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[Bgamer90]

It's bad for most of the XB1 base. It signals that MS values the capital they sunk into the games more than the capital they invested in the XB1. It means internally that the XB division probably has lost support and there will not be a XB2 (ot XB10 because MS hates sequential naming). It probably also means MS will stop trying to get exclusives or even try very hard to influence publishers to come to their platform.

I think it means MS experiment in consoles is done and the XBox brand is likely going to get rolled into Windows. Which isn't that bad for PC gamers but Xbox folks are looking at the end of the line.

This doesn't make any sense though. Why would they drop the (console) gaming user base they currently have when they can kill two birds with one stone and merge various platforms?

Why would they go completely fresh instead of starting with the base they already have that prefers console gaming and gives MS money to not even play games that MS make?

 

[Swass]

It's bad for most of the XB1 base. It signals that MS values the capital they sunk into the games more than the capital they invested in the XB1. It means internally that the XB division probably has lost support and there will not be a XB2 (ot XB10 because MS hates sequential naming). It probably also means MS will stop trying to get exclusives or even try very hard to influence publishers to come to their platform.

I think it means MS experiment in consoles is done and the XBox brand is likely going to get rolled into Windows. Which isn't that bad for PC gamers but Xbox folks are looking at the end of the line.

Well said and my feeling as well..

This doesn't make any sense though. Why would they drop the (console) gaming user base they currently have when they can kill two birds with one stone and merge various platforms?

Why would they go completely fresh instead of starting with the base they already have that prefers console gaming and gives MS money to not even play games that MS make?

Why lose millions of dollars in console r and d and advertising just to segment your user base? What may happen is the Xbox 2 will just be a set top pc box with an included controller running windows 10 with a console skin.

 

[Xbudz]

How long until Microsoft adds a 'Desktop Mode' to Xbox One and updates it to become a Steam Box? It's not unrealistic that they could release a software update to change it from console to PC. It's all Windows 10 anyway.

 

[Trup1aya]

How true is it though that software is where the money is at? Let's use Valve as an example.. they don't even put much effort into software any longer because they make far more money on their ecosystem than software ever could. So if Microsoft is shifting away from a flourishing walled garden ecosystem, how much do they really stand to make?

Huh? Valve's ecosystem revolves completely around selling software.

MS certainly isn't shifting away from a walled garden. The only place to buy their games will be the Xbox store or the Windows 10 store... Which will eventually be just one store...

 

[Beerman462]

How true is it though that software is where the money is at? Let's use Valve as an example.. they don't even put much effort into software any longer because they make far more money on their ecosystem than software ever could. So if Microsoft is shifting away from a flourishing walled garden ecosystem, how much do they really stand to make?

What? Valve has never made a lot of games. Microsoft is just expanding their walled garden to Windows 10, which the Xbox One and any follow will be. They will still push for games on their store and they need to have a piece of Hardware for that store. They know it needs to be cheap. I expect the successor to the Xbox One to come sooner and be about $400.

How long until Microsoft adds a 'Desktop Mode' to Xbox One and updates it to become a Steam Box? It's not unrealistic that they could release a software update to change it from console to PC. It's all Windows 10 anyway.

Um never. It will be what it has always been, a Direct X box. If anything they will be actively fighing Steam machines Which are Linux versions of the Xbox.

 

[vcc]

If Microsoft went straight PC they would get destroyed by Steam. Microsoft doesn't abandon hardware often. In fact the only thing I can think of is the Zune, but that became Windows phone which they are still supporting by the way. They can sell a Windows 10 gaming machine called Xbox 10 and plenty of people will still buy it and they can sell it cheaper than anyone else, because of the Windows license. I don't think they will give up the market to Sony, they still do well in the US and as we saw with this generation. Gamer loyalties swap all the time.

The opportunity cost of the XBox brand has been huge. The first one was a giant money pit because they negotiated their licencing poorly. The 360 had a lot of unexpected costs which dragged down the ledger. The XB1 has under performed and they're seeing that being #2 and less powerful does mean a substantial loss of the game sale pie.

A few folks on the MS board already had objections to the use of MS capital for XB. I think the past few years and the enormous costs and narrow margins have made their case for them.

MS is a very savvy business. They shifted into a service oriented firm partly because they can't get the margins they want on boxed software. Business are balking at the 10k exchange cost on top of the labour required so they shifted to the office 365 which addressed both the upfront licence cost and the enormous labour demand.

I think the XB initiative is likely viewed internally as a cool but unprofitable business choice. They might be backing off because it's more reliable money to be a publisher than a platform holder. Both them and Sony ate huge losses last gen and it took way too long to make it back. A Sony exec mentioned the PS2 era gave a 3-4% ROI on the capital and all of it was devoured by the PS3 launch.I think such a low ROI for MS wouldn't be wise allocation of capital.

MS backs off all the time. This doesn't mean the end of 'support' but it means they shift capital away from it. MS phone has not taken off and they don't resource it as a priority. Azure has taken off they are very well resourced.

The shift of first party games to PC/XB1 just seems like they're signaling a similar shift and the end of the XB. That's how ti seems to me.

 

[Bgamer90]

Why lose millions of dollars in console r and d and advertising just to segment your user base? What may happen is the Xbox 2 will just be a set top pc box with an included controller running windows 10 with a console skin.

Yeah, I think it's definitely going to happen. You can market that like a console though (via Xbox branding) and not lose the audience that prefers console gaming.

 

[wapplew]

How many times does it need to be said. PC gamers don't buy 3rd party on a console they bought for exclusives.

I reply to a poster say Sony/MS don't make money with HW but SW.
I agree with that but also point out HW sale still important because on console they make money on all SW sale and on PC, MS only get first party SW sale.
It has nothing to do with PC gamer buy or not buy third party on console.
Just stating the fact that HW sale is important everytime people use HW doesn't make money as a defend for losing console sales.

 

[Swass]

Huh? Valve's ecosystem revolves completely around selling software.

MS certainly isn't shifting away from a walled garden. The only place to buy their games will be the Xbox store or the Windows 10 store... Which will eventually be just one store...

Microsoft would love for the Windows store to do the volume of software sales Steam does.. and they get that on the Xbox. But that isn't happening anytime soon on the Windows store and throwing up Microsoft exclusives on there isn't going to change that. People will just buy Microsoft's games from the windows store then go to Steam for everything else similar to how people use Origin, Uplay, etc.

 

[Beerman462]

The opportunity cost of the XBox brand has been huge. The first one was a giant money pit because they negotiated their licencing poorly. The 360 had a lot of unexpected costs which dragged down the ledger. The XB1 has under performed and they're seeing that being #2 and less powerful does mean a substantial loss of the game sale pie.

A few folks on the MS board already had objections to the use of MS capital for XB. I think the past few years and the enormous costs and narrow margins have made their case for them.

MS is a very savvy business. They shifted into a service oriented firm partly because they can't get the margins they want on boxed software. Business are balking at the 10k exchange cost on top of the labour required so they shifted to the office 365 which addressed both the upfront licence cost and the enormous labour demand.

I think the XB initiative is likely viewed internally as a cool but unprofitable business choice. They might be backing off because it's more reliable money to be a publisher than a platform holder. Both them and Sony ate huge losses last gen and it took way too long to make it back. A Sony exec mentioned the PS2 era gave a 3-4% ROI on the capital and all of it was devoured by the PS3 launch.I think such a low ROI for MS wouldn't be wise allocation of capital.

MS backs off all the time. This doesn't mean the end of 'support' but it means they shift capital away from it. MS phone has not taken off and they don't resource it as a priority. Azure has taken off they are very well resourced.

The shift of first party games to PC/XB1 just seems like they're signaling a similar shift and the end of the XB. That's how ti seems to me.

I agree with everything, but the last bit. I think the Xbox will stick around as a low cost entry into their store. They are at least breaking even on hardware now and even though they lost money in the past they need to get people into the store. If they remove the Xbox then you will have people playing on Sony consoles and buying games on Steam except any exclusives MS gets for their store which will be a tiny market if they can't get current Xbox One owners to shift to the PC. Most people I know that own Xbox One would go to PS4 not PC.

I reply to a poster say Sony/MS don't make money with HW but SW.
I agree with that but also point out HW sale still important because on console they make money on all SW sale and on PC, MS only get first party SW sale.
It has nothing to do with PC gamer buy or not buy third party on console.
Just stating the fact that HW sale is important everytime people use HW doesn't make money as a defend for losing console sales.

Hardware is important to get people into the Xbox ecosystem, but the argument has been about people that only buy Xbox One for exclusives. Those people weren't buying 3rd party anyway, so losing those hardware sales mean very little to MS.

 

[Trup1aya]

Microsoft would love for the Windows store to do the volume of software sales Steam does.. and they get that on the Xbox. But that isn't happening anytime soon on the Windows store and throwing up Microsoft exclusives on there isn't going to change that. People will just buy Microsoft's games from the windows store then go to Steam for everything else similar to how people use Origin, Uplay, etc.

you are absolutely right.

But MS is and will continue to sell plenty of software on Consoles. That fact isn't going to change simply because PC gamers have less incentive to buy XB1 and will instead buy the same games on the Win10 store .

And EA, for example, makes PLENTY of money selling their titles on Origin AND they don't have to split the proceeds with anyone. MS would love to have a similar thing going with their exclusives...

Microsoft doesn't need the windows store to become Steam over night in order to reap the benefits of this plan.

So again, how is this bad for MS?

 

[Nzyme32]

How long until Microsoft adds a 'Desktop Mode' to Xbox One and updates it to become a Steam Box? It's not unrealistic that they could release a software update to change it from console to PC. It's all Windows 10 anyway.

They may do a desktop mode, but they will always restrict to Universal Windows Apps via the Windows Store only, and prevent Steam. They want to increase and guide people to the Windows Store, which is their source of revenue for digital purchases. Steam would obliterate their business via competition and compromise that revenue stream as well as the Xbox brand. MS basically doing what they are now, is having their cake and eating it, keeping the closed platform and open platform connected yet separate

 

[vcc]

Huh? The games ARE where the value is. It's where it has always been. Consoles have only ever been a vehicle to sell games... it's the same whether we're talking MS, Sony or Nintendo.

All the other stuff you think it signals can't be further from the truth.

The licencing has been the money they're chasing. The 10-20% (30-40% in the cartridge era) they take off the top of all games sold on their platform. It's why Sony/Sega/Nintendo/MS were okay making fewer sales in total of their games so they can skim off the rest of the game studios.

The fact they are giving up lower sales of their first party to push more console sales is a significant move and signals a lot. It means as I said they are valuing the capital they're expending to make those games over the capital sunk to create and market the XB1. That is a huge shift and by any business analysis isn't good for the XB1 as a platform.

yes, the Xbox brand IS being rolled into Windows... But specifically, how is this bad for people that choose to play on console? How does having PC players playing the same games negatively affect someone who chooses to play on console?

It means the $300-$500 they spent on a machine could have been spent to upgrade their PC. It endanger future sales because folks will be doing that math. It makes their competition look more attractive. Spend $300 on a machine with game you can find elsewhere or pay $350/$300 for a machine with a large number of games not found elsewhere.

The publishers are also doing the math and if MS won't sacrifice sales to prop up the XB1 then the cost of third party exclusives for the XB1 just went up and just went down for the Wii U/PS4 (although Nintendo doesn't seem to be chasing that).

For folks who did get a XB1 the near and long term made it a bad deal and this does create ill will. The money they spent could have gone to other things and still gotten to play the same games.

Ill will has business consequences, especially in a enthusiast early adopter market. Like how the quick succession of Sega CD -> 32X -> Saturn -> DC did generate enough ill will that many people didn't get the DC. It sold poorly and the economics pushed Sega out of the platform holder business.

MS Game Studios will do great as a third party as they did before. It just looks like the end of the XBox as a console.

 

[vcc]

I agree with everything, but the last bit. I think the Xbox will stick around as a low cost entry into their store. They are at least breaking even on hardware now and even though they lost money in the past they need to get people into the store. If they remove the Xbox then you will have people playing on Sony consoles and buying games on Steam except any exclusives MS gets for their store which will be a tiny market if they can't get current Xbox One owners to shift to the PC. Most people I know that own Xbox One would go to PS4 not PC.
.

I don't think they will stop XB1 production. They're just not going to make a XB2 (or XB10).

 

[Zedox]

I reply to a poster say Sony/MS don't make money with HW but SW.
I agree with that but also point out HW sale still important because on console they make money on all SW sale and on PC, MS only get first party SW sale.
It has nothing to do with PC gamer buy or not buy third party on console.
Just stating the fact that HW sale is important everytime people use HW doesn't make money as a defend for losing console sales.

Yes, having hardware is important to get a user. The implication that is being made is that PC Gamers who have access to 3rd party games that are also on Xbox One, will most likey buy it on the PC rig for the enhance features. Therefore, these "loss of console sales" is negligible because those people who "leave" to PC isn't really a loss because they were getting those games there in the first place.

Store A has Tomb Raider
Store B has Tomb Raider + Halo (owned by Store B)

I only buy Tomb Raider from Store A
I only buy Halo from Store B

10 days later

Store A has Tomb Raider + Halo (owned by Store B)
Store B has Tomb Raider + Halo (owned by Store B)

I buy Tomb Raider + Halo (owned by Store B) at Store A
I stop going to Store B.

Store B still gets the same money.

Now substitute Store A with PC and Store B with Xbox One.

 

[Lucael]

In fact the only thing I can think of is the Zune, but that became Windows phone which they are still supporting by the way.

Well, honestly there are a lot of hints to Microsoft gradually leaving the phone market at the moment, just see the Lumia 650 launch and the Lumia 950/XL release. Honestly Microsoft has more interest in pushing his Windows 10 Mobile OS than the hardware itself. I think the XBox exclusives on PC and their phone strategy goes in the same direction. Their only succesfull hardware line is Surface (don't know how XBox One is considered).

 

[Beerman462]

I don't think they will stop XB1 production. They're just not going to make a XB2 (or XB10).

Well I guess we'll see. I think we will see another Xbox priced around $400 to get people into the ecosystem. It will keep the same controller as Xbox one, but will have Kinect built in at least some camera and or microphone. They will push the games first and Windows functionality second. I'm hoping for an Alienware Alpha type machine.

 

[Juanfp]

MS will allow 3 party game to be sold in their store? And will other publishers put their games in the W10 store?

 

[Trup1aya]

The licencing has been the money they're chasing. The 10-20% (30-40% in the cartridge era) they take off the top of all games sold on their platform. It's why Sony/Sega/Nintendo/MS were okay making fewer sales in total of their games so they can skim off the rest of the game studios.

The fact they are giving up lower sales of their first party to push more console sales is a significant move and signals a lot. It means as I said they are valuing the capital they're expending to make those games over the capital sunk to create and market the XB1. That is a huge shift and by any business analysis isn't good for the XB1 as a platform.



It means the $300-$500 they spent on a machine could have been spent to upgrade their PC. It endanger future sales because folks will be doing that math. It makes their competition look more attractive. Spend $300 on a machine with game you can find elsewhere or pay $350/$300 for a machine with a large number of games not found elsewhere.

The publishers are also doing the math and if MS won't sacrifice sales to prop up the XB1 then the cost of third party exclusives for the XB1 just went up and just went down for the Wii U/PS4 (although Nintendo doesn't seem to be chasing that).

For folks who did get a XB1 the near and long term made it a bad deal and this does create ill will. The money they spent could have gone to other things and still gotten to play the same games.

Ill will has business consequences, especially in a enthusiast early adopter market. Like how the quick succession of Sega CD -> 32X -> Saturn -> DC did generate enough ill will that many people didn't get the DC. It sold poorly and the economics pushed Sega out of the platform holder business.

MS Game Studios will do great as a third party as they did before. It just looks like the end of the XBox as a console.

What are you even talking about? First party sales aren't what push console sales. They haven't been for a long time. Look at what the big sellers. If people were so concerned about playing only games that couldn't be played elsewhere, then it would be COD, Madden, Assassins Creed, Battlefield, Fallout, Battlefront etc topping the charts on every platform.


Also, Why are you so focused on the hardware itself? The Platform is more than the box. It's the games, services, the apps; the whole package.

Xbox 'as a platform' is extending to make the package available outside of the box. That's a means to growth.

If you are trying to suggest that people who prefer consoles are going to become PC gamers because of this news, then you haven't been paying attention for the last few decades. There is and will always be a large number of people who prefer the console. Period.

MS will allow 3 party game to be sold in their store? And will other publishers put their games in the W10 store?

3rd party titles are available in the Win10 store right now...

I don't think they will stop XB1 production. They're just not going to make a XB2 (or XB10).

They'll definately have a successor... It'll run a modified version of Win10 in which all process are dedicated to gaming and apps.

As a result every 3rd party console game sold digitally, will be by default, also available in the Win 10 PC store.

 

[Beerman462]

Well, honestly there are a lot of hints to Microsoft gradually leaving the phone market at the moment, just see the Lumia 650 launch and the Lumia 950/XL release. Honestly Microsoft has more interest in pushing his Windows 10 Mobile OS than the hardware itself. I think the XBox exclusives on PC and their phone strategy goes in the same direction. Their only succesfull hardware line is Surface (don't know how XBox One is considered).

Xbox One is successful, just not as successful as PS4. Just like Surface is successful, just not a s successful as IPad or MacBooks. Honestly people that think Microsoft are getting out of the console hardware business are thinking about the past where we heard board members were upset about losing money on it. It's becoming profitable and MS needs their eco system on as many machines as possible and right now the Xbox is entry level at least for gaming. Unless they plan on getting out of gaming all together I don't see Xbox going anywhere.

 

[vcc]

Well I guess we'll see. I think we will see another Xbox priced around $400 to get people into the ecosystem. It will keep the same controller as Xbox one, but will have Kinect built in at least some camera and or microphone. They will push the games first and Windows functionality second. I'm hoping for an Alienware Alpha type machine.

There is much less incentive to push the PC-ecosystem as Steam/GoG are such intense competition that they can't operate it like they operate XB Live and the revenues will not be the same.

It's not going to be the XB Live market on PC.

It's more like Uplay or Origin. Maybe with more iOS/Android shovel ware ports. It's tough on a open platform and folks are not receptive to a close one as much (the XB was a attempt to close the PC market, but iOS/Android became what MS was looking to make).

In a lot of ways the XB was MS attempt at controlling home computing; but they were out maneuvered by Apple and Google and eventually Sony. So the over arching motivation is gone; thus the XB has to make a business case on it's own and the XB1 failed to do that.

 

[Bgamer90]

It means the $300-$500 they spent on a machine could have been spent to upgrade their PC. It endanger future sales because folks will be doing that math. It makes their competition look more attractive. Spend $300 on a machine with game you can find elsewhere or pay $350/$300 for a machine with a large number of games not found elsewhere.

This makes little sense. The majority of console gamers do not care about PC gaming. They aren't going to "do the math" since they would be wasting their time with a form of gaming that they couldn't care less about. These people are buying game consoles to play games that are on PC already. This has been the case for many years now with shooters and sports making up the top selling titles with indies (games that are also on PC) backing up a console's gaming library.

The majority care about the console gaming space only. If something on one console isn't on the other two, then its pretty much an exclusive to them. This is the reason why we've seen a huge increase in "console exclusives" this gen.

I understand that we here are more "hardcore" than the average game players but I'm surprised by how much I've had to say this here these past few days.

 

[Beerman462]

There is much less incentive to push the PC-ecosystem as Steam/GoG are such intense competition that they can't operate it like they operate XB Live and the revenues will not be the same.

It's not going to be the XB Live market on PC.

It's more like Uplay or Origin. Maybe with more iOS/Android shovel ware ports. It's tough on a open platform and folks are not receptive to a close one as much (the XB was a attempt to close the PC market, but iOS/Android became what MS was looking to make).

In a lot of ways the XB was MS attempt at controlling home computing; but they were out maneuvered by Apple and Google and eventually Sony. So the over arching motivation is gone; thus the XB has to make a business case on it's own and the XB1 failed to do that.

I really don't know what you are proposing. It sounds like you are proposing Microsoft is doing the worst thing possible financially. If they go straight Origin/Uplay as a publisher and get out of the console market they will make even less money. The Xbox One is profitable. Bringing exclusive games to PC is part of strategy of expanding the Xbox brand. Why would they expand to the PC and cut off the biggest portion of the Xbox brand. It makes no sense.

 

[wapplew]

Yes, having hardware is important to get a user. The implication that is being made is that PC Gamers who have access to 3rd party games that are also on Xbox One, will most likey buy it on the PC rig for the enhance features. Therefore, these "loss of console sales" is negligible because those people who "leave" to PC isn't really a loss because they were getting those games there in the first place.

Store A has Tomb Raider
Store B has Tomb Raider + Halo (owned by Store B)

I only buy Tomb Raider from Store A
I only buy Halo from Store B

10 days later

Store A has Tomb Raider + Halo (owned by Store B)
Store B has Tomb Raider + Halo (owned by Store B)

I buy Tomb Raider + Halo (owned by Store B) at Store A
I stop going to Store B.

Store B still gets the same money.

Now substitute Store A with PC and Store B with Xbox One.

Where's PS4 and steam in your equations? Xbox/win10 ecosystem does not exist in a vacuum
Customers may choose to go PC focus, they could go buy an PS4 ,they could go try Windows store and hated it and never use it again.
There are plenty reasons for a customer not to choose an Xbox one now, we saw many of those in this thread alone, and I don't see anyone said now is the time to buy Xbox one.
Every lost pontential Xbox one customer matter, where they end up spending their money is not something MS can control.

 

[vcc]

What are you even talking about? First party sales aren't what push console sales. They haven't been for a long time. Look at what the big sellers. If people were so concerned about playing only games that couldn't be played elsewhere, then it would be COD, Madden, Assassins Creed, Battlefield, Fallout, Battlefront etc topping the charts on every platform.


Also, Why are you so focused on the hardware itself? The Platform is more than the box. It's the games, services, the apps; the whole package.

Xbox 'as a platform' is extending to make the package available outside of the box. That's a means to growth.

Look at it this way, on the XB1 MS takes 10%-20% of the top on titles they license. On the PC Valve is the bulk of the market place takes 30% off the top MS has little to no leverage. Like Uplay or Origin, gamers will buy only what they HAVE to form the proprietary shop and use steam for the rest. MS has already failed to compete here and it's not likely they can up turn Valves market share.

Your comment presupposes they can and will crush Valve; but they already failed to do so.

So it's really only about their direct game sales, they aren't currently in a position to take a cut off other games and the PC is ruled by a few publishers (Valve, Blizzard, Riot, Bethesda) the vast majority of the revenue flows to them and they all have their own stores except Bethesda. Minecraft is MS which is also a major PC title but it's one title.

If you are trying to suggest that people who prefer consoles are going to become PC gamers because of this news, then you haven't been paying attention for the last few decades. There is and will always be a large number of people who prefer the console. Period.

They still have console competition. So for folks who can afford it, it will go some combination of PC/PS4/Wii U.

This business choice severely hampers the positioning of the XB1. Why get a less powerful XB1 when you can upgrade your PC for MS games or get a PS4. The option isn't PC or XB1. For the budget conscious XB1/PS4 and MS has made a move which devalues the XB1 platform.

They'll definately have a successor... It'll run a modified version of Win10 in which all process are dedicated to gaming and apps.

As a result every 3rd party console game sold digitally, will be by default, also available in the Win 10 PC store.

Again, you presuppose they have eliminated Steam/GoG. That isn't the current business reality. They certainly want to aspire to control that but they don't. Apple has the premium market sewn up. Google/Steam has the value market sewn up. There is precious little business space for them.

 

[Sydle]

This business choice severely hampers the positioning of the XB1. Why get a less powerful XB1 when you can upgrade your PC for MS games or get a PS4. The option isn't PC or XB1. For the budget conscious XB1/PS4 and MS has made a move which devalues the XB1 platform.

Sorry, I do not believe all fans of Xbox first-party games will want to invest in more expensive hardware to play what they want to play, even if it means they get access to Steam games.

Last I looked you could get about a $600 PC rig for the minimum specs of QB. That doesn't even include having to invest in a monitor, headset, KB/M, speakers, and a controller. That would easily run closer to $1000 or more. Some people won't go down that route just to get access to the latest Gears, Halo, or some other Windows exclusive. The good thing is they know they can invest in a Xbox console as a cheaper alternative and always upgrade to a PC setup, with their games ready to download and play if they so choose.

 

[Zedox]

I understand that we here are more "hardcore" than the average game players but I'm surprised by how much I've had to say this here these past few days.

I give up. Maybe I'm too old or something. Maybe my brain works differently, even as a developer and tester...maybe i'm just wired where I don't see how their logic works. I would advise you and a couple others to just let them be.

 

[vcc]

This makes little sense. The majority of console gamers do not care about PC gaming. They aren't going to "do the math" since they would be wasting their time with a form of gaming that they couldn't care less about. These people are buying game consoles to play games that are on PC already. This has been the case for many years now with shooters and sports making up the top selling titles with indies (games that are also on PC) backing up a console's gaming library.

The majority care about the console gaming space only. If something on one console isn't on the other two, then its pretty much an exclusive to them. This is the reason why we've seen a huge increase in "console exclusives" this gen.

I understand that we here are more "hardcore" than the average game players but I'm surprised by how much I've had to say this here these past few days.

Consoles always have a place because like you said not everyone is like us. Willing to spend $1300 on a high end PC, $400 on a system, $200 on a hand held, $250 on the 3rd place platform and then $600 on VR.

However I'm saying MS is just further hurting the perceived value proposition which will push console sales to the PS4. The huge fans of a franchise will do the math. Do I spend $300+Game Cost on a XB1 for Forza or do I upgrade my video card to play Forza on the PC. Folks who buy consoles for a single franchise are more likely to spend to get a better experience. Folks who buy a console because they can't get a PC will likely be pushed to value which isn't the XB1. It just hurts the case to buy a XB1 over a PS4.

MS and Sony do realize that they compete less with the PC because that market is dominated by a few players they can't control. Blizzard, Riot, Valve. So they ceded that market because it's way to expensive to compete on pure power when someone is willing to spend $1000 on a video card.

Sony is only interested in buying 'console' exclusives. However their first party games remain PS only. MS shifting their first party to PC/XB1 is a signal of a loss of faith in their console strategy.

 

[Bgamer90]

They still have console competition. So for folks who can afford it, it will go some combination of PC/PS4/Wii U.

This business choice severely hampers the positioning of the XB1. Why get a less powerful XB1 when you can upgrade your PC for MS games or get a PS4. The option isn't PC or XB1. For the budget conscious XB1/PS4 and MS has made a move which devalues the XB1 platform.

Again, console gamers don't care about PC and stats show that many are buying PS4s to play games that are already available on PC.

If having console games on PC was a bad thing for the console gaming market then the Wii U would be the best selling console this gen. But it isn't because it doesn't have games that many console gamers want to play -- games that are (gasp!) on PC too.

This move really changes nothing for console gamers outside of the few people who own a console that also care about PC gaming.

 

[justsomeguy]

How many times does it need to be said. PC gamers don't buy 3rd party on a console they bought for exclusives.

How are you defining "PC Gamer" though?

If you just mean "Someone who buys everything on PC except for console exclusives" then your argument is just a tautology.

If you mean "someone who owns a PC and a console" then you're clearly wrong, plenty of people buy 3rd party games on console as well as buying "pure PC" games.

 

[Wowfunhappy]

If having console games on PC was a bad thing for the console gaming market then the Wii U would be the best selling console this gen. But it isn't because it doesn't have games that many console gamers want to play -- games that are (gasp!) on PC too.

To be fair, even accounting for console-exclusive titles, the Wii U has the most exclusives period. The problem is that it doesn't have anything else. So that's not the best comparison.

I agree with your overall point though.

 

[vcc]

I really don't know what you are proposing. It sounds like you are proposing Microsoft is doing the worst thing possible financially. If they go straight Origin/Uplay as a publisher and get out of the console market they will make even less money. The Xbox One is profitable. Bringing exclusive games to PC is part of strategy of expanding the Xbox brand. Why would they expand to the PC and cut off the biggest portion of the Xbox brand. It makes no sense.

MS is not 'throwing good money after bad'. Sunk costs fallacy is something successful business avoid. So it seems they are valuing the capital sunk for making these games over the capital sunk for the XB1.

The XB1 costs a lot of capital and their return has diminished. They aren't getting the 10-20% off the top of 66% of game sales like the 360 era. They are getting 10%-20% of 20%. A big shift and it may not be enough to justify buying exclusives or the costs pushing the platform. Stuff like positioning at E3, advertising, and all the PR machinery the platform needs is expensive.

'Growing the ecosystem' falls flat in that they do not get a significant percentage of the PC ecosystem. Valve, Blizzard, CD Projekt, and Riot have bigger pieces of the pie there.

 

[Zedox]

Folks who buy a console because they can't get a PC will likely be pushed to value which isn't the XB1. It just hurts the case to buy a XB1 over a PS4.
.

HOW??!?!!? Because you can get a game on another platform it hurts XB1 v. PS4? That logically makes NO SENSE. I don't even care for the xb1 v. ps4 argument at all (I like all systems) but to literally say because a game is on PC and XB1 it hurts the case to get a XB1 over a PS4? I would bring up SFV as Bgamer90 did but we already went down that rabbit-hole.

You gamers...jesus.

 

[wapplew]

Again, console gamers don't care about PC and stats show that many are buying PS4s to play games that are already available on PC.

If having console games on PC was a bad thing for the console gaming market then the Wii U would be the best selling console this gen. But it isn't because it doesn't have games that many console gamers want to play -- games that are (gasp!) on PC too.

This move really changes nothing for console gamers outside of the few people who own a console that also care about PC gaming.

Well maybe some costumer trying to buy a console would think,
One have all third party and first party exclusive, one have first party exclusive but no third party, one have zero exclusive and all thirdparty expect the Japanese one.

I know I know, exclusive doesn't sold console by the numbers, but it is to me and I'm sure I'm not alone.

 

[ChosenPredator]

I used to think that way that it would somehow affect xbox one that their exclusives are appearing on PC and that it would somehow hurt the xbox.

But when i really think about it, I think it's a great idea and will only help sell the console, I mean if i buy an exclusive on cheaper console and have access to that game when I do eventually build a gaming PC, thats fantastic.

I just wonder how things like mods/subscription will work (I haven't read this whole thread so you guys might have gone through that already)

 

[vcc]

Again, console gamers don't care about PC and stats show that many are buying PS4s to play games that are already available on PC.

PC has been a rising portion of third party game sales. So it's not exactly that console gamers don't care about the PC. It's more that there is still a large market which preffers simpler machines.

If having console games on PC was a bad thing for the console gaming market then the Wii U would be the best selling console this gen. But it isn't because it doesn't have games that many console gamers want to play -- games that are (gasp!) on PC too.

Sony still has their first party PS4 only. This is a nearly unprecedented move. My speculation and analysis on this move is that it's a internal lose of support for a MS console.

This move really changes nothing for console gamers outside of the few people who own a console that also care about PC gaming.

For big ticket purchases like a PC/Console/TV, consumer use different mental math than for impulse items like gum or groceries.

Consumers have some weight to the franchise they like.

Power was some part of the calculus.

They'll have a critical price point for this item.

They will attempt at least a superficial fact finding.

They then make their purchase.

This move changes that math which will hurt future XB1 sales to some extent which will make a poorer business case for the XB1 for other actors in the system. MS knows this, has made the move anyways which is why I say it's a signal of a internal loss of confidence.

 

[Bgamer90]

The huge fans of a franchise will do the math. Do I spend $300+Game Cost on a XB1 for Forza or do I upgrade my video card to play Forza on the PC. Folks who buy consoles for a single franchise are more likely to spend to get a better experience.

The amount of people who buy a console for a single exclusive franchise are very few in number.

Folks who buy a console because they can't get a PC will likely be pushed to value which isn't the XB1. It just hurts the case to buy a XB1 over a PS4.

But the "console exclusives" that are on the Xbox One still won't be on the PS4. Therefore, how will this cause less value for people who only care about console gaming?

Sony is only interested in buying 'console' exclusives. However their first party games remain PS only. MS shifting their first party to PC/XB1 is a signal of a loss of faith in their console strategy.

No, it simply means that they realize they have an opportunity to target their games to more people since Microsoft has Windows as a platform and general consumers in 2016 are used to digital distribution and being tied to an ecosystem. What makes this easier is the fact that a huge number of people are already used to Windows -- therefore Microsoft doesn't have to really "start fresh" in any way. This is one benefit that MS has over Sony and Nintendo.

Microsoft is seeing an opportunity to grow based on what they have already and they want to combine it with what they've built within the console gaming space.

Why would they dump console gamers giving them money to play games (most of which aren't even made by MS) and the subscriptions that people pay for to play these games online just to start fresh again?

 

[Beerman462]

How are you defining "PC Gamer" though?

If you just mean "Someone who buys everything on PC except for console exclusives" then your argument is just a tautology.

If you mean "someone who owns a PC and a console" then you're clearly wrong, plenty of people buy 3rd party games on console as well as buying "pure PC" games.

We have clearly been talking about people that would buy an Xbox 1 just for exclusives. Not people that buy them for the console experience.

 

[Trup1aya]

Look at it this way, on the XB1 MS takes 10%-20% of the top on titles they license. On the PC Valve is the bulk of the market place takes 30% off the top MS has little to no leverage. Like Uplay or Origin, gamers will buy only what they HAVE to form the proprietary shop and use steam for the rest. MS has already failed to compete here and it's not likely they can up turn Valves market share.

That's the point. MS, like Uplay and Origin, doesn't need to achieve Valve's level of marketshare to be successful in this space. They just need to be the only place where PC gamers can go to get Quantum Break, Killer Instict, Halo Wars 2, Recore, Gears of War, Fable Legends, Minecraft Win10 etc.

In doing this, they will make more money selling these games than they would if these games were only sold on Xbox.

Not to mention that regardless of how people choose to play these, they'll be doing so on Xbox live.

Also note, that unlike Steam, origins, and Uplay, the Win10 store comes standard with all Win10 devices...

Your comment presupposes they can and will crush Valve; but they already failed to do so.

My comment suggests nothing like that at all... Again they don't have to crush valve, or even come close to Valves marketshare in order for this to be successful. They just need to sell more software than they would have if these games were Xbox only... Which they undoubtedly will.

So it's really only about their direct game sales, they aren't currently in a position to take a cut off other games and the PC is ruled by a few publishers (Valve, Blizzard, Riot, Bethesda) the vast majority of the revenue flows to them and they all have their own stores except Bethesda. Minecraft is MS which is also a major PC title but it's one title.

Yea it will be primarily about direct game sales. And that's a perfectly fine model, that has proven extremely profitable for publishers (EA,Ubisoft) with large attractive lineups. Which MS has.

They still have console competition. So for folks who can afford it, it will go some combination of PC/PS4/Wii U.

This business choice severely hampers the positioning of the XB1. Why get a less powerful XB1 when you can upgrade your PC for MS games or get a PS4. The option isn't PC or XB1. For the budget conscious XB1/PS4 and MS has made a move which devalues the XB1 platform.

Why are you so focused on the Xbox one hardware, and unable to realize that the Xbox platform is expanding to include both console hardware and PC.
firstly, primary PC users aren't buying xb1's in significant numbers anyway. And those that do weren't ever going to buy much Xbox software.
But now that Xbox is coming to PC, MS can get those users into the ecosystem.

For every PC gamer who MIGHT have bought an Xbox and MIGHT have bought a few exclusives, they likely have a much larger number of PC gamers who WILL buy their games from the Win10 store, which is good for the Xbox platform (which spans console and PC) as a whole

Again, you presuppose they have eliminated Steam/GoG. That isn't the current business reality. They certainly want to aspire to control that but they don't. Apple has the premium market sewn up. Google/Steam has the value market sewn up. There is precious little business space for them.

I'm not saying that at all. I'm saying that chances are the next Xbox hardware will sell its titles directly through the Win10 store. This means that 3rd parties who want in on the Xbox console market will have to support the Win10 store. Which will then allow MS royalties from 3rd parting PC games ON TOP of the money they make from first party sales. Will they top Valve and GoG? Probably not, but they don't need to...

I'm merely pointing out the fact that MS will be offering compelling software to people who otherwise wouldn't have been entering the Xbox ecosystem. That provides obvious business opportunity for MS in terms of first party sales in the near term, and an opportunity to bolster exposure of their Win10 store for the long term.

 

[Barack Lesnar]

These games are still not going to be on PS4 and the Xbox exclusives are still better than PS4's to the mainstream gamer (i.e., not into niche japanese games) and console gamers aren't going to care if they go on PC b/c they don't even acknowledge PC's existence. Why do you think 3rd party games sell so many millions still on consoles and PC is at 10-20%? Xbox is dead this gen so this is a brilliant move by MS to milk whatever $$$ they can get out of these next few years. Game sales are Live subs are what make them money. Releasing on win10 store only is the icing on the cake...i love it! We now have multiple legit alternatives to Steam.

 

[vcc]

HOW??!?!!? Because you can get a game on another platform it hurts XB1 v. PS4? That logically makes NO SENSE. I don't even care for the xb1 v. ps4 argument at all (I like all systems) but to literally say because a game is on PC and XB1 it hurts the case to get a XB1 over a PS4? I would bring up SFV as Bgamer90 did but we already went down that rabbit-hole.

You gamers...jesus.

It's not gamers, it's the business analyst in me (of which I do professionally).

Like I wrote above, folks do attempt a basic calculation when they buy more expensive things. This hurts the value proposition of the XB1 which will lose some percentage of future sales.

MS seems okay with that loss which does mean that they value the money they have in the game studios more than the potential damage to the XB1 sales. That is a huge thing.

There is no magic voodoo in this. It's just business. Making first party games multi-plat is a big shift for a platform holder, a decision no one else had made (Sega shut down as a platform holder before making games for other platforms).

Why do you think it has no implications?

 

[Beerman462]

These games are still not going to be on PS4 and the Xbox exclusives are still better than PS4's to the mainstream gamer (i.e., not into niche japanese games) and console gamers aren't going to care if they go on PC b/c they don't even acknowledge PC's existence. Why do you think 3rd party games sell so many millions still on consoles and PC is at 10-20%? Xbox is dead this gen so this is a brilliant move by MS to milk whatever $$$ they can get out of these next few years. Game sales are Live subs are what make them money. Releasing on win10 store only is the icing on the cake...i love it! We now have multiple legit alternatives to Steam.

No way man. All those Xbox owners are going to build PCs now. The age of Xbox is over.

It's not gamers, it's the business analyst in me (of which I do professionally).

Like I wrote above, folks do attempt a basic calculation when they buy more expensive things. This hurts the value proposition of the XB1 which will lose some percentage of future sales.

MS seems okay with that loss which does mean that they value the money they have in the game studios more than the potential damage to the XB1 sales. That is a huge thing.

There is no magic voodoo in this. It's just business. Making first party games multi-plat is a big shift for a platform holder, a decision no one else had made (Sega shut down as a platform holder before making games for other platforms).

Why do you think it has no implications?

Because they are literally selling games on their platform aka Windows and specifically the Windows store which is very closed. That's in no way comparable to Sega.

 

[Crayon]

I used to think that way that it would somehow affect xbox one that their exclusives are appearing on PC and that it would somehow hurt the xbox.

But when i really think about it, I think it's a great idea and will only help sell the console, I mean if i buy an exclusive on cheaper console and have access to that game when I do eventually build a gaming PC, thats fantastic.

I just wonder how things like mods/subscription will work (I haven't read this whole thread so you guys might have gone through that already)

The problem here for microsoft is that you will eventually build a pc because you already have games there, then immediately install steam. It's great for you as a consumer, but they lost this battle before they knew it started.

 

[vcc]

That's the point. MS, like Uplay and Origin, doesn't need to achieve Valve's level of marketshare to be successful in this space. They just need to be the only place where PC gamers can go to get Quantum Break, Killer Instict, Halo Wars 2, Recore, Gears of War, Fable Legends, Minecraft Win10 etc.

In doing this, they will make more money selling these games than they would if these games were only sold on Xbox.

Also note, that unlike Steam, origins, and Uplay, the Win10 store comes standard with all Win10 devices...




My comment suggests nothing like that at all... Again they don't have to crush valve, or even come close to Valves marketshare in order for this to be successful. They just need to sell more software than they would have if these games were Xbox only... Which they undoubtedly will.



Yea it will be primarily about direct game sales. And that's a perfectly fine model, that has proven extremely profitable for publishers (EA,Ubisoft) with large attractive lineups. Something like what MS has.




Why are you so focused on the Xbox one hardware, and unable to realize that the Xbox platform is expanding to include both console hardware and PC.
firsty, primary PC users aren't buying xb1's in significant numbers anyway. And those that did weren't ever going to buy much Xbox software.
But now that Xbox is coming to PC, MS can get those users into the ecosystem.

For every PC gamer who MIGHT have bought an Xbox and MIGHT have bought a few exclusives, they likely have a much larger number of PC gamers who WILL buy their games from the Win10 store, which is good for the Xbox platform (which spans console and PC) as a whole




Again, I've never suggested such a thing. I'm merely pointing out the fact that MS will be offering compelling software to people who otherwise wouldn't have been entering the Xbox ecosystem. That provides obvious business opportunity for MS in terms of first party sales in the near term, and an opportunity to bolster exposure of their Win10 store for the long term.

Comes down to just math. They don't get a percentage off other PC games so pushing a 'xbox ecosystem' is sacrificing their licencing fees on the XB1 for a bump in direct sales of their own games. Which is a loss of faith in the platform.

I'm just trying to tell you that is a huge thing and a huge shift in positioning. There is a implication there that you won't accept. That the bump in direct sales is more than the potential loss in licencing fees.

 

[vcc]

Because they are literally selling games on their platform aka Windows and specifically the Windows store which is very closed. That's in no way comparable to Sega.

PC market place isn't closed. PC game makers have options (Steam/Origin/GoG/their own store).

The upside you propose doesn't exist for MS there.

 

[Zedox]

PC market place isn't closed. PC game makers have options (Steam/Origin/GoG/their own store).

The upside you propose doesn't exist for MS there.

The games that MS is selling are their games, on their store. They aren't going to Steam (as stated with KI, Gigantic, Fable Legends, Quantum Break). If they were going to other stores, then yes, but they aren't. This is about MS releasing exclusive games (their games) on PC through their store ON PC...not just PC in general.

EDIT: Game makers have options right now. No difference in this at all but Microsoft moving their games to their Store on the PC and giving that same option to 3rd party devs if they want to.

 

[Trup1aya]

Comes down to just math. They don't get a percentage off other PC games so pushing a 'xbox ecosystem' is sacrificing their licencing fees on the XB1 for a bump in direct sales of their own games. Which is a loss of faith in the platform.

I'm just trying to tell you that is a huge thing and a huge shift in positioning. There is a implication there that you won't accept. That the bump in direct sales is more than the potential loss in licencing fees.

You claim to be an analyst right? You should be able to understand that the implications of this with regards to console hardware are wholly insignificant:

So, how are they sacrificing their licensing fees when the userbase that they are choosing not to market their console to (people who prefer to play on PC) typically don't by 3rd party games on consoles?

In other words THEY WEREN'T MAKING LICENSING MONEY FROM THESE CUSTOMERS ANYWAY. Of course it comes down to math... You just aren't doing it..

also, why can't you grasp that the Platform =/= the console.

The platform is expanding to include console and PC.

the console market isn't going anywhere, and will still appeal to people who prefer to play that way.IF/ When the Xbox one store and the Win10 store unite, MS will have a PC library that includes their own franchises as well as those of the 3rd parties targeting their console market. Until then, they'll be more than happy to sell there games to people who otherwise never would have bought them.

 

[Beerman462]

PC market place isn't closed. PC game makers have options (Steam/Origin/GoG/their own store).

The upside you propose doesn't exist for MS there.

I'm just pointing out why it's different. It's their platform. They take 100% of the profits. Nobody is talking about MS selling 3rd party games on their store. You are moving goal posts honestly. They lose nothing by selling these exclusives in their market place. If anything they are losing some exremly marginal profits from a group that decided to game exclusively on Xbox One even though they have/had the means or desire to buy a gaming PC.

 

[Sydle]

Comes down to just math. They don't get a percentage off other PC games so pushing a 'xbox ecosystem' is sacrificing their licencing fees on the XB1 for a bump in direct sales of their own games. Which is a loss of faith in the platform.

I'm just trying to tell you that is a huge thing and a huge shift in positioning. There is a implication there that you won't accept. That the bump in direct sales is more than the potential loss in licencing fees.

I think we can agree that them making Windows 10 a free upgrade for the first year is money they're not going to get back quickly. They're obviously playing a long game and they've flat out said the Windows Store was how they were going to monetize Windows, and Xbox would be used as part of it.

It's not hard to see why. The Apple app store made 20 billion in sales last year, with Apple's cut coming to 6 billion. Last I checked on the Google side of things in 2014 they were very close in sales at about 10 billion.

Those figures are set to keep growing as more people adopt their OS. Microsoft is trying to play the same game on the same terms their OS rivals do in hopes if achieving a similar outcome.

It's far more money to be made with a cohesive OS strategy than there is a console business which has seen a lot of ups and downs, including those by rival console competitors.

I'll agree they have a mountain to climb to get there, but the logic behind UWA's and bringing Xbox into the fold makes sense. When you make billions per quarter you can afford to weather some sacrifices for long term gain.

 

[vcc]

The games that MS is selling are their games, on their store. They aren't going to Steam (as stated with KI, Gigantic, Fable Legends, Quantum Break). If they were going to other stores, then yes, but they aren't. This is about MS releasing exclusive games (their games) on PC through their store ON PC...not just PC in general.

EDIT: Game makers have options right now. No difference in this at all but Microsoft moving their games to their Store on the PC and giving that same option to 3rd party devs if they want to.

As I've said it means more direct sales of games they make, and a loss of some portion of future XB1 console sales and the licencing off those machines. There is no ecosystem upside as other imply as the PC ecosystem isn't under their control.