I don't but yes it is closer in NA but I think (could be wrong) sony is like 4 million ahead in US, rest of the world is were the big gap comes from.
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The Verge interviews Phil Spencer - ‘The business isn’t how many consoles you sell’
- Thread starter SuikerBrood
- Start date
If you are planning on buying their games, I think they would prefer you buy it on their console to make the most money...But it feels like most of these initiatives are to get "something" out of people who are completely disengaged from MS. They have sold what...less than half of Sony world wide? Seems to me that if approx 50 million gamers are disengaged from them from a console standpoint, they would want at least some of that on PC or steam (granted some of that gap already have a pc).
I think a gap like 4 million (if thats accurate) over the course of a 6 year cycle could easily go either way next gen. Worldwide.....I dont think it will be close. My gut is MS would be happy if PS5 sold 95mm and XB2 sold 80mm worldwide.
And that's the best move for them I wouldn't buy an Xbox as of now because there is too few games that I care about to justify the investment.
But releasing on their games on PC allow me to buy those that interests me .Sthey're getting money that they wouldn't have had otherwise(not so sure about the conjugaison here).
Agreed. I was going to say the same thing. This is Microsoft continuing their strategy that they had at launch of Xbox One. What is evolving is how they come at that goal of theirs.
I think that's probably the best they could hope for. MS is playing from behind perception wise. I have said multiple times here, MS needs multiple things to go their way next gen to win back customers...not just being equal. They need some combination of first to market, clearly better hardware, some new feature that sony doesnt have, cheaper, more games. No one thing will pull them even close to Sony world wide. It doesnt nee to be ALL of those, but some combination of multiple "wins" will be needed if they want to be anywhere close next gen.
They don't need to match or beat Sony at all though...their console business, while not near as strong as Sony's is doing well for them all things considered. Room for both.
I agree with this....Spencer has said as much. With that said, I also dont think they want to continue selling 40% of what their biggest competitor does. Services are driving thier goals now and thats fine, but negative perception of the hardware side will slow engagement on the services side. They dont need to match or beat. I expect they wnat to be closer than less than half....
"Hardware doesn't matter" isn't something anyone would say. It's certainly not what Spencer is saying.
Selling hardware is a means to and end. The end goal is selling software and services - that's where the profits come from.
Steam is huge without selling hardware. Netflix is huge without selling hardware. Pandora and Spotify are huge without selling hardware.
In the gaming world, selling proprietary hardware and growing a walled garden is a great way to lock software and service sales - but it's not the only way. going forward, several key players are banking on the idea that the business of selling hardware will give ground to the business of selling access to content run on remote hardware. These are the points Spencer is making.
MS would LOVE to be selling more consoles. No one there would say otherwise.
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So your whole thesis builds on a fact that holds true for half a year ... ok.
MS business is subscriptions and selling products.
If they have you locked in a walled garden your money is on their services and in their products.
If you are not in their walled garden your money not necessarily goes to their services and their products.
It´s simple as that.
Add to this the fact that they keep failing on their initiatives to enter the PC market - let´s see if with Xbox app they can achieve something better than their previous atempts - and looking at the gaming market as it is right now it´s not like they are not selling consoles but making it up cause they are surfing on subscriptions and selling their products...because they are not, specially when compared to their competitors. In any front.
Yeah maybe one day when/if streaming becomes big - and I believe it´ll - this rethoric can make sense if they can sucessed in this market, wich we have 0 guarantees that it ll happen.
But not today and not in a near future.
So yeah they can say to you that they don´t have to sell you a console but you can be sure that they would love too and if they could choose to have you on their plataform or their console they would choose the latter any time of the day.
honestly, if i remove technology from the equation of streaming, the reason xcloud will be more successful than Stadia is because MS has this viewpoint. (i didnt read everything about xcloud) but if they have the ability to let you stream your game on the go and continue playing locally from where you left off... let you purchase a physical/digital game and its streamable... merge progress and saves across platforms (xcloud/PC/xbox), thats where MS's strongpoint ALREADY is, and where I can't see Stadia ever being able to offer. MS just has a more compelling ecosystem to appeal to everyone which streaming would strengthen.
How so?
They don't make much money off console sales, in fact they might lose money on consoles sold.
They make money off the console itself.
They make money off additional hardware like Gamepads.
They make money off Xbox Live Gold.
They make money off every single third party game sold.
And they make money off their first party software.
They
This is obvious, people why buy the hardware spend more money on accessories and are more likely to sub, and buy games and accessories....It is by far the biggest driver for your MAU...people downplaying it are disingenuous. Yes there are other avenues to gain users...but hardware is still very critical if you want to grow your base and make money. This gen they have also been making money off the console, the days of losing a lot on each console sold are long gone....
He's right. Xbox doesn't need to sell the most consoles to thrive. But framing it like getting outsold isn't a concern is dishonest when they won't even share their hardware sales numbers. Like if it don't matter, why not say how many boxes you got out in the wild like everybody else?
1. Not really. Especially considering R&D. Manufacturing, shipping, marketing.
Very little money if any is made of console sales, in some ways money is lost on every person that buys a console.
2. You have to buy a gamepad no matter where you play.
3. Yes, but that's changing with Gamepass and xcloud. That's the whole point. If they can get someone to subscribe to gamepass/xcloud it doesn't matter what hardware they used to make it there.
4. Again with Gamepass they aim to make that money. Also putting the Xbox store on multiple devices they will make the same money they would on Xbox hardware.
5. The more people with access to their 1st party games, the more money they make on them.
You dont need to go back to the 360 days:
I think the conversation should be centered around the difference in philosophy between Sony and Microsoft. How does one stand to make more money: Creating a closed ecosystem and incentivizing consumers to buy into it through a hard line stance that "if you want to play these games, X platform is the only place to do so" OR becoming more platform agnostic to expand your potential consumer base, and relying on software and services revenue to offset and potentially exceed what you'd lose in potential hardware sales?
They both have their benefits and negatives, and I believe that both platforms have made the correct choices given their companies and situations. Obviously Microsoft stands to make more money from someone who fully invests into the platform. Having said that, the two philosophies described above are diametrically opposed. So assuming becoming platform agnostic is the bigger revenue generator, and that remains to be seen, then one could effectively argue that console sales don't matter as much.
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I realize we're talking about Xbox here, but if this logic is correct, it should apply to Sony as well.
So why the heck doesn't PS5 have support for games that go back further than PS4? It would add so much more value to the console, and now that he's said, this I really don't see what they feel they have to lose.
So why the heck doesn't PS5 have support for games that go back further than PS4? It would add so much more value to the console, and now that he's said, this I really don't see what they feel they have to lose.
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Yah the consoles will eventually be more of an upsell that an entry barrier. Makes way more sense. Doesn't necessarily mean streaming, either. Somebody can be playing sea of thieves at 20 FPS on their hand-me-down laptop, and be wanting to step into a $300 xbox which would be a big but seamless upgrade for them.
Sony could even go that way. I think there's a 50/50 they double down on hardware as an electronics company, though.
OK, a lot of posts to respond to.
To close, and to reiterate:
-Having a mixed strategy like MS is doing is a good thing
-The industry is evolving, and casting a wide net to potentially hit more users is the right sort of evolution a platform holder should be making
-Making some money from people who will not buy an Xbox is of course better than not making any money from them
But, once you go from that to "console sales don't matter" or "all users have the same value," I'm sorry but that is factually wrong. And honestly I don't understand why people keep pushing this idea, as it's not even MS's strategy. If console sales weren't important or all users had equal value the Xbox console would not exist, as it would be a needless outlay.
You are all starting from a perfectly reasonable idea, and then going to an unreasonable extreme. And I don't know why.
I don't disagree with any of this, and nothing I have said is in opposition. But none of that changes the basic fact that Xbox console owners are more valuable than people who engage with MS games through any other means.
Yes, enlarging the player base MS can reach is a good thing. I have said that several times in this thread. You are not reading my posts, as I never said anything close to "this strategy will hurt Xbox"
This is all correct. It also does not change the basic point I am making.
Of course that also has a brand impact. I never said otherwise.
I never said consoles matter more than users, but I am saying console users are more valuable to MS than other users. That may change in the future (in fact I think it will), but if you were to ask me in 5 years to estimate the value of a given MS games customer, my first question to you will still be "does that person own an Xbox?", because that will still be the most telling data point to work from.
Again, you can't create an extreme edge case and use that as a bases for assumptions across an entire population. No meaningful amount of people operate under the scenario you described.
That is exactly the point of their strategy. And it is a good strategy!
If you own an Xbox, you are more likely to use it more, engage with it more, and spend more on it than if it was an app on your phone or one of many PC storefront options. People who purchase dedicated devices (and when I say this I mean in aggregate) inevitably invest more in that device's offerings to both justify the initial outlay, and because having a physical box in your house that you see whenever you look at your TV has a psychological impact. It is a presence in your life that has a more fixed place in your thoughts.
Sony has really nothing to do with the discussion I am having. I think MS's strategy is a good one, I think it makes sense, I think it will work out well for them. That has absolutely nothing to do with the basic idea that console owners are more valuable customers than non console owners, and that sales of consoles are an important part of the business.
To close, and to reiterate:
-Having a mixed strategy like MS is doing is a good thing
-The industry is evolving, and casting a wide net to potentially hit more users is the right sort of evolution a platform holder should be making
-Making some money from people who will not buy an Xbox is of course better than not making any money from them
But, once you go from that to "console sales don't matter" or "all users have the same value," I'm sorry but that is factually wrong. And honestly I don't understand why people keep pushing this idea, as it's not even MS's strategy. If console sales weren't important or all users had equal value the Xbox console would not exist, as it would be a needless outlay.
You are all starting from a perfectly reasonable idea, and then going to an unreasonable extreme. And I don't know why.
But if the Xbox store is on "everything" then everyone who engages with Xbox content will be giving Microsoft some money.
Yes, and that's a good thing.
Why do people keep making points at me that I agree with, and that I have said I agree with multiple times?
You quoted me to disagree with my assertion that they stand to make more money by putting their software services where gamers are, as opposed to forcing them to buy hardware to play those games and services.
That's my only point. Why did you disagree with me?
Because you're still wrong. They stand to potentially make more money overall by reaching more players they would not have reached otherwise. But those users will each (in aggregate) be less valuable to MS than Xbox owners, so the value of all users to MS is not equal, and console sales are still important.
I am arguing for MS's current strategy.
I'm not sure that I agree with your underlying point. Is the central point that spawned this thread not Phil Spencer's notion that console sales aren't indicative of the health of a business? With that in mind, I reject that a console owner is intrinsically more valuable than a non-console owner. They have more potential value, but there's nothing to suggest that merely owning a console makes one more likely to be a consistent source of revenue. How many threads on this forum do we have about X, Y, or Z console collecting dust? Having X amount of consoles sold doesn't mean at that specific time that there's high levels of engagement, especially as the generation goes on. Whose to say that a consumer who purchased a console at launch is still contributing to revenue a few years down the road?
I agree with Phil that services are a much better barometer for the health of a platform. Console sales alone don't tell us enough, within reason of course. I think it's more unlikely that someone have an active subscription but is not engaged with the platform, than the same scenario with a console owner. Sunk costs versus present / future costs.
Yes, a console owner has more potential, but it's only that - potential. It's not a foregone conclusion. It's not ridiculous to suggest that a PC gamer who has an active Game Pass account and is actively purchasing downloadable content for Microsoft games is more valuable than a casual gamer who owns a console. And it's not like the before mentioned scenario is going to prove to be a rare occurrence.
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Then why are you even quoting my comments and responding to them as if we disagree? Because you are definitely acting like we are on really different sides of this and I'm not sure that's actually true. lol
I'm reading all of your posts. No need to get condescending. If you want to make a point, make it.
I said that selling consoles is important for MS, but that it's important to recognize it isn't their only option to sell products and services to customers.
Again, you keep responding as if you disagree with that, but after this last comment I don't even know what to think about what your stance actually is. (and it looks like I'm not alone in not understanding what you're even getting at)
¯\_(ツ)_/¯
If you want to try again, go for it, but otherwise I'm going to ignore your condescending approach to explaining your point of view.
I mean, not to put too fine a point on it, you are wrong. You are using edge cases and giving them infinitely more weight than they are do in order to support your thesis.
Every single thing a console owner does on that console generates income for the platform owner. That is not true on the PC, that is not true on mobile. That you can invent a situation where the most active xCloud user outspends the least active console owner is completely irrelevant, because that's not indicative of the console owning population in aggregate.
And the idea that you would use any example from this forum in this discussion kinda shows the problem with your line of thinking. No one here is indicative of the general game playing population. We are outliers.
I mean hes not wrong in the grand scheme of things... but hasn't he said in the past he wanted to win this gen and that they were aiming for like 200m sales????
Regardless of which way the wind is blowing today at Xbox, I still want a new piece of plastic to sit under my TV and entertain me for years to come. Give me a great box with great games and services and I'll spend my $$ on all of the above.
Regardless of which way the wind is blowing today at Xbox, I still want a new piece of plastic to sit under my TV and entertain me for years to come. Give me a great box with great games and services and I'll spend my $$ on all of the above.
Phil is just saying what he has to say to satisfy his shareholders. The fact is that Xbox is not the market leader in consoles sold and not likely to change next gen, and he was simply being realistic in maximizing profit sources in the medium term.
But it is a massive stretch to then say that consoles don't matter. Phil implied this, but does not actually say this. Phil wanted to downplay the fact that Xbox division is making less money than they could have if they were market leader, but not actually outright stating being market leader is undesirable.
Phil is just steadying the ship. He wants to make sure Xbox survives despite not being number 1, and maybe last long enough for Sony to make a mistake on their side to actually take advantage of it. Going full third party is simply less profitable, as SEGA proves. Some extra money from the PC and Switch while keeping the Console is his plan right now.
But it is a massive stretch to then say that consoles don't matter. Phil implied this, but does not actually say this. Phil wanted to downplay the fact that Xbox division is making less money than they could have if they were market leader, but not actually outright stating being market leader is undesirable.
Phil is just steadying the ship. He wants to make sure Xbox survives despite not being number 1, and maybe last long enough for Sony to make a mistake on their side to actually take advantage of it. Going full third party is simply less profitable, as SEGA proves. Some extra money from the PC and Switch while keeping the Console is his plan right now.
I mean, when you post this:
After I, in this very thread, have said this:
And this:
That tells me you are not paying attention to the actual words I am writing.
But, we can agree to disagree.
It is so obvious yet so many poster putting their head in the sand lol.
Hold on.
Who is more valuable?
User 1? Buys a top Surface Book 2 for $4000AU and subs to GamePass and Office 365 to use their Surface as an all in one machine that covers all their needs?
Or
User 2? Buys a $600 Xbox and subs to GamePass? But doesn't have a PC?
I know that's a specific case but still....it's a case that would happen and one where the console user is far less valuable than the PC user.
Just saying.
Again, and as I have addressed multiple times own this thread, that is an extreme edge case, and not at all helpful in this discussion.
To repeat myself, you can't create an example that is in no way indicative of an aggregate user base, and then use that example to justify your thesis.
There's going to be more customers at that $600 device then that one at $4000
User 2 is also super likely to subscribe to Xbox Live Gold. Games not being able to access the internet is a huge deal and various online connectivity features have become popular in single player games too.
What you just quoted yourself saying is almost exactly the same as I what I said here:
So, again, why are you responding to my comments to make lengthy arguments, if we're saying very similar things?
The only point I've been trying to make this whole time was that expanding beyond consoles is a very valuable things for Xbox to do. And it sounds like you actually agree with that.
.
Plus: for any 3rd party game sold on Xbox MS gets royalties. And if that 3rd party game requires Xbox Live to play online, that's additional revenue for MS.
If however someone buys that game on PC, best case scenario for MS is their own store. Worst case: Steam, cause then they get exactly nothing.
What's really odd is that something as basic knowledge as this has actually to be explained here...
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Yeah and Xbox thought at the start of the gen the key to selling consoles was tv services, so evolved their business model and product to focus on television services to sell 200 million consoles. During the generation due to the failures of selling consoles relative to the competition, Xbox under Phil focused on evolving their game console to focus on games, by having hardware revisions for more power and removing ir blasters and making the console cheaper. With the continued failure of their evolutions Xbox are now evolving out of the business of selling consoles and instead changed businesses to focus on software, like Sega.
Netflix did not evolve from a DVD player/ tv manufacturing business, they evolved from renting out DVD in a mail subscription to renting out the same content on the internet.
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Plus: for any 3rd party game sold on Xbox MS gets royalties. And if that 3rd party game requires Xbox Live to play online, that's additional revenue for MS.
If however someone buys that game on PC, best case scenario for MS is their own store. Worst case: Steam, cause then they get exactly nothing.
What's really odd is that something as basic knowledge as this has actually to be explained here...
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It is friggin bizarre, are people being wilfully obtuse here or what.
Plus: for any 3rd party game sold on Xbox MS gets royalties. And if that 3rd party game requires Xbox Live to play online, that's additional revenue for MS.
If however someone buys that game on PC, best case scenario for MS is their own store. Worst case: Steam, cause then they get exactly nothing.
What's really odd is that something as basic knowledge as this has actually to be explained here...
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It is friggin bizarre, are people being wilfully obtuse here or what.
The value of a console owner being higher than a non console owner is nothing more than potential. If your argument is that someone who owns a console is potentially more valuable than someone who doesn't, and we take that at face value in a vacuum, then no shit? It's always going to be $X.XX + the sale of the console versus $X.XX spent. I have no clue as to what value that point serves though?
Console ownership in itself does not equal continued engagement. It just doesn't. Someone can impulse buy a discounted console on a whim and let it collect dust thereafter. Someone can purchase a console and be content playing 1-2 games a year. Someone can purchase a console and not be happy with games ultimately releasing on the system, and cease to support it moving forward. Someone can purchase a console and not have the internet and/or bandwidth needed to subscribe to stuff like Xbox Live or Gamepass. And someone can purchase a console, and purchase every game and peripheral possible. You can't simply reduce all scenarios but the one that suits your need as an outlier. There's so many possible variables that it's absolutely insane to try to package it as a measurable aggregate, and the same is true for analyzing non console gamers.
The value of console sales as a metric grows increasingly less meaningful as time goes on. Five years into a generation, what does 50 million sold truly mean to determining the immediate health of the business at that specific point in time? By February 2013, Microsoft sold 23 million Kinects - an absolutely ridiculous number for a peripheral. And if you were to measure the health of their business at that respective time using nothing but units sold, you would say that things were peachy. But was that the case?
Video games are going in this direction regardless of which company sells more consoles. Software period is moving towards more service based things.
Having read some more comments in the meantime I start understanding why such basics have to be carefully explained - and why it's totally pointless. Arguing against "but Phil said so!" Is a waste of time.
Why do you keep talking about individuals when I am talking about aggregate populations? A person might buy an Xbox and never touch it, but the average Xbox user does not. It doesn't matter that you can think of situations where a single given Xbox owner operates outside the bounds of typical practice, because that's what that is: an edge case, and not at all indicative of the overall behavior of the user base.
Yep it is, they will just double down and put their fingers in their ears.