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News TheVerge: After Xbox testimony, Apple tells Microsoft to put up or shut up

ToadMan

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Dec 2, 2018
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What’s apples end game here? Expose that Xbox has been a money sink for 20 years to the public and hope MS shareholders start to question why they’re burning piles of money so apple can try being a console manufacturer? Surely Microsoft investors know what a black hole the Xbox division has been all this time right?
Does this really help them win the court case with epic or are they twisting this knife for other reasons?

MS said they don’t make money from hardware and so they justify a 30% tariff on 3rd party software sales for that reason.

Apple want this testimony stricken from the record (ie not. considered as a point against Apple) because Apple sell hardware at a profit and have tariffs on 3rd party sales too.

Their method of getting MS testimony struck from the record is to point out that MS don’t publish detailed figures and their testimony therefore cannot be analysed and argued - it’s just “anecdotal evidence”.
 
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Apple lawyers are giving ms, epic and the rest of the industry a lesson to not fuck with them.
There's no evidence that Epic filed this lawsuit thinking they would actually win. All of settled antitrust case law goes against it's premise. Epic seems happy to try and make Apple look bad and force amusing disclosures in a court of law.
 

Iced Arcade

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What’s apples end game here? Expose that Xbox has been a money sink for 20 years to the public and hope MS shareholders start to question why they’re burning piles of money so apple can try being a console manufacturer? Surely Microsoft investors know what a black hole the Xbox division has been all this time right?
Does this really help them win the court case with epic or are they twisting this knife for other reasons?
Good reading. Smh

"Never made a profit from console hardware" so they have to make money elsewhere aka justifying the 30% cut from publishers.
 
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demigod

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This is embarrassing for Microsoft. Console makers do end up turning a profit once they release slim versions of the consoles. I thought for sure they were making profit from the 360 slim and the xbox one s and x. especially the x which sold at $500.

i highly doubt that sony wasnt making profits on the ps4 slim and the pro. same goes for nintendo with the switch.
Microsoft is lying that’s what. Revisions should be profitable, that’s the whole purpose. And I guarantee the One X was profitable day 1 at that outrageous price.
 

Heisenberg007

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This is a bad look for Microsoft.

Everyone and their mothers thought that after the initial launch period, Xbox was sold at a profit. They said otherwise and didn't even bring receipts.

Apple lawyers are in the right here. What MS is saying does not make sense, so they should either bring receipts or scratch their testimony. Apple lawyers aren't just supposed to believe Microsoft without any documents and proofs.
 

DaGwaphics

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Microsoft is lying that’s what. Revisions should be profitable, that’s the whole purpose. And I guarantee the One X was profitable day 1 at that outrageous price.

R&D costs would be quite expensive, plus by the time you would get to the cheaper revisions they've either dropped the retail price (officially or via sales to move stock) and maybe they never actually get out of the hole. Hardly rocket science at all. Hardware revision could very much be about getting the price down to move that many more units.
 
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SlimySnake

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Microsoft is so dumb for getting involved in that shit lawsuit when they have their own walled garden to protect.

Keep your Xcloud off iOS, no one cares about that streaming service anyway and save your Xbox division from Epic. They are the real enemy here. Idiots.
nah. MS wants gamepass on Sony and Nintendo's platforms. This Epic lawsuit is their way in. If Epic wins against Apple, it sets a precedent that MS can use to force themselves onto their competitors platforms and end up undercut every single sale by offering it on gamepass for a small monthly fee.

MS isnt stupid. They know their consoles cant compete with Sony and Nintendo, and they need those 100-200 million nintendo and playstation owners to make gamepass successful.
 

SlimySnake

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Microsoft is lying that’s what. Revisions should be profitable, that’s the whole purpose. And I guarantee the One X was profitable day 1 at that outrageous price.
maybe. but i do remember some things.

1) xbox 360 slim was bundled in with kinect. thats what made it become the next wii midway through last gen. but bundling an expensive peripheral for free could raise the bom.
2) xbox one slim and xbox one without kinect was always bundled in with games. i remember sony was selling their slim for $299 and ms would always undercut them by a few dollars and bundle in a few games. again, that adds money to the cost of the hardware being sold.
3) xbox one x had a really expensive cooling solution and an extra 4gb of ram compared to the ps4 pro. yes, it was a year late and still had a polaris gpu, but it seems MS cant seem to get costs down. they went with a bigger gpu and expensive vapor chamber cooling yet again so that xbox series x is probably another $100 more expensive than the ps5.
 

Heisenberg007

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nah. MS wants gamepass on Sony and Nintendo's platforms. This Epic lawsuit is their way in. If Epic wins against Apple, it sets a precedent that MS can use to force themselves onto their competitors platforms and end up undercut every single sale by offering it on gamepass for a small monthly fee.

MS isnt stupid. They know their consoles cant compete with Sony and Nintendo, and they need those 100-200 million nintendo and playstation owners to make gamepass successful.
I don't think MS can achieve that via this case.

I could be wrong as I haven't been following it too closely, but aren't they basically saying that Apple iOS should not be a walled garden but it's okay for Microsoft to have that walled garden, because general computing devices vs. special devices?

In that case, if that is true for Microsoft, that'd also be true for Nintendo and Sony.
 

Heisenberg007

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R&D costs would be quite expensive, plus by the time you would get to the cheaper revisions they've either dropped the retail price (officially or via sales to move stock) and maybe they never actually get out of the hole. Hardly rocket science at all. Hardware revision could very much be about getting the price down to move that many more units.
That's what everybody thought when Microsoft said that they never ever made any profits on selling Xbox hardware. Apple lawyers are saying that Microsoft should provide official documents to substantiate that claim. Because the general consensus in the industry was that after the initial launch period to gain market share, consoles are sold at a profit in the subsequent years.
 

Zeroing

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Microsoft got themselves involved in the lawsuit voluntarily! That’s the funny part of all this…
 

demigod

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R&D costs would be quite expensive, plus by the time you would get to the cheaper revisions they've either dropped the retail price (officially or via sales to move stock) and maybe they never actually get out of the hole. Hardly rocket science at all. Hardware revision could very much be about getting the price down to move that many more units.
You wanna explain why Sony and Nintendo profits on their hardware there champ?
 

Zeroing

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That's what everybody thought when Microsoft said that they never ever made any profits on selling Xbox hardware. Apple lawyers are saying that Microsoft should provide official documents to substantiate that claim. Because the general consensus in the industry was that after the initial launch period to gain market share, consoles are sold at a profit in the subsequent years.
* Looks at the Xbox Series S
Yeah definitely not being sold at a loss…. So receipts are indeed necessary.
 
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Zeroing

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I'm not sure what you are suggesting?

Do you think they hit the top end and won't grow any further?
No, I am suggesting they will keep trying to find ways of expanding/growing until they exhaust all options.
 

Kagey K

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No, I am suggesting they will keep trying to find ways of expanding/growing until they exhaust all options.
As soon as they hit that 2 cap, you are going to see them expand more.
And they have been flirting with it for a while, but it's makes these Bethesda deals seem like nickels and dimes.

Literally based on their current market cap, Bethesda cost them 75 cents.

Nobody cares in the long run.
 
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Shmunter

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The way this is going, by the end of the trial Xbox will have Steam, Epic, GOG and PSN on the XsX
 

MonarchJT

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Microsoft got themselves involved in the lawsuit voluntarily! That’s the funny part of all this…
Microsoft can only take advantage of this cause. even if it decides to show the real data I don't see how it really could be damaged ...
 
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Zeroing

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Microsoft can only take advantage of this cause. even if it decides to show the real data I don't see how it really could be damaged ...
MS allowed themselves to put in a position of being ridiculed.
It just shows why MS got Involved in the first place. They want to get a chunk of that iOS user base even if it means becoming a sort of parasite.

so yeah MS is not that selfish company that wants to save us ( consumers ) from evil Apple! That’s what the lawyer pointed up and everyone knows it. It could be damaging in the perception of the brand.
 
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N1tr0sOx1d3

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Microsoft is lying that’s what. Revisions should be profitable, that’s the whole purpose. And I guarantee the One X was profitable day 1 at that outrageous price.
Xbox could have been profitable with the massive success that was 360. However their build quality was so shockingly poor, knowingly went ahead and launched the system anyway, ultimately costing them billions.
I loved my 360. The range of games was so diverse. But ended up going through 5 consoles before I got a unit that was reliable.
 

smbu2000

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MS wants to get on all stores with gamepass even if it costs them their own closed store on Xbox.

Even if Apple wasn’t allowing them on the ios App store they were still going to be able to get on ios devices via the Safari work around (like Amazon with Luna). It even came out during testimony that Apple was helping MS with any problems they might have getting Xcloud to work via Safari on ios devices.
Apparently that’s not enough for MS though and they want to bring down all closed systems. Epic says they are against that on consoles, but this lawsuit (and MS help) will only lead to other companies going after the Sony/ Nintendo/Xbox closed systems.
 
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Zeroing

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They don't have to defend it during this trial because they aren't on trial.
yes but why are they even there? Why aren’t Nintendo and Sony there too? Since they are tying to spin this into a console argument…

this lawsuit has no focus and started by the wrong reasons. And I’m the one who is hoping Apple gets a beating.
 

reksveks

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yes but why are they even there? Why aren’t Nintendo and Sony there too? Since they are tying to spin this into a console argument…

this lawsuit has no focus and started by the wrong reasons. And I’m the one who is hoping Apple gets a beating.
- cause Microsoft isn't happy with the distinction between video streaming and game streaming
- cause Microsoft has also has this agreement around the definition of General Purpose computer
- cause it commercially makes sense to.

I wonder what the internal expectations of Epic was, this is effectively turning into the follow up of the Congressional hearing a couple of weeks ago.
 
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Zeroing

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- cause Microsoft isn't happy with the distinction between video streaming and game streaming
- cause Microsoft has also has this agreement around the definition of General Purpose computer
- cause it commercially makes sense to.
Yes so would Sony for example.
Who decided to buy shares from Epic so it would become harder to get called into this mess…
The mess I am taking about is trying to spin all this into consoles don’t make profits as an argument.
If you join the battle, the attorney from Apple will look into everything to destroy the arguments and question the brand if necessary!

we can already see how that “consoles don’t make profit “
argument is just a waste of time.
 
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UnNamed

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So what about Nintendo and Sony then?

 

MOTM

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MS allowed themselves to put in a position of being ridiculed.
It just shows why MS got Involved in the first place. They want to get a chunk of that iOS user base even if it means becoming a sort of parasite.

so yeah MS is not that selfish company that wants to save us ( consumers ) from evil Apple! That’s what the lawyer pointed up and everyone knows it. It could be damaging in the perception of the brand.

 

Eevee86

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I'm not sure I understand how trotting Microsoft out in front of a judge and saying "See?! They don't even make money WITH a 30% cut on games!" helps Epics case.
 
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reksveks

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Yes so would Sony for example.
Who decided to buy shares from Epic so it would become harder to get called into this mess…
The mess I am taking about is trying to spin all this into consoles don’t make profits as an argument.
If you join the battle, the attorney from Apple will look into everything to destroy the arguments and question the brand if necessary!

we can already see how that “consoles don’t make profit “
argument is just a waste of time.
Sony still see their hardware platform as the primary platform, Microsoft clearly doesn't at least to the same intent. So the incentives for Sony to get involved is lessened in my opinion.

I also not sure about Microsoft formal investments in Epic, but it would be even more awkward to justify their testimony in court.

They are just arguing that Console devices are different to General computers for multiple reasons, and one includes the fact they are generally sold at a loss. The more important one is that you don't typically get emergent behaviour and use cases out of game consoles also the majority of time is clearly spent on playing games.

I think Apple has clearly gone for the weakest part of the Microsoft testimony. I don't think Microsoft cares about the discord around this statement (hardware doesn't ever make a sale) and what it looks like to the public relative to the fact they might get more power in relation to the app store.

Epic did the same thing around Apple's definition of a 'game' .
 

ReBurn

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yes but why are they even there? Why aren’t Nintendo and Sony there too? Since they are tying to spin this into a console argument…

this lawsuit has no focus and started by the wrong reasons. And I’m the one who is hoping Apple gets a beating.
They were there because someone subpoenaed them I would imagine. You can't just show up and testify at a trial. Sounds like Apple is upset because Microsoft isn't telling the story the way Apple expected them to.
 
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PaintTinJr

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yes but why are they even there? Why aren’t Nintendo and Sony there too? Since they are tying to spin this into a console argument…

this lawsuit has no focus and started by the wrong reasons. And I’m the one who is hoping Apple gets a beating.
They are probably there, because as an equally wealthy goliath company - to Apple - and the company that makes least from their hardware (a loss as they claim), they can show the biggest reason why the two walled garden situations are different.

If Microsoft can't sell gaming console hardware at a profit, with all their resources and black hole investment in gaming since the beginning, then this suggests success is fickle and short lived, and that anyone that can afford to join the market can be successful - so long as they can constantly deliver entertainment gamers want, for hardware at a price gamers can afford, rather than what it costs at launch, so long as they can compete with a competitive tariff to their rival platforms to offset losses.
 

smbu2000

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They were there because someone subpoenaed them I would imagine. You can't just show up and testify at a trial. Sounds like Apple is upset because Microsoft isn't tell the story they way Apple expected them to.
They were there because Epic called on them as a witness to help bolster their case.
Apple questioning the MS witness was the cross-examination.
 
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Banjo64

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Won’t it be the judge who decides whether the testimony is compelling enough or if they need to see the cold hard figures? It would be madness to lie in court.
 
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Apple is just deflecting. They know damn well consoles and phones are a different game especially since most computing is done on phones now. Many households don't even own a standalone computer. They're just being petty with a single statement trying to make the case that if they don't have to share neither do I. I've got news for apple, this didn't go well for MS in the 90s and it won't go well for Apple now that they're the big bad and not the underdog. Mo money mo problems.
 

Heisenberg007

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* Looks at the Xbox Series S
Yeah definitely not being sold at a loss…. So receipts are indeed necessary.
That's not the point. I don't think anyone disagrees that MS is selling Series X and Series S at a loss.

MS said that they have never made any profit selling hardware and have always sold consoles at a loss. I don't think that's true. Apple's lawyers also don't think that's true, which is why they are asking for official documents and P&L statements.

Now MS can either submit the documents (if they are telling the truth) or retract their testimony (if they were lying)
 
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massivekettle

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Well that even more odd seeing MS don’t sell games anymore on the first party side so they’re eating all that dev costs and marketing for subs!

I been smelling something fishy going on with regards to there gaming division financials and I fear when the shit hits the fans the gamers gonna lose especially the die hard ones at that

lmao. Are you really suggesting Microsoft is committing fraud?

Of all the shitty takes I’ve read in the first page of this thread, this one takes the cake.
 

Zeroing

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They were there because someone subpoenaed them I would imagine. You can't just show up and testify at a trial. Sounds like Apple is upset because Microsoft isn't tell the story they way Apple expected them to.
From what I’ve read Microsoft got into the fight because they wanted. And the idea I got from this, is Apple saying “of course MS would jump to the opportunity to attack” since both companies are rivals.
 

Zeroing

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That's not the point. I don't think anyone disagrees that MS is selling Series X and Series S at a loss.

MS said that they have never made any profit selling hardware and have always sold consoles at a loss. I don't think that's true. Apple's lawyers also don't think that's true, which is why they are asking for official documents and P&L statements.

Now MS can either submit the documents (if they are telling the truth) or retract their testimony (if they were lying)
? I was saying the series S is not being sold at loss. Hence they really need to show proof of what they are saying!
 
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Kerotan

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Microsoft won't show the goods, they hide everything xbox in the financials. Weird they even thought it was a good idea to say that.
Lmao even in a lawsuit ms won't provide Xbox financials properly. Remember the good old 360 days when they couldn't wait to tell us everything!
 
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