PoweredByHentai
Member
Wait, so where did Microsoft get the money for their 400 million dollar NFL deal from?
http://www.gamespot.com/articles/microsoft-nfl-deal-worth-400-million-report/1100-6408723/
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Microsoft FY2015 Q3: 1.6M 360+XBO Shipped
- Thread starter ZhugeEX
- Start date
Wait, so where did Microsoft get the money for their 400 million dollar NFL deal from?
http://www.gamespot.com/articles/microsoft-nfl-deal-worth-400-million-report/1100-6408723/
I think deal was not just for Xbox. NFL is using surface tablets as playbooks (oh BlackBerry). That deal was MS as a whole not just Xbox.
I just don't get the point of Xbox for MS. It takes a ton of resources, doesn't make a ton of money, has pretty obviously failed at being the 'everything in one' TV set-top device. Not saying it doesn't do a lot, or even everything...but for most people, chromecast and whatever cheap holiday system they can get is a much better solution, in my best guess. The reason they got into the business, and the reality of the business now is very very different.
I just don't see the reason. They're not really a gaming company.
EDIT: If they had sold off xbox, and made the deal to have nintendo games on their phones, I think they'd have made more money, with less investment and resources.
I just don't see the reason. They're not really a gaming company.
EDIT: If they had sold off xbox, and made the deal to have nintendo games on their phones, I think they'd have made more money, with less investment and resources.
Captain Tuttle
Member
Likely both. Who knows, management might see Xbox as a tax write off or something. Point is, it's not a significant part of their revenue stream. Clearly there's a line though, I think just "making less money than last year" isn't crossing it
Honesty if Xbox goes it'll be because of some internal power struggle, not because of revenue as it stands now imo
Wildarmsjecht
Member
LOL off course the market didn't mind. xbox is a tiny little division compared to the rest that makes them billions in profit each quarter.
El-Pistolero
Member
I am not sold on the notion that having a stellar E3 could in itself propel sales into new heights...
I don't recall PS4 receiving a price cut and it's already been stated that XBox One was more expensive and available in less market in 2014 compared to 2015. There is no reason why it would be down YOY. Also if Xbox One was up YOY this definitely would have been highlighted in their report and they could shift the some of the blame to more people adopting Xbox One.
Bioshocker
Member
I don't think it's about money for Microsoft. If it was, they would have discontinued the first Xbox and never released a successor. I think it's about helping to create a new entertainment image for the company. In this regard Xbox has actually helped. I remember how hostile people were when MS announced the Xbox. They were going to "ruin the industry", they "don't understand gaming", "they just want to monopolize everything" etc.
Today millions of people respect and appreciate them. Microsoft is not only about Windows anymore. Maybe it's a cheap price to pay for them, since Xbox is such a small piece of the cake after all.
Remember when 3DS was outselling the DS launched align but those who were paying attention could tell it wasn't actually on a trajectory to do better were shouted down for a few years? Trust me it's not worth arguing about just wait until the 360 and X1 cross streams and do a necro bump of this thread ;-).
OT: I wonder if MS has adjusted their manufacturing schedule or just maintaining their same pace since launch. I wonder what is cheaper for them to adjust their manufacturing contract and orders or to just give consumer discounts to move excess inventory.
OT: I wonder if MS has adjusted their manufacturing schedule or just maintaining their same pace since launch. I wonder what is cheaper for them to adjust their manufacturing contract and orders or to just give consumer discounts to move excess inventory.
Killroyskbg
Member
The problem facing Xbox is not about not earning money which I belive it does but how it perfome compared to the other business areas. Say that every 100$ invested in Xbox earns them a profit of 1$ while if invested in cloud services earns them 10$. As long as Microsoft think Xbox is important for them there is no reason for concern however but the minute they dont it will probably be axed since it is so small compared to the other areas and not performing great.
Felessan
Member
You can't directly compare $ to $ different products as perceived value and attractiveness are differs (iPhone sells much more at much higher price tag).
But what you can compare is behavior of a price. Strong market leader does not need to resort to drastic measures (and any price drop is drastic measure as it is irreversible as MS experience in January clearly shows) - they just stay at the same price until current niche saturates and then drop price. PS2 stayed at the same price almost 2 years, X360 stayed at the same price almost 2 year, PS4 will stay at the same at least 1.5 years. Market leader can just say "get lost, I'm a king" and forget about price drops for a time being.
Contenders are less lucky. As market leader continue to dominate, it get increasing mindshare and contenders have to fight mentality "why buy a loser when you can buy a winner?" (especially when you go after mass-market who don't really care about particular exclusives) and there is not much they can do. One of the obvious - is that "but we are cheaper" and it is clear indication that this particular console feels itself vulnerable and that it believes that it's brand, exclusives and mindshare alone is not enough to put fight against market leader, and this is what I call "struggling console".
For example - PS3 never really resorted to "we are cheaper" strategy, although it had it's own share of struggles and was forced to price parity - meaning Sony was confident enough that they do not need to enter price war over market share.
MS got into console space for two reasons IMHO (and there's quite a few good articles on history of the console kicking around if you Google for it):
- Heading into PS2 generation the thinking was that game consoles would become media devices and replace stand alone DVD players, etc. and that they'd become internet connected. In short the wisdom was that most everyone would have a device under their TV as a single box for games, media and accessing online content. This would account for hundreds of millions of devices and challenge use of home PCs/laptops for such usage.
- Majority (all) consoles did not use Direct X and hence MS looked likely to be left out in the cold with no OS on all those devices and no use of their Direct X standards.
So MS entered the fray with the Original Xbox seeing games as the Trojan Horse to getting to the good stuff - hundreds of millions of devices all running MS OS and using Direct X and accessing content via internet. Revenue from games would be a nice kicker as would Live subscriptions but the real big money would be the media content, advertising, etc. as well as promotion of MS brand to a near monopoly position in the home.
Of course Apple happened, then Google happened and the vision never came to pass and nor does it look likely it every will. Today everything gives content access and most people use multiple distributed devices such as Tablets, Smart Phones, Smart TVs, etc. and game consoles seem, in my view, to have actually settled back to being just that. A game console first and foremost that can access content on the side just like any other device these days.
The question for the Xbox hardware going forward is what's its role for MS? It's certainly not the one it was originally designed for, certainly not the Xbox One which, at reveal, represented what MS really wanted (along with talk of 200 to 300 million home consoles all as primary media consumption hub).
Will they retain it as a MS specific device as part of their new more distributed strategy (Nadella has clearly defined MS is going to be moving into a direction that accepts that Android and iOS are hear to stay and are in fact dominant on many devices and while continuing to compete MS is also looking to exist in that kind of fragmented environment) and settle for 50 to 80 million devices depending on how each gen goes or maybe even dips to 20 million or so if they get it badly wrong like Nintendo?
Will the drop Xbox Hardware and shift to Live and something similar to PSN Now and push to be on lots of devices be it MS hardware or not?
Will they shift Xbox to more of a specific kind of home PC aimed more at the living room?
Nobody knows but I don't believe the entertainment angle is important for them and I know for a fact the original goal for Xbox Hardware has clearly evaporated for the moment (perhaps forever) and the lackluster reaction to the initial reveal and the need to rapidly drop everything about "owning the living room" and instead focus on being just a good game console is the proof of the pudding.
MS has a good game console in XB1 their issue is Sony has a better one in PS4 (by better I mean the fundamental design is better suited to running games and provides more power to do so whereas XB1 will always have a memory and OS design compromised by non-gaming design decisions) and that's their fundamental issue this gen as the market has shown its primary interest is in a games console first and foremost.
I'd like to see MS and Sony drop the fixed hardware approach and build incrementally more powerful consoles every year like Android and iOS devices . That might mean Xbox One 2013 plays Halo 5 in 720p30 whereas Xbox One 2016 plays the same game in 1080p60 at the same price point. As the old devices enter the 2nd hand market, new buyers enter the market and continue to buy new games at budget performance. It would have zero impact on existing users who have full backward and decent forward compatibility for at least the next five years.
Yes, this is pretty much the PC model but with all the benefits of a console. Being Direct X and using similar hardware should mean we still get close to the metal performance on all systems. These new machines should continue to be fixed hardware, non-user upgradable consoles.
My main issue this gen is that consoles used to be cutting edge in power and sold at a loss so the bang to buck against a PC was great. This gen they're under powered and sold for a profit on day one so aside from exclusive games there's no compelling reason to buy these over a PC.
Yes, this is pretty much the PC model but with all the benefits of a console. Being Direct X and using similar hardware should mean we still get close to the metal performance on all systems. These new machines should continue to be fixed hardware, non-user upgradable consoles.
My main issue this gen is that consoles used to be cutting edge in power and sold at a loss so the bang to buck against a PC was great. This gen they're under powered and sold for a profit on day one so aside from exclusive games there's no compelling reason to buy these over a PC.
That would just be a kick in the teeth of early adopters like myself, more than it already has been.
...Scatter...
Banned
Well it sure is really nice to have in those nice new MS Stores Microsoft opened around the world. It does attract young people which in turn exposes them at an early age to the MS ecosystem. That can be invaluable.
MisterXDTV
Member
Consoles exist because they last a few years and they are not very expensive. (400$/7 years= 57$ a year)
If they do this, then what's the advantage over PC Gaming? None, because technically PC is always gonna be better than any revised console hardware.
chromatic9
Member
One big thing that changed which people don't seem to know about is the GPU power consumption
High end PC GPU was around 100w back then.
A console looking to compete in 2005/6 could easily. Since then however the PC spec has jumped to 150W for the GPU alone, then to 200W and 250W+
Sony/MS will want to stay at around 150W in total for the system for many reasons.
It's why I think we never seen a console come out in say 2010. The best hardware they could get to fit in this power would've been a 5770. This part would've been a waste of time.
30yearsofhurt
Member
I'm pretty sure Jeff Rigby has posted on this issue particularly on the power consumption issue and the regulations console makers have to meet.
Mass Effect
Member
This would never work in the console space as it is now for several reasons. First and most importantly, the only reason so many people upgrade phones every year is because they are heavily subsidized by the wireless companies through contracts. We can almost be certain that if people had to pay $500-1000 each time they wanted to upgrade phones, they would not do it on a yearly basis. And even then, the number of people constantly upgrading has been dropping in the last few years, which is why we've been seeing the companies introducing (no-contract, because those are in decline too) upgrade plans, with trade-ins and monthly payment options.
Secondly, the smartphone market is much larger and also provide more usefulness than consoles in general. Most people buy consoles to do one main thing: play games. There is the streaming of course, but most people aren't buying consoles to watch Netflix or Hulu. In contrast, smartphones can do so much more. The console market is tiny in comparison, and I just don't think you'd be able to convince most people outside of the hardcore to keep upgrading every year. Most will just stick with the one they initially buy.
I know you or someone else may bring up tablets, but once again, they have far more usefulness than a console can provide for the same price. Many times they're also subsidized as well. And I don't think people upgrade as much in comparison to smartphones.
This is mostly because both Sony and MS lost billions last generation, not to mention costs in the industry spiraling out of control with little growth in the (console) market on top of that.
serversurfer
Member
I wasn't sure where to stick this, but I thought you may be interested, Zhuge. Ubi break out their sales by platform, so we can use that to get an idea of relative market share, at least from a publisher's perspective. Due to multi-console users and other considerations, game purchases may not split as cleanly as the hardware market shares may indicate, and sales are what really matter to the developers. Anyway, I charted Ubi's revenue by platform for the home consoles, split out by generation. Note that the values are expressed as a percentage of Ubi's total sales for that quarter, so there's some rounding involved; on one occasion, rounding WiiU's sales right out of existence. I also graphed the splits for Gen7, to give a better idea of whether or not "things have changed" from last generation.
As we can see, PS4 has been taking more and more of the market, peaking in 3Q14 with sales that were 234% of what they collected on the Bone. The Bone seems to have made a resurgence last holiday, but keep in mind that Ubi were getting paid twice for most of the Bones shipped in that quarter. So rather than sales to "customers," a lot of that revenue was actually sales to MS. As such, I wouldn't expect those "sales" to carry over in to the next quarter, but it'll be a couple more weeks until Ubi post their year-end results. Also, EA and Acti don't break down their sales by platform, but with no major bundles for them, it's unlikely they saw the same influx of "free XBone money" that Ubi saw.
We can also look at the sales breakdowns to get an idea of how much the AC bundling cost MS. In 3Q14, Ubi sold 26.1M worth of PS4 software. In 4Q14 they sold 275.3M, an increase of roughly 10.5x. If we apply the same multiplier to the Bone's 3Q14 sales, we get a "prediction" of 118.1M, but the actual sales booked were 186.2M. So about 68M magically appeared in the Bone's ledger. It seems likely that revenue came from MS buying copies of AC to stick in the bundles. In fact, since the bundling likely would've caused their "real" sales on Bone to drop since people already had the two newest AC games it's possible the bundles cost MS even more than 68M.
All of this would also help explain why the major marketing deals seem to be shifting to Sony now. The third parties are all trying to elbow their way on to Sony's stage, since that's the conference the vast majority of their users are going to be watching. In turn, that leaves MS with their newfound "focus" on first party development; everyone else is heading to Sony's tent, leaving no one else on Microsoft's stage.
As we can see, PS4 has been taking more and more of the market, peaking in 3Q14 with sales that were 234% of what they collected on the Bone. The Bone seems to have made a resurgence last holiday, but keep in mind that Ubi were getting paid twice for most of the Bones shipped in that quarter. So rather than sales to "customers," a lot of that revenue was actually sales to MS. As such, I wouldn't expect those "sales" to carry over in to the next quarter, but it'll be a couple more weeks until Ubi post their year-end results. Also, EA and Acti don't break down their sales by platform, but with no major bundles for them, it's unlikely they saw the same influx of "free XBone money" that Ubi saw.
We can also look at the sales breakdowns to get an idea of how much the AC bundling cost MS. In 3Q14, Ubi sold 26.1M worth of PS4 software. In 4Q14 they sold 275.3M, an increase of roughly 10.5x. If we apply the same multiplier to the Bone's 3Q14 sales, we get a "prediction" of 118.1M, but the actual sales booked were 186.2M. So about 68M magically appeared in the Bone's ledger. It seems likely that revenue came from MS buying copies of AC to stick in the bundles. In fact, since the bundling likely would've caused their "real" sales on Bone to drop since people already had the two newest AC games it's possible the bundles cost MS even more than 68M.
All of this would also help explain why the major marketing deals seem to be shifting to Sony now. The third parties are all trying to elbow their way on to Sony's stage, since that's the conference the vast majority of their users are going to be watching. In turn, that leaves MS with their newfound "focus" on first party development; everyone else is heading to Sony's tent, leaving no one else on Microsoft's stage.
No. Opportunity Cost only come into play if you have limited resources. When they have to take away from one area for another. That isn't the case here. If it was the case then Sony would put all their money in Insurance. It makes by far the highest profit per dollar spent.
The Mad Draklor
Member
Me neither, but it would at least, help MS maintain some sort of mindshare. I hope MS has learned its lesson to not consolidate all of its major releases to the last quarter of the CY.
The NFL deal wasn't just for Xbox, it also entailed the NFL using Microsoft Surface Pro's for their coaches, analysts, and advertising. The Minecraft deal also benefits their mobile division more than their Xbox division. The warchest is pretty tight when it comes to Xbox only acquisitions, I'm sure if Phil Spencer puts in work at the corporate office he will get money to expand the Xbox division but it's certainly not like a blank check a lot of Xbox fans believe it is.
Beautiful Ninja
Member
Ah yes, the Microsoft Surface Pro tie-in with the NFL. NFL announcers made the mistake of calling it an iPad or iPad-like device multiple times when the season started.
Its like everyone forgot what happened last year. E3 will not propel sales into new heights.
The game has changed since Xbox 360 and PS3 launched.
Smartphones/tablets have driven droves of people away from traditional console gaming. Just ask Nintendo. They offer portable convenient gaming on the go at a dollar a pop. So consoles at least need to deliver full fat gaming if they're gonna justify their $60 a game price point
Nvidia have super powerful GPUs. If you want performance in the region of 5-10x console gaming, if you have the money you can buy it TODAY. Theoretically, you could build a gaming PC today that will be more powerful than the next PS5.
PS4 is selling great i give them that but the game has changed. Morpheus will give a mid gen boost to the PS4 but if they really want to boom the market, they will need to improve performance before then.
1. Continue to build a cheaper PS4/XboxOne for the budget market. Develop an upgraded version for the enthusiasts every 2yrs. I will be the first to admit I will NOT upgrade to the first upgrade, but maybe I'll go for the 2nd or 3rd revision.
I would have no problem playing the Last of Us 2/Uncharted 4/Gran Turismo 7 at 720p30 on the original PS4 even as a day one owner. I quite like the 'option' of playing those at 1080p60 on PS4 2016 rather than wait until 2018-2020 to play the same games remastered. The long painful wait for next gen was excruciating. I understand the engineering and commercial challenges. However, choices never hurt no one.
Smartphones/tablets have driven droves of people away from traditional console gaming. Just ask Nintendo. They offer portable convenient gaming on the go at a dollar a pop. So consoles at least need to deliver full fat gaming if they're gonna justify their $60 a game price point
Nvidia have super powerful GPUs. If you want performance in the region of 5-10x console gaming, if you have the money you can buy it TODAY. Theoretically, you could build a gaming PC today that will be more powerful than the next PS5.
PS4 is selling great i give them that but the game has changed. Morpheus will give a mid gen boost to the PS4 but if they really want to boom the market, they will need to improve performance before then.
1. Continue to build a cheaper PS4/XboxOne for the budget market. Develop an upgraded version for the enthusiasts every 2yrs. I will be the first to admit I will NOT upgrade to the first upgrade, but maybe I'll go for the 2nd or 3rd revision.
I would have no problem playing the Last of Us 2/Uncharted 4/Gran Turismo 7 at 720p30 on the original PS4 even as a day one owner. I quite like the 'option' of playing those at 1080p60 on PS4 2016 rather than wait until 2018-2020 to play the same games remastered. The long painful wait for next gen was excruciating. I understand the engineering and commercial challenges. However, choices never hurt no one.
Souldestroyer Reborn
Banned
Samsung. Then they'll go and buy AMD and make competitive CPU's and GPU's thus breeding competition and gamers around the world rejoicing for our new overlords.
Boombloxer
Member
Pipe dreaming. The amount of spend that goes into console is specifically tuned to last longer than a cellphone. Releasing one every two years kills one of the larger advantages, and the main reasons you don't do that is because you want the audience to spend more on raw software because it's a higher margin, and the companies supplying content to be able to maximize hardware and turn the games out so they can stay in business.
What your describing is a cell console market with pc parts that the mass market flat out doesn't want. They want 1 box for years, and all of the console makers know this. The upgrade all the time crowd is quite tiny for consoles, close to the backwards compatibility crowd, that experience is on PC.
Phones are communication devices that are basically essential to function in society, so getting a new phone every few years/year is something that you can do pretty cheaply and has more cases where you'd want the latest communication tech vs my gaming hobby.
ProfessorMoran
Member
The worst thing to do is to split the market with multiple models, the PS2 was successful because outside of the HDD compatibility, every PS2 did exactly the same thing and the library is open to any PS2 owner (outside of ffxi), day one or day 1500 the consumer should be able to play any game, games will never properly tap the extra power of a premium model, developers and publishers will likely never go for it since they're in the business of selling as many copies of the same thing to an audience instead of trying to make multiple versions of the same game in order to be compatible with low/medium/high settings, it's bad enough they have to do it for the PC market, the whole point of consoles is that every PS4 has the exact same specs.
No, opportunity cost is always a factor. Depending on how profitable Xbox business really is (which we have no way of knowing), it could be more advantageous to instead pay that money off as dividends or buy back stock, keep the money on a bank account with zero interest, loan it to poorer companies, acquire start-ups or expand to insurance business.
Killroyskbg
Member
It depends on how invested you are into a business area. Playstation is now one of Sony most important business areas both in size as well as profit.
Xbox is not close as important to Microsoft in. Also as many have said it was planned to be the go to device for your tv and offer their services through it. Just look how they marketed the Xbox One at the reveal not as a gaming device but as media device. This however have not been accomplishied since now many of the services is already in your smart TV or other cheap devices and the focus is now on games since it failed.
I would not be surprised at all if Microsoft regarded this as a final attempt and sold/cut the Xbox division.
Hans.Gruber
Banned
Then why have Xbox1 in all your Win10 promos? OG xbox was a failure, 360 was very successful. Lets assume One fails badly. As you pointed out the marketing angle as a media device was bad and by Nov 2013 people already had all these functions on some device. Kinect and 900p are also bad. The people at MS made a bet and found out that dedicated gaming devices are what the market wants.
However these (big) mistakes can easily be avoided with the next Xbox, so why cut losses (we don't even know they exist) now?
Killroyskbg
Member
The Xbox one uses Windows as an OS so why not use it when it will run it?
The 360 was a hit sure when it comes to consoles but comparing to other areas of MS it was still really small.
But is a dedicated game consoles something MS want? How does that help the rest of the companies business areas?
Microsoft is a service company and want devices that helps to sell those services.
Sony on the other hand is a hardware company at heart and is right now using playstation now as a service to help sell more devices. See the difference.
And if the billions needed to fund a new generation of a console can generate safer and probably higher income in other areas closer to the heart of the company...
Boomstompfloppy
Banned
While enthusiast models may sound like a good idea on places like neogaf it would be a disaster.
There's already a way for enthusiasts to have that option, pcs, consoles are the option for people who just want to plug and play, get the same results as anyone else with a ps4 or xbox.
If you want to sell to the masses you make things easy, you don't split your playerbase.
There's far more people who want to play fifa and cod after the pub and kids who want minecraft then people who would gun for a more expensive console.
Hans.Gruber
Banned
I don't think dedicated consoles will ever exist anymore, some multimedia apps have to be available. The fault was the angle: X1 = "~Apple TV that BTW plays games". Sth you can easily fix when designing a new device. The market is there, MS just read it poorly.
MS will definetly want something to hook up to the TV, just like Apple, Google and amazon. Lumia-Surface-Xbox, all able to stream, sync and link with your Windows Laptop or Desktop, makes a ton of sense to me. Killing one of those three sends a message to anybody looking to get one of these devices. As far as the business solutions go, they have nothing to do with it and no stakeholder in MS would ever expect that a successful Xbox makes people switch from SAP to Dynamics. As far as MS consumer business goes the Xbox gets ppl MS accounts, exposes them to OneDrive, Skype etc. and the media services. That said, I expect MS to release one more gaming device. If that doesn't work just like X1 then maybe it's time to focus on sth selse.
Industrialist
Member
The problem with the poster's idea though, was that it didn't even sound like a good idea on NeoGAF.
A console that's updated every two years, leaving masses of unsold stock of the oldest version when the newest version suddenly launches at a pricepoint that isn't much higher? Kids being unable to convince their parents that the new console is different from the old console, meaning underwhelming sales of each version?
Yeah, retailers will love that. And the manufacturers will love it even more once the retailers stop ordering anything that they make.
ghostwritingduck
Member
I wasn't sure where to stick this, but I thought you may be interested, Zhuge. Ubi break out their sales by platform, so we can use that to get an idea of relative market share, at least from a publisher's perspective. Due to multi-console users and other considerations, game purchases may not split as cleanly as the hardware market shares may indicate, and sales are what really matter to the developers. Anyway, I charted Ubi's revenue by platform for the home consoles, split out by generation. Note that the values are expressed as a percentage of Ubi's total sales for that quarter, so there's some rounding involved; on one occasion, rounding WiiU's sales right out of existence. I also graphed the splits for Gen7, to give a better idea of whether or not "things have changed" from last generation.
As we can see, PS4 has been taking more and more of the market, peaking in 3Q14 with sales that were 234% of what they collected on the Bone. The Bone seems to have made a resurgence last holiday, but keep in mind that Ubi were getting paid twice for most of the Bones shipped in that quarter. So rather than sales to "customers," a lot of that revenue was actually sales to MS. As such, I wouldn't expect those "sales" to carry over in to the next quarter, but it'll be a couple more weeks until Ubi post their year-end results. Also, EA and Acti don't break down their sales by platform, but with no major bundles for them, it's unlikely they saw the same influx of "free XBone money" that Ubi saw.
We can also look at the sales breakdowns to get an idea of how much the AC bundling cost MS. In 3Q14, Ubi sold 26.1M worth of PS4 software. In 4Q14 they sold 275.3M, an increase of roughly 10.5x. If we apply the same multiplier to the Bone's 3Q14 sales, we get a "prediction" of 118.1M, but the actual sales booked were 186.2M. So about 68M magically appeared in the Bone's ledger. It seems likely that revenue came from MS buying copies of AC to stick in the bundles. In fact, since the bundling likely would've caused their "real" sales on Bone to drop since people already had the two newest AC games it's possible the bundles cost MS even more than 68M.
All of this would also help explain why the major marketing deals seem to be shifting to Sony now. The third parties are all trying to elbow their way on to Sony's stage, since that's the conference the vast majority of their users are going to be watching. In turn, that leaves MS with their newfound "focus" on first party development; everyone else is heading to Sony's tent, leaving no one else on Microsoft's stage.
Thank you for this post. It was really informative. Is this information easily available from other publishers?
The only other company that does something similar I think is Konami.
I wasn't sure where to stick this, but I thought you may be interested, Zhuge. Ubi break out their sales by platform, so we can use that to get an idea of relative market share, at least from a publisher's perspective. Due to multi-console users and other considerations, game purchases may not split as cleanly as the hardware market shares may indicate, and sales are what really matter to the developers. Anyway, I charted Ubi's revenue by platform for the home consoles, split out by generation. Note that the values are expressed as a percentage of Ubi's total sales for that quarter, so there's some rounding involved; on one occasion, rounding WiiU's sales right out of existence. I also graphed the splits for Gen7, to give a better idea of whether or not "things have changed" from last generation.
As we can see, PS4 has been taking more and more of the market, peaking in 3Q14 with sales that were 234% of what they collected on the Bone. The Bone seems to have made a resurgence last holiday, but keep in mind that Ubi were getting paid twice for most of the Bones shipped in that quarter. So rather than sales to "customers," a lot of that revenue was actually sales to MS. As such, I wouldn't expect those "sales" to carry over in to the next quarter, but it'll be a couple more weeks until Ubi post their year-end results. Also, EA and Acti don't break down their sales by platform, but with no major bundles for them, it's unlikely they saw the same influx of "free XBone money" that Ubi saw.
We can also look at the sales breakdowns to get an idea of how much the AC bundling cost MS. In 3Q14, Ubi sold €26.1M worth of PS4 software. In 4Q14 they sold €275.3M, an increase of roughly 10.5x. If we apply the same multiplier to the Bone's 3Q14 sales, we get a "prediction" of €118.1M, but the actual sales booked were €186.2M. So about €68M magically appeared in the Bone's ledger. It seems likely that revenue came from MS buying copies of AC to stick in the bundles. In fact, since the bundling likely would've caused their "real" sales on Bone to drop — since people already had the two newest AC games — it's possible the bundles cost MS even more than €68M.
All of this would also help explain why the major marketing deals seem to be shifting to Sony now. The third parties are all trying to elbow their way on to Sony's stage, since that's the conference the vast majority of their users are going to be watching. In turn, that leaves MS with their newfound "focus" on first party development; everyone else is heading to Sony's tent, leaving no one else on Microsoft's stage.
Thanks mate.
Certainly something of interest to me and really does make sense. Where as last gen the Wii/PS3/360 were evenly matched with fluctuations towards all 3, this gen has seen one clear leader and a clear second place console. Whilst one publisher won't be representative of all publishers, it's clear that software sales worldwide are higher on PS4 due to the higher install base.
I can only see US Centric games selling better on Xbox where as titles with a worldwide audience will certainly ship more on PS4.
I don't think so. I know Konami do but that's about it.
Yet we have Nintendo doing it with the DS/3DS and other hardware manufacturers doing it with mobile phones, tablets, wearable technology, TVs, headphones, media players, graphics cards, and more.
I don't know a single person who feels the need to upgrade those products every time a new version is released, but typically those releases come with some bell or whistle that bring more people into the fold. People that own older versions upgrade when they want or when it's finally needed.
Devs have had to target multiple console and PC specs for ages, hardly anything would change for them in that regard.
Retailers will adjust to sell whatever is in demand just like they always have.
The Mobile phone market is 1.9 billion units a year. the tablet market is 230 million units a year, the tv market is 220 million units a year, the headphone market is 300 million per year, the PC market is 316m per year.
The Home console market is less than 35 million per year.
It just doesn't make sense to further segment a small market with incremental updates to consoles every year or two.
These sorts of things never take off.
It turned out that this was just a rumor and wishful thinking. Failure of their TV services on consoles ended the chances of subsidized sales.
oldergamer
Member
Jumping into this thread now makes it really hard to follow exactly where the discussion went.
IMO
1. I think the people that think the xbox business is doing poorly or MS will/should sell it off aren't looking at the big picture. You don't have to be in first to make the most money or even turn a profit. MS realized that after the first xbox. sales may be down YOY but there's been a distinct lack of titles to drive that. Even still they are doing better sales wise then the 360 at the same point of it's life, and they won't have a billion dollar write off this time around.
2. To the people that think sony has a 10 million unit lead, people shouldn't forget that the xbone didn't launch in nearly as many regions as PS4 on launch. I think its closer to a 6 or 7 million lead at this point.
3. I also think sony can't physically make the PS4 much smaller this early. They already sacrificed space to make the current console small. MS went the other route making it larger but quieter. I think MS has some room to make the system smaller if they chose to do that.
IMO
1. I think the people that think the xbox business is doing poorly or MS will/should sell it off aren't looking at the big picture. You don't have to be in first to make the most money or even turn a profit. MS realized that after the first xbox. sales may be down YOY but there's been a distinct lack of titles to drive that. Even still they are doing better sales wise then the 360 at the same point of it's life, and they won't have a billion dollar write off this time around.
2. To the people that think sony has a 10 million unit lead, people shouldn't forget that the xbone didn't launch in nearly as many regions as PS4 on launch. I think its closer to a 6 or 7 million lead at this point.
3. I also think sony can't physically make the PS4 much smaller this early. They already sacrificed space to make the current console small. MS went the other route making it larger but quieter. I think MS has some room to make the system smaller if they chose to do that.
StealthGoblin
Banned
Q4 2014 is interesting because Microsoft had a huge exclusive marketing campaign for Assassins Creed. There were bundles etc. Only a 10% gain though which says a lot. Ubisoft were making bank on that marketing deal and then on every bundled copy of Assassins Creed. Really surprised they didn't make more of a dent.
BrokenIcarus
Member
What countries could MS still launch in to make that would make any real difference?
You can check zhuges charts, no point in downplaying the gap.
Well, salty!