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

cireza

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I think most people don't really understand why Xbox, kind of suddenly, started making a lot of money with gaming.
 

Bernd Lauert

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So what exactly are you going to play without a controller and a console? Its just the beginning of the year and i think your comment already has the chance for the stupidest in 2021.

Unless you think every household comes with a PC, a beefy one at that and with perfect, uncapped, very fast internet. If thats so then you probably never left even your own town to think such a thing is even possible in the near future. Go ask Stadia how they are doing nowadays with that play anywhere on anything attitude.
Seems like you're stuck in the past. This is a long term strategy, we're talking 10 years. Stadia failed because it's not a good offer, not because nobody has good internet lmao. 5G and Starlink are on the rise. By 2025, something like 80% of households will have "good enough" internet for game streaming.
 
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michaelius

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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.

They are fueled by their near monopolistic positions in operating systems and office plus their professional apps + azure are well liked and widely used.
On the other hands Microsoft entries into consumer market where they are the underdog that has to take market share from established competitors have been pretty much all smaller or bigger failures.
 
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martino

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I'm not sure you've understood what Microsoft's strategy is, and some of your assertions are factually incorrect. Small indie success aren't out earning the big studio games, for example. Sure, Valheim sold a million copies in a week - nice. Call of Duty pushes a billion USD and change in revenue in less than 60 days from launch on a bad year. Valheim pulled in less than USD$20 million in half that time, and they have no reoccurring revenue model. It's not even in the same galaxy.

Microsoft aren't interested in being a publisher - that's just a means to an end. They want to be a platform that other publishers use, because that's where the money actually lives. Hardware, first party titles - that's nothing, that's just about building a user base for their platform, on to which they can then sell other peoples work and take a cut. Sony makes billions a year not because of hardware or first party sales, but by taking their cut of third party sales on their PS platforms. They have a 120 million install base on PS4 alone; that's a lot of ancillary purchases that Sony gets to make money from.

Microsoft's strategy for Xbox is to push a reoccurring revenue stream - Gamepass - alongside the traditional platform model, using the service and first party titles to hook you in. Their approach should target the hardcore and casuals alike. It's a good value proposition - I have my Xbox Series X and Gamepass - but the scenario under which Microsoft's current strategy fails to work is pretty simple: they don't build a big enough platform base, and it all comes crumbling down. The damage the Xbox One did was enormous, and Mattrick's decimation of their first parties is a decade-long problem. They're basically rebuilding from scratch. Their Zenimax acquisition was a good step one. Now, it all hinges on Microsoft delivering strong first party titles consistently. Not a big hit once every three years, but three hits every year. That level of quality software brings in the gamers, that boosts Gamepass subscriptions, and that builds their platform to make money from. They fail to deliver on the first party titles, and no one shows up to the party.

So, do you think Microsoft are going to turn it around? Do you think they're ready to start delivering the industry-defining titles that made the OG Xbox and 360 the consoles we remember?
this. It's all about adding new revenue stream (a more profitable one if possible)
I will begin to consider ms strategy a fail in 3-4 years only if their output and reception of it doesn't change by good margin.
 

pasterpl

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I think it’s easier to ask if there’s any scenario where their strategy would actually work.

I’d rather quit gaming than have to buy an Xbox to play games.
This ladies and gentleman is an excellent example of the fanboy /s
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.
flight simulator, forza horizon, sea of thieves, ori says hi
 
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Negotiator101

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Fuck all that money they made, we won’t pretend that happened.

They have to be hurting now.
What we have here is a very narrow minded vision of gaming, for the last 20 years Sony have been dominant within the console space. The PS5 will continue that tradition, nothing will change that short term. The thing is people don't like change but that's exactly what is happening, Microsoft know this and have been laying the foundations for years now. Sony and Nintendo have largely remained flat footed in evolving their gaming division's but hopefully they will.

The age old release a console and support it for 5 to 7 years is not sustainable long term. Microsoft are in a far better position to take advantage of an all digital future.
 

Kagey K

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What we have here is a very narrow minded vision of gaming, for the last 20 years Sony have been dominant within the console space. The PS5 will continue that tradition, nothing will change that short term. The thing is people don't like change but that's exactly what is happening, Microsoft know this and have been laying the foundations for years now. Sony and Nintendo have largely remained flat footed in evolving their gaming division's but hopefully they will.

The age old release a console and support it for 5 to 7 years is not sustainable long term. Microsoft are in a far better position to take advantage of an all digital future.
This is exactly what I have been trying to allude to.

The old way of making money can still work now, but you are going to see a lot less of it.

Gaming is shifting and those that can’t see it are going to be left behind.


But it’s fine, because sos and spin 2021.
 
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martino

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Got any proof as to how it adversely affected them so far?

Or are you imagining things?
never said it adversely affected so far because i don't think they are in for full digital. they want to be well positioned there or even dominant if possible but not at the expanse of other streams of revenue.
 
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It will pay next gen, when games are there. This gen is dead for them. It takes between 10 and 5 years to create a supreme AAA, sometimes even more.
 
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H-I-M

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Really?

You can't expect big studio aquisitions to roll games out in a year or two when game development is now a 3 - 5 year process.

Yes and this is exactly why this thread is pointless.
Microsoft so far only have promises and hopes.
So far their strategy hasn't worked, but it's up to them to prove everyone wrong in the future.
 
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H-I-M

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

But they just proved us recently with Halo Infinite that they have absolutely no idea what their fanbase expects from them.
It's their biggest project, they're been working on it for years and still completely missed the mark.

You can have all the studios in the world, all the funding and still not deliver a good product...
 
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Men_in_Boxes

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I mean, something like 80% of this forum thought the Switch will barely manage to sell 20 million consoles. Neogaf has no clue what the average gamer actually wants.

NeoGAF whiffed on a bunch of things. The Vita and the Wii come to mind.

Plus, the market pretty clearly doesn't care about graphics anymore but the PS5 vs Series X graphics threads are longer than War and Peace.

NeoGAF:

 

zedinen

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PS3 comeback will haunt MS and N forever. They received a $600 gift and ended like this.

Since Sep 2009
PS3 Slim 63.6 million
Xbox 360 52.5 million
Wii 49.01 million
Wii U 13.56 million

And here we are.

2020 Gaming Revenue
1.Sony $23.88 bn

-PS $22.90 bn
-Mobile Gaming $0.98 bn (Apr - Dec)
2.Nintendo $15.90 bn
3.Microsoft $13.82 bn


PS5 will reach 10 million within 3 months. Once PS gains momentum ...
 
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SaucyJack

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Microsoft bought Rare and allowed them to make Sea of Thieves. One of the best games on PC or console right now.

That’s hardly a endorsement of MS success in managing their studios.

At time of purchase in 2002 Rare were an extremely productive gaming hit factory, which continued through the early years of the 360.

Sea of Thieves is their first moderate hit since Nuts n' Bolts in 2008 and even then it took a lot of time post-launch for it to be a decent game.

Rare is the perfect example of how Microsoft have been terrible at managing their studios.
 

Demon2blades

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The age old release a console and support it for 5 to 7 years is not sustainable long term. Microsoft are in a far better position to take advantage of an all digital future.

It's worked like that since forever and will continue to do so for longer than you think because people love new console releases that shiny new hardware it's a trend that's gone up and up and now somehow that means nothing because the company in third place has other ideas ? ...

Fair play to ms's cloud gaming stuff as an add on to console/pc gaming it's quite sweet but it will never fully eradicate consoles there will always be some mass adopted new fangled hardware wether it's a console or some neuro shit like ready player one (not massively far away into the future either !)
 
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kyussman

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I think Xbox has done fine since Microsoft entered the console business....and I think they will continue to do fine...of course Microsoft like to stomp all before them when they do buiness in an area and that hasn't happened,Nintendo and PlayStation are too big for that at this stage.If GamePass is their master plan to finally jump to the top of the gaming leaderboards then I think they will fail....but Xbox will continue to be one of the big three and make billions of dollars for Microsoft.
 
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Negotiator101

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It's worked like that since forever and will continue to do so for longer than you think because people love new console releases that shiny new hardware it's a trend that's gone up and up and now somehow that means nothing because the company in third place has other ideas ? ...

Fair play to ms's cloud gaming stuff as an add on to console/pc gaming it's quite sweet but it will never fully eradicate consoles there will always be some mass adopted new fangled hardware wether it's a console or some neuro shit like ready player one (not massively far away into the future either !)
It's the way everything is going, the highstreet is dying, online sales are increasing and this was the case even before covid.

Digital game sales are increasing, online subscription services are growing. Bluray sales are decreasing as the shift to downloads continues. Broadband speeds are getting better and will continue to do so, and that's where cloud gaming starts to become the preferred way to game. People don't want multiple consoles and a PC hanging around under TV's. Imagine in 10 years from now, you switch your TV on and pick a game from a subscription service. It plays instantly with no discernable difference to gaming with hardware today. That's what Microsoft are capable of doing, and other companies who are preparing for this transition.
 

Demon2blades

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It's the way everything is going, the highstreet is dying, online sales are increasing and this was the case even before covid.

Digital game sales are increasing, online subscription services are growing. Bluray sales are decreasing as the shift to downloads continues. Broadband speeds are getting better and will continue to do so, and that's where cloud gaming starts to become the preferred way to game. People don't want multiple consoles and a PC hanging around under TV's. Imagine in 10 years from now, you switch your TV on and pick a game from a subscription service. It plays instantly with no discernable difference to gaming with hardware today. That's what Microsoft are capable of doing, and other companies who are preparing for this transition.

Don't mean brick and mortar store sales or digital store fronts though Im on about this notion that consoles won't exist like people keep saying , it won't be like that consoles will continue to thrive and won't be knocked completely out by gaming through TV software like xcloud etc the console hardware trend keeps goes up and up ...
 

Starbuck2907

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Microsoft want to become the Netflix of gaming, which would bring in huge, huge profits from subscriptions.

Their strategy is already working fairly well. They, like Apple, know that the real $ is no longer in devices but in services.

They don’t care what device you play on so long as they get some $ from the subscription. They are now offering a single sub for pc and Xbox. So, you can consider their “market” all pc and Xbox gamers - not just one or the other. Xbox hardware sales will just become “extra” revenue eventually which will seem tiny in comparison to the recurring services revenue. Unless gamepass gets a serious competitor, I can see Xbox hardware sales eventually increasing too.
 
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Seems like you're stuck in the past. This is a long term strategy, we're talking 10 years. Stadia failed because it's not a good offer, not because nobody has good internet lmao. 5G and Starlink are on the rise. By 2025, something like 80% of households will have "good enough" internet for game streaming.

Says who? Maybe in the US. Not so much for rest of the world. And yes one big factor for stadia was data caps especially in the US. You cant game shit on that. Thats great if you are looking as an investor 10 years ahead but by then there will be 2 more deciding generations.

A lot of things change in 10 years and not always for the better. Plus im sure by then Apple will jump in the game and disrupt that plan. Or any other big company if they see constant value in gaming because everyone wants piece of the pie.
 

Bernd Lauert

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Says who? Maybe in the US. Not so much for rest of the world. And yes one big factor for stadia was data caps especially in the US. You cant game shit on that. Thats great if you are looking as an investor 10 years ahead but by then there will be 2 more deciding generations.
A lot of the world is generally ahead of the US in terms of broadband availability. For example you can get unlimited fast broadband for like 30 bucks a month or less pretty much everywhere in Europe. Asia is the same in urban regions.
A lot of things change in 10 years and not always for the better. Plus im sure by then Apple will jump in the game and disrupt that plan. Or any other big company if they see constant value in gaming because everyone wants piece of the pie.
Other companies are not in the gaming business so it will be very hard for them to enter it. Google tried with Stadia and failed. Amazon tried with their games and essentially failed too. There's no reason Microsoft should be afraid of Apple.
 

ToTTenTranz

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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?


I'm not sure what the question is.

What exactly is Microsoft's endgame, in your opinion?

To make money out their gaming division? They're already making some, though I'm not sure they've already recouped all the investment. Probably not since the Bethesda acquisition.

To surpass Sony and Nintendo in gaming revenue? That is in good part outside of Microsoft's sphere of influence because it depends on how Sony and Nintendo's plans and their execution.

To surpass Sony in number of consoles sold? Most probably not in this generation.

To become "one of the biggest publishers in the PC-console industry"? It already was, even before acquiring Bethesda.


So what do you mean with Microsoft's "strategy" working? Working at what exactly?
 
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llien

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3. Locking games onto single platforms no longer makes any sense.
If Sony exclusives (e.g. GoW) were available on all platforms, picking XSeX over PS5 would be a no brainer for me.

So "doesn't make any sense" in what sense, may I ask?
 
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Bernd Lauert

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I'm not sure what the question is.

What exactly is Microsoft's endgame, in your opinion?

To make money out their gaming division? They're already making some, though I'm not sure they've already recouped all the investment. Probably not since the Bethesda acquisition.

To surpass Sony and Nintendo in gaming revenue? That is in good part outside of Microsoft's sphere of influence because it depends on how Sony and Nintendo's plans and their execution.

To surpass Sony in number of consoles sold? Most probably not in this generation.

To become "one of the biggest publishers in the PC-console industry"? It already was, even before acquiring Bethesda.


So what do you mean with Microsoft's "strategy" working? Working at what exactly?
Microsoft's strategy is to get as many people as possible into their ecosystem. Maybe you remember their insane goal of reaching 1 billion players on their platform. I bet they're still chasing that internally. The goal is impossible to reach with the "classic" console approach. The only way is what they're doing with Gamepass.
 

vaibhavpisal

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Series consoles are not getting trampled by ps5 like it happened with PS4/one generation, sales wise.

They are doing pretty good actually.
 
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H-I-M

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Series consoles are not getting trampled by ps5 like it happened with PS4/one generation, sales wise.

They are doing pretty good actually.


We know that the PS5 is outperforming the PS4 and we also know that the Series is selling slightly less than the One.
So technically the Series consoles are getting more trampled than the One was but there's also covid. It's too soon to tell.
 

martino

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It's worked like that since forever and will continue to do so for longer than you think because people love new console releases that shiny new hardware it's a trend that's gone up and up and now somehow that means nothing because the company in third place has other ideas ? ...

Fair play to ms's cloud gaming stuff as an add on to console/pc gaming it's quite sweet but it will never fully eradicate consoles there will always be some mass adopted new fangled hardware wether it's a console or some neuro shit like ready player one (not massively far away into the future either !)
I'm not so sure espcially if at some point we decide to save remaining living creature on the planet (us included)
the approach where hardware( or could be other things like car) sleep more than it is active should really think long term imo.
 
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Demon2blades

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I'm not so sure espcially if at some point we decide to save remaining living creature on the planet (us included)
the approach where hardware( or could be other things like car) sleep more than it is active should really think long term imo.

??? We are not going to be living in huts with no tech that's for sure , things get more efficient as does manufacturing process's
Seems a funny point your making when if that digital streaming no console hardware world would come to pass we'll still be using mass produced TV/gamepads and using power like we do now ... What are we saving planet wise at that point ?.
 
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I must ask if our definition of “shit” is different because I’d like everything I touch to turn to shit if it’s going to be another billion dollar industry.
By the way their biggest failure is mobile (after iPhone came out)... and that’s because they quit and found more money releasing software for iPhone and Android, please feel free to elaborate
Read up on how Microsoft mismanaged its mobile operating system, including by buying Nokia, at the time the most successful phone company in the world, and running it into the ground in the space of two years. The parallels to their mismanagement of their games division are striking.
 

driqe

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There's enough games to play where you never have to touch an xbox and you still have access to over 99% of them.
There's enough games to play where you never have to touch a playstation and you still have access to over 99% of them.
 
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KungFucius

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I think they almost leave the market (as hardware manufacturer) last gen. And this gen could be the last one as we know it. Also, I see gamepass as their transition to only software company. So yes, if this generation they don't surpass Sony or at least they really grow, I believe Microsoft will leave the console hardware market.
You are clearly missing the point. You have to look at the whole platform, Xbox and PC to judge their success not just look at Xbox vs PS sales. If MS is raking in a good profit per console and gaining users on PC as well then they are successful and will continue following that successful model. Why would any company who is making good money stop making that money because a competitor is more successful? It must be weird being a fanboy and seeing that the world doesn't line up with your delusions.
 

Nikana

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Read up on how Microsoft mismanaged its mobile operating system, including by buying Nokia, at the time the most successful phone company in the world, and running it into the ground in the space of two years. The parallels to their mismanagement of their games division are striking.
Nokia was already on the decline before Microsoft bought em. They would have likely died even faster if Microsoft didnt buy them.
 
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Nokia was already on the decline before Microsoft bought em. They would have likely died even faster if Microsoft didnt buy them.
False: Microsoft deployed Stephen Elop to Nokia specifically to sabotage the company and tank its share price to make it cheaper for them to buy up. This is well documented, and Elop was rewarded for this with an executive position at Microsoft as soon as the deal was finalized: https://communities-dominate.blogs....l-whose-the-baddest-of-them-all-waterloo.html

Nokia's decline at the time of Elop's taking the CEO role was gradual and it was still in a dominant position. The company would still be a major player today if Microsoft hadn't ratfucked them.
 

OmegaSupreme

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If Nintendo and Sony decide to stay in the console business then yes their strategy won't work.
 
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TonyK

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You are clearly missing the point. You have to look at the whole platform, Xbox and PC to judge their success not just look at Xbox vs PS sales. If MS is raking in a good profit per console and gaining users on PC as well then they are successful and will continue following that successful model. Why would any company who is making good money stop making that money because a competitor is more successful? It must be weird being a fanboy and seeing that the world doesn't line up with your delusions.
I'm speaking only about hardware, not software. And I'm not a fanboy. X360 was my main platform in that gen. Past gen I was mainly PC and I had gamepass. Now I have a PS5 and I plan to boy a XBsex. But I think they will be more successful as a only software company. It's only my feeling based in nothing, but for me they are a Sega with money, but not Sony or Nintendo.
 

ManaByte

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I'm speaking only about hardware, not software. And I'm not a fanboy. X360 was my main platform in that gen. Past gen I was mainly PC and I had gamepass. Now I have a PS5 and I plan to boy a XBsex. But I think they will be more successful as a only software company. It's only my feeling based in nothing, but for me they are a Sega with money, but not Sony or Nintendo.

It’s funny how people claim “Xbox has no games”, but then want them to become just a software company to put all those games they don’t have on the PS5.