Bonus Round - Is Time Running Out For Xbox?

pixlexic

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Nov 10, 2012
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The Xbox division isn't a meaningful source of revenue for MS.

This is their third try, they've been second, last and now second. The console industry has a questionable future. It's just not worth it anymore. If MS aren't happy with the XBO's performance they'll sell the division.
that is just silly the xbox is MS window to the youth and home entertainment. Windows will not be able to support them forever.

The only down fall for ms is if old business minded people in charge do not see that.
 

Kosma

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Feb 22, 2007
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The Xbox division isn't a meaningful source of revenue for MS.

This is their third try, they've been second, last and now second. The console industry has a questionable future. It's just not worth it anymore. If MS aren't happy with the XBO's performance they'll sell the division.
Which is why I wonder what the future will be.

In sure MS could throw money at the xbox and turn it around so that it sells better, the question is do they want to?

They thought they had a winner and already spent so much money, will they want to spend billions more just to reach 60/80 million sold units again?
 

Duxxy3

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Nov 30, 2007
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Microsoft was predicting to sell 10 million consoles in 2014, at $500?

That's just delusional thinking.
 

mrklaw

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No doubt, but that's not what Microsoft wants. The plan for the Xbone was growth in the mass market. They didn't spend $400 million dollars on the NFL deal to get core gamers to upgrade.

Let's say they sell 80 million consoles again. Same as last gen. That would be a huge failure for them.
I wonder.

Surely MS can't honestly have thought they'd launch at $500 and be a runaway success? Maybe they be satisfied with fewer sales but higher value ones. More people signed up to the XBL ecosystem, using bing voice search etc.
 

R_thanatos

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Apr 20, 2010
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earth planet
Just finished watching.

-First i disagree that sony has let infamous down to focus on the order , the real reason why we got info on the order was because they have a lot (more) titles and they need to show them. Not every gamer will buy both , so it's counter productive IMo to focus only on 1 franchise.Especially when you have a big catalog and a bigger franchise for the end of the year ( uncharted )

-Patcher , twich marketing actually works , especially since you can see your friends streams right away on your own console i do this on my smartphone with the playstation App. So answer " but you have to buy a camera " is null and void since , some people just want to watch , not everyone wnat to show , and even if you do both consoles have gaming session sharing habilities .... again we're back on the aspect of the choice that the consummer have to do . Something microsoft ignored.

-I actually agree with patcher that removing kinect won't happen in 2014. If it does happen before Q3 , that just means that their sales estimates are worse than anyone could have anticipated.

-Patcher and his compagnion are actually right on this point , the first console you buy is usually the one you stay on ( unless you're disapointed ) that's why the lead sony is creating is important . so patcher, people can have netflix , amazon video and watch their content on their ps4 ..i'm not sure what was your point really.

-Another thing they are right however is that if microsoft want to keep kinect they need to showcase what it can do with games... Not voice commands in your games , but cool ways to use your thing. Microsoft totally forgot to do that and it doesn't help when kinect 2.0 is doing the same mistakes in the games than kinect 1.0 did. ( fighter within LOL )
At some point you need something more than kinect adventures.
With the move i could play killzone 3 or infamous it was optionnal but i could ..... if you can't convince your big and small studio to work with it , just drop the idea.
 

Zombie James

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Dec 28, 2005
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Interesting that Pachter claims 38% of Xbox owners are on Live Gold.
That figure alone severly limits Titanfall's potential effect on the Xbone's prospects (or any other multiplayer-only semi-exclusive). Paying for multiplayer access might have positive effects on your bottom line, but the audience will never be as large as it could be.
 

Imperfected

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Jul 17, 2013
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that is just silly the xbox is MS window to the youth and home entertainment. Windows is not be able to support them forever.

The only down fall for ms is if old business minded people in charge do not see that.
The "youth" do not realize that X-Box runs on Windows. The X-Box does not successfully "sell" Windows to anyone. You know what sells Windows? The desire to play PC games, which more often than not require Windows for compatibility. The idea that the X-Box is (or ever has been) "selling" Windows is so absurd I can't even accuse you of parroting Microsoft talking points, because no one internal to the company would even believe it.
 

erawsd

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Apr 5, 2012
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No doubt, but that's not what Microsoft wants. The plan for the Xbone was growth in the mass market. They didn't spend $400 million dollars on the NFL deal to get core gamers to upgrade.

Let's say they sell 80 million consoles again. Same as last gen. That would be a huge failure for them.
Exactly. The Xbox One was intended to be bigger than the gaming industry.
 
Feb 17, 2005
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so if people aren't buying xbone because kinect or wiiu because it's so weak. does that mean non gamers have left the market or have they turned into gamers
 

Duxxy3

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After watching this I am starting to realize just how much Mattrick completely fucked up the Xbox one.

Emphasis on TV, weaker system, $400m NFL deal, $100m controller, forced kinect, and of course the cherry on top... always online/drm.

Holy shit, I actually feel somewhat bad for Zynga.
 

Mandoric

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Jan 6, 2005
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The Xbox division isn't a meaningful source of revenue for MS.

This is their third try, they've been second, last and now second. The console industry has a questionable future. It's just not worth it anymore. If MS aren't happy with the XBO's performance they'll sell the division.
I don't think they'll be able to easily, at this point, which may encourage another shot.
The Xbox has the following assets:
1) Brand name - currently being run through the mud.
2) Hardware design staff and functioning prototypes - the Xbone is making the PS3 look like smart design, and most likely buyers are either major electronics companies in their own right (Samsung, LG, Panasonic, possible surprise bid from China) or already have a decently-sized design bureau with a better recent track record (Amazon).
3) "Guaranteed" cash flow from XBL subscriber base - likely to be chipped away significantly as the CoD crowd migrates to PS+.
4) Internal studios - Lots of valuable assets here, but assets that are more valuable to a post-console MGS shipping AAA titles for PC and multiplat than they would be to a prospective buyer, especially because if MS -does- bail it will be solid proof that Halo and Gears are no longer system sellers.
5) Operating system - development intertwined with Windows development, basically unsellable and more likely to resurface as a kind of Dreamcast WinCE for the new era.
6) XBL infrastructure and software - intertwined with enterprise services, basically unsellable and more likely to resurface as a service similar to PS3's Gamespy and Steam integration on select games.

I think a more likely result is "Xbox the service" - providing a prebaked OS/online stack to a new competitor as part of an enterprise services push - combined with "Xbox the WP equivalent of Apple TV" as a more profitable and less capital-intensive offering in the living room.

Depends what they mean alive. In sales they wont win but they can still be doing well for themselves.
This is 100% true, but MS doesn't seem to want to take that road. The launch marketing budget of the Xbone alone was roughly as much as the profit the PS2 turned in its best year, which suggests that they honestly built the system and their strategy around the 400m+ figure bandied around prelaunch.
 

E92 M3

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Always enjoy listening to Pachter - he is a smart guy. Gets some things wrong, but overall, enjoyable to listen to.
 

StuBurns

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that is just silly the xbox is MS window to the youth and home entertainment. Windows will not be able to support them forever.

The only down fall for ms is if old business minded people in charge do not see that.
I think the future for MS is similar to IBM, focused almost exclusively on enterprise support. It's an incredible revenue source, it's low impact, and low risk.

I agree with the 'old business minded people'.
I don't think they'll be able to easily, at this point, which may encourage another shot...
Yeah, all good points.

I don't think it would be someone like Google, or Samsung, I actually think it'd be a publisher acquisition, someone like EA, just buying it for the studios and IP.
 

jelly

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Oct 14, 2013
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There is rumours Microsoft are starting to consider taking Xbox Live to other platforms like iOS and Android in full form, not just the odd test game. Xbox Music and Video one step in already.

I think Xbox will continue down the Windows route and Microsoft will only release Windows devices that come with Xbox services, no separate Xbox consoles. Windows with an Xbox layer will be the game machine. Back to build/buy your own PC, gaming under the guise of Xbox competing toe to toe with Steam/Machines/OS. Along with Windows Phone, Android and iOS support. Xbox and Microsoft services become as ubiquitous as Windows.
 

Jtrizzy

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Jun 20, 2007
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You can still make a nice profit with a distant second place finish. I am not sure if all this gloom and doom talk is a reaction to Xbox One sales or a comparison to PS4 sales. It is nice to be market leader, but money can be made being #2. Either way, it just seems really early for all this kind of talk.
 

Tobor

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Sep 15, 2006
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I wonder.

Surely MS can't honestly have thought they'd launch at $500 and be a runaway success? Maybe they be satisfied with fewer sales but higher value ones. More people signed up to the XBL ecosystem, using bing voice search etc.
You wouldn't think so, but all the evidence is to the contrary.

It's clear whatever expectations they had aren't being met. Mattrick was pushed out as a result.
 

N.Domixis

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May 30, 2013
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Absolutely not. The Xbone had an amazing, record breaking launch and it outsold PS4 in Dec in North America. It still hasn't launched in many major countries. MS has nothing to worry about.
The xbox one never really broke any records. All records were shattered by ps4 first leaving xbox with scraps. The only reason xbox sold more in December was low supply of ps4's. Nov. Jan. And Feb. all won by ps4. March is next. ;)
 
Feb 18, 2013
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I understand the point about indies and Kinect but they should of been trying to get this started before launch, voice commands and snap are not a justification for a $100 price over its competitor who is more powerful in the hardware stakes imo
 

funkystudent

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Apr 3, 2010
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Really have to see how Feb and March turns out.

If February NDP's are close to January's numbers for the Xb1 then "shit is fucked" would be a good way to describe that situation. If its still getting outsold 2:1 in March with the system seller Titanfall out. Well thats just hilarious.

Those January numbers where red alarms. I hope they can fix the problem soon.


MS are lucky that they have a built in price drop with Kinect. I wonder how quick they will drop that thing.
 

Mandoric

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Jan 6, 2005
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I think the future for MS is similar to IBM, focused almost exclusively on enterprise support. It's an incredible revenue source, it's low impact, and low risk.

I agree with the 'old business minded people'.

Yeah, all good points.

I don't think it would be someone like Google, or Samsung, I actually think it'd be a publisher acquisition, someone like EA, just buying it for the studios and IP.
Yeah, if it went down as selling the valuable parts and spinning down the rest, a major publisher would be a good buyer. "MGS IPs underperformed because of Xbone and would sell on 360 levels if we took them multiplat" is a fairly compelling argument, especially if Destiny performs well.
 

Hoo-doo

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Sep 29, 2011
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Absolutely not. The Xbone had an amazing, record breaking launch and it outsold PS4 in Dec in North America. It still hasn't launched in many major countries. MS has nothing to worry about.
You have to be doing this just to fucking troll at this point. Sad.
 

MercuryLS

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Apr 21, 2007
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Garnet has a good point about leveraging indies for Kinect. But not sure MS is smart enough to do this.
It sounds good in theory but focusing on Kinect means they can't bring the same title to PC/PS4. Indies want to release on as many platforms as possible just like big publishers. MS might be able to money hat a few of them but not enough to make a big difference in the grand scheme.
 
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I always thought console makers made their money on software sales. So if the software sales of the 360 and One combined outpace the software sales of the PS4, PS3, and PSV combined, then how is that a bad thing?

Doesn't that mean that MS is making more money than Sony?
 

Captiosus

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Jun 7, 2013
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As I wrote in a Kinect thread earlier in the day, part of this Doom & Gloom is brought on by the new leadership at Microsoft. You have a CEO who is a software and services guy and he appointed Stephen Elop (the former
Microsoft Plant &
CEO of Nokia) as the new head of Devices and Studios. A rumor went around when Elop was mentioned as possible CEO about him "trimming" the Xbox line.

Part of me actually wonders if Xbox wouldn't do better if it was spun off into its own company. It would lose the negative stigma associated with Microsoft's name, it would no longer be subject to a massive corporate bureaucracy as it is currently, and, with it's own stand-alone management, may even have a better opportunity of competing in the Asian market. Microsoft could still develop games for it exclusively as a first-party software developer, which would be consistent with the new CEO's vision.
 

Majine

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May 21, 2009
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I think I prefer having Microsoft in a 2nd place, so to speak. You have to light a fire under them, or they will screw you over.
 

Tobor

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It sounds good in theory but focusing on Kinect means they can't bring the same title to PC/PS4. Indies want to release on as many platforms as possible just like big publishers. MS might be able to money hat a few of them but not enough to make a big difference in the grand scheme.
Add to this the ridiculous launch parity clause.
 

Fuchsdh

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Jan 14, 2012
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It's never been a proven driving force in hardware sales.

People often cite that piece of trivia, the most powerful system has never won, and it's true, obviously it's going to win this time, but I'd doubt it's because of performance.
Pretty much this. It's so easy for video game nerds to turn it into the specs, but even having the weaker performance of cross-platform titles isn't really any major threat to the Xbox. The other issues are the more important.
 

Jaxar

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Oct 12, 2013
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So it's not about the games, it's about the demeanor of executives?

Odd way to choose a console.
Actually I feel the same. I remember very clearly what a complete tosser Major Nelson was around E3 last year, along with Mattrick. Those sorts of things (along with the games themselves) stick in my mind when considering to pick up an Xb1.
 
Feb 17, 2010
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CT
www.doddscientifics.com
If Titanfall doesn't push the needle... I don't know what will. I don't mean to be doom and gloom, and will freely admit that there could be something that comes out that changes everything that we don't know about (I don't think anyone foresaw Monster Hunter saving the PSP, for instance). But, looking at the trajectories of both systems and the release schedules for both systems... Titanfall is the biggest exclusive this year for either platform. If it doesn't push the needle and keep the needle pushed for a sustained amount of time I think there's a real danger of Microsoft falling far behind (which... I don't think they are far behind yet, for the record).


Microsoft doesn't need to "win" to make money. Microsoft wants to sell services. They will make money with XBLG. They will make money with Skype. They will make money with NUADs. They will make money with the NFL deal. They will make money with TV stuff. They will make money with Forza/Halo/Gears/etc. They don't need to be in first to do that.


But... and this is where if I was microsoft I would start shitting myself a little bit. They aren't the "cool" console currently. The PS4 is sleeker. The PS4 is more powerful (and early adopters are making it known via social media to the more casual gamers that this is the case... something that didn't exist 10 years ago). PS+ is beloved. And the PS4 is $100 cheaper. The xbox one is a big, bulky box. The Kinect hasn't caught on (I like it far more than I thought I would... but let's be serious, the gaming public's general sentiment about it is "i don't want it."). XBLG is looking like a rip off at $10 more for less stuff than PS+.

Microsoft has a very real image problem right now. And if Titanfall doesn't help correct that there isn't any reason to think anything will this year. Forza Horizon 2 will be awesome and I can't wait to buy that game but racing games are fairly niche. A big niche... 2 million sold, sure... but it's not going to move units. Halo 2 anniversary will be the biggest HD remake ever but as of yet there is no proof that a HD remake does much more than make a company some easy money.

The biggest problem is that when you add all of this stuff up, it's hard to think that MS will stay at the same trajectory. Like I said before, they don't need to win, but they do need to keep selling so they are a somewhat close second place. But when Watch_Dogs comes out and it's different resolutions that's another chink in the armor. I was told last night by a guy at MS that Batman is being preordered, in the US, to the tune of 4 to 1 in favor of the PS4 currently. If the xbox keeps getting the shit kicked out of it I think less people want to buy it as we go forward. It becomes so much more expensive for them to buy exclusives. The system is thought of as uncool (see: wii u).

Marketing guys project that Titanfall has already helped sell around 1 million Xbox Ones. This is based off of things like upticks in sales after every major titanfall announcements. They don't know if it will move 200k more at this point. The titanfall bundle is selling less than Microsoft projected (but they are still hopeful for a big swing come tuesday). If titanfall doesn't turn around the sales... and the image problem - what will? Direct X 12 unlocking the magic secret gpu when it releases in 1.5 years? Even if that bullshit is real the system would be buried by then.


As for "get rid of the kinect" i agree with Pachter that it won't be this year. Well, it can possibly be this year, but later this year. I think his reasoning is the same as mine... because the people I talk to say "We literally cannot unbundle it, we have contracts with parts suppliers that are yearly or multi-year." Mattrick really fucked them with that device. If you do see microsoft announce a kinect-less bundle early, like at e3, keep in mind that means they are eating A TON of money. And that has to be worrying for a division that certain people would like to see sold off...


I dig my xbox one but they have serious hurdles to overcome. I also love my Vita and it had serious hurdles to overcome... and it didn't. It needed Gravity Rush or Soul Sacrifice to become a Monster Hunter-like phenomenon and it didn't happen. So for the rest of its lifespan it will be a niche device. Shit happens.
 

McHuj

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I think we'll know the fate of kinect at E3. Not that they'll announce that they are or are not removing it, but that we'll see what (if any) software is announced for it.

Realistically if there are no new ( not dance central 4) games that are really unique and showcase the kinect at E3, then I think Kinect is done for. We'll be soon approaching a year since the announcement and there has not really been anything wow worthy announced for Kinect. Project Spark is the only thing that comes to mind.
 

StuBurns

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Jan 9, 2008
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If Titanfall doesn't push the needle... I don't know what will. I don't mean to be doom and gloom, and will freely admit that there could be something that comes out that changes everything that we don't know about (I don't think anyone foresaw Monster Hunter saving the PSP, for instance). But, looking at the trajectories of both systems and the release schedules for both systems... Titanfall is the biggest exclusive this year for either platform. If it doesn't push the needle and keep the needle pushed for a sustained amount of time I think there's a real danger of Microsoft falling far behind (which... I don't think they are far behind yet, for the record).
The fact they've bundled it, and have aggressively dropped the price in the UK, is a pretty strong indication that preorders are soft as hell.

TitanFall isn't going to do anything.
 
Saw this earlier; Over-dramatic title/description but decent points in the video. I think me and Mike are on the same page in terms of what they could do to keep kinect (introduce a new SKU that has larger storage + kinect for $500 and introduce a $400 SKU that's the current 500 GB size). Game streaming and indies were brought up for kinect too which were things discussed in the kinect thread here.
Completely agreed. How dare the X1 outsell the 360 in the same time frame. Failure!
 

Tobor

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Sep 15, 2006
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I think the conversation should turn from "if Titanfall does not reverse things" to "when Titanfall does not reverse things." People expect too much from the mere release of it.
Pretty much. Even if they win in March NPD's, which isn't a lock, the worldwide gap will continue to grow.
 

Mandoric

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Jan 6, 2005
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I always thought console makers made their money on software sales. So if the software sales of the 360 and One combined outpace the software sales of the PS4, PS3, and PSV combined, then how is that a bad thing?

Doesn't that mean that MS is making more money than Sony?
Software sales are a function of hardware sales, though.

If Sony sells 8 games per million consoles and MS sells 10 games per million consoles, which is plausible, that's MS at an advantage. But if Sony sells 100 million consoles and MS sells 25 million consoles, that's 800m games vs. 250m games.

There's also the new factor introduced last-gen of people buying on 360 because all their friends are on Live - what do you think those people are going to do if most of their friends opt for a PS4 instead?

(The numbers you're referring to also aren't hugely useful because the 360 winning the US is a done deal - they're about as skewed as pointing out that Sony has sold 140m home consoles since 2005 compared to MS's 80m and ignoring the fact that 60m of them are PS2s, which made Sony's accountants happy but didn't mean a thing for the PS3/360 wars.)
 
Sep 6, 2007
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Shouldn't they be buying PCs then, if they care about performance?
I'm so tired of this flawed argument. There are valid reasons for people wanting to stick with consoles instead of gaming PCs. It doesn't mean they shouldn't want the best bang for their buck when choosing among the available console options.
 

mrklaw

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Jun 10, 2004
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-Patcher , twich marketing actually works , especially since you can see your friends streams right away on your own console i do this on my smartphone with the playstation App. So answer " but you have to buy a camera " is null and void since , some people just want to watch , not everyone wnat to show , and even if you do both consoles have gaming session sharing habilities .... again we're back on the aspect of the choice that the consummer have to do . Something microsoft ignored.
.

Just waiting for twitch to roll out on Xbox one and then suddenly twitch being cited as a way that MS will help spread the word about Xbox games to the wider market.
 

BRocknRolla

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Feb 7, 2013
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Absolutely not. The Xbone had an amazing, record breaking launch and it outsold PS4 in Dec in North America. It still hasn't launched in many major countries. MS has nothing to worry about.
You slay me. It's one thing to be sanguine about the Xbox's outlook. It's another thing to be... this.
 

Miletius

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Oct 1, 2010
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This is a really interesting comment - I agree. One of the huge differences this time around is that we've seen an absolute explosion in the availability of online information. I don't remember anything like the utterly obsessive scrutiny of the hardware/software that we're currently seeing on things like Digital Foundry during the early years of last gen. I wonder if there's been some kind of explosion in 'enthusiast' gaming - there seems to be a lot more people who aren't simply passively reading reviews, and instead, are actively engaged in analysing system performance. Even if they don't necessarily understand the technology, they know that these debates go on, and want to be involved in them.

As far as I've seen, neither Sony nor Microsoft effectively prepared for this level of scrutiny. I don't think that they anticipated that the kind of rigorous community analysis that has traditionally been the domain of PC enthusiasts has gone 'mainstream', and that they can't whitewash the deficits of their hardware through advertising.
Agreed. But, on another tone I wonder what it means if the only ones paying attention are the ones who care to look at these things critically. Does that mean the mom and pop market is gone? Does it mean that they will follow after a clear dominant force (the PS4, presumably) takes over? Or does it mean that that the general market has educated themselves to the point of being enthusiast levels of informed?
 

azhar

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Dec 21, 2013
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Pachter is an interesting guy and I thought his point about people not signing up for both Xbox Live Gold and PSN+ was quite astute. I wonder if the fact that Sony now charges for online play has made this generation's console war even more heated, since people are less likely to double-dip with respect to online subscriptions. It seems like it has forced people to make a single console choice (and then to stick to it.)