS anymore. Maybe some "opened up" Xbox is the move; not fully Windows PC, but Steam Deck-like that gives users the option to go into "PC Mode." Either way, I just can't see current Microsoft tanking $100+ losses on every console sold when both game sales and subscriptions are stagnating on the console.
Or maybe they give up on the power race and make a capable Xbox that is less powerful than PS6, but can be priced similarly while still making a profit (or at least a much, much smaller loss).
After the regulators worldwide basically nuked their plans to buy themselves exclusive to some of the biggest franchises in the console space (because nobody believes that getting COD as Xbox exclusive wasn't their primary goal), they're turbo fucked IMO, and massive layoffs and studio closures will continue until morale improves the whole thing crumbles down.
I fully believe everything will be day and date multiplatform within the next couple years and at that point they're just a third party publisher to me, regardless if they offer hardware or not.
They're collapsing now though aren't they
They're cutting forcasts now aren't they
They're cancelling projects and shuttering studios now aren't they
They should celebrate their new found love for Sony with a native Series X|S controller for PS5 please.
YES!!!! Every controller with asymmetrical sticks for the PS5 costs $200 and the adapters only work with PS4 BC games
I'm not really sure what to think. I'm leaning more towards the thought that Xbox hardware will stick around in some form, but probably just Xbox-branded devices instead of traditional consoles. Meanwhile, in terms of software they become a giant third party publisher, though where Game Pass factors in, I have no idea.
Cutting forecasts from record highs, cancelling projects happened no matter what gen (how is this even an argument?).
Given those choices? Nothing changes. Practically speaking, though, it's a different and more nuanced story that had me pick "Third Party" as the broader theme.
Microsoft Gaming will be the third-party brand, not Xbox, and I expect it'll get the lion's share of resources and strategic attention. Xbox as a brand won't be going anywhere overnight, but it will continue to struggle for relevance with some changes in the cards to try to find their new niche as something other than the centerpiece of Microsoft's gaming ambitions. What shape will that take and how successful will it be? Those are questions I expect are being asked internally, probably without definitive answers at this stage, and I have no inside scoop to offer – just my direct experience with Microsoft's broader culture.
They'll find a path to keep hardware in the market while the gaming software side finds itself. Whether the Xbox brand remains exclusively attached to Microsoft hardware or goes OEM depends 100% on what traction they can get. They'll follow the path of least resistance. As the software settles into a healthy internal business, it can be used to lift the hardware somewhere down the line. Asking it to do the heavy lifting now alongside the challenges of integrating into the broader Microsoft culture is simply asking too much, and carries too many risks for the scale of the assets they've acquired.
Microsoft Gaming will be the third-party brand, not Xbox, and I expect it'll get the lion's share of resources and strategic attention. Xbox as a brand won't be going anywhere overnight, but it will continue to struggle for relevance with some changes in the cards to try to find their new niche as something other than the centerpiece of Microsoft's gaming ambitions. What shape will that take and how successful will it be? Those are questions I expect are being asked internally, probably without definitive answers at this stage, and I have no inside scoop to offer – just my direct experience with Microsoft's broader culture.
They'll find a path to keep hardware in the market while the gaming software side finds itself. Whether the Xbox brand remains exclusively attached to Microsoft hardware or goes OEM depends 100% on what traction they can get. They'll follow the path of least resistance. As the software settles into a healthy internal business, it can be used to lift the hardware somewhere down the line. Asking it to do the heavy lifting now alongside the challenges of integrating into the broader Microsoft culture is simply asking too much, and carries too many risks for the scale of the assets they've acquired.
Xbox themselves don't know what their future is. Their back and forth about core features such as exclusivity and (seemingly) day one Gamepass is telling that they are all over the place.
When it comes to software, they have no choice other than going full multiplatform. Their own platform cannot support the insane costs of operating both Bethesda and Activision, especially when they have trained their core audience to not buy games.
When it comes to hardware, they will probably launch more devices, only to keep a foot in the space. But it probably won't be a mass-market device such as the Series consoles, and something more like a Steam Deck or a very high-end machine for enthusiasts.
When it comes to software, they have no choice other than going full multiplatform. Their own platform cannot support the insane costs of operating both Bethesda and Activision, especially when they have trained their core audience to not buy games.
When it comes to hardware, they will probably launch more devices, only to keep a foot in the space. But it probably won't be a mass-market device such as the Series consoles, and something more like a Steam Deck or a very high-end machine for enthusiasts.
The way I see it is they'll just become another Call of Duty factory and an IP graveyard, with the occasional Fallout and Elder Scrolls release from Bethesda. New hardware will be de-emphasised and they'll eventually phase GamePass out.
If Phil was a competent manager (unfortunately for the people working under him, he is not), he would pivot Xbox to become a 100% software developer with 3 main BUs: Xbox, Activision and Bethesda ASAP.
They should rework the Game pass to become a sort of PS Plus Extra and stop producing/selling hardware where they are losing an insane amount of money.
They will probably keep trying selling a new niche super ultra mega powerful console, losing a massive amount of money once again (which will result in more studio closures and developers being fired).
They should rework the Game pass to become a sort of PS Plus Extra and stop producing/selling hardware where they are losing an insane amount of money.
They will probably keep trying selling a new niche super ultra mega powerful console, losing a massive amount of money once again (which will result in more studio closures and developers being fired).
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By 1/1/25:
1. Day one gamepass phased out; only a back catalog future
2. Full 3rd party publisher (made official)
3. Future Xbox portable (or home system) will support stream / epic / nvidia cloud
4. 99% of new development to be focused on big AAA ip only
1. Day one gamepass phased out; only a back catalog future
2. Full 3rd party publisher (made official)
3. Future Xbox portable (or home system) will support stream / epic / nvidia cloud
4. 99% of new development to be focused on big AAA ip only
I don't think the greater Microsoft machine would ever let this happen.
If I just take the elements highlighted by Bond in the Bloomberg interview:
If I believe all of the talking points were curated beforehand (that's how these things work), then they were all strategically mentioned.
I'm not sure much has changed. I believe they still want the top subscription service (Game Pass) and mobile gaming store (announced back in 2022 as to why they were buying ABK). I can imagine Nadella not wanting to give up on those when he knows that device agnostic market shift is happening (slowly) and the gaming industry is still set to grow significantly over the coming years.
All that seems to have changed is the means to the end. So now it's about growing (or not fucking up) the value of their IP/content they bought and having that in service of their end goals.
How? Consider the idea that the fastest way to build your audience is to tap into someone else's. I 100% believe Microsoft will accelerate putting their live service games everywhere possible to stay in front of as many gamers as possible.
While all AAA devs will continue working on monetization schemes to cover costs (they have to in order to survive), for Microsoft I believe that the in-game stores of their live service games will become a focus area to have hooks back to buying their sub service and or making mobile store purchases. Before year's end I imagine we start to see the early signs of those hooks in in-game stores regardless of the device you're playing on. Discounted MTX in their mobile store and maybe Game Pass is discounted MTX plus rewards, pick up and continue on any device via cloud streaming/cross progression, access to a lot of other games, etc.
EDIT: And they will still make good hardware. It just won't be core to the growth strategy.
- Market not growing, cost rising (i.e. need more users, more monetization)
- Everything still day one Game Pass
- Building a mobile store for broad access, starting with discounts for in game store purchases and wanting partners in it soon
- Cloud streaming is outgrowing the market and they are investing
- Cross-progression and cross-play (Phil also mentioned both of these back in February)
If I believe all of the talking points were curated beforehand (that's how these things work), then they were all strategically mentioned.
I'm not sure much has changed. I believe they still want the top subscription service (Game Pass) and mobile gaming store (announced back in 2022 as to why they were buying ABK). I can imagine Nadella not wanting to give up on those when he knows that device agnostic market shift is happening (slowly) and the gaming industry is still set to grow significantly over the coming years.
All that seems to have changed is the means to the end. So now it's about growing (or not fucking up) the value of their IP/content they bought and having that in service of their end goals.
How? Consider the idea that the fastest way to build your audience is to tap into someone else's. I 100% believe Microsoft will accelerate putting their live service games everywhere possible to stay in front of as many gamers as possible.
While all AAA devs will continue working on monetization schemes to cover costs (they have to in order to survive), for Microsoft I believe that the in-game stores of their live service games will become a focus area to have hooks back to buying their sub service and or making mobile store purchases. Before year's end I imagine we start to see the early signs of those hooks in in-game stores regardless of the device you're playing on. Discounted MTX in their mobile store and maybe Game Pass is discounted MTX plus rewards, pick up and continue on any device via cloud streaming/cross progression, access to a lot of other games, etc.
EDIT: And they will still make good hardware. It just won't be core to the growth strategy.
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You quoted the wrong person, lol.
And context, how does that work?
Yup.
No one in their right mind looks at Sony's financial situation and says it's "collapsing."
What studios are they closing? London Studios? They hadn't done anything in years other than Singstar and some low budget VR titles.
Everyone's forecasts not just within gaming but across tech in general are being adjusted because the COVID boom for tech is over. Endless growth off of record breaking profit years obviously wasn't going to be sustainable once people were *allowed to go back outside*.
edit: did I even write that? when is that quote even from?
Or Japan Studio who they allowed multiple unprofitable projects over several years. Still not a good thing that they closed them down either.
I would buy an Xbox controller for PS5 in a heartbeat.
I think they'll pivote to 3rd party development.
Maybe make Xbox PCs kinda like Steam Machines, I doubt this though cause don't think the Xbox name is that valuable at this point.
Maybe make Xbox PCs kinda like Steam Machines, I doubt this though cause don't think the Xbox name is that valuable at this point.
I can't see how it is. "Xbox" is a very damaged brand everywhere in the world that isn't the US, and it's rapidly speeding towards that territory here, too. Someone could pull off a traditional console other than Nintendo/Sony next generation, but Microsoft isn't one of those people.
Right. the math doesn't work. The business model of the traditional console is to take losses up front on the hardware that you make back on your users buying software within the ecosystem on the back end. But their userbase has declined to a point where this isn't really viable, and with the end of exclusives there's no reason for anyone not already invested to buy in to increase those numbers. The hardware end of the business is just setting money on fire at this point with no way to turn that around.
Unfortunately for Microsoft that's the strategy that Nintendo is already using with the Wii/WiiU/Switch/Switch 2. Microsoft wading into that space to try and compete with Nintendo on the "low powered" end with no exclusive software to differentiate themselves is just setting themselves up to fail. We don't have the confirmed specs of the Switch 2, but it's hard to imagine a performance space between say, that and a PS5 that's particularly meaningful.
There really IS no viable way to release a traditional hardware platform with a brand that damaged that has no exclusive software to convince people to buy in.
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Japan Studio didn't really close, they just spun off the unit that was actually making games into Team Asobi and rebranded it.
The traditional console model (read: console only, console first) isn't viable long term for Sony either. The fact they explicitly stated to investors that they will "aggressively" move to release games on PC, on top of the fact that they've been building a mobile team for a while, says that the days of having a console-only or console-first focus are coming to a close.
Never mind the insights we got from the Insomniac hack that even a top contributing studio was having to explore layoffs, shortened windows between console and PC releases, breaking up the next game into fully priced parts, etc. AAA devs will have to get in front of as many people as possible and squeeze as many dollars out of them as possible. The console market hasn't grown since 2008. It's clearly a limiting strategy.
If Nintendo drastically increases its dev costs they'll probably end up in the same boat.
Don't care, I'm done with them.
Hi Fi Rush might be my personal favorite game of the last half decade (since Nier Automata). This studio closure has hurt me more than any studio closure I can remember, especially since it came a year after a critically acclaimed game release.
Fuck Xbox. Gonna sell my X once my gamepass expires next year. Need to find of there's a way to transfer save date from gamepass PC games to their Steam counterparts.
Hi Fi Rush might be my personal favorite game of the last half decade (since Nier Automata). This studio closure has hurt me more than any studio closure I can remember, especially since it came a year after a critically acclaimed game release.
Fuck Xbox. Gonna sell my X once my gamepass expires next year. Need to find of there's a way to transfer save date from gamepass PC games to their Steam counterparts.
I'd even argue that cancelling projects in time is one of the things that made Sony more successful than MS.
Apples and oranges.
Sony clearly has a strategy to release their live service and multiplayer titles cross platform, while keeping their catalogue that does not benefit from that tied to Playstation for a few years until they run their course. That hasn't really changed, and they are in a position to release a Playstation 6 or even a Playstation 7 at their leisure and neither one would sell less than PS3 numbers. Beyond that who can say because technology moves quite rapidly, but two full generations longer than this one is long enough for me to meet the definition of "long term."
That's not the case for where the Xbox platform is- there simply is no business case for another traditional console from MS that doesn't sell less than the Series X/S and lose billions at this point.
The mobile unit isn't even anything new for them. It's like people forget Xperia Play was a thing, and Sony had games streaming via PSNOW straight to Bravia TV's without a console back in 2017. If it makes sense for them to move "Playstation" to other form factors, they're happy to do it.
edit: Dev costs are a concern, but honestly cost of labor is the biggest part of that and drastic reductions could be had by doing nothing but moving development out of high cost areas like the US west coast to literally anywhere else.
I made an edit before you saw it, but the Insomniac insights we got says otherwise about SP games.
Costs are likely to continue rising. I don't think that problem, or the problem of the console market not growing, goes away. The answers really are monetize more of the same users or get new ones. I venture every exec in AAA gaming right now is saying "both, the answer is both."
Insomniac is a special case, since a TON of the costs for Spider-Man went not to development cost per se, but for Royalties due to license spidey from Marvel.
This wasn't trivial:
Sony/Insomniac were paying Marvel 9-18% of net sales on all physical units, 19-26% of net sales of all digital copies, and 35-50% (!!!) of net sales on all spidey bundles.
That's a MASSIVE chunk of money they were paying out to license that game and explains somewhat why they went over the top with it. That game was designed not to move units, but to be a flagship advertisement for the PS5 and move systems. Unless it's moving ten million PS5 units that otherwise might not have been sold, that game isn't worth making and even then you're going to need to make a ton of DLC and spin off games to make the math work on it. Granted there were definitely issues with efficiency and Insomniac could have done a better job controlling costs, but pointing to spidey as an example of costs going out of control isn't really a great example.
The largest driver of costs in any industry is cost of labor. Move development out of the most expensive region of the most expensive country on earth and that problem solves itself.
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ABK games launching day one on all platforms and Game Pass (which will get a price hike)
Xbox Game Studios / Bethesda games being exclusive to Xbox and Windows for a year. At least for now, it will be everywhere day one eventually.
Xbox hardware will continue but won't be subsidized anymore.
Xbox Game Studios / Bethesda games being exclusive to Xbox and Windows for a year. At least for now, it will be everywhere day one eventually.
Xbox hardware will continue but won't be subsidized anymore.
Insomniac is a special case, since a TON of the costs for Spider-Man went not to development cost per se, but for Royalties due to license spidey from Marvel.
This wasn't trivial:
Sony/Insomniac were paying Marvel 9-18% of net sales on all physical units, 19-26% of net sales of all digital copies, and 35-50% (!!!) of net sales on all spidey bundles.
That's a MASSIVE chunk of money they were paying out to license that game and explains somewhat why they went over the top with it. That game was designed not to move units, but to be a flagship advertisement for the PS5 and move systems. Unless it's moving ten million PS5 units that otherwise might not have been sold, that game isn't worth making and even then you're going to need to make a ton of DLC and spin off games to make the math work on it. Granted there were definitely issues with efficiency and Insomniac could have done a better job controlling costs, but pointing to spidey as an example of costs going out of control isn't really a great example.
The largest driver of costs in any industry is cost of labor. Move development out of the most expensive region of the most expensive country on earth and that problem solves itself.
Fine, Spiderman is the extreme example, but because Sony saw it fit to port more than just that game to PC then it's obvious, they are looking across the P&L of all of their AAA dev and seeing they have to do something different more broadly.
As for moving jobs to cheaper markets, that sounds like a lot of job loss.
Again, their strategy for a long time has been putting things on PC when it makes sense to do it. Helldivers 1 was 2016. Horizon: ZD and Predator:Hunting Grounds was 2020. Nothing has changed here.
How does moving development from California to North Carolina, Ohio, Tennessee, or Michigan result in job loss? Insomniac specifically already has a studio in Durham, NC (Median home price $400k) alongside the Burbank one (Median home price $1.2M).
And the head person at Sony said they have to do more because of their financials. That is change. If everything was fine then we would see that in their financials and we wouldn't have a Sony executive in charge of their financial posture saying they must do something different.
Oh, I thought you meant other countries.
No, moving to other countries has a whole lot of logistics involved that don't make a whole lot of sense when you have a large team. Few people would be willing to just up and move from California to Warsaw, Poland or whatever even if they could, and there's no guarantee that new talent outside of the country would be up to the same standard.
Within the united states though? Different story. It's not obvious to most people just how bizarrely fucked the CA economy actually IS compared to the rest of the country (downtown NYC and parts of North Jersey aside). Moving your offices anywhere BUT there would cut your labor costs by more than half because housing no longer costs a million dollars for a 2 BR starter home.
Full 3rd party, clearly that's what's needed for their business to be sustainable and grow. Sea of Thieves doing really well on PS5 is probably all they needed to see. By cutting the consoles they will save a ton of money, but of course they'll lose out on their take from selling games on the store. Unfortunately, the Xbox hardware team will be the casualties for switching to full 3rd party.
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They largest third party publisher ever
Xbox will be irrelevant in two years, and only supported by big western publishers. The next xbox will hit like a pebble in water and be discontinued soon after.
Gamepass will become like Disney plus, a subscription for MS' ips basically
Xcloud and gamepass will be the premier Cloud gaming alternative and basically sinónimous with that distribution method
Xbox will be irrelevant in two years, and only supported by big western publishers. The next xbox will hit like a pebble in water and be discontinued soon after.
Gamepass will become like Disney plus, a subscription for MS' ips basically
Xcloud and gamepass will be the premier Cloud gaming alternative and basically sinónimous with that distribution method
So what it feels like is that MS is banking on a future where the ecosystem and the content are two distinct products they are offering. Where they want you to ideally consume their games and subscription service via their hardware and ecosystem, but it's by no means the only option to do so. They're banking on a future where almost everyone sees those things just as interchangeably, including people like Apple.
Hardware will become less of a priority. They will still release devices but they will leverage Windows and effectively be PCs with custom front ends that will still run everything on GamePass and all modern games but will probably lose some OG Xbox/360 era compatibility. Hardware won't be sold at a loss and won't compete with the traditional console market in terms of pricing/release strategy.
Majority of games, particularly bigger ones will probably see Switch2/PS5 releases. Some Day 1, some later on down the line. Traditional blue blood Xbox brands like Halo, Gears, Forza, Fable will still be Day 1 exclusives to try and maintain whatever is left of the brand and the die hard fanbase but Bethesda/ABK stuff will all be fully Multiplatform.
Majority of games, particularly bigger ones will probably see Switch2/PS5 releases. Some Day 1, some later on down the line. Traditional blue blood Xbox brands like Halo, Gears, Forza, Fable will still be Day 1 exclusives to try and maintain whatever is left of the brand and the die hard fanbase but Bethesda/ABK stuff will all be fully Multiplatform.
Whatever it will be, it will be without Phil Spencer, most likely. Whatever vision he had for Xbox is gone.
They're moving a little slowly which is interesting to me. Like "testing" with the first four games. What's the point of the test? They should be moving faster. This is existential for them. I dunno.
Why have exclusive games if you're launching a like $699 box aimed at TimDog? Who does it serve? This feels like trying to have your cake and eat it too. Not that I think this is "your" idea or that they won't do this. But if you don't see the point of competing on hardware, not competing 100% on software makes no sense to me.
Why have exclusive games if you're launching a like $699 box aimed at TimDog? Who does it serve? This feels like trying to have your cake and eat it too. Not that I think this is "your" idea or that they won't do this. But if you don't see the point of competing on hardware, not competing 100% on software makes no sense to me.
If they do something like that, I imagine it'd be a short term thing as they probably aren't long for the hardware game anyway. Ultimately their future is probably in 100% third party publishing.
Like you said in your first statement I think this is probably an internal conflict of directions they're trying to dip their toes in the pool but most can probably predict where this is headed. Putting games on other platforms usually doesn't lead to the ending of: "Suddenly Xbox Series X and NextBoxes started flying off the shelves all over the globe"
Man, I really, really love my Series X and the Xbox controller, but this whole ordeal has been weird. I have no idea what's gonna happen. I just don't think having only PS and Nintendo is a good thing for the industry.