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Is there any scenario where Microsofts strategy doesn't work?

Men_in_Boxes

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It feels like Microsoft assessed the market in 2018 and landed on three key realizations.

1. The market is going to grow significantly over the next 10-20 years.

2. Prestige development studios are overrated.

3. Locking games onto single platforms no longer makes any sense.

Most people probably agree with 1. Point 2 may be a bit more controversial until you zoom in and see titles like Valheim (4 person studio) blow up and out earn massive studio games. In fact, many of the industries biggest hits are from small to mid tier studios. Point 3 seems to ring true once you look at how EA, Ubisoft, and Activision outgrew studios and Nintendo and PlayStation.

Is there any scenario where Microsoft isn't one of, if not the biggest publisher in the PC+console industry in 5 or so years?
 

Excess

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I moved on to PC this generation, but I generally believe their Game Pass business model will prove to be a viable alternative, including xCloud.

They still have major PR issues, though. That recent stunt with quietly increasing first-time Live subscriptions recently comes to mind, but looking back, much of what they push usually has good intentions. It's the execution that fails miserably. As an example, the vast majority of games are now purchased digitally with DRM, and consoles are generally always online. Back in 2013, this was unfathomable. Gaming on nuclear submarines was important. :^)
 
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A.Romero

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They out earn both Sony and Nintendo in 5 years. I can't envision a scenario where they don't dramatically improve their position in the market in relatively short order.
Out earn as in making more money?

Maybe. But they still won't be number 1 in consoles sold nor have the best games.

I don't see a scenario where Microsoft becomes the best option for gaming in the next 5 years.
 

Men_in_Boxes

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Everything Microsoft touches turns to shit. They can't manage creatives. They're just a dysfunctional monopolist with more money to throw around than they know what to do with.

If "everything Microsoft touches turns to shit", they wouldn't be the 4th largest company on earth.

I'll agree with you that Sony and Nintendo seem to understand gaming more than Microsoft, but when you see all these left field hits you start to realize that maybe that's not all that important.

Heck, I'm always surprised to see how well XBox has been doing over the last 10 years relative to their (lackluster) output.
 
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Lets see.... so far...

Beat to the punch in the mobile space by Apple.
Beat to the punch by Steam/Epic on Windows PC.
Beat on the console space by Sony/Nintendo (despite gamers welcoming them after Sony's PS3 fuck up)
Even Tencent is more successful in terms of gaming market footprint.

Seems to me like merely a local player in the anglo markets trying to stay relevant while throwing billions around hoping something sticks. Kinda like Google and Amazon. I mean one day right? In that, the OP is right I guess.
 
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Men_in_Boxes

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I don't see a scenario where Microsoft becomes the best option for gaming in the next 5 years.

The scenario is relatively easy to see.

Microsoft has 24 studios that are going to release games over the next 5 years. Take the top 12 best, or most successful, games from those studios and compare them to Sony's or Nintendos.

I think there's a real chance that Microsoft's wide net strategy works.
 
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Zefah

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Completely comes down to how they manage the studios they acquired. It's not a done deal by any stretch, especially with a company as fickle and not beholden to games as Microsoft.
 
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The scenario is relatively easy to see.

Microsoft has 24 studios that are going to release games over the next 5 years. Take the top 12 best, or most successful, games from those studios and compare them to Sony's or Nintendos.

I think there's a real chance that Microsoft's wide net strategy works.
Take a look at the sales trajectory of studios owned by Microsoft.
 

Men_in_Boxes

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Only people who cant see the long term play are emotionaly invested in their plastic game boxes, MS will be the major player in 5-10 years unless Sony gets their shit together they will go the way of blockbuster

Honestly, this.

I can only see two ways that Microsoft doesn't become the dominant player.

1. Games become the new platform much sooner than people expect. If a non Microsoft company produces the next Fortnite, then maybe 24 studio output means relatively little.

2. There's some major merger/aquisition that reshapes the landscape. Microsoft is the 800lb gorilla in the room. I think only a 900lb gorilla competes.

Both scenarios are possible, but not really predictable.
 

SaturnSaturn

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Honestly, this.

I can only see two ways that Microsoft doesn't become the dominant player.

1. Games become the new platform much sooner than people expect. If a non Microsoft company produces the next Fortnite, then maybe 24 studio output means relatively little.

2. There's some major merger/aquisition that reshapes the landscape. Microsoft is the 800lb gorilla in the room. I think only a 900lb gorilla competes.

Both scenarios are possible, but not really predictable.

I just cant go back to buying games anymore for 60+ dollars, thats what ms has done to me with gamepass, as xcloud and gamepass gets combined and rolled out to almost every device in the future, pluss their game studios producing content it will be a sure winner, i just cant see how its not in 5-10 years. even though i have no interest in streaming the casual market will. The only obstacle left is Amazon after google kamikazed itself
 

TaiLopezFan

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They out earn both Sony and Nintendo in 5 years. I can't envision a scenario where they don't dramatically improve their position in the market in relatively short order.
Microsoft does not Xbox. Xbox’s latest quarterly revenue was at record high but it was still only 5.0 Billion compared to Playstation at 8.4 Billion.
 

Men_in_Boxes

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I just cant go back to buying games anymore for 60+ dollars, thats what ms has done to me with gamepass, as xcloud and gamepass gets combined and rolled out to almost every device in the future, pluss their game studios producing content it will be a sure winner, i just cant see how its not in 5-10 years. even though i have no interest in streaming the casual market will. The only obstacle left is Amazon after google kamikazed itself

I have a different take.

"GamePass is the best deal in gaming".

I've heard this ad nauseum over the last couple of years by games media.

And yet, it's wrong.

Fortnite is free. I burned through the entire GamePass library in 2-3 weeks after getting my Series X. I sampled the 10 or so games that appealed to me. I really enjoyed a few of those. Now GamePass is stale for me.

I played Fortnite 20 or so hours over the last two weeks. That game is a better deal than GamePass.

I'm not trying to proszletize Fortnite here. I'm saying it's possible individual games are the new Netflix, not GamePass.

I'm not certain one way or the other. I just think it's possible the industry shifts towards the "game as platform" instead of "subscription as platform."
 

Men_in_Boxes

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"Big things are coming soon!" is a line we've been hearing from MS for about 10 years now. They have yet to deliver. I'll believe it when I see it.

The thing is, no one actually believed it.

They said it because they had to. That's how you sell mediocre products. Microsoft was always hamstrung by having a small stable of first party developers and a small install base.

Now, Microsoft has the fleet of developers (and install base) where "Just you wait" means something.
 
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SaturnSaturn

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I have a different take.

"GamePass is the best deal in gaming".

I've heard this ad nauseum over the last couple of years by games media.

And yet, it's wrong.

Fortnite is free. I burned through the entire GamePass library in 2-3 weeks after getting my Series X. I sampled the 10 or so games that appealed to me. I really enjoyed a few of those. Now GamePass is stale for me.

I played Fortnite 20 or so hours over the last two weeks. That game is a better deal than GamePass.

I'm not trying to proszletize Fortnite here. I'm saying it's possible individual games are the new Netflix, not GamePass.

I'm not certain one way or the other. I just think it's possible the industry shifts towards the "game as platform" instead of "subscription as platform."

If thats the way it goes Tencent and its umbrellas would be the biggest player in 5-10 years imo
 
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Kerotan

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Microsoft doesn't need you to buy an XBox. They're perfectly happy with you on a PC.
And PlayStation! Although they'd be happier if Sony allowed gamepass but they're still benefiting from the likes of Minecraft on playstation.
 

Kerotan

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The thing is, no one actually believed it.

They said it because they had to. That's how you sell mediocre products. Microsoft was always hamstrung by having a small stable of first party developers and a small install base.

Now, Microsoft has the fleet of developers (and install base) where "Just you wait" means something.
It's not that they're small in number it's that they weren't making games on the level of Sony and Nintendo. Don't forget Sony reduced their studio numbers too.

With the exception of Forza they had a trash gen.
 

Men_in_Boxes

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It's not that they're small in number it's that they weren't making games on the level of Sony and Nintendo. Don't forget Sony reduced their studio numbers too.

With the exception of Forza they had a trash gen.

I'd argue it was both.

Microsoft entered into the PS4/XBO generation with 7 first party development studios.

You could definitely make a case that those 7 weren't as talented as Sony's, but the small number ensured Microsoft could only produce one or two notable exclusives a year, while Sony was able to pump out 3-4 a year.
 
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Now, Microsoft has the fleet of developers (and install base) where "Just you wait" means something.
It only means anything when they actually deliver on their promises. Which they haven't. For a full decade.

I'm not saying this because I want them to fail or anything. There's always the potential for great change. I'm just saying history tells us to be wary when MS makes big promises.
 

Krisprolls

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Microsoft's strategy is literally not working as we speak

This. According to their track record in gaming over the years, it has a much bigger chance to fail actually... As the OP hinted at himself, they bet on people suddenly not buying the games they want anymore, the ones from the most acclaimed studios, which mostly aren't on gamepass. That's a bold strategy.

As I already said multiple times, it's unlikely to happen because this hobby is not really money constrained, it's time constrained. Tons of great games are basically free or very cheap, what you lack is time (unless you're very young maybe), subscription models make much less sense than Netflix here. In gaming, you don't want to play ANY game, you want to play THAT great new game. I'm ok with trying a new series or movie, not so much with trying a game I don't want instead of the game of the year.

It's relatively cheap to buy and play the best games every year, so why on earth would you choose to ignore them and play something you don't want to play as much, even if you spend a bit less money ? Doesn't make much sense, outside of casuals or if you're somewhat broke.

I already stopped my PC gamepass subscription because at $10 per month with the selection of games available (many of them are 60 or 70 meta rated filler, or good indie games but indie games I can already buy for $2 on Steam) , it was already better and cheaper to just buy the great games I really wanted on EGS or Steam... You get a lot of great games on PC for $120 per year, and you get to choose them and play them when you want.

I don't say it won't work, but it's not at all the slam dunk their fans here think it is.
 
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Captain Toad

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Only people who cant see the long term play are emotionaly invested in their plastic game boxes, MS will be the major player in 5-10 years unless Sony gets their shit together they will go the way of blockbuster

Sony has more success in the home console business than anyone else - by a long shot. Their shit couldn't possibly be more together.
 
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Ozzy Onya A2Z

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Microsoft's strategy is literally not working as we speak
 
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Gods&Monsters

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I just cant go back to buying games anymore for 60+ dollars, thats what ms has done to me with gamepass, as xcloud and gamepass gets combined and rolled out to almost every device in the future, pluss their game studios producing content it will be a sure winner, i just cant see how its not in 5-10 years. even though i have no interest in streaming the casual market will. The only obstacle left is Amazon after google kamikazed itself
What games on Gamepass are 60$? All the MS games were in bargain bins during the holidays for 20$ or less. Most indies are 15$ or less regular price. More recent games like Doom Eternal you can easily find for 20$ or less. I struggle to find any game that you would need pay 60$ to get now?

I see this narrative every time but all the games on Gamepass you can easily find for cheap on sale and own forever.

Every week there are sales at 75% off.
 

Men_in_Boxes

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If locking games to a single platform no longer makes sense explain the success of Switch and PlayStation? For their strategy to work they need to continue to lock a lot of games to game pass only.

It doesn't make sense in this regard...

Nintendo pursued the blue ocean strategy after seeing the GameCube perform.

Shawn Layden said Sony was shifting to "first, best, or must" with it's games a year or two ago.

Ubisoft, EA, Activision all have monstrous size development studios because their games sell on PC, PlayStation, XBox, and sometimes Nintendo.

They can afford these massive studios because they're selling to 300 million potential customers.

There's an innate advantage by selling to 300 million potential customers vs 20, 50, or 80 million customers (PS5 future install base).
 
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cdthree

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Standalone games that cost 500 million and take 5-10 years is probably in the past. If Microsoft only takes the path they aren't going to as successful as they would like. I would expect Halo to be a big open world with 2-3 massive standalone DLC's that cost 20 to 30 bucks and then gets turned into an online game with residual loot sales and is around for at least 10 years. Kind of what should have happened to Skyrim instead of creating Elder scrolls online. Mobile Gacha style games is a massive market they don't have a presence in. That allows companies that do like Tencent, Apple and others to dictate what the gaming market evolves into.


To maximize their total profits Microsoft is going to have to have their gamepass everywhere, own multiple publishers that sells games on every platform and hard medium (DVD's, play store, Apple). That means making peace with Sony and Nintendo and putting catered stuff on those platforms. Sony, Nintendo, and Microsoft should form a gaming network for the cloud stuff. Figure out Gacha gaming through gamepass. Gacha style is perfect for gamepass even if you don't use the whale method. It's training your customers to use your service over Netflix and a gateway to AAA properties you are trying to sale. Plus the residual sales for those that don't want to buy gamepass on Apple's, Google's, Steam, and Amazon's platform.
 
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Dec 2, 2018
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Ubisoft, EA, Activision all have monstrous size development studios because their games sell on PC, PlayStation, XBox, and sometimes Nintendo.

They can afford these massive studios because they're selling to 300 million potential customers.

There's an innate advantage by selling to 300 million potential customers vs 20, 50, or 80 million customers (PS5 future install base).
Note that Sony's games division is about as profitable as Activision and EA combined, depending on the year. The same goes for Nintendo. Why do you think that is? Because they print money off every game sold on their platform, off every subscription to their online services, and off every console sold (immediately in Nintendo's case, within a few years of launch in Sony's case). And this money comes in reliably, year after year, with no need to roll the dice on the latest flash in the pan mobile fads. Why would you give that up?
 

Nyxir

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What games on Gamepass are 60$? All the MS games were in bargain bins during the holidays for 20$ or less. Most indies are 15$ or less regular price. More recent games like Doom Eternal you can easily find for 20$ or less. I struggle to find any game that you would need pay 60$ to get now?

I see this narrative every time but all the games on Gamepass you can easily find for cheap on sale and own forever.

Every week there are sales at 75% off.
But thats the point I think. You can play the games the day of the release and buy them late and cheap if you want to.
Also because of game pass I was introduced to generes and games I thought I would never like. The entry barrier has vanished. Which is a great thing for both the makers and the consumers.
 
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Ozzy Onya A2Z

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ITT members don't realise how open Microsoft/Azure is and how it has transformed MS in the last decade. Xbox and Gamepass are just the latest iteration of embracing an agnostic approach company wide. It's already paying dividends and the acquisitions just accelerate and compliment their strategy inside of console business and beyond it into mobile and PC or anywhere else they choose.

How someone looks at the big 3 console brands and doesn't see 3 major players now all performing exceptionally well is beyond me. How someone looks at what Xbox/MS are doing for their 2-5 year roadmap and doesn't see them breaking out of the traditional console closed system race while developing within it simultaneously is beyond me. They're not exiting console warring, they're increasing studios, market segments and simply applying their Azure success to Xbox now. Open platform, not a monopolistic approach. They have a strategy to take on the likes of Steam, Amazon, Apple, Stadia. Nintendo and Sony aren't their direct competition in the wide aspect of MS+Xbox. The largest companies in the world are pushing aspects of the gaming industry outside of consoles. Xbox is in a unique quality position across console, devices and PC.

Series X/S, xCould, Gamepass, Elite/Adaptive controllers, Bethesda, crossplay, backend services (e.g. Sony cloud infrastructure) and more. You're now seeing the fruits of the years under Phil coming to light. There's more to come. Microsoft are masters of long term market capitalisation, always have been able to grind to a #1 or #2 spot eventually. There's no doubt within the console space Sony and Ninty are bringing the exclusive games. Everything outside of that Xbox is killing it and poised to bury it over the next 2-6 years; specifically this current generation just getting started.
 
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Danjin44

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If I had stocks with them or working on stock market then I would have cared about this but to it doesn't matter to me if their "strategy" is working or not, what does matter is if they can get me the games I want, if not then I continue not buy their system.
 
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Nyxir

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Note that Sony's games division is about as profitable as Activision and EA combined, depending on the year. The same goes for Nintendo. Why do you think that is? Because they print money off every game sold on their platform, off every subscription to their online services, and off every console sold (immediately in Nintendo's case, within a few years of launch in Sony's case). And this money comes in reliably, year after year, with no need to roll the dice on the latest flash in the pan mobile fads. Why would you give that up?
Because with game pass. Average spending per xbox user is doubling that of the PlayStation or Nintendo.
Sony know what the are doing. And Microsoft too.
 
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