Thick Thighs Save Lives
Gold Member
Microsoft's hardware strategy for the Xbox Series X and Xbox Series S was promising coming out of the gate back in 2020. But now it's 2023. An unexpected global pandemic, an unprecedented chip shortage, and an upheaval of tech supply chains have impacted both console firms. In terms of hardware sales, PlayStation has come out swinging, though. Microsoft has ... well, not. Microsoft announced just yesterday that Xbox hardware had seen another quarterly decline, although it reflects figures from before its announcement of boosted supplies last June.
I noted in the intro that Sony has a 2:1 advantage over the Xbox Series X|S, but it's actually a little worse than that.
I was quite bullish on the Xbox Series S strategy in the early days. On paper, it makes a lot of sense to have a more affordable SKU that can potentially target students, younger gamers, the gift market, and stuff like that. The Xbox Series S makes up a significant chunk of the Xbox Series X|S player base, although we don't know exactly by how much.
I thought it was a good strategy, but unfortunately, it seems to have come at the expense of the more powerful, direct-PS5 competitor Xbox Series X, which increasingly doesn't seem to have the install base developers and, perhaps Microsoft, need it to have. So, for third-party developers, not only is developing for the Xbox Series X|S lineup more expensive (having to test and maintain two separate versions), it also comes with poorer margins, since you're obviously going to sell far less on Xbox Series X|S. The "S" version will also showcase games at their worst, which is not something developers would want to do ideally, making it easier for PlayStation to land marketing deals.
Much ado was made about the power gap between the PS5 and the Xbox Series X at launch. On paper, the Xbox Series X is "more powerful" than the PS5, but we've yet to really see that manifest into actual results. Outside of Gears 5 and Forza, Microsoft hasn't really produced games that are truly visually impressive generally, with the spectacular license we've seen out of games like Horizon Forbidden West and Final Fantasy 16. Additionally, analysts like Digital Foundry repeatedly cite the Xbox Series X versions of games as having slightly worse performance than their PS5 counterparts.
Developers have begun more openly complaining about the Xbox Series S' power as well. Larian Studios' noted that Microsoft's policies of Xbox Series X|S launch parity are preventing it from shipping Baldur's Gate 3 day and date on Xbox, since the Xbox Series S' lack of power is incompatible with the game's couch co-op features. Microsoft itself scrapped the split-screen co-op for Halo Infinite, probably for the same reason. Despite this, Microsoft has sent out engineers to Larian to see if it's something that's possible to achieve. Other developers have also complained about the console over the past few years, and as we head deeper into the generation, and games become more complex, it's going to become an ever-increasingly fraught issue.
We've already seen games struggle to hit 4K60 on the Xbox Series X and PS5, including Microsoft's own Starfield, and Plague Tale Requiem last year. Meanwhile, Microsoft is struggling to get current-gen games running on its cheap and cheerful Xbox Series S. That's a major problem that will only get worse as the generation follows the market leader, Sony, into higher fidelity gaming.
I wrote recently about how Microsoft's horizontal expansion efforts were distracting them from the Xbox console experience, and I can't help but feel like Xbox Cloud Gaming has to shoulder a large portion of that blame.
Again, I was quite bullish on Xbox Cloud Gaming in previous years. With everyone switching from DVDs to Netflix, it makes total and complete sense that gaming would go down the same route, right? Well, maybe not. The laws of physics are a tricky thing. When you combine the expenses of actually running global server farms to power the cloud, the cost of content acquisition, and the requirement to have near-perfect network circumstances to get even the most vaguely tolerable experience, increasingly I think Xbox Cloud Gaming was a red herring.
Much like the Xbox Series S, it seems that Xbox Cloud Gaming has been at the expense of the Xbox Series X. Microsoft hasn't really made any secret of the fact that Xbox Cloud Gaming is powered by Xbox Series X chips. One of Microsoft's biggest issues since launch has been stock levels, which have been dismal since before the pandemic even. After the pandemic, things still aren't great overall, despite the fact Sony has, once again, plowed ahead and seen triple-digit year-over-year sell-through.
It's not quite as dire as some would expect and predict, of course. 21 million consoles all grabbing FIFA, Fortnite, and Call of Duty microtransactions generates quite absurd levels of revenue, still. And on paper, the console strategy is sound. Xbox Series S would have been a great additive. Xbox Cloud Gaming as well, would have been a great additive. The problem is that it feels like both have detracted from Xbox, rather than helped it.
The engineering effort required for Xbox Cloud Gaming has seen the pace of updates to the Xbox dashboard slow to a crawl, with the console becoming all but featureless despite Microsoft's software legacy. We used to have a clip editor baked into the system. We used to have picture-in-picture video viewing. We used to have TV pass-through and onboard voice commands. We used to have cool Avatar games. We used to have innovation. Now, the best Microsoft can offer is slightly resized Xbox tiles after literal years of begging for it. Forget streaming to YouTube, sharing to socials, or new Xbox achievements features — enjoy your new tiles.
However, on the off chance Microsoft can somehow truly crack cloud gaming, break the Google-Apple business model-blocking duopoly, and circumvent the latency issues preventing it from being truly fun — they'll be better placed than most to take advantage. In the near term, the Xbox Series X local hardware install base is really the main problem.
who's lying here??
