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Opinion Clickbait Cringe Hypothetical: Could Amazon or Microsoft end the console industry?

Warnen

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Think MS has moved on from the console wars into the Service wars. Hope one day soon I’ll be playing Destiny 2 and halo on my iPad thru that service and it actually work.
 

Kdad

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This makes no sense. Video game consoles are not actually that expensive for their target audience: adult hobbyists. $500 over the six or seven years of a console's lifespan is a tiny expense for any first world adult with enough disposable income to have a television in the first place. The hardcore gaming audience is simply not that price sensitive. On the other hand, it's extremely performance sensitive - that's why the entire market drops $500 to upgrade to new, moderately more powerful hardware every six or seven years even though their old hardware works just fine and is even continuing to see game releases.

Streaming is always going to entail a performance penalty over playing on local hardware. That's just a matter of physics. There's no reason to believe that console gamers will be willing to tolerate that performance penalty. The reason they play games on console in the first place and not on their smartphone or laptop is that they're not willing to tolerate significant performance penalties.

Outside of the first world, of course, the vast majority of people would never be able to afford a $500 entertainment expense. But streaming won't take off in the third world because the internet infrastructure is so bad - people there will just continue going to arcades or playing on mobile phones instead.

There simply isn't a significant market for streaming. The console market is very performance conscious and not particularly price conscious, so they won't tolerate the performance drop. The mobile market is so price conscious that they're basically unwilling to pay for games at all, so there's no way you'll hook them on a monthly subscription.
Re: quality of games

Analog and CD based music is higher fidelity than streaming....therefore there should be no market for streaming music...yet here we are.

UHD BLU-Ray is higher fidelity than streaming...therefore there should be no market for video streaming...yet here we are.

The players are not going to determine the fate of gaming...gaming companies are, they will simply remove your choice...and they will seek the path of least resistance, lower hardware development costs and recurring revenue streams... game companies are not going to give you a choice of a console as there are better roi opportunities for them without the hardware development risk.
 
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Release a console for free 🤣

Some basic back of napkin maths. Console would cost about 400 dollars to make so they would have sell 6 - 8 first party games just to break even and then they would have to cover the dev costs as well!

Or for 3rd party games assuming they take 30% per sale that would be 20 games sold at 60 dollars! The best attach rate ever was the ps4 with about 12 to 14 games! I guess the consumer would save money not having to buy a console!

Okay fine gamepass subscription then well then your looking at 2 and half years just to break even again then you have to cover first party dev costs AND all the 3rd party deals as well.

Christ do you remember how much money Sony lost on the ps3? This would be like that 10 times over it probably would be 3 generations before they turned a profit and God knows what knew innovations and disruptions could come along in that time!?
 
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Re: quality of games

Analog and CD based music is higher fidelity than streaming....therefore there should be no market for streaming music...yet here we are.

UHD BLU-Ray is higher fidelity than streaming...therefore there should be no market for video streaming...yet here we are.

The players are not going to determine the fate of gaming...gaming companies are, they will simply remove your choice...and they will seek the path of least resistance, lower hardware development costs and recurring revenue streams... game companies are not going to give you a choice of a console as there are better roi opportunities for them without the hardware development risk.
The difference in quality between local and streaming for music and movies is simply not noticeable to the average person. A song or a film is small enough in size that it can be buffered in its entirety shortly after beginning streaming playback. This does not apply to games, for obvious reasons.

If Microsoft chooses to stop releasing consoles Sony and Nintendo will simply absorb its share of the console market. Nobody is going to follow Microsoft to an all-streaming future.
 

Kdad

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The difference in quality between local and streaming for music and movies is simply not noticeable to the average person. A song or a film is small enough in size that it can be buffered in its entirety shortly after beginning streaming playback. This does not apply to games, for obvious reasons.

If Microsoft chooses to stop releasing consoles Sony and Nintendo will simply absorb its share of the console market. Nobody is going to follow Microsoft to an all-streaming future.
The OP post is about the feasability of giving away a 500 console...my response is that you'd see streaming take over before anything like free 500 consoles would make sense. I'm not arguing that today or tomorrow streaming will dominate, but that long term play on any device streaming will dominate and it would therefore make zero sense to give away 50 billion dollars in hardware such as the OP is suggesting.
 
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Amazon has the capital but not the competence to shake up the industry so severely that consoles would become obsolete. Microsoft on the other hand has a very compelling short term strategy with Game Pass. Whether it will remain stable in the decade will have to be determined by time. I don't believe Game Pass will be significant enough to delegitimize consoles, but it will become an interesting alternative to how we consume games. PlayStation and Nintendo are strong enough companies that disruption won't harm them that much, if at all.
 

nerdface

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I hope not, but at this point there’s already a life time’s worth of amazing videogames. One person could probably never play all of, let alone master.

...everything is going to be ok! 😃
 
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So those of us familiar with sales have probably seen this image below of Sony's gaming division’s financials.


The big red line was when the PS3 launched with a 200-dollar loss and it took Sony the rest of the generation to finally be profitable and a good chunk of the PS4 generation to fully recoup all their losses.

The PS3 was eventually sold at a profit what you are proposing with Microsoft or Amazon never will. They will have to sell an unimaginable amount of software for it to be ever worth it.

And at the end of the day, you still couldn't play Mario, Zelda animal crossing, uncharted, God of war, spiderman etc on this Theoretical console. (unless you want them to spend even more) Nintendo have shown with absolute clarity that they can survive just on their First party output 80% of their revenue comes from this and I think Sony's are heading this way as well.
 
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I don't think it's possible.... Amazon have 84 billion cash on hand and 33 billion longterm debt (The accountants won't allow the reserves go below the debt marker out of prudence)
MSFT have 110 billion cash (Had 130 before Nuance) and have 55 billion debt (Again, accountants will demand at least 55 billion stays in the bank)

Gaming is neither of these companies main businesses and we are facing unsure times... China is on the rise and tech is changing faster than ever. They will need the cash for other things to keep their dominance over Chinese competitors IMO.

Xbox had their finance options for Series X and S and it really hasn't impacted how many units they've sold at all. It's more down to who can produce more and which is in the cultural zeitgeist.

PlayStation should have remained headquartered in Japan, it will be more beneficial in the future than being in the US.
Despite what I have said in this thread I’m clueless about Finance.

Do you know why they do not just pay off their long-term debt?
 
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FunkMiller

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Amazon will never make a console, simply because their philosophy is to enter markets with disruptive new technology, marketing and customer service. A console does not accomplish this.

The Luna platform is where they will concentrate their efforts, because it leverages AWS, and is disruptive new tech.

They’ll kill any intentions toward first party games, given how poorly it’s done for them, but expect them to buy a lot of game exclusivity for the Luna platform going forward.
 
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Bryank75

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Despite what I have said in this thread I’m clueless about Finance.

Do you know why they do not just pay off their long-term debt?
Companies raise debt financing through issuing bonds...another financial instrument. They can mature at different rates...3, 5 or 7 years or even more. So once they are issued they must be paid at the rate that is associated with that bond and on the specified date.
 
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Companies raise debt financing through issuing bonds...another financial instrument. They can mature at different rates...3, 5 or 7 years or even more. So once they are issued they must be paid at the rate that is associated with that bond and on the specified date.
Thanks. Although that sounds even more complicated 😅
 
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Jigsaah

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No shot. They can make the industry better or worse for consumers though. Competition is usually a good thing, but it's kinda like if you have pee-wee league basketball game and one team has a college player on their team. It would initially make the game somewhat hilarious, but it also would ruin the spirit of the game.

Not the best analogy but the best one I can think of.

If Microsoft or Amazon buy up most of the industry I feel like it could risk the quality of the games we get all together. One because the majority of games we get will be greenlit through a singular lens. Two because there would be far less competition, which could stunt the fervor for innovation. We are no where near that point yet so all the acquisitions feel like a good thing right now. I believe it can go too far though. Developer studios may start to lose their identity because the sheer number of values would become more narrow.
 

FStubbs

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No shot. They can make the industry better or worse for consumers though. Competition is usually a good thing, but it's kinda like if you have pee-wee league basketball game and one team has a college player on their team. It would initially make the game somewhat hilarious, but it also would ruin the spirit of the game.

Not the best analogy but the best one I can think of.
It's a pretty good analogy of what happened to Nintendo, Sega (and a couple of guys hanging around the outside like Atari and SNK) once Sony created PS1. That was their nightmare scenario, game companies having to compete against an electronics giant. Remember "$299"? They couldn't keep up in terms of tech. Sega was a teetering ship to begin with and Nintendo was done competing in specs after 2 generations of trying and failing.
 
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Alright

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I think those days are past Xbox, at least for now. They don't appear arrogant at the moment, so they have a better chance (compared to previous generation) to succeed this time. But my concern is with their strategy and how sustainable it is.

I hope they stay the course this time, and i share those concerns. GP is an aggressive foot in the door, and i don't know if MIcrosoft know what to do next. They seem to struggle with any successful product that isn't software
Of course we are not privy to the information and the promises that MS has made them. For example, if MS has given them free reigns for, say, the next 10 years, Xbox will most likely succeed (will probably still stay at #3, but they will be profitable). However, if MS is going to pull the plug in the next 3-4 years, we may see awful results for the Xbox division, considering their recent expenditures.

Microsoft do have the potential to get to #1 and overtake Nintendo. It will take a generation before they can compete with Sony on a global market
Their current strategy is to:
  • Sell hardware at loss (not extraordinary)
  • Put all their games on Gamepass day one (a subscription that doesn't make them profit)
  • Pay other developers to put their games on the same subscription that doesn't make turn profits
  • Buy tons of other studios and incur that acquisition costs (roughly $10B). For reference, PS recorded their highest operating profit at ~$3B last year. Even PS will require 3+ years to recover that acquisition costs at record profits. Xbox isn't anywhere near that in terms of profit.
  • Bear 3x extra cost of salaries and game development than before (because of acquisition).
  • Their studios are still mismanaged (e.g., Halo: Infinite + Forza missing usual time frame + still no games available from their first-party) which means additional development cost.
  • Hope that Gamepass will garner enough subscribers to make all this profitable.
In all these points, Xbox is incurring cost with no return in sight. Their only bet is to sell a lot of hardware very quickly, gain market share (PS is outselling them again!), and use that to exponentially grow Gamepass subscribers and make them profitable. But what if there is a change in leadership? Will it still get the same support that it is getting right now? Also, there are two more points that should be considered here:
  1. People say they don't need to sell Xbox hardware. They obviously do. Selling an Xbox (assuming the gamer has GP on that Xbox) minimizes the burden and the cost of maintaining servers, which xCloud would incur. This means -- without selling Xboxes -- with each incremental GP user, MS will incur incremental cost. This won't change their financial situation.
  2. As the number of GP users increase across Xbox and PC, the cost of getting those third-party deals will also likely increase. So the profit won't be as linear as we may think right now.

I agree with all these points and it seems that Microsoft are focusing and praying on the "Three Billion Gamers" to come Xbox's way, but i think that's to wide of a plan for one device to attack. 'Xbox' should be a suite of devices, from consoles to hand helds to fire sticks to VR headsets, but there seems to be a lack of interest, a lack of understanding, or both and it's stopping them from really breaking out (again)
I know some will just discard this message in the name of FUD, but that's not really my intention. I'm genuinely curious about this new direction and the financially viability of it -- especially now that Xbox is the only following this strategy, and that Sony has publicly said that this is not a sustainable business model.
In all honesty, Xbox have boxed themselves in to a corner with GP. They have to churn out games constantly to keep the offering fresh and worth while (we will see more and more of the same games making a re-appearance).

GP should be a platform of exposure for 'B tier' devs. They've already seen great success thanks to GP and this angle should be aggressively pushed. The AAA are great and MS needs them, however, they have a real chance not to just grow one or two studios from the ground up, they have a chance to grow a whole tier. Most of those B tier devs that could be supported by Microsoft could easily become AAA studios, in the same vein of Sony and Housemarque.

Interestingly, Xbox itself doesn't have a fool-proof plan. They are also sort of just doing things right now and seeing how this will all work for them, which further increases my doubts about the long-term sustainability of the Xbox division.

If MS shuffled the Xbox department up a little bit, change a few aims and goals, they could make a much bigger impact than they are doing now.






The OP post is about the feasability of giving away a 500 console...my response is that you'd see streaming take over before anything like free 500 consoles would make sense. I'm not arguing that today or tomorrow streaming will dominate, but that long term play on any device streaming will dominate and it would therefore make zero sense to give away 50 billion dollars in hardware such as the OP is suggesting.

Doesn't have to be $500, or cutting edge, it was just an example. How cheap is it to make an X1x or equivalent?


Amazon will never make a console, simply because their philosophy is to enter markets with disruptive new technology, marketing and customer service. A console does not accomplish this.

The Luna platform is where they will concentrate their efforts, because it leverages AWS, and is disruptive new tech.

They’ll kill any intentions toward first party games, given how poorly it’s done for them, but expect them to buy a lot of game exclusivity for the Luna platform going forward.

You may disagree but i see VR as still new enough and fresh enough to be considered disruptive tech.

I thought it was mental that FB didn't give away Oculus' for free, even a limited run of a couple of million before they began to sell them at retail.
 
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Bernd Lauert

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Console hardware is just a means to get you into the ecosystem. Soon (within the next 5-10 years), that won't be necessary anymore, and console hardware will become redundant. Cloud streaming is the winner.
 
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FunkMiller

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You may disagree but i see VR as still new enough and fresh enough to be considered disruptive tech.

I thought it was mental that FB didn't give away Oculus' for free, even a limited run of a couple of million before they began to sell them at retail.

No, I agree completely. Amazon should have got into VR in the way Facebook have. VR is going to be the biggest gaming revolution of the next few years, and Amazon could have been at the forefront of that.

Having said that, putting their efforts all into streaming and cloud gaming is also a very sensible idea.

....but Facebook and Oculus are the only people working on *streaming* VR as far as I know. Hate to say it, but FB might be in the pound seats one day very soon...
 

Menzies

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Well the answer is that these publicly traded companies don't have full autonomy to leverage their weight like that. And depending on which region you're talking about, there is likely challenges with competition regulators with such a predatory pricing strategy.

I could foresee more aggressive trade-up programs and promotional giveaways, but nothing like giving 200 million consoles away for nothing.

Sony has publicly said that this is not a sustainable business model.

Interestingly, Xbox itself doesn't have a fool-proof plan. They are also sort of just doing things right now and seeing how this will all work for them, which further increases my doubts about the long-term sustainability of the Xbox division.

I believe Sony actually said "it doesn't make sense for them". Surely, a critical milestone number of 50 million subscribers at 9 billion annual revenue is more than just sustainable, the issue is the capital to get there.

The wheeling and dealing happening right now with third-party GP deals I suspect is part of the initial ramp-up of subscribers. I assume they want to keep investing in their first party so that they are less reliant on these deals.

I know that Microsoft's current position is third, but with their future vision I wouldn't trade places with anyone else. The vision for Xbox aligns with the CEO's mission for Microsoft - "any device, any where" / platform agnostic to drive up Azure growth, and make the platform as accessible as it can be. I think the plan is great, but now they need to execute.
 
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Negotiator101

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The difference in quality between local and streaming for music and movies is simply not noticeable to the average person. A song or a film is small enough in size that it can be buffered in its entirety shortly after beginning streaming playback. This does not apply to games, for obvious reasons.

If Microsoft chooses to stop releasing consoles Sony and Nintendo will simply absorb its share of the console market. Nobody is going to follow Microsoft to an all-streaming future.
Wouldn't it be amazing if technology got better with time.....
 

Bryank75

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Wouldn't it be amazing if technology got better with time.....
Physics and economics simply don't allow streaming to ever compete on even footing with local hardware.

Why would someone pay a monthly fee to play games they will no longer own, at a far lower quality, with input lag far greater than local hardware and open to all types of signal interference and throttling during peak times or during holidays and lockdowns.

Signal cannot travel faster than light, therefore there will always be lag.

Signal will always be compressed and therefore the image quality will never reach that of local hardware.

There are also several other issues like 'out of sight, out of mind'..... if you have not invested in hardware, you are not going to even think of gaming.... it feels so remote and detached.

Gaming takes up way more time than music and film..... much like the golden era of MMO's and each having their subscription..... people found they could only play one MMO due to the huge time sink.

Streaming will always fail.
 
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Derktron

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Why is it always Microsoft, this is just bias once again from the gaming community. Microsoft is doing more good when it comes to business practices than what Sony and Nintendo are doing.
 

Negotiator101

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Physics and economics simply don't allow streaming to ever compete on even footing with local hardware.

Why would someone pay a monthly fee to play games they will no longer own, at a far lower quality, with input lag far greater than local hardware and open to all types of signal interference and throttling during peak times or during holidays and lockdowns.

Signal cannot travel faster than light, therefore there will always be lag.

Signal will always be compressed and therefore the image quality will never reach that of local hardware.

There are also several other issues like 'out of sight, out of mind'..... if you have not invested in hardware, you are not going to even think of gaming.... it feels so remote and detached.

Gaming takes up way more time than music and film..... much like the golden era of MMO's and each having their subscription..... people found they could only play one MMO due to the huge time sink.

Streaming will always fail.
Time will tell, it always does. Technology has a way of making naysayers look foolish, I'll see you on the cloud 😉
 
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Wouldn't it be amazing if technology got better with time.....
Streaming technology would have to improve faster than gaming hardware, and I see no reason to believe that'll be the case. Most games this gen will be 4k60 (or 1440p60 or whatever) versus 1080p30 for last gen, that means that streaming technology has to improve massively just to keep pace. And at the basic level you're always going to have significant input lag if the hardware is dozens or hundreds of miles away vs right underneath the TV.
 
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Negotiator101

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No, you wont. That would be the time I stop gaming.
You may be right it may not happen, I just like the idea of not having a console or PC under my TV. Maybe just a small box or stick and launching a game from an app on my TV, that would be great.
 

Menzies

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I think a dedicated streaming-only service in today's market is being sent in to die against the competition. I'm not bullish on Luna or Stadia at all.

But I look at what Microsoft is doing, which is supplemental and about giving players extra choice with no extra fee on top of the service and I think "maybe".

Streaming won't be for most of us here on a gaming enthusiast forum (at least not for a while). The idea is to bring the service to people who might just want to dip their toes into gaming with a cheap low barrier to entry.

There's also a ton of 'lag resistant' games on the service, Octopath Traveler doesn't need much reflex time.
 
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Streaming won't be for most of us here on a gaming enthusiast forum (at least not for a while). The idea is to bring the service to people who might just want to dip their toes into gaming with a cheap low barrier to entry.
Even this is a very limited business model, though. If streaming is to capture something like the Wii's "blue ocean" of non-gamers, they're either going to lose interest after a couple months and cancel their monthly subscriptions (as happened with the Wii's audience) or they're going to become actual gamers and buy dedicated hardware. I really don't see streaming ever capturing anything more than a tiny and peripheral segment of the market - it'll be a not particularly profitable waystation for people who for whatever reason are interested in gaming but not willing to spend $300 on a mid-cycle console.
There's also a ton of 'lag resistant' games on the service, Octopath Traveler doesn't need much reflex time.
This is definitely true. Certain genres can be adapted to streaming services more easily than others.
 

Menzies

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Even this is a very limited business model, though. If streaming is to capture something like the Wii's "blue ocean" of non-gamers, they're either going to lose interest after a couple months and cancel their monthly subscriptions (as happened with the Wii's audience) or they're going to become actual gamers and buy dedicated hardware. I really don't see streaming ever capturing anything more than a tiny and peripheral segment of the market - it'll be a not particularly profitable waystation for people who for whatever reason are interested in gaming but not willing to spend $300 on a mid-cycle console.

This is definitely true. Certain genres can be adapted to streaming services more easily than others.
Oh yes, streaming has been tried and tested several times now without much fanfare. The challenge is all in front of them that's for sure, but not all the eggs are in that basket as console and PC adoption of Game Pass still thrives.

The bolded is quite a massive win if that scenario plays out. Reaching an audience for a couple of months for $15, then they race out and double their commitment with actual hardware. That's better than any advertisement to convert sales.
 
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The bolded is quite a massive win if that scenario plays out. Reaching an audience for a couple of months for $15, then they race out and double their commitment with actual hardware. That's better than any advertisement to convert sales.
Definitely, that's the best case scenario for streaming in my view: that it'll basically be an elaborate advertisement for a company's underlying console business. I think there are some complications that might prevent that from happening as much as Microsoft would like, though. It's logical to expect that people will get Gamepass on their smart TV and decide to upgrade to an Xbox, but I think it's likely that streaming will serve as an advertisement for console gaming generally rather than for the Xbox in particular. The sort of hyper-casual gamers (or blue ocean non-gamers) Microsoft could entice with a streaming service might actually be just as likely to defect to Nintendo or Sony. I'm thinking of the boyfriend who gets a streaming subscription for his girlfriend to try to get her into games, she gets sort of into it but really what she wants to be playing now is Animal Crossing. Or the lapsed gamer who gets a streaming subscription to check out the state of the hobby but who winds up buying a PlayStation because that's where his friends are.

Microsoft's efforts could just wind up redounding to the benefit of its rivals, in other words.
 
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Alright

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No, I agree completely. Amazon should have got into VR in the way Facebook have. VR is going to be the biggest gaming revolution of the next few years, and Amazon could have been at the forefront of that.

Having said that, putting their efforts all into streaming and cloud gaming is also a very sensible idea.

....but Facebook and Oculus are the only people working on *streaming* VR as far as I know. Hate to say it, but FB might be in the pound seats one day very soon...
I think streaming and cloud services would suit VR more than a traditional console. Being totally wireless and having the power of a server on your head would slim the design down a lot. We're a long way off of that though.

Facebook should have distanced itself from Oculus on day one. All the marketing, logos and ads should be free from association with Facebook. People don't need reminding of Zuckerberg when putting a headset on.
 

reinking

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Console hardware is just a means to get you into the ecosystem. Soon (within the next 5-10 years), that won't be necessary anymore, and console hardware will become redundant. Cloud streaming is the winner.
So we are seeing Microsoft's last console?
 

Dabaus

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Here’s one thing I don’t get. We keep hearing how MS has opened the war chest for Xbox and how it’s basically only a matter of time before Phil buys this publisher and that publisher right? So my question is why make the series X 500 dollars and not just make it be 299? Like if money isn’t a concern and Phil has limitless amounts of money to buy square enix, and sega then why bother with the series S and charging for online? That’s what I don’t get.
 

Dabaus

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I don't think it's possible.... Amazon have 84 billion cash on hand and 33 billion longterm debt (The accountants won't allow the reserves go below the debt marker out of prudence)
MSFT have 110 billion cash (Had 130 before Nuance) and have 55 billion debt (Again, accountants will demand at least 55 billion stays in the bank)

Gaming is neither of these companies main businesses and we are facing unsure times... China is on the rise and tech is changing faster than ever. They will need the cash for other things to keep their dominance over Chinese competitors IMO.

Xbox had their finance options for Series X and S and it really hasn't impacted how many units they've sold at all. It's more down to who can produce more and which is in the cultural zeitgeist.

PlayStation should have remained headquartered in Japan, it will be more beneficial in the future than being in the US.
Always appreciate your posts man. I never knew that about debt. How much debt does Sony have ?
 
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Menzies

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Here’s one thing I don’t get. We keep hearing how MS has opened the war chest for Xbox and how it’s basically only a matter of time before Phil buys this publisher and that publisher right? So my question is why make the series X 500 dollars and not just make it be 299? Like if money isn’t a concern and Phil has limitless amounts of money to buy square enix, and sega then why bother with the series S and charging for online? That’s what I don’t get.
Well thank the semi-conductor shortage for demand out-stripping supply. A cheaper sell price would do absolutely nothing at this point in time.

I would argue that Microsoft is less interested in selling more plastic boxes than Sony, and more focused on building up their service. Most of their moves haven't been about instant gratification, but long-term plays for the future.
 

bender

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Yes. This has been Phil Spencer's plan from the beginning. Killing consoles game isn't enough for him though, he wants to get console gamers to love and respect him blindly and once they do, that's when he pulls the rug out from everyone and starts devouring our hearts. Why, Uncle Phil? WHY!??!?!?!

 
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Dabaus

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Well thank the semi-conductor shortage for demand out-stripping supply. A cheaper sell price would do absolutely nothing at this point in time.

I would argue that Microsoft is less interested in selling more plastic boxes than Sony, and more focused on building up their service. Most of their moves haven't been about instant gratification, but long-term plays for the future.
I’m of the opinion that gamespass is unsustainable. If Netflix with its 10 of millions of viewers is barely profitable I have no idea how a gaming Netflix service that spends money with reckless abandon can in anyway be sustainable. Also keep in mind Netflix was the only service like it’s kind for awhile. It’s only recently that Amazon and Disney got serious, which means less market share for Netflix and more money spent to secure content. What happens if/when Sony makes a game pass service and it’s actually somewhat good? Also Games take longer and more expensive to make than a tv show or movie.

My fear and concern is that MS will continue its shopping spree of studios and publishers of beloved franchises then in 4-5 years MS reviews their strategy and wonders why 10s of billions of dollars was spent with little to nothing to show for and start to wind down their games studios.
 
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Menzies

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I’m of the opinion that gamespass is unsustainable. If Netflix with its 10 of millions of viewers is barely profitable I have no idea how a gaming Netflix service that spends money with reckless abandon can in anyway be sustainable. Also keep in mind Netflix was the only service like it’s kind for awhile. It’s only recently that Amazon and Disney got serious, which means less market share for Netflix and more money spent to secure content. What happens if/when Sony makes a game pass service and it’s actually somewhat good? Also Games take longer and more expensive to make than a tv show or movie.

My fear and concern is that MS will continue its shopping spree of studios and publishers of beloved franchises then in 4-5 years MS reviews their strategy and wonders why 10s of billions of dollars was spent with little to nothing to show for and start to wind down their games studios.
Well, success is never assured. Microsoft is making the best educated decision that they can at this point in time, which is all you can do.

Similarly, nothing is buffering Sony's strategy from another PS3-like generation of financials, which eats up all the previous generations profits. There is a lot of risk and reward in this industry.

There are some differences against the Netflix model, which help buoy the strategy; Minecraft sales on mobile and other platforms, PC sales on Steam, digital sales, DLC and others are assisting the platform costs, no doubt.
 

Blond

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Yes, but you could look at Apple as prime (no pun intended) example of why this can't work.

You have millions of people right now with phones, tablets, streaming boxes and more recently M1 ARM chips that are vastly superior to the switch and in the M1s case playing up-to-date AAA games at decent settings. Apple could easily money-hat a ton of ports to iOS/MacOS and sell a dock/controller combo for iPhones and tablets to get people playing on the TV or portable but it doesn't work because honestly they just don't have the edge to actually create original attractive software or even get companies with existing software to come over. All that money and power in the world can't bring the people together to create or move content over that's worth saying "Yes, I'm going to stop going to the established sources and go for your more experimental start-up service that might just end up being a total waste of my time and money."
 
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Heisenberg007

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My fear and concern is that MS will continue its shopping spree of studios and publishers of beloved franchises then in 4-5 years MS reviews their strategy and wonders why 10s of billions of dollars was spent with little to nothing to show for and start to wind down their games studios.
That's what my guess is.

Satya is currently supporting the Gamepass strategy as of now because his income increases if GP subscription increases. Even if he sticks with that, what's the possibility that the next CEO or CFO will also stick with a strategy that does not give them any profit?

Here is the thing: Bethesda acquisition was the biggest bombshell announcement before current-gen launched last year. That was supposed to be the defining factor b/w Xbox X|S and PS5. While these are very early days and anything can happen down the road, early signs are not looking as positive for Xbox as MS would have hoped for.

PS5 is still outselling XSX|S pretty much in every single part of the world. Xbox's efforts to spend so much money on Japan isn't working either. Gamepass subscribers have increased, but the goal is still so far away. Most importantly, Xbox big games are still at least 2-3 years away. By that time, PS5 will have Horizon FW, God of War Ragnarok, Spider-Man 2, and more. PlayStation movies and TV shows will also roll in to create unprecedented level of brand awareness and market share.

Then PS5 will also have PSVR2 (which I believe will be a game changer).

The next Elder Scrolls may be a huge win for Xbox when it releases, but it's still 5+ years away. This generation will be ending by then. Won't MS look back and see what they achieved after betting on this new strategy? And what PlayStation achieved without incurring so much cost or betting on a risky strategy that raked them billion of $ in loss.

I'm sure there will be a reassessment.
 
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Ill make 4000 accounts and claim all of them. Also this is stupid. Thats what ps now is for. They are better off buying Dish, and use their spectrum to sell 5G routers + xcloud subs.
 
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Bernd Lauert

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Here’s one thing I don’t get. We keep hearing how MS has opened the war chest for Xbox and how it’s basically only a matter of time before Phil buys this publisher and that publisher right? So my question is why make the series X 500 dollars and not just make it be 299? Like if money isn’t a concern and Phil has limitless amounts of money to buy square enix, and sega then why bother with the series S and charging for online? That’s what I don’t get.
Because it's not necessary to burn that money. The XSX is selling out everywhere. They could make the XSS a bit cheaper but it's also not really necessary since it too is selling almost at supply capacity.
 
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