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Phil Spencer: Selling as many consoles as Sony or Nintendo is not our approach

onQ123

Member
guess I’m not understanding you. Right this second I don’t have a controller hooked to my tv. If my tv had the xcloud app and it actually worked I would hook a controller to it and play games instead of buying a console.

You're not because I'm saying that it's a small percentage of people who would have a controller hooked to their TV who wouldn't have a console.
 

DeepEnigma

Gold Member
This is what I think too.

My misunderstanding with Microsoft’s approach at this point is why not just nix the consoles and just push Gamepass on all platforms that are willing to have it...

If money is the goal, then wouldn’t they stand to make more if xcloud/GP was ok Switch and PS? I can’t imagine what consoles they do sell would make up for that potential revenue lost...

it just seems like a half measure. Like...based on what Phil is saying their goal is, they’re only doing it half-assed to really achieve it.

The console is for the hardcore base still. They need to ease into this and not abandon cold turkey.
 

kretos

Banned
Phil has to talk everyday doesn't he

It's not his approach because he knows he can't compete with them that's why Xbox is taking a different route with no exclusives and subscriptions

Software and services is a FAR more lucrative market than console hardware sales. You guys are about to learn this lesson soon enough.

you sell more consoles = you sell more software on that console
 

Abriael_GN

RSI Employee of the Year
My misunderstanding with Microsoft’s approach at this point is why not just nix the consoles and just push Gamepass on all platforms that are willing to have it...

Because they want to sell *their* ecosystem. Doing their own consoles is the good balance (in their eyes) between having a variety of access points and retaining as much control as possible on the revenue generated by their ecosystem and on the ecosystem itself.

If they put game pass on all platforms, they'd have to rely on the PSN and Nintendo network, which would make their ecosystem more reliant on networks owned by other companies. As we all saw, they're already having issues with Apple.
 
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Warnen

Don't pass gaas, it is your Destiny!
This is what I think too.

My misunderstanding with Microsoft’s approach at this point is why not just nix the consoles and just push Gamepass on all platforms that are willing to have it...

If money is the goal, then wouldn’t they stand to make more if xcloud/GP was ok Switch and PS? I can’t imagine what consoles they do sell would make up for that potential revenue lost...

it just seems like a half measure. Like...based on what Phil is saying their goal is, they’re only doing it half-assed to really achieve it.

I would think GP would eat into game sales on other platforms especially if they are going after 3rd party stuff. I mean if you had game pass on switch and carrion was on it, are you going to buy carrion from the eshop?

I would guess MS wouldn’t be the ones not wanting game pass on other consoles really.
 

Warnen

Don't pass gaas, it is your Destiny!
You're not because I'm saying that it's a small percentage of people who would have a controller hooked to their TV who wouldn't have a console.

or you just buy a controller for $50 instead of a console for $500 if you want to play a game
 
This is what I think too.

My misunderstanding with Microsoft’s approach at this point is why not just nix the consoles and just push Gamepass on all platforms that are willing to have it...

If money is the goal, then wouldn’t they stand to make more if xcloud/GP was ok Switch and PS? I can’t imagine what consoles they do sell would make up for that potential revenue lost...

it just seems like a half measure. Like...based on what Phil is saying their goal is, they’re only doing it half-assed to really achieve it.

original.gif

Probably because they would get told no by them. Take into account that with EA access it's just EA games but something like Gamepass would compete with many other publishers on Sonys and Nintendos platform. Microsoft can't just buy their way in and I'm pretty sure many 3rd parties love their sales on both Nintendo and Sonys systems.
 
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THE DUCK

voted poster of the decade by bots
You guys are really missing the point of what he's saying. He's saying we could sell 100 million consoles and 5 games per unit over thier lifetime, or we could sell 40 million and have the all on game pass and or xbox live. Guess which one makes them more money?

It's already happened this generation, I haven't checked the numbers directly, but I would wager that ms made more profit on xbox one and its online services than sony despite losing the "console war" total sales figure.
 
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Now that xCloud seems to be ready for action they should focus on getting their app included by default on smart TVs. Maybe even include a free controller when you buy the TV.
 

onQ123

Member
or you just buy a controller for $50 instead of a console for $500 if you want to play a game

And that would be a really small percent of people who would buy a $50 controller for their TV if they are not into gaming enough to buy a console.
 

onQ123

Member
You guys are really missing the point of what he's saying. He's saying we could sell 100 million consoles and 5 games per unit over thier lifetime, or we could sell 40 million and have the all on game pass and or xbox live. Guess which one makes them more money?

It's already happened this generation, I haven't checked the numbers directly, but I would wager that ms made more profit on xbox one and its online services than sony despite losing the "console war" total sales figure.

LOL no they haven't lol
 

FunkMiller

Member
Actually taking a look at financials shows clearly that this strategy is very suitable for Microsoft as a company and it's not as dumb as people who know literally nothing of economics paint it.

Selling consoles has a very narrow profit margin when you're not selling at a loss (even when your price is higher than the bill of parts, you may still be selling at a loss because there's plenty more costs associated with selling a console unit). It's also very unstable because you're making most of your money in the middle of a console's life cycle. In the beginning, it's bad, and going toward the end, it drops considerably.

On the other hand, selling an ecosystem with plenty of recurring transactions for the customer, from subscriptions to microtransactions, has massively better profit margins and has more stable economics.

The new Xbox consoles aren't designed to be Microsoft's big earners, so they don't need to sell as many as them. They're important to sell an ecosystem with many entry points, whether it be consoles, PC, or mobile, but they're not the most important factor.

This is not to say that their strategy is better than anyone else's, but it's a strategy that works very well for them, and with a diversified approach selling Series X and Series S, it certainly has potential.

 

Vasto

Member
You guys are really missing the point of what he's saying. He's saying we could sell 100 million consoles and 5 games per unit over thier lifetime, or we could sell 40 million and have the all on game pass and or xbox live. Guess which one makes them more money?

It's already happened this generation, I haven't checked the numbers directly, but I would wager that ms made more profit on xbox one and its online services than sony despite losing the "console war" total sales figure.

They know what he is saying.
 
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I'd buy this if they weren't still shelling out for console exclusives and releasing a weaker spec system for the primary purpose of undercutting the PlayStation, to say nothing of supposedly even trying to undercut the PS5's price with the Series X's if possible.

Phil keeps trying to have a foot in both worlds. The mixed messaging is not helping.
 

Jaxcellent

Member
Although, I think its good to choose an approach, I'm not so sure this one will work, then again, Microsoft is all about hitting critical mass, they must have done the math on this, I prefer the original approach for console gaming/next gen consoles, dont see the incentive to buy a new Xbox, my old Xbone still works fine, its not like I'm missing out on any games or anything...
 

Jigsaah

Gold Member
Guess we'll have to check the earnings in a few years to see if this pays off. What's irritating about this is these kinds of statement, whether true or not, seem to be made to basically buy time.

I don't really subscribe to the console war, so unlike many of you, I'm not desperate to rope Xbox into he ring with Sony. Them going a different route has produced some initiatives that I doubt we would see otherwise. Variety is good.
 

Nikana

Go Go Neo Rangers!
He may have a valid argument to make, but the condescending tone, and the insulting attitude, guarantee no more communication and a lovely trip to Ignoresville 👍

That's not what your comment highlighting and GIF indicated in any capacity.
 
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Nikana

Go Go Neo Rangers!
Phil has to talk everyday doesn't he

It's not his approach because he knows he can't compete with them that's why Xbox is taking a different route with no exclusives and subscriptions



you sell more consoles = you sell more software on that console

Yet attach rates don't ever seem to climb. Attach rates never going higher is the issue.
 

Vawn

Banned
So THAT'S why you won't reveal the price until you see PS5's price?

But, you don't care to sell more and don't even consider Sony as a competitor. Yet everything you do seems to revolve directly around PlayStation.
 
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Microsoft... Microsoft.. Come on. Blood in the water much? Why even open your mouth . Just sit there quietly with your 12TF, work with your developers to pump out
a couple really shockingly good looking games for the launch window and just sit there quietly and sell the units. Why do you keep talking about your competition in this
context and why in the name of god are you saying "W...... WELL I WILL JUST TAKE MY BALL AND GO HOME THEN" And claiming you Dont want to play anymore/ wasnt trying to win anyway.

God damn it just tastes like cringe I cant even explain everything thats been wrong with their messaging. They came out screaming about their console hardware, early, then keep not
showing games and keep backpedaling saying they dont care about selling it, but also its the best , and they arent worried about Sony because their console is better but also they
will sell more than Xbox and thats ok but also.... I mean come on.
 

onQ123

Member
Show me some numbers then, if true should be easy.


Highlights :
  • Over $5.63B Revenue and $1.152B Profit between April-June 2020 (Q1 FY20)
    • Biggest Revenue ever for PlayStation (and for any platform holder) during Q1
      • Top 3 biggest Q1 Revenue everis :
        1. Sony Q1 FY20
        2. Sony Q1 FY18
        3. Sony Q1 FY19
      • To show how big Revenue are, Q1 FY20 Revenue are higher than any quarter of Xbox (even Oct-Dec quarters)
    • Biggest Revenue everfor PlayStation (and for any platform holder) during a non-Holiday quarter (non-Q3)
      • Top 5 biggest non-Q3 Revenue everis :
        1. Sony Q1 FY20 (April-June 2020 - FF7R/TLOU Part II)
        2. Sony Q2 FY18 (July-Sept 2018 - Spider-Man)
        3. Sony Q4 FY18 (Jan-Mar 2019)
        4. Sony Q1 FY18 (April-June 2018 - God of War/Detroit)
        5. Sony Q1 FY19 (April-June 2019 - Days Gone)
    • 9th biggest Revenue ever for any platform holder during any quarter
      • The 8 quarters ahead are all Q3 (Oct-Dec) from Sony (4) and Nintendo (4)
    • Best Operating Profit everfor PlayStation during Q1
      • 2nd best Operating Profit ever for any platform holder during Q1
    • Best Operating Profit everfor PlayStation during any quarter
      • 1st time, profits during a quarter exceed $1 Billion for PlayStation !
  • Hardware : 1.9m PS4 sold-in during Q1 FY20 (LTD: 112.3m)
    • 3rd biggest shipments for any console during its 7th Q1 or 27th quarter (behind only PS1/PS2)
  • Software : 91.0m games sold-in during Q1 FY20
    • Highest software sales during Q1 in video game history
      • During the past 4 Q1, PS4 set each time a new software sales record for the industry
    • PS4 is the only console to have 4 Q1 with over 40m games sold
    • PS4 Software LTD almost reached 1.400B games sold
  • Software digital ratio : 74% during Q1 FY20 (April-June 2020)
    • Highest digital ratio ever during a quarter
  • PlayStation Store had its biggest Revenue everduring Q1 with more than $3.67B
    • Biggest Revenue ever during any quarter
    • including Digital Software & Add-on content
  • PlayStation Software & Services saw their biggest Revenue everduring Q1 with more than $4.89B
    • Biggest Revenue ever during any quarter
    • including Physical / Digital Software & Add-on content / Services
  • New Informations given in financial results
    • 113M MAU (monthly active users)
      • 113M active users each spent about $32.46 on average on PS Store during Q1
    • 18.5M first-party games sold during Q1 FY20 (vs 11.7M in Q1 FY19)
      • 1 game out of 5 sold this quarter was a Sony first-party game
  • FY2020 Forecast :
    • $23.4B Revenue & $2.24B Profit... it would be:
      • Biggest Revenue for PlayStation (and for any platform holder) in video game history
      • 2nd best Operating Profit ever for PlayStation


 

Warnen

Don't pass gaas, it is your Destiny!
And that would be a really small percent of people who would buy a $50 controller for their TV if they are not into gaming enough to buy a console.

I would disagree, phone gaming market alone shows there are lots of casuals that don’t want to buy a console to play games.

If you just need a controller and a sub the low cost of entry would drive many new users to check it out.

Also you have the audience that buys 1 or 2 games a year, if they could get 100s of games for that same price why not?
 

onQ123

Member
I would disagree, phone gaming market alone shows there are lots of casuals that don’t want to buy a console to play games.

If you just need a controller and a sub the low cost of entry would drive many new users to check it out.

Also you have the audience that buys 1 or 2 games a year, if they could get 100s of games for that same price why not?

Phones come with their own interface that can play games TVs don't so like I said the percentage of people with controllers hooked to their TV without a console is small.
 

Warnen

Don't pass gaas, it is your Destiny!
Phones come with their own interface that can play games TVs don't so like I said the percentage of people with controllers hooked to their TV without a console is small.

Lol why are you so hooked on the interface? People buy controllers and headphones for there phones too. People buy sound bars and extra universal remotes for there TVs as well.

The point you keep going to is nonsense.
 
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