MS owns Xbox. And even then, Xbox cannot launch 5 failed consoles and still expect support.
Just because MS is massive doesn't mean Xbox has a huge warchest.
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Next gen PS5 and next Xbox launch speculation - Secret sauces spicing 2019
- Thread starter Phoenix Splash
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MS owns Xbox. And even then, Xbox cannot launch 5 failed consoles and still expect support.
Just because MS is massive doesn't mean Xbox has a huge warchest.
Sony's net income in 2018 was about $4.5 billion. Microsoft's was four times that amount.
Microsoft is in a superior position to take a loss on a console. Not saying they will, but it would hurt them less than it would Sony.
And just because Sony is making more with ps4 doesn't mean it can take bigger losses then ms
If they can guarantee user retention they probably can.
Right. That's why its speculation.
However, that speculation actually has basis in reality. If you make more money with a division, you can take more losses when launching a new product.
If your Xbox, citing the "infinite warchest" of MS that has basically never panned out is not an equivalent.
I hope it's as powerful as
Actually no. User base turn over would be worth the risk.
There was a time last generation when there was a lot of speculation as to whether or not Microsoft would have been better selling the gaming brand. That was when they were in the red each and every year since they had launched the first console.
Gaming is now a $10 billion business for them and they are looking for ways in which they can leverage their cloud business even with a gaming setup. They have similarly diversified from Windows and earnings and profits are on the way up. What losses they are willing to take will eventually come to how much they think is worth the risk.
Both companies will have a limit that they want to accommodate early on.
Don't confuse investment with "willing to take a loss"
The Xbox advantage is that it can leverage Microsoft capital for "big bets". This could be headcount, acquisitions, or infrastructure (like Xcloud)
But the bet needs to pay off. Unlike say Nintendo, Microsoft's size means that it's also diversified, and therefore a single business unit like Xbox can't bring down the whole company.
It's not correct to draw a line between the size and profitability of Microsoft, and the willingness or ability for Xbox to take a loss on HW. They are completely independent things.
The Xbox advantage is that it can leverage Microsoft capital for "big bets". This could be headcount, acquisitions, or infrastructure (like Xcloud)
But the bet needs to pay off. Unlike say Nintendo, Microsoft's size means that it's also diversified, and therefore a single business unit like Xbox can't bring down the whole company.
It's not correct to draw a line between the size and profitability of Microsoft, and the willingness or ability for Xbox to take a loss on HW. They are completely independent things.
And it would be worth the risk for MS to remain competitive with Sony.
I mean this is not even a debate.
Willingness to take a loss or any sort of investment is not only dictated by division profits because if that was the case with MS, how come MS have recently invested far More in devs then Sony?
Using the logic of some here that's impossible because ps4 is making more money.
Thank you!
Lol, Albert's post essentially undermines your posts over the last few pages.
No it does not, its similar to what I've been saying.
I don't think you read Albert's post properly, or your approaching it with too much confirmation bias to interpret it correctly.
LOL I don't think u understood what he meant.thank you for proving I m wrong ?
The notion I'm reading from yourself and others in the last few pages is that MS has infinite moneyz and therefore they can take a huge loss on hardware.
Albert's post debunks that.
He goes over the same points I have been saying. So unless you can demonstrate otherwise you have to be Trolling.
Or you need to learn to express yourself better, because that's precisely what your posts have read like.
He clearly mentioned just cause it's MS doesn't mean they can take big loss on Xbox due to being much more diverse company. What u have been saying is Xbox can take a big loss cause it is MS and reasons etc..
Either u express ur self incorrectly or u didn't understand what he said .
Microsoft as a whole is not the same as Xbox. They can take a loss but it needs to pay off in their eyes. Their is a line between the profitability of Microsoft and the ability of Xbox the division to take a loss. They can't take a stupid loss because the money aloted is the money aloted. Spencer can always go make his case and ask for more, that's not an issue. But Xbox can't arbitrarily decide to take a $150 loss for example. Atleast I think that's how I'm reading it. Apologies to Albert if I've missunderstood
That doesn't mean anything. You're using the same tired argument we've heard since Microsoft entered console gaming in 2001, 17 years ago, an argument that has no merit as proven by history time and time again.
This infinite warchest of funds from Microsoft simply doesn't exist for Xbox and never has, and the reason for that is because ultimately Microsoft is a company that needs to make a profit and simultaneously please shareholders. If there's a risk that particular investments will lead to heavy losses, simply put they're going to be orders of magnitude less likely to risk them, which is why neither the Xbox One, Xbox One X or Xbox 360 were sold at a tremendous loss, or even as much of a loss as Sony's platforms (eg the PS3 which was sold at a whopping $307 loss per launch unit sold).
It's certainly possible Microsoft sells the Xbox 720 at a much bigger loss than the PS5, however based on the history of how these companies operate, plus the fact that the PS5 is going to be projected to sell far more, thus reduce manufacturing costs at a quicker rate due to increasing mass production and a greater volume of orders, it's simply not likely.
So, how does what Sony have announced stack up to the next xbox then?? lol
I've said MS can make big investments because they are massive company, which is precisely what Albert says here.
Actually, Anthony, I apologise. I went back and re-read the thread of discussion and the post in question that was the biggest offender wasn't yours but from Maple.
You said:
Which while isn't implying directly that MS is prepared to take a huge loss on HW, it certainly doesn't agree with Mr Penello's post.
It was Maple which said:
Which I thought was your post -- so sorry again for that mix up.
I conflated Maple's post with yours.
How does it do that? Microsoft got into the business because they thought that Sony was going to dominate the living room. They spent a lot of money to get into the industry and a lot to get to the point they are at.
He also stated that they are diversified, something that is mentioned in the prior page. Microsoft might be willing to make a bigger bet simply to keep the likes of Google off. This is something that happens in almost every industry I can think of.
There isn't an infinite warchest. What there is is losses that the business might be willing to take going forward especially early on.
Sony did not anticipate dropping the PS3 price so early in the generation due to lagging sales. Microsoft may not have anticipated allocating more cash to seal the RRoD mess either when they were designing the console.
What some is saying here is that Microsoft is in a better position to absorb losses. Sony might not be in the same position seeing that gaming is their biggest revenue stream, biggest profit making business.
Because Sony has had bigger studios with higher production budgets allocated for their games for sometime while MS didn't have many studios?
How is this a question? MS geared up to match initiatives like Gamepass. Sony doesn't need to gear up. They've been funding a steady slate of first party and second party offerings for the entire generation.
The bet needs to pay off with Sony to.
I don't disagree that the investment needs to pay off.
It is the nature of investments after all.
Microsoft is in a better position to absorb losses, but that doesn't mean Xbox is. If Xbox becomes a massive loss for Microsoft and investments or whatever else continue to come short or disappoint shareholders etc, there is a very real possibility that Microsoft changes course and is considerably less favourable with funding etc towards the Xbox division going forward, or even its support for console gaming in general.
Obviously this is also the case for PlayStation to some extent, but the difference is PlayStation is Sony's premiere and primary business segment, essentially the heart of the business, whilst Xbox isn't for Microsoft.
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Companies (at least successful ones) don't make huge potentially perpetual bets that fuck over the profitability of their hardware business, because of anxiety over a company who has no history in the AAA games industry.
Google isn't a threat to MS, and even more so now thay've shown their hand in the gaming sphere. At best Google will carve out a small niche for themselves. They will amount to little more than an afterthought in MS's next-gen strategic planning.
Also, taking a loss on hardware to increase a product BOM is not an investment. Power has not proven to boost sales of console hardware at any point in the history of the console industry. So a more powerful box is at most a marketing bullet-point and at worst a liability that torches platform profitability for very little gain.
Imho, both Sony and MS will be looking to end up with no more than a minimal loss on hardware amounting to the equivalent of packaging and shipping costs, i.e. RRP closely aligns with BOM. Any more is fanboy fanfiction.
Google isn't a threat to MS, and even more so now thay've shown their hand in the gaming sphere. At best Google will carve out a small niche for themselves. They will amount to little more than an afterthought in MS's next-gen strategic planning.
Also, taking a loss on hardware to increase a product BOM is not an investment. Power has not proven to boost sales of console hardware at any point in the history of the console industry. So a more powerful box is at most a marketing bullet-point and at worst a liability that torches platform profitability for very little gain.
Imho, both Sony and MS will be looking to end up with no more than a minimal loss on hardware amounting to the equivalent of packaging and shipping costs, i.e. RRP closely aligns with BOM. Any more is fanboy fanfiction.
It demonstrates that ms are willing to make investments even if xbox is not as profitable as Sony.
It does not matter if that investment is in games or hardware price, these investment may have different risks but at the end of the day's its still an investment.
And I believe ensuring hardware price and parity with your main competition is a pretty good investment.
This narrative that Sony can take a bigger loss on hardware and there's nothing ms can do about it is pure fan fiction.
Guys, if you are Microsoft and if you can spend $500 mil on Office products and make twice back versus taking $100 loss on each console sold, which one are you going to spend money on?
It's no guarantee that $100 loss will turn into anything while you know putting x dollars in cloud services will net you y% back. The best way to play Sony is to release a cheaper but less powerful sku and a more expensive but more powerful sku when compared to the PS5. Both skus don't need to take a loss, you just need to be able to market you have the most powerful console but also offer something to the price conscious crowd.
It's no guarantee that $100 loss will turn into anything while you know putting x dollars in cloud services will net you y% back. The best way to play Sony is to release a cheaper but less powerful sku and a more expensive but more powerful sku when compared to the PS5. Both skus don't need to take a loss, you just need to be able to market you have the most powerful console but also offer something to the price conscious crowd.
There's so much shit slinging in here, it's crazy! It feels like I've just walked into a room rife with pandemonium. It'll be interesting to see how MS stacks up come E3 but Sony's move was masterclass. They've essentially made it to where MS will have to unveil their console and spill more than Sony has just to take the conversation away from them and when they do that Sony will blow the lid off of their plans in much greater detail at the later event. Even if Xbox is marginally more powerful, the games will truly do the talking and it's hard to envision a line-up of games that will oust what Sony has established and is further iterating upon. Looking forward to Bleeding Edge though and hearing more about it.
Tbh, based on Spencer's own admissions about a lack of first party investment while they were working on XB1X, meanwhile Sony has been consistently investing in a slew of 1st party content simultaneously alongside their PS4 Pro (and now PS5) development, I would argue there's a very strong indication that Playstation's operating budget is bigger than Xbox's.
N.B. doesn't still mean they'll take any significant loss on their next-gen console though. Neither of them will.
N.B. doesn't still mean they'll take any significant loss on their next-gen console though. Neither of them will.
I agree with this. My posts were in response to some on here thinking Anaconda would magically be far more powerful than the PS5 whilst simultaneously being the same exact price. That is simply not very likely (though it's certainly still possible), and neither is the opposite either. I'd imagine both will try to keep losses as minimal as possible whilst being competitive with one another, and I doubt either takes a considerably bigger loss per unit sold than the other. In other words, if Anaconda really is a lot more powerful than the PS5, it's probably going to be more expensive too.
But what about selling 50million consoles instead of 80million because you failed to be competitive in price.
That $2 billion loss (per 20million consoles) cost of $100 loss per console pales in comparison to the money they would make from an extra 30 million install base.
A bet that doesn't pay off won't be discussed on this forum for very long anyway.
Anyway, it's entirely possible for a corporation with more/most money to lag behind the market in terms of actual investment/spend, even on relatively high-profile initiatives. It's not unheard of to see this even when one is a google-sized tech giant and the other a startup.
So how sure are we that Microsoft is going for a two-tier solution? Verified insider(s) sure?
And their next-gen games have to run on both these tiers meaning the lower spec'ed one is their next-gen baseline?
And their next-gen games have to run on both these tiers meaning the lower spec'ed one is their next-gen baseline?
Pretty much confirmed on all .Lockhart and Anaconda. AMD names arden and anubis
The bolded is fan fiction too.
For months I've been saying I expect PS5 will be $499 and be very similar to anaconda.
It just makes sense when you look at sony's approach to PS4, the market reaction to it and the market reaction to xbox 1x.
Both will be beastly. Both will be $499.
Yes but in this case, and for the reasons stated I don't think Ms the bigger company will invest less.
Unless they have 2000 employees working for stadia game studios, google have just been so stupid not to invest at least $2billion on devs.
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