Most subs come from folks buying the hardware.......it's why Sony has way more profit, MAU... That may change in the future...but that time is not now.
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The Verge interviews Phil Spencer - ‘The business isn’t how many consoles you sell’
- Thread starter SuikerBrood
- Start date
yup. they could easily go service only. this is just a PR spin safety net for when they continue to be outsold 2:1 next gen. but you know for a fact if they were in sony's shoes right now they wouldn't be saying this.
Only to gamers. If Xbox stopped selling consoles, everyone would freak
Yeah I'd like to have a source on that. I'm pretty sure both Sony and Nintendo make a healthy profit with their hardware business.
...but once again. Some people itt claim that selling hardware means less profit than a subscription service.
How much money did MS and Sony get from apps like Netflix over the years as an example? In the streaming future that profit is gone, as you'll have your Netflix or Disney+ app right next to your Xbox TV-app.
I'm not buying it. Imo Phil and MS are choosing a two lane-approach, but of course right now he chose the PR-statement that makes them look best.
You need to sell consoles to also sell Xbox Live Gold (PS+ and Switch Online on competitors), a "service" whose sole purpose is to allow software on the machine to connect to the internet. It prints money! You can't do that without owning the hardware and selling it.
It's about making money, selling subscriptions. Sony revenue is PSN plus online subs and royalties.
Sony games are only available on the console. Microsoft xbox+ PC. Microsoft revenue model is very different nowadays to Sony. Phil is just reflecting on the change inside Microsoft.
Sure Phil would love it if the Xbox was doing as good as Sony in the console space, still, Microsoft is doing very well if you think about it.
Revenue
Sony 20 billion Microsoft 11 billion.
They have only sold 30 million console- Sony near 100. There only a difference of 9 billion and Sony obviously spend more on first party games also this gen.
Microsoft potentially may even lower the revenue gap with new services like gamepass on PC and their games on Steam.
This is the second time you claimed this, I called you out the first time and you didn't reply, what's your source on the numbers? Because they are very wrong.
I called it out too he ignored.... PSn makes more then Live and Nintendo combined last quarter I believe.
You ultimately need some piece of hardware to play cloud services.
It also allows for changes. Maybe the plan still has it launching, but maybe it launches later. Maybe they will can it but not yet.
If it was false, they'd shoot it down. Vague talk is usually an admission.
It also allows for changes. Maybe the plan still has it launching, but maybe it launches later. Maybe they will can it but not yet.
Sure, but that's not my point or my concern. I'm talking specifically about the point you raised - the challenge Sony and Microsoft have in keeping third parties on board rather than starting their own subscription services.
The amount that Microsoft and Sony got from Netflix is, I imagine, zero dollars. They don't get a cut.
I thought last I heard, Xbox is closer to 45 million sold. I mean it's a slaughter no matter what...
Yeah, what he's doing is comparing PSN alone (which is the store and Plus only) versus all Xbox, PS4 as a whole made over 20 billion.
Last we heard was over 40 million for Xbox.
As for revenue, that's not how it works, just because you sold x2 more consoles it doesn't mean you should make x2 the revenue (even though they almost did), the more consoles you sell the more casuals you have which in turn means the less revenue in relation to the console numbers.
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This is just a continuation of the strategy pushed across the entire company since the change of leadership in Microsoft since 2014. This has seen the share price of Microsoft literally triple in five years.
It's a bad move to immediately assume it won't also see some degree of success in the Xbox space, and it'll take a year or two to see if it pays off.
Too much "But Sony!" in this thread, and it's a lil embarrassing. It's way too soon to try and make comparisons either which way.
It's a bad move to immediately assume it won't also see some degree of success in the Xbox space, and it'll take a year or two to see if it pays off.
Too much "But Sony!" in this thread, and it's a lil embarrassing. It's way too soon to try and make comparisons either which way.
Considering Sony's immense growth in its Network business, selling console surely doesn't hurt. It also builds your brand for when you want to launch your own subscription service.
Spencer has a point but you can't tell me there isn't a strong "moving the goalposts" component to that statement.
Spencer has a point but you can't tell me there isn't a strong "moving the goalposts" component to that statement.
Then he should become a third party publisher, since hardware margins are low, and they have a breadth of newly acquired studios. If he was really about making the most money, he'd sell all his games on PlayStation and Nintendo as well since they compose the large majority of the games hardware.
It probably somewhere between 30 and 40- with no real numbers it hard to know. I doubt they sold 40 million.
Just to be clear: of course subscription services can potentially make more money than selling hardware, but you have to pull off much bigger numbers to achieve that and MS has more than once said that they believe in big market growth potential.
If this does not happen to a certain degree tho, the old business model may end up being more profitable.
^^^^no, Xbox is most definitely around 45m now, maybe a little higher
If this does not happen to a certain degree tho, the old business model may end up being more profitable.
^^^^no, Xbox is most definitely around 45m now, maybe a little higher
Just checked Wikipedia and it says 41. Yeah, who knows for sure.
I know?
What I'm saying is the moves they made from Microsoft to boost Xbox was because they were not selling well in hardware and software. So they tried to bolster the whole division by widening it.
Which in tern shows growth, but growth not from AAA games they internally produce. I would like to see what their profits are, see if they actually made their money back from the buying of minecraft.
I'm getting side tracked here. My main point is the change in widening their reach with xbox being a agnostic platform was because they were doing so poorly, and not seeing enough growth.
Which in tern to me has changed the way they are approaching games, and it may not work out for them the way they want it to.
That's pretty much never been the case in the history of gaming. Over time they recover R&D cost and the hardware becomes cheaper to develop, but the margin was never in the hardware. It's in first party accessories, the games, licensing fees, and now services.
Okay, thanks. I must have missed that. Maybe they want to hedge their bets somewhat and see how streaming does? It could always come as a mid gen refresh if adoption is high.
You could argue they already are. Most (all?) Xbox exclusive games are now available on Windows and they're starting to come to Steam. Minecraft is available on pretty much every device and Minecraft Dungeons is coming out on both Switch and PS4.
Sony themselves said consoles are niche, 100 million consoles isnt what MS want, they want much more and that can't be achieved with consoles alone.
Yeah, PS5 and high end XB2 will probably be twins as usual too, so I don't even think some low end system launching with them would even be worth it personally.
Felt to me that Phil is doing what Phil wants to do though we might never have got him if XB1 sold like PS4 from the start.
A person who has dedicated gaming hardware is more prone to spend more money on other things they make money on. The person playing a mobile game is not going to subscribe for xbox live to play minecraft on their phone. They will spend money within the virtual store though ala MT'S.
Someone who buys consoles spends more on games in a shorter spand of time, than someone who plays mobile games. Over the coarse of maybe a couple years the mobile player may have spent couple hundred dollars buying card packs or something. But when you look at a customer who buys dedicated gaming hardware is spending more on average every year in the form of software, subs, peripherals etc.
Phil is doing what Nadella wants to do, and probably was the only way to have xbox get a bigger budget. When your in a room full of investors in 2014-2015 looking at sales, subs, and revenue being super not great what do you do?
How can we make more money without selling more hardware? Make our games available on more things? our games right now are not selling like competition how do we entice new customers? Make a netlfix like subscription and flood it with content to make it attractive, regardless of the type of content.
To me I would rather have xbox even be as barren release wise as they have been, if it meant quality wise it was going to improve over just putting tons of stuff with mixed quality/size on a service that's catered to a wide audience than the ones who buy their brand of games.
Hence why EA Access is EA's stuff mostly. People who love madden, Fifa see that brand and know it, they know the games they make. Getting Jedi fallen order is just icing on the cake.
Gamepass is just like let's put tons of shit on here and see what sticks. Even though some of those might be on other sub services from the publisher themselves.
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Ye this was clear from the start. Xbox is no longer designed to compete with PS in hardware sales and we likely never get sales numbers for hardware ever again from them. It's all about the software and services now for them
Yeah, but things are different now. Hardware is off the shelf PC parts without a ton of engineering. There's nothing special about the PS4. It's not a PS3. It's not even a PS2.
I agree with Phil, but there seems to be a pretty clear correlation historically between the hardware units you sell and the services revenue you can generate. Short track record, but PSN network revenues are what they are because of hardware sales. They are clearly related.
Clearly both companies are trying to decouple the hardware from that equation. Hence xCloud and whatever Sony is doing. But it remains to be seen if it works.
Over the life of the console they would not be sold at a loss. Except maybe Xbox 1 and PS3.
I don't know... that two model approach always sounded stupid to me. This could end up in a scenario where the cheaper version is just too cheap and the expensive version just a little too expensive with Sony finding the sweet-spot in the middle. The X hasn't changed anything about the market share @500$ and most games will be cross-plattform at the start of next gen, so a 600+$ console may end up being too niche for the mass market.
No..Sony has been making money off PS4's sold for ages....Ps3 is the exception not the rule.
The bigger point is though...more consoles sold = More service revenue. There is a direct correlation.
The money comes from software people are forced to use because they bought your hardware. The two go hand in hand. As more publishers use their own streaming services and 'game passes' there will be less and less reason to use Xbox at all without a console.
Hardware + Services + exclusive IP is the way to go.
Console manufacturers aim to sell them at cost. That said, they usually sell them for a (little) profit most of the year to offset the loss during holiday season (especially black friday deals).
MS is a cloud-first, mobile-first company ever since the new CEO took over in 2014. He said back then that he thought your experience, whether it's productivity or entertainment, should go with you across screens no matter the device and there was an opportunity to have Xbox be part of his vision. It looks like we're finally seeing what he meant.
In other words, I don't think the MS CEO would have kept a console-only business around. That's not part of his charter.
Showed Remote Play from my PS4 to my laptop to a couple of friends this weekend after the Xbox conference & they were blown away. It's amazing how much these features aren't known to the casual because I'm almost sure they can stream to their PC's from the Xbox while they're home. And one of them got very excited about taking their iPad on vacation & playing their Xbox through that.
Once this stuff starts being marketed properly, it's going to be a hit.
Once this stuff starts being marketed properly, it's going to be a hit.
Truth is Microsoft has been pushed into this area but in hindsight I'm glad they have. Things like PC support and Game Pass and it's BC efforts have certainly been a good thing IMO. Them also investing in all of these studios also shows to me gaming is not a vanity project for them.
At the end of the day there is far more interest in actual gaming now than the Ballmer/Mattrick combo.
At the end of the day there is far more interest in actual gaming now than the Ballmer/Mattrick combo.
It's been the case with the Wii and apart from that there has also never been a 6 year old console sold for 300 bucks.
So what applied in the past isn't really relevant for the current situation.
And fact is you can make money with hardware if you don't get involved in pointless price/spec wars. I think Nintendo and Sony are demonstrating this pretty well right now.
I remote play nightly but I still don't think it's going to be a hit anytime soon. I have also shown friends how remote play works on PS4. They are amazed. Then they go home and try to do it themselves and realize it takes some money, a lot of patience and a bit of tech knowledge to truly get it up and running optimally. Most don't even attempt it now. Let's not even talk about what the ask is when people go "on vacation" to stream their favorite game to their phone. They gotta have a clip, a controller, proper wifi... or they could just turn on a mobile game or Switch.
Just wait for the scenarios in 2021 or 2022 when people are attempting to stream their Xbox game on their phone while in a condo in Myrtle Beach and their buddy is playing native games on their Switch Pro or iPhone X3 with zero issues.
Sony is making many of the same changes Microsoft is. These changes are changes made with the future of the gaming industry in mind and everyone is making them. Don't think for a moment that console hardware sales aren't going to be treated like irrelevant legacy figures next to MAU by Sony next generation, as Sony like everyone else switches away from hardware-centric focus over to service-centric focus.
Consoles are expensive to make so it wouldn't surprise me if they only released a single one and maybe a streaming box. But it will definitely be expensive, can't see the Scarlett being under $600.
To make up for that I can see them making the Xbox One X into the base model for next gen starting at $299
To make up for that I can see them making the Xbox One X into the base model for next gen starting at $299
You are talking in the present tense whereas "looking to" refers to the future tense. What you said isn't relevant to what MS is looking to do