Remember the best selling console in the US for those couple months after the slim launched.....they were quick to boast.
-
Ever wanted an RSS feed of all your favorite gaming news sites? Go check out our new Gaming Headlines feed! Read more about it here.
-
We have made minor adjustments to how the search bar works on ResetEra. You can read about the changes here.
The Verge interviews Phil Spencer - ‘The business isn’t how many consoles you sell’
- Thread starter SuikerBrood
- Start date
Consumers don't care about who is first. They care about value and if the product is good. It's like the mobile phone debate when Apple makes an old Android feature popular because consumers embraces it. PSNow has been rejected in it's current state, because it's not up to the standard of what consumers want. There is a reason why Sony isn't talking much about PSNow and streaming atm and it's because they now PSNow isn't good enough yet. They made a partnership with Microsoft and Azure for a reason.
Yep. That probably explains why they ran to a subscription model with Office 365.
Docs to Go, Lotus Notes, Google Docs and the iOS Notes app must have hammered Microsoft Office in the enterprise.
/s
Probably nearly the same thing, tbh. Every one of the big tech firms are going MUA and subscriptions.
I mean, this should be an incredibly obvious thing unless you made that comment in bad faith. Freaking Apple - one of the biggest, most successful consumer electronics companies in the world - are going all in with subscriptions, and are putting their apps on competing streaming boxes.
Apple cares FAR more about selling Apple TV + subs than about selling $179 Apple TV 4K boxes.
How are the two situations remotely similar at all? For one Office has no real competition.
That's pretty narrow minded. A piece of hardwareis the perfect key to a huge gate with a walled-off garden behind that containing several avenues to profit. The traditional console business was always about that.
What if everyone starts doing their own services? Bethesda has demonstrated their own streaming solution and Ubisoft has their own gamepass on PC this E3.
Google has just entered the game.
Retail as the middle-man will become irrelevant, but the content-creators+publishers now can do their own thing and are not at the mercy of the plattform-holder anymore. Sounds good and fair, but...
The whole EGS vs. Steam thing is just the beginning of a huge war for content, because the entry-point is much lower.
The problem people are not seeing because they're happy getting stuff for cheap - developers and publishers will have to find ways too work against the inevitable devaluation of their products. Let's take a small publisher from Japan for example: they're selling a rather small amount of copies at the regular price of 60$ and it works for them. Right now Phil can approach said publisher and pay them a good price as an incentive to put the game on gamepass. Once subs are the common thing, no one will ever be willing to pay 60$ again. MS holds all the data - what if their data tells them that this game from the mentioned Japanese dev was only played by 10.000 people and was not worth the money they invested? I'll tell you: the next time those two parties engage in negotiations will look completely different: "No, we can't pay you that anymore, look at our data. Take this or good luck with selling your game."
LOL. Not saying y'all are entirely wrong, but you're ignoring what Microsoft is doing. Microsoft as a whole is not bending over backwards to accommodate Xbox. The gaming division is following the corporate strategy. The one that got Sony to sign on the dotted line and that pushes the very successful Surface line of computers PRIMARILY to sell services. Hardware has always been a means to an end for Microsoft. Console sales were never going to be the metric that mattered most in the boardroom.
Now, morale wise, I totally agree that the tone of the conversation might be different. But at the end of the day, the content is exactly the same, even if the context changes.
Console sales don't help big time. Especially not with how many people expect them to be selling these machines at serious losses this gen (I'm personally still skeptical, but whatever). If console sales were primarily about revenue and profit, the X1 and PS4 would have been $800 machines. But no, it's not about the hardware. It's always been about selling software. And now, it's also about selling services and subscriptions. That's where the profit is.
Nonsense...people who BUY the hardware also sub to LIve, and buy games which you make money off. Console sales right now are the Biggest factor still. How many people sub to LIVE without an xbox? Come on.
I feel like they are just waiting for e3 2020 to give the full blowout of information. No sense in talking about a lesser console right now.
But Microsoft is expanding to PC, and cellphones and tablets via cloud, Microsoft can grow their MAU without selling hardware. Google is not selling hardware to compete with sony and Microsoft, and Sony is looking for the same allowing PS Plus on PC.
Google, Microsoft and Sony doesn't need to sell a lot of hardware to sell games and services anymore, even if it's still very convenient to do it.
None of what you said changes what I said..Sony is also going to do the same, but as of now HARDWARE is easily the biggest driver still. I mean Sony has more MAU, profit, because they SOLD more hardware...it's pretty simple. Phil is just being phil.
Microsoft has really benefitted from finally no longer locking themselves in and closing the console space. It took them long enough to realize that the landscape has changed and gaming on other devices like PCs and mobile phones is no longer a threat to consoles, but a way to sell more games. It's like they remembered that they actually owns Windows and PC gaming.
This interview is just another evidence that Microsoft is finally on the right path. Literally everything Phil says is music to gamers ears. It's pretty much what a lot of people wanted back in the dark ages of the closedness of last gen.
This interview is just another evidence that Microsoft is finally on the right path. Literally everything Phil says is music to gamers ears. It's pretty much what a lot of people wanted back in the dark ages of the closedness of last gen.
Too early for next gen talk really, so to be expected. Although they kinda invited it by doing the unnecessary Scarlett video, so probably should've came up with some answer worth anything beforehand.
Yeah, but I think Spencer is looking for the future. In 3-4 years Sony may have sold more PS5 than Microsoft and MS still having a better revenue. Maybe will be google who will have the better revenue without selling any hardware.
Right now you are right, 3 years from now I don't know.
Phil is obviously talking about the future and how Microsoft and Xbox is no longer focused on just selling consoles. Nothing more than that.
Yeah but he knows what the journalist is asking, if you don't want to reveal you are making 2 different consoles is more honest simply not answering the question. And if you're only playing one then say it clearly.
Will be interesting to see how long this subscription model goes for without wholesale changes to the industry
Seen a few tweets from industry folks musing about how subscription services just wont work for AAA game development in the long run, without some big changes to how they charge the consumers horrible MTs in game for stuff etc.
Of course MS can afford this type of service as a platform holder for maybe the medium term but other publishers are gonna get screwed by this trend imo. I very much doubt consumers are gonna start taking out 4 or 5 subscriptions each . Devs need the 60 upfront, not a much reduced payment on a sub service model for their 150mil USD budget game.The only way to recoup is to start putting lots of MTs in imo.
Also I just dont think many people wanna stream AAA games to their phones etc. Unsure what market is getting chased here
Sorry for the slightly offtopic post, but its certainly interesting where things are going.
Seen a few tweets from industry folks musing about how subscription services just wont work for AAA game development in the long run, without some big changes to how they charge the consumers horrible MTs in game for stuff etc.
Of course MS can afford this type of service as a platform holder for maybe the medium term but other publishers are gonna get screwed by this trend imo. I very much doubt consumers are gonna start taking out 4 or 5 subscriptions each . Devs need the 60 upfront, not a much reduced payment on a sub service model for their 150mil USD budget game.The only way to recoup is to start putting lots of MTs in imo.
Also I just dont think many people wanna stream AAA games to their phones etc. Unsure what market is getting chased here
Sorry for the slightly offtopic post, but its certainly interesting where things are going.
PS NOW has been rejected? You have any facts to back that statement up? its going to be funny when other streaming services launch and they stay just as niche...
That seems like a naive and rather stupid take since PSNow isn't very good atm.
Anyone with any sense could see that it doesn't need to be one or the other.
It really wont be any different on any other streaming device.....No one can beat physics. PS now works fine btw, results will vary like with any other streaming. I know several who use PS now with no issue? Shrugs.
I can't wait for xcloud and stadia to launch with a thud..Streaming is going to remain niche for awhile yet.
I wonder how Gears 5 will fare, since Game Pass will have it there also.. Sales don't matter anymore as long as MS got a lot of ppl involved in Game Pass?
Interesting point, if not a new one for why streaming services are bad. I don't see this as fundamentally different from what happens today already. That small Japanese studio doesn't just make a game and sell it for $60. Game dev is expensive. No small studio has the funds to self publish a $60 game, especially not with a Japanese focus. That's because they're ALREADY competing with all the games on consoles, Steam, mobile, etc. today. Good luck charging full price, small studio.
So, they can go to a publisher to try and run up some money to find initial costs. They will, of course, have to pay the publisher back first. If the game doesn't sell at the price they need it to (despite being a critical success), the studio and publisher get nothing. They lost money and the studio shuts down. Forget worrying about the second game, it's never happening. There is only one metric of success, and it's one that's under heavy fire even without subscriptions.
Services like game pass see success differently. Yes, revenue and engagement are important, and yes, they will certainly carefully look at engagement and pay accordingly. But, none of that is different than the status quo. And on top of that, being able to check out a cool small game for no additional cost means I've checked out a lot more games that otherwise would never have seen any of my money this gen.
You're right, maybe streaming services will take over. If they do, it's because it's a better gaming model that people prefer. I just don't see that as a bad thing.
Well it makes a lot of sense. You only buy a console every x years but if you're invested in the ecosystem you spend a lot more on services, games, accessories, peripherals. Game Pass + xCloud + Live Gold will move a lot of money without even necessarily having to own a gaming hardware.
Their overall strategy is so on point these days. Backwardscompatibility did a lot to change my perception of the console, but I rarely played current generation games in their ecosystem. The PC support and Game Pass has changed all that. It's just ridiculous value and I've also found that I often wait to play games on other platforms, if my Game Pass subscription is running, because I feel I wanna get as much value out of the subscription as possible.
And them offering people to upgrade to GP Ultimate, adding Gold and GP months together, have made many I know upgrade for longer than they would have otherwise and so they'll probably stay subscribed in the transition phase between generations. Which console are they gonna choose, when they already have a running subscription to an ecosystem, basically offering them more games they've already payed for, if they pick up Scarlett?
It's a smart play from MS.
And them offering people to upgrade to GP Ultimate, adding Gold and GP months together, have made many I know upgrade for longer than they would have otherwise and so they'll probably stay subscribed in the transition phase between generations. Which console are they gonna choose, when they already have a running subscription to an ecosystem, basically offering them more games they've already payed for, if they pick up Scarlett?
It's a smart play from MS.
All fine and dandy, but all speculation about the future of gaming is futile until we get the raw facts:
Right now, we know Sony's profit and how many consoles they've sold. And we see Switch dominating NPD and Japan currently.
We know jack shit about how many people have used MS's services and the adaption rate of those services on mobile devices and PC.
Some people on this board are buying someone else's vision of the future and selling them as pure facts.
We can have this discussion again when Phil stops the mystery-mongering and finally announces 40m gamepass subscribers all accross the board.
It's possible they are still deciding on if they go 2 skus. The manufacturing could take up the valuable Anaconda resources and they mightn't be sure it's worth it yet.
Hit the nail on the head with this line
Funny thing is the main way to get people into your ecosystem right now is.....buying the hardware. The future anything can change.
Good interview, just keep growing XGS like you're currently doing and making Game Pass more attractive and I will be going with Scarlet day one.
I said platform holders would be OK, but I was mainly more worried about the others. If your not paying money for games upfront companies like UBisoft, SE, Activision, EA etc will change their model.
I know gamepass has lot of small first party games but I imagine they will want to get more AAA over time. They cost so much more, and that will be passed onto the consumer someway.
Games wont get bigger and better with subscription models imo
Exactly. Come on. Let's stick our heads in the sand of the traditional model that we can clearly see changing before our eyes. Gold is huge for Xbox, and I agree that it won't change any time soon. And yet, what just happened this week? We had Xbox's premier subscription unveiled with Gold and Game pass. In fact, it had game pass on console AND on PC. In fact, it was called GAME PASS Ultimate.
And then what did they do? They talked about ways to use this premier gaming subscription without even buying a console.
You're not wrong, this is not how the world works today. And we don't know what the future will look like. But I can guarantee you this: the future will not look like today.
Ya don't say. Doesn;t change the fact that as of right now hardware is by far the single biggest driver, it's why Sony also has way more MAU and Profit..unless you have another explanation? Anything can happen in the future.
The next fight is going to be around the multiplayer subscription services I believe. XBL vs PSN vs Switch Online. The value proposition just isn't there anymore:
- PSN free monthly games from 4 to 2
- XBL putting FTP games behind subscription pay wall
- XBL not required (yet) on PC even though cross play games now exist across Xbox and PC
- Switch Online is the only service to offer real value, with the continued expanding selection of NES games
I would not put it past MS to make XBL required for xCloud streaming, meaning that's two mandatory subs for one service, since you'll need multiplayer access for a big chunk of streaming games (I doubt they would segment games between single and multiplayer, and folks getting half of a game will surely balk at the idea).
And MS is starting to get a bit like Netflix in that, it all comes down to their first party content. Once these third parties pull back games into their own streaming services, the game selection will boil down to the MGS output, which is still a wild card. And if those studios are making considerations in their game designs specifically for GP, will the games they offer have enough interest by mainstream consumers? Or would MS be happy to have a niche market?
Not all third party pubs will have their own subscription services, but like Disney+, Time Warner, and eventually Comcast, it's trending in that direction (look at Uplay+, EA Access, etc.).
It still boils down to the quality and appeal of the games. Games sold hardware, they'll also sell xCloud, PSNow, XBL and PSN.
- PSN free monthly games from 4 to 2
- XBL putting FTP games behind subscription pay wall
- XBL not required (yet) on PC even though cross play games now exist across Xbox and PC
- Switch Online is the only service to offer real value, with the continued expanding selection of NES games
I would not put it past MS to make XBL required for xCloud streaming, meaning that's two mandatory subs for one service, since you'll need multiplayer access for a big chunk of streaming games (I doubt they would segment games between single and multiplayer, and folks getting half of a game will surely balk at the idea).
And MS is starting to get a bit like Netflix in that, it all comes down to their first party content. Once these third parties pull back games into their own streaming services, the game selection will boil down to the MGS output, which is still a wild card. And if those studios are making considerations in their game designs specifically for GP, will the games they offer have enough interest by mainstream consumers? Or would MS be happy to have a niche market?
Not all third party pubs will have their own subscription services, but like Disney+, Time Warner, and eventually Comcast, it's trending in that direction (look at Uplay+, EA Access, etc.).
It still boils down to the quality and appeal of the games. Games sold hardware, they'll also sell xCloud, PSNow, XBL and PSN.
- Next to software revenues services like Game Pass or PS+ are currently the most important indicator for profit since console hardware is usually sold at cost year-aligned (higher prices in the 1st half of the year compensate the major discounts during holiday season).
- You need a continuous flow of content to sell those services resp. make customers prolong their subscriptions.
- There seems to be a positive correlation between hardware sold and subcriptions and MAUs for your platform.
The disappointing numbers Sony released showed that the service is not where Sony wants it to be atm. They have said that they want to push it more in the coming years and they just went into a partnership with Microsoft and Azure. It's clearly not in a competitive state right now, but they are hiring and upgrading it to compete with Stadia and xCloud.
Do we have any idea of how many subscribers they have? I know Phil said millions and millions in one of the recent interviews, but do we have anything more specific?
That revenue is boosted by other markets not just xbox. XBox on mobile, PC. But a lot is a combo of their services, and games like Minecraft and Fortnite that make people sub.
If they didn't have minecraft on everything, and made people pay for F2P games that revenue wouldnt be as high. Sony doesn't charge people for F2P. XBox does if im not mistaken.