Phil Spencer: The Xbox business will become ‘untenable’ if it remains ‘irrelevant’ on mobile.

Phil Spencer's last interview before this one, said they've reached saturation with their sub service, and that F2P is the future. 🤷‍♀️
I think I've cracked the code and got the winning formula:

- Make F2P games that can only be played on consoles
- Lock those free-to-play games behind a paid subscription service
- Lock that game subscription, with console-exclusive games, on a mobile device.

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feynoob

Member
Phil’s comment says the console (Xbox) is staying relatively flat, this statement isn’t in comparison to mobiles.



The other statement of it shrinking is the comparison you’re referring.



This is an Xbox exclusive.
Consoles are shrinking, because the cost of making games is rising.
This isn't only exclusive to Xbox. Even Sony is facing that problem. It's why they are porting their games to PC and increasing their investments on mobile.

The old traditional console revenue is shrinking fast, as the cost of workers is rising.
 

Ozriel

Member
Phil’s comment says the console (Xbox) is staying relatively flat, this statement isn’t in comparison to mobiles.

he says ‘console’, not xbox. The console market overall.

FFS, ‘Relatively’ is used when you’re making a comparison



How do you not know this?

This is an Xbox exclusive.

Series of weird arguments because you’re eagerly trying to cycle back to ‘only xbox is struggling’.
Meanwhile, Xbox revenue has continued to grow for the past 5 years.
 
Why is he doing so many interviews lately? Feels like theres a new one every week now

He needs to create hype until the games release early next year.

…and now you know a big reason why they’re trying to buy Activision Blizzard King.

And they’ve started with Mobile. Slow so far (Gears POP failed, for example), but there’s an Age of Empire mobile game coming out next year.

Microsoft tried mobile many times with Windows Phone and early post death of WP during the transition from Ballmer to Nadella. It just never worked.

I notice some people here act like MS missed an opportunity they should have made earlier, but they were trying earlier it's just they realized it would be easier to buy King and other big mobile developers than to try from scratch.

Even Sony is buying mobile developers and just released a gaming phone.
 

93xfan

Member
Terrible analogy.

“I need to have a foothold in tiktok to reach young viewers” is dramatically different from “I need to drop my regular movies and focus on Tiktok”.
Didn’t mean to suggest xbox would drop Consoles. It’s more about how I can see greedy companies only focusing on mobile.

For example will we ever see another Rayman game that isn’t a mobile run game?
 

Raven77

Member
If the writing has been on the wall for 9 years with no progress to the actual prophesies of the wall, maybe we need to check the people seeing these "writings on the wall" first.

You do realize that ActiBliz's mobile games make more money than their PC/console titles with much lower investment? Why would they need to take funds from the Xbox/Bethesda first party division? You are acting like ActiBliz revenue suddenly disappeared and the entire gaming division has to run on Xbox/Bethesda division revenue. How are any of those claims "basic business"?

Yeah, it makes you want to not invest on Xbox who just started investing in mobile and instead wants to make you want to invest on other platforms who have been investing on mobile for 7 years and way too deep into it.

Because Phil is taking about putting more emphasis on mobile. That means more money put towards it and less towards console games.
 

Bernkastel

Ask me about my fanboy energy!
Microsoft tried mobile many times with Windows Phone and early post death of WP during the transition from Ballmer to Nadella. It just never worked.

I notice some people here act like MS missed an opportunity they should have made earlier, but they were trying earlier it's just they realized it would be easier to buy King and other big mobile developers than to try from scratch.
Those Windows Phone games were just free or paid casual games for the mobile platform
We are specifically talking about free to play online mobile games that just make billions. Thats like comparing Soltaire to League of Legends
Microsoft has not really invested into that genre unlike others.
 

Bernkastel

Ask me about my fanboy energy!
Because Phil is taking about putting more emphasis on mobile. That means more money put towards it and less towards console games.
Because he is going to own a big mobile publisher. Does not mean he is obligated to remove funds from the console business. Xbox generates more revenue than ActiBliz, and ActiBliz does not need additional funds from other divisions. Instead like the other two console manufacturers, revenue from the mobile division will now help the console division.
 

bitbydeath

Gold Member
Source in a constant currency?
PS5 shortages and COVID-19 didn't stop Sony's gaming division from recording its most profitable year in its 27-year history.

The year also marks a new record for gross profit as Nintendo surpassed its previous March 2019
 

bitbydeath

Gold Member
Consoles are shrinking, because the cost of making games is rising.
This isn't only exclusive to Xbox. Even Sony is facing that problem. It's why they are porting their games to PC and increasing their investments on mobile.

The old traditional console revenue is shrinking fast, as the cost of workers is rising.
Nintendo and Sony have been breaking profit records, see above. The issue Xbox is facing is exclusive to them.
 
Well I don't like hear that things like mobile are needed in the future to have growth. Getting a game popular on mobile is like catching lightning in a bottle. Many gaming companies have tried and slunk back to consoles due to how much it costs and if it doesn't catch fire then it burns through money. Remember everyone was on the mobile wagon on 2010 when it started getting big.
I hope this doesn't take anything away from consoles, if it does then screw that, look at their output so far.
 

bitbydeath

Gold Member
he says ‘console’, not xbox. The console market overall.

FFS, ‘Relatively’ is used when you’re making a comparison



How do you not know this?



Series of weird arguments because you’re eagerly trying to cycle back to ‘only xbox is struggling’.
Meanwhile, Xbox revenue has continued to grow for the past 5 years.
Xbox is the console he looks after and is referring. Xbox is relatively flat whilst the other two are setting record profits.
 

feynoob

Member
Nintendo and Sony have been breaking profit records, see above. The issue Xbox is facing is exclusive to them.
Xbox had that too. $16b with low 1st party output.

The issue is salaries and the resources required to make those games are getting expensive as time goes on.
Look at current graphics. You need alot of resources to afford that much. Same with salaries.

Both Sony and MS are focusing more on PC market, to offset the development cost.

Nintendo on other hand, their games are low graphic cost, but high sale. They rarely drop prices. Which is why they make insane amount of money. Mario kart is still $60.
 

bitbydeath

Gold Member
Xbox had that too. $16b with low 1st party output.

The issue is salaries and the resources required to make those games are getting expensive as time goes on.
Look at current graphics. You need alot of resources to afford that much. Same with salaries.

Both Sony and MS are focusing more on PC market, to offset the development cost.

Nintendo on other hand, their games are low graphic cost, but high sale. They rarely drop prices. Which is why they make insane amount of money. Mario kart is still $60.
You’re referring to revenue, MS purposely avoids speaking about profit, which is what the links for Sony and Nintendo were about that I had provided above.
 

feynoob

Member
You’re referring to revenue, MS purposely avoids speaking about profit, which is what the links for Sony and Nintendo were about that I had provided above.
Sony profit was low, when they made that revenue.
What matters is that Xbox with super low 1st party output, and half of PS numbers managed to bring in that much money.

MS is a big company compared to Sony. So you wont see Xbox segments with profits.
 

Tomeru

Member
Xbox had that too. $16b with low 1st party output.

The issue is salaries and the resources required to make those games are getting expensive as time goes on.
Look at current graphics. You need alot of resources to afford that much. Same with salaries.

Both Sony and MS are focusing more on PC market, to offset the development cost.

Nintendo on other hand, their games are low graphic cost, but high sale. They rarely drop prices. Which is why they make insane amount of money. Mario kart is still $60.
Sure, but why did you say consoles are shrinking, when its obviously not? Unless you meant they are not enough as a source of revenue anymore.
 

reksveks

Member
What do you think is better for a business, profit or revenue?

I can wait while you mull it over.
I didn't make the comment about xbox being flat and then change metric to one that we don't know about and then start going on some tangent about revenue and profits being better so bye bye.

So Nintendo is the most successful platform holder? now bye.
 
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Ozriel

Member
Xbox is the console he looks after and is referring. Xbox is relatively flat whilst the other two are setting record profits.

Sony, Nintendo and MS report their revenue. Independent agencies like Statista aggregates all that into reports that everyone can see.

Clearly, when he says console, he referring to the overall console market.

You think when he mentions PC, he’s only talking about the Windows Store? 😀
 

bitbydeath

Gold Member
The OP is about revenue. Not profits. The growth figures or patterns being discussed is focused on revenue.

Pay attention.
You’re guessing. Revenue has been increasing for MS, it doesn’t fit the statement and if it does then profit would be in an even worse place.
 
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Ozriel

Member
You’re guessing. Revenue has been increasing for MS, it doesn’t fit the statement.

From a simple Google search

The global video game market size was estimated at USD 195.65 billion in 2021 and is expected to reach USD 220.79 billion in 2022.

Thats not profit. Obviously.

And yes, revenue has been increasing for MS, as well as the other console makers. But nowhere near the projected growth rate of mobile gaming. Do I have to run you through the meaning of ‘relatively’ once again?
 

bitbydeath

Gold Member
From a simple Google search



Thats not profit. Obviously.

And yes, revenue has been increasing for MS, as well as the other console makers. But nowhere near the projected growth rate of mobile gaming. Do I have to run you through the meaning of ‘relatively’ once again?
It’s increased a lot for two of the three, as I had stated. And again, I already broke that quote down for you, you can’t keep saying something hoping it sticks.

For example on the definition you provided, “relatively clean” means mostly clean. It’s not clean compared to “insert other place”, same goes for the statement of “relatively flat”, it’s mostly flat.

The sentence isn’t in conjunction with mobiles, just of itself.
 
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feynoob

Member
Sure, but why did you say consoles are shrinking, when its obviously not? Unless you meant they are not enough as a source of revenue anymore.
Because you are dealing with alot of factors.
Current economy makes production console harder, due to shortage of supply. We almost got out of one now.
Mobile and PC market is dominating. Especially with younger crowds, who are growing up with Ipads, and mobile phones.

Cost of mainting 1st party games. Which means focusing on other market, which in turn affects your business.

As of now, most played games are f2p, and live service games. That should tell you more about the current gamers, and their taste.
 

Ezekiel_

Member
I’ve yet to meet anyone that puts money into that ecosystem. Who are these people?

Also, imagine if a film director you respect said they need to focus on Tik Tok videos to be successful. While maybe true, it’s unfortunate.
Yeah, it's really baffling to me too, how mobile games can generate such revenue.

I'd like to see a break down of how that revenue is made.

Is it a small percentage of players who spend incredible amounts? AKA whales

Is it a moderate amount of players, spending small amounts periodically?

Is it through advertisements displayed between levels, etc?

I've never once been even remotely tempted to spend money on a mobile game 🤷‍♂️
 
What hype has he generated for games coming out?

I said hype UNTIL the games come out next year lol.

Those Windows Phone games were just free or paid casual games for the mobile platform

Windows had more games than the ones that were only in the windows store, it had remote play and some IOS/Android titles to.

The point is they were TRYING to get into the mobile market before and failed, They weren't just sitting around waiting until it was late and then tried to buy King.

What does making a mobile OS a decade ago have to do with making mobile games?

So going to pretend there weren't any games on windows phone?
 
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Drew1440

Member
Didn't they try this already with the Halo Spartan Assault games? There was also a Forza mobile spinoff also.

They need to go back to the Windows Phone era of games, stuff like Wordament , Shuffle Party, Flower and Beards & Beaks were pretty fun.
 
So if cloud doesn't take off, Xbox business is untenable.

That's what he's talking about, not creating mobile games.

MS isn't in this because they think they can compete with the likes of Sony / Nintendo and their profits.

They think Xbox and "xCloud as a service" is going to be 10's of billions in profit business because of some pie in the sky idea that cloud streaming will replace native mobile gaming..

Have they also done native mobile games / will continue to do so? Of course.. but the thing Satya has been sold on is the idea that Xbox can cut into Apple's gaming profits, and they think that can be done via cloud.
 
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feynoob

Member
Yeah, it's really baffling to me too, how mobile games can generate such revenue.

I'd like to see a break down of how that revenue is made.

Is it a small percentage of players who spend incredible amounts? AKA whales

Is it a moderate amount of players, spending small amounts periodically?

Is it through advertisements displayed between levels, etc?

I've never once been even remotely tempted to spend money on a mobile game 🤷‍♂️
They are regular people like you, who has less time for consoles, so they use mobile as substitute.
They really don't pay that much attention to how much they spend.
 

Ozriel

Member
Yeah, it's really baffling to me too, how mobile games can generate such revenue.

I'd like to see a break down of how that revenue is made.

Is it a small percentage of players who spend incredible amounts? AKA whales

Is it a moderate amount of players, spending small amounts periodically?

Is it through advertisements displayed between levels, etc?

I've never once been even remotely tempted to spend money on a mobile game 🤷‍♂️


All of the above.
 
Except games aren't movies, where you can just binge play them.

That 1 benefit for gaming subscription.
Same principle goes for gaming.

I can just take a look at my mom or gf, they play maybe 15-20 minutes on their mobile phone and already get bored.

Fact is, movies/series have a far larger target audience.
That's the billions of people MS was aiming for.
What did they reach? 25M and it's already becoming stagnant?
 
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Same goes for series.

Fact is, movies/series have a far larger target audience.
That's the billions of people MS was aiming for.
What did they reach? 25M and it's already becoming stagnant?
That's the point. Netflix subscriptions will have numbers in 100M+ easily. There's no precedence for that in the gaming industry.

PS+ has been the most successful gaming subscription service ever and, despite multiple quarters and revamp attempts and COVID boost, they couldn't breach the 50 million mark -- despite having an essential component that's mandatory for online gameplay.

If PS+ with the largest userbase couldn't do it, I doubt any other service can in the near future.
 

feynoob

Member
Same goes for series.

Fact is, movies/series have a far larger target audience.
That's the billions of people MS was aiming for.
What did they reach? 25M and it's already becoming stagnant?
As I explained to you, MS doesn't enough console userbase.

Xbox one was 55+m users. There is new gen console in the market. Most of new gamepass games are going to be next gen. It makes sense for console subs to slow down.

1 other thing you ignoring is the PC market. That is a growth avenue, which can increase gamepass userbase numbers. Total of those sub could hit up to 60m.

So for now, the growth would be inline with console sales (until those who have gamepass manage to get the system), and pc growth. Minus those who only use xlive gold.


The real growth would be in the form of cloud gaming. Just like how Netflix and Disney plus are on streaming devices, xcloud could be that tool. But we aren't on that step yet. It would take time for cloud to hit.
 
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