Yes they need to grow on those platforms on an Xbox store , thats been the problem with the old vision it has eroded the brand and made the brand meaningless
They didnât even market Hi-Fi Rush, so Iâm not sure thatâs a great example. But I do agree about safe risks. I edited my comment for more clarity there.
I think using known IP as a foothold would be fine, but I also think making IP and growing it is also fine and can lead to an even larger payoff. The problem is how expensive these âriskyâ games have been to make in time, money, and overall resources. Getting stuck in the COD cycle is bad (like even as a business, Xbox wonât be sustainable if they become reliant on a handful of known IP that become increasingly stale), but so is burning money and making bets that donât pan out. Iâm still flabbergasted that Perfect Dark & the Iniative were allowed to go on as they were for as long as they did. That was insane. If they had nothing to show and were still making basic design decisions after several years then they shouldâve been forced off the game earlier or even closed earlier. Maybe if they had been made to pivot then they couldâve worked on a different game thatâd be out by now. Maybe if they had closed then resources couldâve gone to another project like Everwild to actually make that possible or even Fable to get that out on time. Or maybe just nowhere at all and they couldâve just not have wasted money and be a healthier business.
From creating a new team to develop the game, to become the most wishlisted single player game in Steam, quite an achievement and incredibly well managed in my opinion, itâll release in 2027 after being announced a very long time ago, yet itâll be profitable in what, days? weeks?
Production cycles, budgets⊠mean nothing if your game doesnât well, Avowed was announced in 2020 and released a year ago already, right now SteamDB marks itâs sales at around 300K, obviously it wasnât profitable, Fable will have several million sales in that store alone.
As i said, i donât want the samey sequels Sony is doing nowadays, but it was obvious several of the latest games from XGS would lose them money way before itâs release. That canât continue if we donât want big lay offs being more common.
Corpo BS.
Yup. Fucking hate business.
Regardless we know Playground will not be impacted just based off Forza. If anything, the missing studios at this event would be the likely targets.
If the talk from Rebs about Halo CEmake being mostly outsource to the point that it almost wasnât a Halo Studios project are true I can see Halo Studios getting layoffs because they can just outsource Halo to others and it would cost them less.
You do realize thatâs what, âThis is an Xboxâ was? So you think they should do more of that? They didnât advertise Steam or Playstation with those ads. They advertised that Xboxâs first party ecosystem included cloud and PC. The entire poing to sell people the idea of Xbox being everywhere and accessible through every decide with cloud gaming and their PC storefront. The ROG Xbox Ally highlighted as the campaign went on was focused on moving gamers on Windows on an Xbox centric experience and the Xbox PC store.
The old vision was building Xboxâs storefront and ecosystem up across console, PC, cloud, and mobile. Thatâs what theyâve always said and pushed for and invested in. Steam & PS Ports werenât part of any vision, they were attempts to grow and cushion revenue amidst a precarious gaming industry that saw all studios and publishers struggling. PS ports notably came after Xbox was already failing to meet the success they saw during covid and struggling with growth.
So which is it? Should Xbox be pushing for âXbox Everywhereâ and marketing that their ecosystem is accessible on mobile and PC and smart TVs like the âthis is an Xboxâ campaign was doing or is that devaluing the brand? Ignore the PS ports because that wasnât a part of any vision and happened as a result of the revenue struggles. What vision is it that Xbox needs to reject? If anything youâre saying the execution of the old lesdershipâs vision was the problem not the vision itself. What do you think the vision is or was?
Avowed has the same problem Fable does of being a game that was internally rebooted multiple times and went over budget. Five years after being announced isnât much better than Seven. Avowed also suffered because the final product wasnât good enough to justify its budget and the budget forced it to be priced higher than it should have been. Iâm not sure why youâre using a game thatâs VERY SIMILAR to the problems Fable is facing as an example of how Fable (still unreleased) is doing it right.
Fable hasnât released yet. We donât know how successful it will be, but we do know that it will have very high financial expectations. Thatâs what the budget and production cycle means. A game that releases in 3 to 4 years on a reasonable budget will have far lower expectations than one that releases in 5 to 7 years on a larger budget. I am very very hopeful that Fable sees massive success that makes up for that. But âmanaging studios betterâ isnât letting that happen on a common occurrence. Itâs not letting Avowed happen either. For Godâs sake Fable was announced just before the start of the Series Generation and now it will be releasing the same year as the next Gen Xbox. Thatâs not okay. Fable is an example of what they should avoid & learn from. Improve the production cycle to avoid internal reboots and wasting time and having to scrap ideas or work done. A good game shouldnât take the ENTIRE GENERATION to release. Unless itâs GTA VI (and I donât think Fable is planning to be a massive live service game that serves as a platform in of itself and probably lasts for two generations making gamers spend tons in Microtransactions).
I feel the vision of the old leadership completely forgot about the console which was the core of their business, and thought PC/cloud would fully make up for it while completely destroying the console business and giving it for free to Sony. They completely betted on the wrong horse and doubled down hoping itâd work at some point.
We are in a hardware component crisis. When I joined as CEO in February, the price we paid for console storage components was over 2x as high as we paid last fall. These costs have since doubled again. And as we plan for the 2027 holiday season, we expect another significant increase, taking us over 5x the prices we paid only two years earlier. Memory costs have followed a broadly similar trajectory.
The other horse isnât looking too hot. Console sales still arenât growing across generations, thereâs been a problem with users being sticky on last gen, and now on top of that thereâs major hardware production issues. Looking at the competition things arenât peachy on the other side of the fence. The loyalty Nintendo and Playstation built up hasnât stopped sales from slowing or changed that they still have ballooning hardware costs and need to find somewhere to put that cost. Usually itâs given to the consumer and as a result gamers are just slower to purchase new hardware at all.
I think itâs really unfortunate that the growth Xbox wanted across platforms didnât pan out, because the reality of console hardware isnât looking very good at all. Thereâs a very strong chance the PS5 doesnât even each PS4 sales by the end of next year. Based on last estimates itâs struggling to even reach PS1 sales. Nintendo has said they might have to end production of the Switch 2 early at risk of it being unsustainable. Hardware continues to go up in price and gamers are starting to just get priced out.
Xbox does need PC & Mobile & Cloud to pan out. The console market has matured and peaked. The memo and reason given for layoffs is a lack of growth. Growth is something all consoles have and continue to struggle with. We can say Xboxâs decisions didnât work or even go to the extreme and say they cratered the console, but even in the best case scenario Xbox would still be failing to grow as costs increase all around them. The vision was a solution to that and thatâs why even now Xbox has stated their intention to follow through with it even if methods for executing it change.
Hope phil is wrapping up his transition time wfh. None of this makes sense.
Prior SLT ran the business into the ground. Booty was part of that. He gets promotion.
Xbox has been in the shitter for 5 years and satya didnât step in until now?
Parent co sets arbitrary profitability goals to a 25B company in an industry they donât understand.
All shareholder communication on xbox has been anywhere from good to poor, but nothing to indicate what asha just said. More players than ever! Game pass records! MAU out of this world!
competitors are getting better hardware pricing? Who did those negotiations/contracts for xbox to expose them to so much risk?
We need to rethink helix, 3 weeks after sending out helix welcome kits to influencers?
Ashaâs first question to Ball was if the company can be fixed?
Layoff 1,000 people?
What on earth is going on over there? The good news/bad news whiplash will never go away. They should have held their June event later in the year. get all this shit cleaned up first.
I at least think that the 2021 vs 2026 revenue makes sense. Itâs what a lot of companies saw with COVID and then post COVID they invested too much and that increased revenue was gonezo.
The rest is⊠idk. It reminds me a lot of the ABK court case when Xbox was doing a pity tour to push that they needed ABK, so all of a sudden their wins from the prior year werenât wins. It seemed very corporate then and it seems corporate now. Xbox playing the loser seems good for gaining fan sentiment (apology sympathies) and Xbox as the loser needs to do these terrible layoffs so please forgive them.
Sales are slowing down on Nintendo and Sonyâs end, yet they still manage to ship A LOT more hardware on a yearly basis, which means they secure more components when necessary. Growth in the PC space is still somewhat limited imo and heavily skewed towards free to play titles, which isnât MSâs forte it seems. Take out the Roblox, Genshins, League of Legends, DOTAs of this world and I donât think PC gaming looks so hot. Heck, remove China and itâll paint a much different picture.
MS wants growth in the PC space, but if you grow 5% and lose 30% on the your console business, youâre not in a better position. And now you canât rely and those old revenues, you washed away goodwill and lost customers, and customer trust is hard to get back, and then your strategy is to give away your games to other consoles, basically losing even more consumer trust.
Like PC growth literally means Steam, which long term is loss of subscription revenue, game sales revenue from third parties, and accessory revenues. Itâs literally impossible to make the PC store a competitor except for those in the ecosystem already.
Basically, they gave away the only foothold they had and I honestly donât think there is much they can do to get out of that hole the dug. Next gen theyâll have a super nice system that will be too expensive while the competition will beat them on value, at the worst possible time. Unless they magically come up with a value offering in time for next gen.
Both Sony and Nintendo manage to get monetary growth, by eating away at the pie chart whatever MS had. The ecosystem as a whole might not be growing, but in the end it doesnât matter if you push out the competition, and the competition basically rolls over and letâs you have it.
MS basically needs to go back to the OG Xbox and 360 days and run in the red for 2 consecutive generations, stop publishing on other consoles, buy exclusivity and big game partnerships, and rebuild visibility for the brand. The actual RESET she is talking about imo is exactly that, starting from scratch and do whatever it takes.
What are you saying? Did you read what was said here. They spent 20 billion in 5 years part of that was subsidy covering the losses incurred on hardware. They would have been in an unimaginable hole if they pushed more hardware especially when levied with a 30% margin. They didnât make the wrong bet here because the consoles were not even selling after they increased the prices. Also isnât this article alluding to OEMs. Obviously consoles or hardware at this point will result in loses if storage components as they say is at minimum 4X and might be hitting 5X. I think you can only do the best with what youâre given. I donât know how with the margins they were levied they could have done any better except if they had foresight to have been pushing with a structure and strategy before this gen that could have gradually led to those margins naturally.
#2: We will end this fiscal year at about a 3% accountability margin, down year-over-year. Excluding Activision Blizzard King, over the past five years, we have spent over $20 billion on ongoing investments in our content, platform, and hardware subsidy, but our annual revenue has declined nearly half a billion during that time. Going forward, this cannot continue.
20-billion-dollar investment with half a billion loss is not that bad imo considering what the loss here is for. Console subsidy probably takes over a billion to get it to half seems quite manageable considering they might have been expecting hardware parts to fall to either make profit there or be at cost.
Sony and Nintendo arenât even eating away at Microsoftâs piece of the pie. If they were sales would up over last generation for both not down. The PS5 would have already surpassed the PS4 in sales. People arenât even switching theyâre just getting priced out or theyâre staying in place on last gen systems where games continued to recieve updates & thereâs been new releases up through this year.
Being in the red for two generations is an insane ask and then whatâs the future? Is Xbox just supposed to forever be in the red to cling to whatever relevance they can? The layoffs are happening because Xbox has failed to grow over the entire generation, so they gut themselves and start over and money hat the business following Nintendo & Sony⊠and when does the growth happen? Are we going toward a future where every game is the size of a Nintendo game and costs $80 to $100 dollars? Where has Sony even been able to pump out exclusives? Their first party studios are struggling to get games out and their third party partners are increasingly abandoning exclusives.
That would actually be Xbox giving up and itâd be insane and so insane even Sharma immediately started off the memo saying they need to do the opposite. They canât bash their heads against the wall and ignore that things arenât going hot for consoles on the whole. Microsoft shareholders also just would NOT stand for running a business in the red for over 10 years after that business has already struggled to grow and the entire market it exists in has struggled to grow and started to decline for hardware sales. The only way the console continues to exist is if they build Xbox out as a healthier business seeing growth in other avenues while maintaining the stable console user base (which has continued to remain stable even in the series generation based on sales estimates).
I never likedPhilâs direction, its always been bad to me,.cutting out 3rd party marketing deals ( cod destiny,madden fifa 2k etc) demphasizing console has led to the continued spiral of the brand, Iâm generally not surprised. He released 3 consoles ( one x both series) without major exclusive ip attached to them !!
The 20 billion isnât only hardware subsidies, and if smaller companies like Nintendo and Sony can afford to subsidize hardware, so can MS.
Its mismanagement is what it is. If you spend 20 billion on studios and cloud infrastructure that doesnât bring in the money, you invested wrong.
Like how come they had to spend 20 billion for a measly 3% profit while we are seeing great numbers and growing profits even in some cases from the competition, which may I remind you, doesnât have a strategy of publishing heavily on PC and competing platforms.