The Split is irrelevant because both Series' consoles have failed to hit the overall goal and targets set by Microsoft. It doesn't matter if the ratio is 90:10 or 1:99 S:X, they both failed together, which logically means that the S failed.
The S/X have no software. That may sound like hyperbole seems they have some games, but those games are delivering 0 impact and in the case of Halo, have negatively affected the platform. while we will never know, I can only assume that Microsoft would have received less flak if they had have postponed Halo until it was a full package. A delayed game is eventually good, a bad game is bad forever.
This sounds hyperbole because it is. Has been very hit and miss as well as mismanaged? Most definitely. But the whole Microsoft has no games is pure BS. No one is out here touting they have had their best software years ever. But the whole no games thing is a tired and boring stance.
The conversation was about the series S in particular. If you want to make this now about their entire strategy as a whole we can, but that is moving the goal post.
In the effort of not going in circles about targets and such, I will just say again, we have no evidence of this missing goals to this extravagant extent to where the Series S/X is a failure. But for the sake of the discussion, lets say they did miss their goals wildly. It still is not to the degree that its time to throw in the towel. They have a healthy business with pay customers.
Switch is a handheld not a traditional console and your point would hold some weight if Microsoft didn't, at one point in time, have more marketshare than Playstation. They threw away their lead during the end of the ps360 era and it has been decline ever since. To say that they don't need to sell more is an out and out fabrication of reality. They need to stop the downhill slide and that is only achieved by taking more market share through selling more consoles. After all, more consoles = more gamepass subs, which is another metric of Xbox and another target they failed to hit.
Will have to agree to disagree on the whole swatch isn't a home console thing. This has been debated to death and its obvious we stand on opposite sides of the fence. However, it doesnt change the fact that its the same sector. I think we can agree on that. And I only made that statement because it shows how people like to play this mental gymnastics when it comes to console wars about how X doesn't match X criteria. IF we wanna talk business then lets stick with that topic and not debate what classifies as a console these days.
I am not debating Microsoft dropped the ball with their marketshare. However, I think people give Microsoft too much credit for that generation and I would view it as an anomaly more than a victory. Similar to the Xbox one gen, the best advertise for the Xbox 360 was the PS3. Microsoft came out of the gate extremely strong but they also had their competition literally stumbling over themselves at every turn. This is important and I will get to it in other points.
Unfortunately that is no longer the case. The Series' consoles came out of the gate very strong vs Xbox one, mainly due to the abysmal launch of the One. Now the Series consoles are falling behind the curve vs One (NPD figures leaked and shared on other gaming sites. I'm not sure of the rules here otherwise I would post them).
I don't see why anyone would have an issues with posting articles on leaked content.
But even still, the math I have seen and roughly done myself still shows Series X/S is outpacing than the Xbox One at this point and time. Again, its not a landslide by any means. But it is showing growth even after the terrible year of software Microsoft had. As a betting man, I will make my stance and say Series X and S will end at 70ish million by the end end of year 7. That is a 20 million-ish increase.
Additional revenue of Gamepass is a deception. Even if the roughly 25 million (it may be higher, they were the last figures i saw) subscriptions were 100% full priced at $15, that does no recoup the money lost on 1 single franchise, let alone the money splashed out to bring games to gamepass. We saw these figures during the Apple vs Epic lawsuit and while Microsoft did get some good deals on some games, the rest were quite high costing.
I believe that lastest figures from MSFT was indeed 25 million but they did say they had some growth but lets just stay at 25.
How is additional revenue a deception? Again, need to see receipts on this. Yet they don't exist because we don't know the inner workings of how each Game Pass deal is structured. Lets round down and say they pulling 300 million a month from GP which I think we both can agree is low considering 25 million confirmed subs. With the information from Apple Vs Epic theres a very clear path to profit here.
If we wanna break that down even more we can but the point is we can use that data that both Epic and Microsoft have had to expose and it shows that lump sum deals comer at a significant discount to the platform holder. Mutant Year Zero is a good example of this as that was a day 1 game pass get. Epic paid 1.5 million for it a mere 6 months after release. Obviously Microsofts price was higher. Lets even say it was 10x higher, thats very sustainable for the subscirption fee Microsoft is charging.
I know there's this giant boogeyman of subscriptions that people love to harp on but Game Pass is unique in that its a tiered structure than is designed to lock the customer in and have them spend more money.
People love to point the finger at netflix and say they havent turned a profit, yet they always forget they have a positive operating income. That's without additional revenue from subscriptions or ways for people to spend more money other than their subscriptions.
Game Pass doesn't stop at the $15 at the door. Looking at Forza Horizon 5 as an example, you had people who already subscribed to Game Pass who also threw down more money to play early and get the expansions. I don't recall the exact numbers but it was over a million people had paid for early access. Thats a boat load of revenue at $45 a pop. Were they all Gamepass subscribers? No. But some of them definitely were.
Granted, MTX and Lootboxes bring in additional revenue for Microsoft, without the player base generated by selling consoles, and subscriptions generated by selling consoles, those extra income streams will be nowhere near what the target should be. Microsoft may wish to go the route of the Whales in their games but that isn't happening.
They are selling consoles though? Again, are they selling as many as Nintendo and Sony? Not even close. But they have surpassed over 20 million sales of Xbox Series X/S alone. They have the PC market, and they still have some people on Xbox One. How are they missing their targets exactly? They will have their own whales as well on whatever game you want to point at. CoD with their skins and packs, fortnite, Apex etc. The whales dont only exist on swicth and PS. Will they have less whales as their isntall base is smaller? yes, but again, how is that missing their targets?
No they would not be classed as a valued customer, unless the metric is MAU and time logged-on to a game. I know Xbox has boasted about those figures a lot in the past, but it is spin and deception to keep the higher-ups in Microsoft happy. In reality, the person who sits on a FTP game all day and spends little to nothing on MTX is not only not valuable, they are not motivated. If MS have a lot of customers on their platform who are not motivated to purchase more of their products, then MS have a serious problem on their hands.
Key word: Revenue. That is not profit. And if 15% of their revenue is coming from Gp, then it's an admission that Gamepass is not only a failure, but is diverting resources away from the platform.
Why are we assuming people are spending money on PlayStation and Nintendo but not on Xbox? I am not following here. Same with the revnue of GP of gamepass being 15% is a failure? How is it diverting resources away from the platform? Its bringing in its own revenue stream and its bringing in players. Need more context on this one, but this again sounds like not looking at the whole picture.
I do not need a lecture about revenue vs profit either.
Production wise, having multiple SKU's is a big no-no. Not only do you pay for everything twice, you lose the discount received from mass manufacturing. Economies of scale play a big part in savings on the production line, especially if MS hits a figure of 50 million consoles sold this gen. If they hit 80 or 100 million sold, that double SKU will cost them big time. Which in turn makes it harder to sell. If they could have saved $1 billion dollars lifetime on manufacturing, they could have past that saving on to the customer, making their product more attractive from a sales point of view, stealing more sales from their competitor, which means making more product, which means bigger savings...
Add in the extra resources needed for programming at a developer level and you've got a cost that you do not need and cannot afford to take on board.
Microsoft split itself between low-end and high-end this gen, when it should have focused on moderate power. Let Sony have the power advantage because Sony NEEDED to have the power in their console to further their strategy of VR. Microsoft could have chucked out a decently powered console at a very fair price and fit between switch and Playstation. Remember in the ps360 gen when everyone owned a PS3 or 360, but both owned a wii? That should have been Microsofts strategy here.
Having multiple skus does not have to be taboo if you plan accordingly. I mean...literally every other manufacture in electronics does this. If you go into production without thinking about it..sure..it could be disasterous. But this also isnt a situation where you have 2 extremely high end products trying to be made at the same time. I dont think we need to get into how the Series S is a much easier chip to produce reuslitng in far lower costs. But point is, its only a huge porblem if you dont plan accordingly.
The programming is something I will agree with. From the get-go I have never been a fan of the Series S as it can be a drain on resources from a developer standpoint. It requires more QA, more planning, etc. But I think Microsoft has done the best they could considering their strategy here. They have made their SDK's as easy as possible for testing and development over multiple targets. Removed the need for multiple dev kits, etc.
I dont agree that targeting a moderate power instead of a high and low tier would have made much of a difference. I think that would acutally be worse for them as the narrative/press isnt kind when one console ou performs the other. But thats really diving into a whole different topic.
IIRC $100 loss per series X sold and $50 on series S, before the sales discount. VS $30 gain for selling a Disc PS5. Imagine how mad Microsoft must be, they take a hit on their consoles and have a hard time selling them, and their competitor raises their price and sells out.
I know those were hte estimates and lets say even if they were right, it wont be that way forever. Its really hard to know with current world ecnomics.
But either way, its the same mentlaity as the discless PS5. Its a lead driven device. You sell it at a steep discount in order to recoup sales because you are locking the consumer in.
I think you are giving way too much credit to the fact they put the series S on sale. Again, not arguing that the Series S isnt flying off shelves and Microsoft wishes they were. But again, as a lead driven sales device, it would be foolish to think they wouldnt. I will say I think they should of taken the Sony approach a bit more in that Sony doesnt really talk about the production rate of the digital PS5. I acutally am the only person I know that has one and I have never even seen one for sale in store while I have seen Disc PS5's. Pushing the Series S over the X at times I think is a mistake. But they are in a different position. Its a sku, both the series S and Digital PS5, that is asking a lot of the consumer to give up. You have to be aggressive. Or in Sony's case, I would call it selective.
By all accounts, literal Microsoft accounts, it is not doing that. The share of MTX for Fortnite is majority on the PS5. Again though, more consoles sold, more people to buy MTX
Microsoft literally said its doing that. Its appealing to new customers who have never been part of the ecosystem and people are buying it. New customers are the not only ones buying it, but they have seen a large number of people buying the Series S that are new to the ecosystem. So I dont know why you are stating Microsoft is saying different because they are not.
Microsoft should have learned what happens when they chase new customers. They did it with Kinect and failed then they did with the xbox one and failed. It wasn't until they readjusted their strategy with the One that they began to see an increase in sales and marketshare. Chasing new customers while haemorrhaging the old ones is not a successful strategy
This is a whole different topic we can get into if you want but I don't entirely disagree.
However, people forget how much money it took for Xbox to secure the deals and such they got during the 360 gen. There were A LOT of factors other than just money as well. The reason Microsoft pivoted was for more than just they wanted new customers. Its the same reason to why the Xbox One became the device it was from a design standpoint to be more than a gaming device. Its the same reason why they are going in so hard on the acquisitions as well. Gen 7 was a very expensive gen for them but times have also changed. Like I said, thats a while different topic.
I think their focus is a bit misguided. Their decision to go on an acquisition spree is something I have a hard time getting behind as I don't think its smart from a market standpoint. However, I understand it at the same time, Gaming is a weird ass market, and like you said earlier, sometimes companies take these swings that seem absolutely nuts but somehow work out. But i do think if you look at the entirelty of the 360 and Xbox One gen and what worked well and what didnt for them, it makes sense to why were are here now.
However, lacking a disc drive limits the customers you can target. The PS2 is the best selling console of all time because it was purchased as a cheap DVD player, not a console. Restricting options from a new market of customers is not a good idea, especially as MS have 0 data on the spending habits of those new customers on their platforms. It also restricts what media those new customers can play.
Do you really think the lack of a disc drive is going to hurt them longevity wise? The numbers simply don't match. There is plenty of data to show that discs are not preferred anymore. From almost any standpoint in media. I say this as a 4k disc advocate, nobody is buying the PS5 and the Series X because they play 4k discs. Its a bonus for sure, but even then, its not a defining sales point like DVD was. Comparing it the PS2 is silly. Completely different era of media.
Ridiculous statement. Name me a product that costs billions to make, market and sell, the purpose of which is to not take off. Then show me the companies that did so while desperately needing their product to take off?
Then there's a new product, or two, on the market this year in the form of VR (possibly a new market entirely for consoles) and Switch 2.
Sorry, what? You are telling me that Microsoft expected Series X/S to suddenly sell 200 million devices? Either I am misunderstanding you or vice versa because no business ever looks at a market and suddenly thinks they can double or triple whatever market they are targeting. Never has happened or will happen.
Thats like saying Movie Pass was expected to grow movies to 100 billion dollars in 2015. You dont build a product without looking at the current market.
Edited for clarity/mistakes.
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