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Was trying to do some whatifs but for Sony's relevant Q
CY 2021 Q4 (thousand JPY)
revenue - hw: 201,534
revenue - SW: 461,877
revenue - network: 102,501
Sony could be flat or up in JPY numbers quite easily with a decent increase (50%) in hw revenue and a double digital decline in SW. Haven't done the back of the envelope maths to figure out roughly what % of Sony's revenue is consoles vs accessories.
Yeah, I am not sure about being up (maybe in full game sales) otherwise Nintendo and PC would have had to decline a decent amount. Obviously just basing this off the limited NPD, UK and EU numbers that we have.
Heisenberg007
Gold Journalism
That's not the case though. PS has been performing extremely well in the same US and UK market and the effects are not being offset from other regions.
So it's not the economic conditions that affected Xbox hardware sales. And it's not console supply shortage either. It's just that people don't want to buy Xbox as much anymore. That's why Xbox X|S just performed -44% worse in the US than Xbox One did in 2014, 2015, or 2016.
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Heisenberg007
Gold Journalism
Benniewise de Clown
Banned
I think Phil is doing his job the way he's supposed to.
Always believed he was put in charge to oversee the transition from MS being one of the console-giants, to becoming a major 3rd party publisher.
Just a heads up, that source is from December 2020.
Can't remember Mat's tweets for December 2022.
Edmund
Member
But I read from Resetera that MS will go scorched earth and take revenge on Sony by buying up everything else!! (Capcom, Sega, Square Enix, EA, Ubisoft and Ten Cent!!!!!)
Heisenberg007
Gold Journalism
Oops, added the wrong link, fixed! Thank you!Just a heads up, that source is from December 2020.
Can't remember Mat's tweets for December 2022.
geary
Member
Playstation sold better than the year before in the quarter where they release GoW, while MS didnt release anything notable to drive sales. I dont know why is so hard to understand why PS had a great quarter and MS did not.
MS fucked up by not releasing anything and it's showing. If Starfield would have been released in Nov'22 we might not have this discussion now.
Let's cry next quarter when Bandai Namco will have a software decrease YoY.... i wonder why would be that.
MS fucked up by not releasing anything and it's showing. If Starfield would have been released in Nov'22 we might not have this discussion now.
Let's cry next quarter when Bandai Namco will have a software decrease YoY.... i wonder why would be that.
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Mibu no ookami
Member
Let's ignore the Campaign because it doesn't fit in with your argument.
You realize that the showcase is to stop the bleeding right? It means Microsoft said, I don't care show what you have, and teams have probably had to work the last few weeks on prepping material. There is no coincidence with the timing of this, the financial report, and the layoffs.
DenchDeckard
Moderated wildly
Cant wait to see Sony and nintendos reports vs last year and see people's energy then. Even a mid to high single digit down turn must be terrible news for them with the big releases.
I guess people are expecting gains of low to mid double digits at least for Sony. They didn't have any big games for Xmas 2021 so God of war, Horizon and gt7 should be showing decent growth for their q4 numbers, right?
Couple that with the fact Sony said they sorted their supply chain out for peak, consoles were everywhere so I'm expecting big things from them and it looks like a lot of users here are.
I guess people are expecting gains of low to mid double digits at least for Sony. They didn't have any big games for Xmas 2021 so God of war, Horizon and gt7 should be showing decent growth for their q4 numbers, right?
Couple that with the fact Sony said they sorted their supply chain out for peak, consoles were everywhere so I'm expecting big things from them and it looks like a lot of users here are.
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DenchDeckard
Moderated wildly
*vs covid q4 2021 right?
PeteBull
Member
looks like customers decided its still bad value, while switch at its outdated af hardware and higher price sold so well over the years, it had quality exclusives tho, thats the major diference
demigod
Member
Where did he say its becoming irrelevant?
Benniewise de Clown
Banned
Ronin_7
Banned
Eh nobody really knows how it went but stock in January has been massive.
So I'd say SONY has mostly solve the situation in the key countries because over here it's still terrible.
Heisenberg007
Gold Journalism
COVID wasn't as strong late 2021. Also, hardware sales aren't affected by COVID anyway. After all, COVID didn't inflate HW sales in 2021 (Xbox didn't beat PS5) and HW only grew by 4% last year, and PS5 just had its record year in December 2022.
That's multiple evidence points that COVID didn't have any effect on these HW numbers.
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Poltz
Member
Looking at the evidence we have seen to date:
God of War Ragnarok was 5m sales 1st week.
COD MW2 was biggest COD launch ever, hitting $1b revenue very quickly. https://www.businesswire.com/news/h...rough-in-10-Days-Fastest-in-Franchise-History
FIFA 23 was the biggest FIFA launch ever. https://ir.ea.com/press-releases/pr...23-Delivers-Massive-Opening-Week/default.aspx
So yes I expect PS to be up. Hardware will not be in decline that is for sure.
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[Sigma]
Member
Numbers go up and down. No such thing as infinite growth. That said how healthy is your business matters. With Xbox, that's pretty grey because they obfuscate so much shit when it comes to the gaming stuff. It seems like they're only ones that does it to this degree.
The only things I find interesting here is the lower volume of consoles sold over that 3 month stretch. That really shouldn't have been the case. I mean they practically tried to give away the little speaker box. It had like 100 different promotions and was $200 yet still was always in stock. It was in stock all of last year too.
The only things I find interesting here is the lower volume of consoles sold over that 3 month stretch. That really shouldn't have been the case. I mean they practically tried to give away the little speaker box. It had like 100 different promotions and was $200 yet still was always in stock. It was in stock all of last year too.
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Poltz
Member
It seems asking people to leave the PlayStation 4 library they built up behind is difficult.
Heisenberg007
Gold Journalism
But that doesn't matter. Because if it mattered, gaming revenue would have been up, despite a decline in HW revenue.
The ground realities haven't changed much: revenue, software sales, and subscribers are all tied up to console sales. When console sales go up, everything goes up. When console sales go down, almost everything else goes down too.
Mibu no ookami
Member
There has been very limited reason Microsoft has given anyone who bought a PS4 to buy an XSX/S instead of a PS5.
One, you lose your library of games that in most cases will work even better on PS5 and second they've been so poor out of the gate, while Sony has been relatively strong and has probably convinced some to move from X1 to PS5. Bethesda never really had a strong place on PS4, I doubt many were attached to Bethesda (obviously a non-zero number), but not a needle mover.
Meanwhile, the cross-media Sony has with TLOU is building that brand into a juggernaut and we've yet to really see Sony's biggest studios coming out with their original PS5 exclusive material.
Ultimately it's not a formula that works in Microsoft's favor and without continued growth of gamepass at a requisite rate, they can't afford to keep dumping money into it to retain customers but not attract new ones.
My guess is that 2024 gamepass will shift to more 1st party content and less 3rd party to improve margins, but at a cost to overall subs.
The first QTR that GamePass loses subscribers to the point where they can't hide it behind quarterly MAUs... it's over.
Mibu no ookami
Member
The fact is that their subscription service is eating into their software sales like pretty much anyone could have predicted and exactly why Sony and others refused to emulate.
All of the shit that PS+ tiered model gets, Sony sat down and said the service can't come at a cost to our primary business model and it can only be additive, and it is. PS+ makes more money than GamePass AND costs less to maintain it AND it doesn't negatively impact their 1st party sales or their 3rd party royalties.
We're going to reach a point in this generation where Sony doesn't even bother with many exclusivity deals because it just won't matter.
Bragr
Banned
Why would game revenue have been up? it only means that it would have been even worse without XBOX PC.
Why are subscribers tired up in console sales?
Heisenberg007
Gold Journalism
Not necessarily. Because there are 2 other companies (Nintendo and PS) who don't release everything on PC and do not treat PC the same way as Xbox does. They continue to post higher and higher revenues. So we have those examples.
Because Xbox console users make up the majority of Gamepass subs.
https://www.engadget.com/microsoft-game-pass-comments-phil-spencer-214044898.html
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Nice try but the PS5 & Switch is selling just fine without COVID lockdowns.
suspicious mind
Member
A lot if wishful thinking going on about xbox going away. All very emotional but not very rational. Be careful what you wish for hardcore fanboys.
Riky
$MSFT
They've been saying it since the original Xbox, 2 decades later.....
Astray
Gold Member
These results kinda confirm a lot of what the eye test told me a while back. It's anecdotal on my end, but I've been seeing a lot of Xboxes (both X and S) available on store shelves with no takers, even when they got on sale (heavily discounted in S's case).
You look at the numbers it's honestly abysmal for MS to be in this shape when entering a new console generation, in fact, you look at how they are approaching the ABK deal with regulators, and you can tell from their offers of making COD available on PS for a decade that they have essentially given up on this gen and are already planning for the next.
I think if ABK deal doesn't land, then Spencer is gonna out of a job.
I don't think that making GP more 1st party is gonna necessarily improve its margins, mainly because the capital spent on developing said 1st party titles is now exclusively MS's, there's no one that will "share the risk" of putting those titles on GP like there is with 3rd party. Paying say, Square, 10 million to put Triangle Strategy or whatever on GP day 1 is infinitely cheaper than making a similar game all by yourself, especially when most of the games on GP are of the indie and AA variety. Licensing is just always a far less risky and far less expensive endeavor than making things from scratch.
It's the same reason why Netflix had to take on a ton of debt (and raise prices multiple times) to finance all their productions that they needed to make in order to replace the content they lost when former partners decided to make their own streaming platforms.
You look at the numbers it's honestly abysmal for MS to be in this shape when entering a new console generation, in fact, you look at how they are approaching the ABK deal with regulators, and you can tell from their offers of making COD available on PS for a decade that they have essentially given up on this gen and are already planning for the next.
I think if ABK deal doesn't land, then Spencer is gonna out of a job.
Lots of food for thought in your overall post that I might revisit for further discussions, but I wanted to comment on this part of it for now.
I don't think that making GP more 1st party is gonna necessarily improve its margins, mainly because the capital spent on developing said 1st party titles is now exclusively MS's, there's no one that will "share the risk" of putting those titles on GP like there is with 3rd party. Paying say, Square, 10 million to put Triangle Strategy or whatever on GP day 1 is infinitely cheaper than making a similar game all by yourself, especially when most of the games on GP are of the indie and AA variety. Licensing is just always a far less risky and far less expensive endeavor than making things from scratch.
It's the same reason why Netflix had to take on a ton of debt (and raise prices multiple times) to finance all their productions that they needed to make in order to replace the content they lost when former partners decided to make their own streaming platforms.
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John Wick
Member
How dare you? The Series S was a masterstroke by Xbox division according to certain people on this very site. It was a no brainer at $200????
This is what happens when you target two different consoles. Now we need numbers on the split between S&X
Dick Jones
Gold Member
Don Mattrick who left the company 10 years ago:
Poor Don has been out of gaming (last one was Zynga) since 2015. The poor lad still taking unfair hits.
Mibu no ookami
Member
Spencer is definitely out of a job if ABK falls through. There is no way he survives that, but he is also nightmarishly overpaying for ABK, so it's going to blow up in his face one way or another. They're paying pure pandemic prices for ABK. To compare it to T2, T2's stock price pre-pandemic was hovering around 110, it went as high as 210... Imagine paying 210*1.3 (273 per stock) or 45 billion dollars for a company valued today at 18.67 billion dollars, even with premium you're looking at 24.27 billion dollars... nearly half the price.
This M&A has AOL Time Warner written all over it and all it will take is a stumble where CoD loses popularity in the next 20 years.... Who could envision that?
But back to your response, your mistake is in thinking Triangle Strategy only costs 10 million. As a 60 dollar game, 10 million only covers 166K copies sold. Square is going to want more than that. And that price will keep going higher and higher. You eventually reach a point where publishers just don't want their games on GamePass day 1. And this doesn't include lost revenue from royalties.
Netflix was already taking on debt with 3rd party licensing. It was 100 million dollars for friends, and then they paid 500 million for 5 years of Seinfeld... Stranger Things Season 4 cost 270 million comparatively.
Mibu no ookami
Member
It'll be a long time before we ever get those numbers if we ever do.
Microsoft likes to work in a shroud to give (im)plausible deniability to their decisions and results.
I think there are two ways of looking at it.
Camp 1 - Series S has hamstrung the Xbox Series X and the development of its games and components. Only to end up sitting on shelves gathering dust.
Camp 2 - The Series X alone might have really struggled to keep up numbers with the Ps5 even with reallocating the resources for components to shore up XSX supply. And that the games aren't tremendously hampered because PC still is part of the equation.
KungFucius
King Snowflake
Is it really increasing in supply? The XSXs are still not super easy to get so the supply is selling. Is this all a reduction in XSS sales? It is baffling without more info. Perhaps it was just that they got more out the door in the previous quarter and then supply slowed or something.
geary
Member
Never saw such a dying wish of someone to fail as I see on this forum the wish of Phil Spencer to fail and be fired. It's like he's taking the lunch money of so many of you...
DeltaPolarBear
Member
If the ecosystem difference reach criticality, you get 'free exclusives". As an example Japanese console games often don't come out on Xbox in Japan because it isn't worth their time. And this means Sony gets exclusives that end up happen by default.
Wii U sales was so bad that it barely has third party games. On the other hand, Switch is so important that third party studios can't ignore it, and jump at the chance to port their games to it despite the power difference. Having a large ecosystem is always important.
Of course Xbox tried to say it doesn't matter. But reality doesn't care what they say.
Mibu no ookami
Member
I don't have any ill will for the guy. I'm calling balls and strikes.
Activision was worth about 60 dollars a share before the pandemic and Microsoft is paying 95 dollars per share. This ignores the turmoil the company faced/faces with the lawsuits and a generally poor output of games. Modern Warfare 2 was a juggernaut, but there's really nothing else, they've dedicated everything to CoD.
Activision is probably at best worth 71-75 dollars a share WITH premium. Definitely not 95. Then you take into account the gamble this is based largely on the popularity of one franchise... and you realize how risky that is.
Then you have the risk of it getting blocked and with Activision being the largest 3rd party publisher in gaming, it has a decent chance at getting blocked. If regulators don't block this, they basically can't block anything. If Sony wants to buy T2, they can easily buy T2 without regulators being able to say anything. And Sony buying T2 would hurt Microsoft more than MS buying Activision hurts Sony.
Sony paid pandemic money for Bungie, but it's a much smaller overall value in the first place. Not the end of the world if that blows up in your face. Would still probably cost Jim Ryan his job though.
That brings me to my point. If the deal falls through, Spencer is done. CEOs don't survive failed mergers that includes mergers that go through and aren't successful or mergers that don't go through. It's Spencer's job to get the deal through. It's his number one job right now. Please look up CEOs of failed mergers and let me know how many of them you have found that are still in their job (2 years after the failure).
Spencer rolled the dice here, he's clearly gambling and it's a 70 billion dollar gamble. He could have bought CDPR and Crytek and probably made out much better.
suspicious mind
Member
Its because of fear. Spencer is making or tryîng to make big moves and change the game up a bit and they cant have that. Change always brings fear with it and some people prefer an eternal status quo for obvious reasons.
Bragr
Banned
I don't understand your point. How could Xbox game revenue "not necessarily" be worse without PC? if you removed Xbox on PC, they clearly would suffer more.
And even if consoles tie up most subs, which frankly your quote doesn't say, it still means there is a substantial amount of PC-only players who use Xbox. Just because consoles dominate doesn't mean PC subscribers are not important.
Mibu no ookami
Member
I think the games will still come out multiplatform, I just think that Sony won't be worried about siphoning of sales if the gaming community decides that PS5 is the place to play.
You win/lose hearts and minds and that's it. Sony already has Asia, South America, and Europe locked down. They just need North America. And I suspect they'll flood the market with PS5s in North America to ensure they sell as many units to potential consumers as possible as quickly as possible.
A year and a half is just too long to go without a killer app and Starfield isn't for everyone. You're probably looking at 2+ years without any significant exclusive games. That's devastating to demand.
Right now everyone is talking about TLOU and how to play it. People are excited for Hogwarts legacy and it appears to me that the PS5 is more readily available and with more enticing bundles than XSX.
DragonNCM
Member
Only 30fps with RT on 4K
Mibu no ookami
Member
I feel like that's kind of projecting.
Starfield has also been mocked a bit, but it's less high profile than Halo. People were very hyped for Halo before they weren't. We know so little about Starfield. I'm not sure I've seen a game tread so much on so little.
DenchDeckard
Moderated wildly
I think they all are, are PS5 and Switch up VS Q4 2021?
I mean I would expect them to be with the releases, so it should send a firm message to Xbox to sort their release schedule out.
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ExcitableBoy
Member
They desperately need some exclusive games out and fast.
Starfield really can’t come soon enough.
Starfield really can’t come soon enough.
Mibu no ookami
Member
For the record, Starfield has 4.1 million views on its gameplay trailer on youtube. This is down from 17 million on its teaser trailer.
Heisenberg007
Gold Journalism
I was referring to the opportunity cost of bringing games day 1 to PC.
For instance, if Xbox remained a walled garden (like Nintendo) and didn't bring everything on PC day one, perhaps they'd sell more consoles (because there'd be more incentive to buy an Xbox for exclusives). Those additional console users could have increase Gamepass sub % and revenue. Third-party software sales on Xbox would have also increased.
So there is a possibility that Xbox without PC may be performing better than what it's doing currently.
Heisenberg007
Gold Journalism
Yep. It really is unfair. Blaming the guy who left the company 10 years and 2 generations ago, instead of blaming the guys who have been in charge for the last 10 years.
Poor Don has been out of gaming (last one was Zynga) since 2015. The poor lad still taking unfair hits.