Despite being flogged for it, this is why I think we shouldn't trust MS to just be full on third party publisher now, and why their supposed partners should keep their guards up for a backstabbing the instant MS perceives the strength to take a shot. In fact, I would be nervous and cherry picking the games I take from Xbox, on the basis those IP will gain a following on my player base only to return the favor by trying to steal them away with future exclusivity.
Yep, this was exactly one of the ?s I had about this whole 3P venture of theirs and SIE in particular being gung-ho to take it on. Now Nintendo to a large extent I can understand, because they aren't reliant on 3P all that much and MS can't really compete directly against them even if they wanted to honestly try. Not these days, anyway. I mean they did compete directly with them during 6th gen but only edged out GC by 4 million. Meanwhile PS2 obliterated both in sales and PS2 did more harm to GC than Xbox ever did IMHO (and was the reason Nintendo shifted with the Wii).
But Sony? Dunno, sometimes it
feels like they're just letting Xbox "exist" thinking they're just going to wither away. Well maybe that would work if Xbox wasn't owned by Microsoft. The scary thing about MS, IMO, is they have the bandwidth and resources to weather multiple generations of losses in gaming due to the sheer profits their other divisions bring in. That's mainly why Phil was able to get ABK and even Zenimax; that wasn't Xbox's money, Xbox has no money. It was Microsoft's. Sony can't play that same type of game with PlayStation, they simply can't.
I think SIE's focus on pushing profit margins is maybe the main reason they are letting Xbox set up shop on PlayStation with these games. And it's that plus feeling like they've "practically won" why SIE are doing this major push for PC, or even things like the console pricing more recently. Maybe they felt they could take a gambit on GAAS due to what they perceived to be a dead Xbox and figured their core don't have an alternative aside from PC & Nintendo so, why not take that gambit? But it all would also mean SIE still don't view PC (or specifically, platforms like Steam and I'd even say to an extent EGS due to Fortnite, which is in itself becoming a platform) as competition.
That mentality is going to be what knocks PlayStation down a peg or two in a few years, IMO, especially if SIE start moving to Day 1 PC releases for the big titles (and not even in ways where it maybe would make some sense like region-locking Steam releases to China). Steam might not be Microsoft's platform, but Windows is their OS, and the OS that vast majority access Steam through is Windows. Pieces like that are basically right there for Microsoft to form a solution (of sorts) to their hardware woes with, the question is if they pounce on it. SIE enabling PC storefronts like Steam with their catalog of ports over the past 4 years just creates some nice cherries on top for Microsoft if they do make "that" move.
And say Microsoft do that, they bring Windows functionality to Xbox (through Xbox OS) for native compatibility of whitelisted Windows apps and alternative gaming storefronts...how does Sony block access of their games on that type of Xbox? If it's a hybrid console/PC, but the business model is closer to PC than console, what would Sony be able to use in court to block their Steam games being accessible on that Xbox versus say an Asus ROG Ally? That's the conundrum I feel they might have placed themselves in, but at the same time they shouldn't have moved so quickly with this PC initiative the way they did in the first place. It should've been significantly more measured, structured, and organized. And perhaps, if they really wanted to pursue it no matter what, they should've gotten their own storefront on PC first (Windows & Linux) and then stuck to hosting their games there exclusively, only considering options like Steam as a last resort.
I mean yeah, with them doing their own PC storefront and doing the games there they'd still create a bit of a pickle in the case Microsoft move the way they're likely to move with their next generation of hardware, but at least in that case SIE'd retain more vertical integration of their own pipeline. Say MS do in fact leverage Game Pass as a gateway access point to alternative storefronts (I think this is highly likely to happen)...SIE could just...not be one of those storefronts. Problem solved. They can't do that the way they're doing things right now, though. Even if MS then had another model where you pay even more upfront for the hardware but access alternative storefronts like normal...problem still solved for SIE because that's effectively a PC gaming device MS are selling and any Xbox branding is just a minor consequence.
There's another aspect to all of this too such as Microsoft potentially making a switch to Xbox more as a PC for next gen, but before MS actually commit to fully Day 1 support of their games on other consoles like PlayStation. Then that creates a situation like you've suggested where they've now built up new customer bases on PS & Nintendo hardware (I've been leaving Nintendo out of this mostly because they wouldn't be affected by this shift of Xbox anywhere near what PlayStation would, IMO), but then leverages what the new Xbox hardware brings to lure console/PC gamers or console-only gamers looking to jump to PC, to jump towards an Xbox since it'll "mostly" be a PC in many aspects of the experience (but not 1:1 like a PC, for example only running whitelisted apps from MS's store vs. what you'd do on Windows itself).
That could have stronger pull than SIE might've considered, realization of that potential only likely tempered by MS's end on combination of pricing for such devices and target/realistic volume of production for said devices. In both cases, pricing would probably be too high and volume too low to make something that'd truly compete with PlayStation in terms of install base & market share, even if that is no longer necessarily the point on MS's end. So no matter how high or even how low PlayStation's install base floor goes, I don't think Microsoft's initiative in changing the Xbox hardware business model would get them in a competitive range of that in the span of a single generation. There's just been too much depletion of brand goodwill on Xbox's part to accomplish that.
But I do think a shift of the model from where it currently is (wholly steeped in the traditional console business model) to what it seems like they're leaning towards doing, would do well to at least start restoring brand faith in the hardware and get install base numbers on the upswing again, it just depends on how much effort MS put into things. If it's an extremely poor effort, they'll maybe get some decent profits off hardware but'll probably tap out at like 10-15 million lifetime in hardware sales over a generation. If they put some real effort into it, they might be able to net 20-25 million lifetime, if they're the only one making the hardware. If it's that and licensing with OEMs to make variants, it could be closer to 35-40 million lifetime. If one of those variants happened to be from, say, SEGA, they could maybe hit between 50-55 million, maybe even 60 million.
The point is with the right approach they'd be able to take hardware on the upswing again while no longer losing money on the hardware and in fact having good profit margins on the hardware being sold, even if in fact it might come from multiple manufacturers with different variants that add non-essential features but are all built around a common baseline spec. Would also assume those numbers to come from devices of varying form factors too, like NUC-style mini systems, laptop-like devices, tablets, PC portables & hybrids etc.
And that looks significantly better for them vs doing another take on the Series S/X approach and keep things very traditional. In which case, they'd tap out at 20-30 million lifetime (possibly trending to the lower end) but with much narrower profits on hardware. It does assume they keep the same multiplatform strategy they have ATM; maybe ridding of that and even stopping the Day 1 PC stuff would help bolster that closer to 40-45 million lifetime but it'd require a massive gamble on Microsoft's part and I don't think they want to take any such gamble when it comes to the software. They'd rather a scenario where they can still do Day 1 on PC and ease into more full-line 3P support for PS & Nintendo (even if that doesn't necessarily translate to Day 1 for all games), vs. cutting off Sony, Nintendo, Steam and their own Windows Store to give Xbox the "good college try" once more.
Because they've done that multiple times now, and it's been failing.
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