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Forbes Contributor: Microsoft's Xbox Revenue Is Plummeting, And Here's Why That's Fine

meenseen84

Member
Feb 15, 2018
85
The hardware drop is somewhat significant if it continues. Blame it on Fortnite is probably accurate, but I believe other factors are involved. The prices of these consoles are too expensive. It's crazy to think the X is still MSRP $500 and the S $300. Yet we have a new console 16 months away. If these consoles were cheaper they would be selling much better, especially the X.
 

TheRulingRing

Member
Apr 6, 2018
3,641
I'm getting the suggestion from all these analyses that revenue per user in this 'new' world of services/subscriptions is a lot lower than in the trad console+unit-purchase market.

If that's the case - I'm not totally sure it is, but let's say it is - how many users will a company have to reach under these models to match the revenues achievable to date on high console userbases?

I also see the suggestion that MS is going to 'compete' with $1 gamepass subs. Is that actually a long term strategy or a short term marketing tactic - does that deal have an expiry? Is that deal really sustainable long term?
It's the Netflix strategy of dumping massive losses into each user in the hope of turning them profitable later. It's obviously all the rage these days so people have latched onto it as Xbox being "progressive".
 

Volimar

Moderator
Oct 25, 2017
11,289
Official Staff Communication
Updated thread title to indicate the author is a Forbes Contributor.
 

giapel

Member
Oct 28, 2017
804
This is weird. Software going down yoy is not a great indicator at this stage and you can’t “blame Fortnite” and shrug it off as insignificant. I suspect the focus on game pass is eroding the amount of money spent on software and that’s a problem they’ll have to solve going forward.
 

Dega

Member
Oct 25, 2017
2,650
I feel like ive been hearing this XBOX is doomed crap for nearly 2 decades now.
 

arbok26

Member
Oct 26, 2017
2,659
And I've been saying this year has been quiet on the gaming front... seems about right to me.
 

Trickster

Member
Oct 25, 2017
5,938
This is weird. Software going down yoy is not a great indicator at this stage and you can’t “blame Fortnite” and shrug it off as insignificant. I suspect the focus on game pass is eroding the amount of money spent on software and that’s a problem they’ll have to solve going forward.
I'll go out on a limb and say that if this is actually something MS considers a problem internally. Then they either already have a plan for how to deal with it, or currently have a bunch of highly skilled people looking at how to fix it.

I personally find it weird that people on era seem so doom and gloom about xbox, especially since MS have actually, for probably the first time since they got into console gaming, started behaving in a way that makes seem like they have a solid vision for the future of xbox

Honestly if anything. I'd be more worried about Playstation in a world where all the big US tech titans like MS, Google, and Amazon, are focusing on gaming
 

*Guaraná

Member
Oct 25, 2017
4,002
The fact that a Forbes contributor says its fine doesn't make it fine. Hardware sales are still relevant and software sales are still relevant. A lot. And in this two aspects, Xbox is failing.
 
Oct 2, 2018
2,558
I feel like this is always the Microsoft narrative alway with gaming.

Because they have the deepest pockets and whatever narrative re: its success or failure ultimately does not matter because a) deep pockets b) moving goal posts.
 

Gestault

Member
Oct 26, 2017
6,543
The fact that a Forbes contributor says its fine doesn't make it fine. Hardware sales are still relevant and software sales are still relevant. A lot. And in this two aspects, Xbox is failing.
Just for context, a "Forbes Contributor" makes it less credible/substantive. Effectively any paid Forbes account can make editorial write-ups like this, so you see a lot of middling-to-worse writing and topics that don't go through the traditional editorial filter under that banner.
 

12Danny123

Member
Jan 31, 2018
571
There are alot of folks that are concerned about Microsoft hardware revenue. One way this can be remedied by Microsoft is buying even more studios ips and possibly even publishers to make more Xbox platform exclusives. Those that want to play these games on console will have to purchase an Xbox console thus increasing hardware revenue. This will alleviate the hardware revenue decline that many here are so worried about.
Why would any company force consumers to purchase hardware to play games? With Cloud Gaming likely to become mainstream in the next decade, it absolutely makes no sense to have hardware exclusives.
 

KSweeley

Community Resettler
Member
Oct 25, 2017
3,938
Baltimore, Maryland, USA

Vj27

Member
Feb 10, 2019
486
Gears is done. stick a fork in it.
Yeah I’m gonna disagree. That tech test has been the talk of every gaming forum, hell even the (toxic) pro Sony dudes on YouTube won’t stop talking about, sure not in a good light lol it’s mainly complaining about war being removed from gears title and the smoking thing but I haven’t seen a single person rag on the gameplay itself... except for Dreamcast guy but his review said he loved all the refinements and the new change then in the same breath said it was bad because of said refinements and new change so... I think gears is going to do better than we all thought it would. Even seen radbrad play it and he’s a casual lol, even he had a shit ton of fun. I don’t think it’ll sell like gears 3 but I think this’ll do better than 4 at the most. I don’t expect that to curb the next gen wait game hardware decline but gears and many other gamepass launches could at least have another big spike in subs and revenue related to it.
 
Apr 6, 2018
1,645
This drop in revenue wouldn't have happened if:
• Crackdown wasn't a total disaster
• SoT, Gears or Halo had legs in terms of post-launch monetization
• PUBG had more success on consoles
• Marketing partner games were better: Xbox went with fucking Fallout 76, Anthem and BFV, while PS has RDR2 and COD.

The growing subs are not the reason behind revenue being down. The revenue is down because the games' menu isn't appealing to drive console sales, game sales and microtransactions.
But SoT had no post launch monetization
PUBG sold 9 mln on x1 in less than a year, so basically 20% of the owner bought a copy, how the hell it could have had more success?
 
Oct 27, 2017
2,323
But SoT had no post launch monetization
PUBG sold 9 mln on x1 in less than a year, so basically 20% of the owner bought a copy, how the hell it could have had more success?
SoT microtransactions were supposed to come out last summer: pets and shit. They are either heavily delayed, or already cancelled.

When MS got the deal, it was a 2m+ concurrent user game on Steam, easily the next League or Minecraft. PUBG was bundled with every Xbox SKU. MS inserted themselves as a PUBG publisher and made it a timed exclusive, but by the time it came out, Fortnite was already booming. I doubt MS got the expected results from the PUBG exclusivity deal.
 
Apr 6, 2018
1,645
SoT microtransactions were supposed to come out last summer: pets and shit. They are either heavily delayed, or already cancelled.

When MS got the deal, it was a 2m+ concurrent user game on Steam, easily the next League or Minecraft. PUBG was bundled with every Xbox SKU. MS inserted themselves as a PUBG publisher and made it a timed exclusive, but by the time it came out, Fortnite was already booming. I doubt MS got the expected results from the PUBG exclusivity deal.
And how those things impacted 2019 fiscal year?
BTW mtx are in the insiders program, so not cancelled, but how those could have impacted msft earnings?
And I don't see how they were unsatisfied by 9 mln copies in less than a year
 

Niks

Member
Oct 25, 2017
943
Carnival of stupid with all these articles. (More so being the US media) and we are still A YEAR away from next gen launch.

It's going to be a pain.