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CNBC: Xbox is losing the console race by miles. It’s part of Microsoft’s big gaming pivot
- Thread starter IbizaPocholo
- Start date
- Opinion Analysis Platform
Tobimacoss
Member
You should learn the difference between an "open platform" and "open-sourced".
I never said it is Open Sourced, but it is an "open platform" in terms of commerce and distribution. Steam and other PC stores wouldn't exist if Windows wasn't an open platform.
Magnus will be closed bootloader, very locked down in terms of security, but only open for competition.
bitbydeath
Member
Ass of Can Whooping
Member
Possibly true? Their margins were around 12% back when Sony was around 6 or 7% three years ago
Sony is back to around 15%. Now that parasyte Nutella's took of the mask wouldn't suprise me if Xbox is getting closer to 20% with all the layoffs, fuck all hardware sales etc
But who knows with their FP flops, COD underperforming etc
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Setsuna Mudou
Member
There should be a thread (sticky to the top of the forum) with the worst takes ever on GAF... both those would be strong contenders, and the fact they are in the same post is absolute cinema
Daneel Elijah
Member
Those numbers are estimates from VGChartz . Microsoft sadly still do not give any data on their console sales. Honestly this article show a pretty good understanding of Xbox right now for a mainstream media. Curious to see how Xbox will react in the next few months. If they sold so few consoles now, what will they do when the holidays end?
Donald mac Ronald
Member
Everytime we sell a game on playstation they take 30%. They use that 30% to undermine us.
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rm082e
Gold Member
Eh, I don't know that I do.
Could another business come along and give Valve competition? I think the answer is yes. The reason that seems almost impossible is simple: Valve is a privately owned business. Because they are privately owned, they don't have to chase the easy money quarter over quarter like a public corporation (Microsoft), or a company that's got investors pressuring them to make bigger and bigger returns (Epic). That pressure from shareholders or investors is what leads the management of big companies to ruin their products/services by trying to squeeze the customers/users too much. Just look at what's happened with Windows 11 as an example
There's nothing legally stopping Microsoft or Epic from retooling their businesses to be like Valve. But neither Microsoft or Epic are going to do that because it would be a huge undertaking, and they wouldn't hit their revenue/profit targets. That's not a lack of fairness in the industry - it's a choice by Valve's competitors on how they want to build their business.
I don't think they can realistically do anything to disrupt Steam's dominance.
PC gamers have chosen Steam (and GOG to a much lesser extent) because a pro-consumer attitude is of the highest importance to them. PC gamers were vilified by gaming publishers as a bunch of pirates and treated like a criminal class from the late 90s up through the late 2000s. The publishers torched their relationship with PC gamers, and Valve saw an opportunity to step in and be the good guy. It was only after Steam became a juggernaut that the publishers realized that Steam was a way to sell their games. Valve has had their hic-ups along the way, like when they wanted to create a marketplace and allow users to charge money for mods. But they've gotten it right better than 90% of the time.
Microsoft and Epic have no credibility with PC gamers. Microsoft is currently ruining Windows and pushing AI garbage that gamers mostly hate. Their out-of-touch executives keep putting their foot in their mouth in interviews. Sweeny isn't as bad, but whenever he talks it's clear he's not far off. PC gamers aren't going to trust either of these companies. Because they don't trust them, they won't support them, nor do they have any responsibility to support them.
asdasdasdbb
Member
For good reason. And Valve found the solution - GAAS. I remain convinced Valve doesn't make much off of non-GAAS, and that's why nobody else can really challenge them. There isn't much of a market.
Plus, I'm pretty sure MS can't make their PC games exclusive to an MS Store because of ABK agreements.
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This was all just part of the 5d grandmaster chess plan.
bender
What time is it?
DeepEnigma
Gold Member
Two of the shittiest stores combining to take on the two best and try to force them to open up to the loser's strategy to weaken them?
I await the entertainment with the legal battles from these altruism posers.
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Red Crayon Aristocrat
Member
The only people who still use Xbox are brand loyalists who that's just what they had as a kid/teen, so it's what they stick with.
I don't think it's been bringing in any new audiences in at least a decade.
I don't think it's been bringing in any new audiences in at least a decade.
thicc_girls_are_teh_best
Member
Is he? Wasn't what I picked up, but maybe I misread.
With MS's trajectory of late not just for Xbox but even Windows as an OS, we shouldn't have much confidence in them putting the right machine together at all.
Well America is undoubtedly Xbox's largest market still, so it's not like the number'd be even 50% higher if including all the non-American markets combined. Xbox sales have absolutely cratered everywhere, even the UK (their other stronghold, traditionally speaking).
It's a disaster.
It could be a half-assed "open" ecosystem for all we know, because we don't know how MS are going to integrate alternative storefronts to the platform.
Also if the cost of the hardware to offset potential loss in B2P, MTX & sub sales to those alternative storefronts is too high, we could argue if the cost of it being an "open platform" was actually worth it or not.
Yeah but I think it'd also depend on when MS actually began pushing for the high margins, no? My thought is, it was somewhat recent, and then you have to factor games like COD just failing to perform this year, negatively impacting whatever they expected their revenue to be which would then also impact their profit margins.
It really doesn't matter to me if their margin target for profit is 30%; when you're getting outsold by a Me Too Kinect in your strongest market, and that Me Too Kinect didn't move anywhere near Nintendo or Sony numbers to begin with (still impressive for its own right I suppose), I have to imagine their profits aren't that high from Xbox.
At least, not this year.
It's from VGChartz?
Well, that means the real number's likely actually lower.
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ZehDon
Member
Well, I do believe the industry is now in full contraction. Huge price increases year after year, lower quality products year after year; it had to come to a head eventually and it looks like we're finally there. Whoever wasn't delivering what the market was willing to pay more for was always going to be eaten alive - and it looks like it was Xbox by a mile. With any industry-wide contraction, closures and consolidations will be the name of the day as the big players desperately try and prop up their balance sheets by cutting the fat and eating their competitors as their number of organic customers shrinks. GTAVI will give them false hope, as it props up the entire industry by itself for a quarter. And then the reality will set back in.
From where I'm standing, next-gen will likely be the straw that breaks the camel's back. It really is lining up for a perfect storm. With RAM prices currently orbiting Neptune, next-gen hardware is looking at USD$1,000.00 minimum across the board. They'll effectively price their customers out entirely, leaving current-gen to limp on for an entire generation as console-gamers hold off on those hugely expensive purchases at a time when disposable income in the industry's strongest markets are approaching multi-decade lows. This means every major title will need to be fully cross-gen if it wants to make back its budget, further disincentivising people from upgrading to new hardware, as more people step away from consoles forever. To make up for the missing customers as the industry permanently contracts, game prices will undoubtably go up, lowering overall sales as the publishers try and milk every last red cent to starve off bad quarterly balance sheets. Layoffs cement the negative cycle as publishers double down on AI to save them. Fewer customers, over-priced hardware, over-priced software, AI slop everywhere. At this point, all I see is the coming crash.
From where I'm standing, next-gen will likely be the straw that breaks the camel's back. It really is lining up for a perfect storm. With RAM prices currently orbiting Neptune, next-gen hardware is looking at USD$1,000.00 minimum across the board. They'll effectively price their customers out entirely, leaving current-gen to limp on for an entire generation as console-gamers hold off on those hugely expensive purchases at a time when disposable income in the industry's strongest markets are approaching multi-decade lows. This means every major title will need to be fully cross-gen if it wants to make back its budget, further disincentivising people from upgrading to new hardware, as more people step away from consoles forever. To make up for the missing customers as the industry permanently contracts, game prices will undoubtably go up, lowering overall sales as the publishers try and milk every last red cent to starve off bad quarterly balance sheets. Layoffs cement the negative cycle as publishers double down on AI to save them. Fewer customers, over-priced hardware, over-priced software, AI slop everywhere. At this point, all I see is the coming crash.
mdkirby
Gold Member
This seems strange given Sony are a major shareholder of epic, owning 5%, and microsoft own nothing. It a bit like how Sony invested the best part of a billion into fromsofts parent company a few years ago, and the only thing to come from it is a spiritual successor to bloodborne as a switch exclusive.
apple_of_enlightenment
Member
Obvious fix:
CNBC: Xbox is losing the console race by miles. It's the cause of Microsoft's big gaming pivot
CNBC: Xbox is losing the console race by miles. It's the cause of Microsoft's big gaming pivot
ByWatterson
Member
Phil is essentially Mikhail Gorbachev. To save a dying system, he made reforms that actually ended up accelerating its demise. Now he's helping create a future of which he obviously won't be part.
I'm absolutely the first to say this and it's brilliant.
Mik-Phil Gorbachev.
I'm absolutely the first to say this and it's brilliant.
Mik-Phil Gorbachev.
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SportsFan581
Member
It might be the right moment for a prebuilt of this type, given the supply chain problems associated with feeding the AI monster. For both MS and Valve, it all depends on the specs and the pricing. And if either of them is willing to pass some of the bulk savings associated with mass-produced goods on to the customer. If you can build a custom system for the same price, both of them are probably in trouble.
If MS is going this route, which they've never explicitly confirmed or denied, you'd have to think that they've accepted their platform in terms of MTX is going to shrink (if other storefronts are supported). I assume they will be, as even the SteamDeck technically supports them, since they give you access to the desktop and anything made for Linux (or Windows through a wrapper) can run on there already.
darrylgorn
Member
Pretty sure MS already acknowledged they are no longer making consoles, so I'm not sure why the media still reports as if they do.
Topher
Identifies as young
I guess you think Microsoft should have been broken up and sold off years ago because of their operating system monopoly. Actually....the government did try and failed. They had a hell of a lot better case against Microsoft than whatever you a dreaming that they would have on Valve. What you don't understand is that dominating a market is not illegal. Valve is doing nothing wrong and so there is no legal justification for taking any action against them.
But you are right that Microsoft needs to improve their own PC gaming experience. The FSE is a start, but they are very far behind. Funny thing is, Microsoft is really the one that has to be careful and not use their operating system monopoly to stifle competition.
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demigod
Gold Member
If Chernobyl accelerated the fall of the Soviet Union, was Day 1 pc releases the equivalent for xbox?
Radical_3d
Member
Profitability is measured using metrics that combine profit margin, revenue and invested capital.
PlayStation generated over $30 billion in annual revenue on $10 billion of invested capital.
Microsoft gaming generated over $23 billion in annual revenue on $80 billion of invested capital.
PlayStation is a massive cash cow for Sony; Xbox is a massive headache for Microsoft.
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ExtendEmbraceExtinguish
Member
Would be absolutely funny if nextbox is mirrored by an onslaught of oems w Xbox compatibility. Analyst community will get their wish as msft hardware costs will be minimal. Makes you wonder what a small company like msft with products on all devices can do with all types of hardware under it; maybe they focus on software. Everything in the pc space as an Xbox would be hilarious.
Physiognomonics
Member
I don't know their endgame but based on their strategy (publishing their games day one on the much better Steam platform), they wanted to lose the console race.
Obviously people would prefer to buy their games on Steam (with free online) rather than on their shitty and more expensive store. Their main competitor was not Sony, Nintendo (or Apple/Google LOL), it was PC + Steam.
Obviously people would prefer to buy their games on Steam (with free online) rather than on their shitty and more expensive store. Their main competitor was not Sony, Nintendo (or Apple/Google LOL), it was PC + Steam.
Angry_Megalodon
Member
Damn, this pivot is diabolical. Sony, Nintendo and Ouya won't know what hit them.
Bondo
Member
Only a failing company will tell you exclusives dont matter to sell you a console.
They have none worth anything at the moment. What they do have needs to be placed on other consoles to make some extra cash.
Their formerly exclusive games may turn a profit on playstation now- cause its a "wow, finally moment" but i cant see them being all that successful in the future. Microsoft's biggest problem is making good games consistently, considering how many solid IPs they own,.
They have none worth anything at the moment. What they do have needs to be placed on other consoles to make some extra cash.
Their formerly exclusive games may turn a profit on playstation now- cause its a "wow, finally moment" but i cant see them being all that successful in the future. Microsoft's biggest problem is making good games consistently, considering how many solid IPs they own,.
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RAIDEN1
Member
Hence why I can't see the point of their next console in 2027..
Bondo
Member
Neither can I. But they have stayed afloat this long with Microsofts bankroll and bad decisions overall. Why not fund another bad idea and see what sticks?
memoryman3
Member
Intended. They lose a significant amount of money on the consoles. I think it's a bad idea for mindshare but if it's going well to them then fair play i guess.
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Shubh_C63
Member
Yup. I honestly thought GP was meant to be a bleeding cow for two decades straight until Cloud gaming becomes the norm where they might excel. But then MS-papa is demanding profits right now or go home so I am again confused over their strategy.
"The vision is to reach anyone who wants to play, regardless of the device" - MS
That would work if there wasn't already a solution ready for gamers in Steam. Xbox just being present in the mix hoping sooner or later new kids habitual of an wall-gardened Windows platform would know MS-Store before Steam is a 20 year strategy and will still result them being in last place. You're so right if they couldn't beat Playstation, they have no hope of winning against Steam. Only way MS wins this if they disrupt Steam with some shady practices.
Cyberpunkd
Member
I find it hilarious how Microsoft losing is somehow portrayed as a grand strategy lol. Yes, in 2025 losing is winning.
RAIDEN1
Member
Not a lot will stick, that's for sure, and they lose money from it probably more than they did with the Series X...especially now with their "pillar" exclusives being found on Playstation and PC..
Bondo
Member
Agree, and on a supposed $1000+ premium console with no exclusives? lol ok
mckmas8808
Mckmaster uses MasterCard to buy Slave drives
memoryman3
Member
Care to explain how this Xbox/Epic partnership is bad for gamers?
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thicc_girls_are_teh_best
Member
It's very unlikely either company are going to take a hit on their end to pass benefits to customers WRT price, but Valve's machine is a lot cheaper to produce than Microsoft's if the Magnus leaks are to be believed. So, if Valve are coming in at let's say $599 - $699 as a worst-case for Steam Machine 512 GB model, with the way the RAM & NAND situation is playing out plus larger chips costing more, Magnus will likely be around $1499 - $1999 unless they bottleneck it with too little RAM and/or storage.
If Magnus is going to be open to alternative storefronts and Game Pass growth has stalled, MS are going to need to ensure the hardware itself is profitable enough to reach their 30% profit margin targets for the division. That's why I think $1999 as a worst-case high-end for Magnus isn't off the table.
And this is part of their bigger problem: they are winging this shift, and lack any sort of clear direction or confidence. They don't even have anything to show for all the talk they've been regurgitating the past half a year. Meanwhile, Valve just kept quiet, got to work, and when they were ready to show off Steam Machine/Steam Frame/Steam Controller 2, they did. They let their actual work do the talking and the enthusiasm towards their upcoming hardware is very positive overall.
Microsoft couldn't buy their way to 1/10th of that goodwill if they spent a trillion dollars, because goodwill and faith in your products from customers isn't something you can buy. You have to earn it, and Microsoft haven't legitimately earned goodwill since the days of Windows 7.
Care to explain how it's good for gamers?
Nothing in this partnership is going to fundamentally change feelings towards either company's product or services. Only them actually substantially improving the quality of their product can hope to do so, and it'd have to be towards a level where the advantages over PlayStation & Steam are immediately clear to the common person's eye.
Microsoft have demonstrated zero ability to do that with Xbox hardware or Game Pass for the past several years, same with Epic in terms of Epic Game Store. And stop with this "good for gamers" BS; gamers aren't a monolithic group.
So many people choose to not understand this. Legal monopolies can 100% exist. If the market prefers your product so much more than competitor offerings because you've in fact put out the better product, then you deserve whatever market share you get.
That's what Steam is, that's what PS2 was back in its day, it's what 360 was in the US & UK. But now it's a problem because the company known for buying its monopolies is complaining about not having one in gaming because their gaming offerings have been worst than competitors for going on a decade.
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mckmas8808
Mckmaster uses MasterCard to buy Slave drives
I was speaking spefically to your comment here "Can Xbox and Epic dismantle the PlayStation/Steam oligopoly and establish a vibrant, open PC platform that benefits small and large developers?"
And I was speaking to what Tim is saying from Epic's viewpoint. The idea that gaming is being caged and it really needs the more openness from them is plan laughable.
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