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NPD Sales Results for October 2015 [Up1: Xbox #1]

Three

Gold Member
This is so simple. I feel like you guys have just dug in your heels so much that you're not willing to budge. That's fine. Ignore the obvious, it won't make a bit of difference as the world changes around you.

I've watched the world change since the 80s. ironically the one thing that hasn't changed since then is the concept of "Windows Everywhere" that I keep hearing year in year out.
 

Sydle

Member
I've watched the world change since the 80s. ironically the one thing that hasn't changed since then is the concept of "Windows Everywhere" that I keep hearing year in year out.

Is that surprising to you? The concept of an OS being on as many devices as possible seems like a reasonable ambition for a company that has built a business on it.

The world has changed and there are a lot more devices, with people typically using multiple form factors every day. It makes perfect sense that most digital software, services, and content providers are evolving their businesses to cater to multiple device usage.
 
Hello paco,
It's great that you defend your opinion with so much verve.
And I even share parts of your vision about the future of Xbox. I think MS does not care about Xbox. Stakeholders don't, Nadella doesn't and Spencer is the poor piggy who has to dance and laugh so gamers think the brand has a future. Okay, it will have a future, but not as box. Maybe as a sub-brand for gaming in the all-bright and unified future. And that's fine. (that was a lot of future, my apologies).
Funny thing is that MS presents cross-play as the next big thing. Apple is doing it for years. Google does it of course. Even Sony does it.
I know, I know W10 is much bigger in scope and will change everything when it comes belated to the party, even key figures. Got it.

Problem: we are living in the present. (now)
So, how can we know if Xbox does well if all we get is talk about metrics that might be relevant in years to come?

Plus: if I was Nadella and Subscriptions and Services were so damn important to me - why shouldn't I be interested in the amount of people buying my product. Who else should use my service if not my customers?
 

Sydle

Member
Hello paco,
It's great that you defend your opinion with so much verve.
And I even share parts of your vision about the future of Xbox. I think MS does not care about Xbox. Stakeholders don't, Nadella doesn't and Spencer is the poor piggy who has to dance and laugh so gamers think the brand has a future. Okay, it will have a future, but not as box. Maybe as a sub-brand for gaming in the all-bright and unified future. And that's fine. (that was a lot of future, my apologies).
Funny thing is that MS presents cross-play as the next big thing. Apple is doing it for years. Even Sony does it.
I know, I know W10 is much bigger in scope and will change everything when it comes belated to the party, even key figures. Got it.

Problem: we are living in the present. (now)
So, how can we know if Xbox does well if all we get is talk about metrics that might be relevant in years to come?

Plus: if I was Nadella and Subscriptions and Services were so damn important to me - why shouldn't I be interested in the amount of people buying my product. Who else should use my service if not my customers?

I'm going to respond as if you were genuine, so I won't respond with any dose of sarcasm like you did to me.

Nadella has repeatedly said that gaming is important to Windows. He even recognized that the gaming category was significant in a mobile-first world, and he's repeated himself several times.

Satya Nadella said:
The single biggest digital life category, measured in both time and money spent, in a mobile-first world is gaming. We are fortunate to have Xbox in our family to go after this opportunity with unique and bold innovation.

You can read more of that here.

I don't think MS has said that cross-play is the only benefit. Cross-buy and taking the experience with you on the device you choose is also a major benefit. MS has admitted they've stumbled in the past, but they are committed to it now. I liken it to their half-hearted effort with Office for Mac in the past to now having Office device and OS agnostic, with key features typically releasing for iOS first. Nadella's MS is very, very different from Ballmer's.

I don't think MS is concerned over GAF's sales-age talk. Their CEO has determined that Xbox is a sub-set of Windows now and that team is to work on supporting all of Windows 10, not just the Xbox console. He wants to make it a wide-reaching service, so the last thing he should do is measure the team based on the sales of a single console. Additionally, didn't their fiscal year just start? Typically things like new metrics and re-orgs align around these things.

Why not start comparing it to Steam and PSN users since that's what MS tells us is success to them now? If I'm not mistaken, they both have larger userbases than Xbox Live.
 

GobFather

Member
I'm going to respond as if you were genuine, so I won't respond with any dose of sarcasm like you did to me.

Nadella has repeatedly said that gaming is important to Windows. He even recognized that the gaming category was significant in a mobile-first world, and he's repeated himself several times.



You can read more of that here.

I don't think MS has said that cross-play is the only benefit. Cross-buy and taking the experience with you on the device you choose is also a major benefit. MS has admitted they've stumbled in the past, but they are committed to it now. I liken it to their half-hearted effort with Office for Mac in the past to now having Office device and OS agnostic, with key features typically releasing for iOS first. Nadella's MS is very, very different from Ballmer's.

I don't think MS is concerned over GAF's sales-age talk. Their CEO has determined that Xbox is a sub-set of Windows now and that team is to work on supporting all of Windows 10, not just the Xbox console. He wants to make it a wide-reaching service, so the last thing he should do is measure the team based on the sales of a single console. Additionally, didn't their fiscal year just start? Typically things like new metrics and re-orgs align around these things.

Why not start comparing it to Steam and PSN users since that's what MS tells us is success to them now? If I'm not mistaken, they both have larger userbases than Xbox Live.
MS or any company has to care about gaf. This is a fan base discussion on NPD "Physical" software and hardware discussion about the sales. You?
 
I don't think MS is concerned over GAF's sales-age talk. Their CEO has determined that Xbox is a sub-set of Windows now and that team is to work on supporting all of Windows 10, not just the Xbox.

Why not start comparing it to Steam and PSN users since that's what MS tells us is success to them now? If I'm not mistaken, they both have larger userbases than Xbox Live.
I don't think they care about GAF's sales talk either. And, as I said before, the CEO can decide what he wants. That's why he is the CEO and salesGAF isn't.

On the other hand I love the feeling to discuss NPD-relevant stuff, get NPD-relevant PR and NPD-relevant pie in a thread dedicated to NPD sales.
And discussing subscriptions, steam or whatever is a side dish here, and not the other way round.
So, if you and Nadella see this differently that's fine.
BUT: i still don't get why they just cannot stick to the theme and throw in random stuff instead when the theme of the homework is:
PR statement for NPD-Day.

Edit:
I just imagine creamsugar appearing next time, posting subscription numbers.

P.S. I am not sarcastic. Sarcasm is negative.
 

Sydle

Member
MS or any company has to care about gaf. This is a fan base discussion on NPD "Physical" software and hardware discussion about the sales. You?

Thank you for the comedy relief.

I don't think they care about GAF's sales talk either. And, as I said before, the CEO can decide what he wants. That's why he is the CEO and salesGAF isn't.

On the other hand I love the feeling to discuss NPD-relevant stuff, get NPD-relevant PR and NPD-relevant pie in a thread dedicated to NPD sales.
And discussing subscriptions, steam or whatever is a side dish here, and not the other way round.
So, if you and Nadella see this differently that's fine.
BUT: i still don't get why they just cannot stick to the theme and throw in random stuff instead when the theme of the homework is:
PR statement for NPD-Day.

I don't understand. You're still getting the hardware sales to discuss (the source doesn't really matter), so why do you care what MS is using as their measuring stick?
 

Three

Gold Member
Is that surprising to you? The concept of an OS being on as many devices as possible seems like a reasonable ambition for a company that has built a business on it.

The world has changed and there are a lot more devices, with people typically using multiple form factors every day. It makes perfect sense that most digital software, services, and content providers are evolving their businesses to cater to multiple device usage.

About as surprising as people wanting/expecting flying cars by 2020. I know I did in the 80s because 2020 sounded so far away. I think flying cars are very ambitious and maybe even reasonable. Must be why the local council no longer fixes pot holes.


Forgive me, I thought the thread was due a car analogy. In all seriousness though I'm not saying it is surprising or unexpected to strive for that but this concept is not new and it has not changed. It's been around since the 80s and it hasn't happened since. The fact that it may happen some time in the future is no reason to discard what is important in the world today (namely hardware numbers and fixing pot holes).

You keep mentioning cross-buy or the fact that you can log in to Live on windows but again this is no reason to discard hardware sales now.

There is a reason why we don't get "PlayStation family" sales figures anymore and it's not because there is no longer cross/buy/play/save or the fact that there isn't a shared PSN login. You can even do it on your TV now, right, with PS Now. All those things are still there. The software is still hardware dependent in the world we live in today though. The requirement for a subscription is still hardware dependent in the world we live in today. The same goes for xbox. Yet one still provides hardware sales and the other doesn't. One didn't provide sales figures in the past and the other did provide hardware sales in the past even when you could sign in to your Live account on windows 8. Not much has changed since then other than the less favourable sales switching sides. If you are convinced that a unified store, unified platform and unified subscription where PC players pay to play online is still happening some time to make hardware numbers meaningless then that is your vision of the future. The world we live in now is not like that though and there are metrics that are important now.
 

Talax

Member
Nothing as of right now. They haven't released any of their Xbox games on it yet.

Eventually? They've said they're going to bring all of their games to the Windows Store, so you can play them on any Windows 10 device you want. Personally, I like the idea of buying less hardware. I could get my Steam games and Xbox games on one piece of hardware.

I find that hard to believe. They've had so many chances to do exactly that, even mentioned that they're gonna bring more games to Windows instead of keeping it console exclusive and yet have never exactly followed up with that.Personally I don't see that changing. At the end of the day, they still want the living room, and the closest they've ever gotten is this console line. That's why they need it and most definitely a bigger install base on it.
 
I don't understand. You're still getting the hardware sales to discuss (the source doesn't really matter), so why do you care what MS is using as their measuring stick?

I just prefer people who answer to questions with answers related to the questions.
 

Sydle

Member
About as surprising as people wanting/expecting flying cars by 2020. I know I did in the 80s because 2020 sounded so far away. I think flying cars are very ambitious and maybe even reasonable. Must be why the local council no longer fixes pot holes.


Forgive me, I thought the thread was due a car analogy. In all seriousness though I'm not saying it is surprising or unexpected to strive for that but this concept is not new and it has not changed. It's been around since the 80s and it hasn't happened since. The fact that it may happen some time in the future is no reason to discard what is important in the world today (namely hardware numbers and fixing pot holes).

You keep mentioning cross-buy or the fact that you can log in to Live on windows but again this is no reason to discard hardware sales now.

There is a reason why we don't get "PlayStation family" sales figures anymore and it's not because there is no longer cross/buy/play/save or the fact that there isn't a shared PSN login. Hell you can even do it on your TV now right with PS Now. All those things are still there. The software is still hardware dependent in the world we live in today though. The requirement for a subscription is still hardware dependent in the world we live in today. The same goes for xbox. Yet one still provides hardware sales and the other doesn't. One didn't provide sales figures in the past and the other did provide hardware sales in the past even when you could sign in to your Live account on windows 8. Not much has changed since then other than the less favourable sales switching sides. If you are convinced that a unified store, unified platform and unified subscription where PC players pay to play online is still happening some time to make hardware numbers meaningless then that is your vision of the future. The world we live in now is not like that though and there are metrics that are important now.

This is exactly what MS is saying they're aiming for. I think it's entirely fair to measure them based on what they say they're trying to accomplish.

It's entirely up to MS to determine which metrics are important, just as they are free to change anything about their business at any time. There's no sense in arguing it and there's absolutely nothing of value of lost when you're going to get the numbers you want regardless of what MS does.

I find that hard to believe. They've had so many chances to do exactly that, even mentioned that they're gonna bring more games to Windows instead of keeping it console exclusive and yet have never exactly followed up with that.Personally I don't see that changing. At the end of the day, they still want the living room, and the closest they've ever gotten is this console line. That's why they need it and most definitely a bigger install base on it.

Given their history it's perfectly reasonable to be skeptical.

I'm just following the developments and so far things seem to be falling into place. Ballmer had individual divisions within MS running like their own businesses, Nadella changed all of that and Xbox is no longer its own business. They've said what their intent is and I suppose we'll have to see how they deliver.

I feel like Fable Legends, KI, Gears Ultimate, Halo Wars 2, and Sea of Thieves are a step in the right direction, as well as MS published games like Ashen and Cuphead, but they have a ways to go before they can fully sell their vision.

I just prefer people who answer to questions with answers related to the questions.

That's fair to want, but why set yourself up for disappointment by ever reading PR statements? You can count on getting the numbers you want right now from other sources, so I'd just stick with those if I were you.
 

Serenity

Member
Isn't xbox live only high margin due to gold subscriptions. And aren't the 360 and X1 the only platforms that require a paid xbox live subscription. It would reason that an engaged x1 customer provides higher margins than a mobile user or win10 user. Is there a plan to introduce a gold membership to win 10 and mobile. I just don't see how MS makes up all the lost gold revenue. I'd hazard to guess MS would very much love to have a majority of live members be x1 owners. Its offers the greatest number of ways to montenize a customer. So all of that is to say hardware sales are very much still important to MS.
 

Sydle

Member
Isn't xbox live only high margin due to gold subscriptions. And aren't the 360 and X1 the only platforms that require a paid xbox live subscription. It would reason that an engaged x1 customer provides higher margins than a mobile user or win10 user. Is there a plan to introduce a gold membership to win 10 and mobile. I just don't see how MS makes up all the lost gold revenue. I'd hazard to guess MS would very much love to have a majority of live members be x1 owners. Its offers the greatest number of ways to montenize a customer. So all of that is to say hardware sales are very much still important to MS.

You're forgetting the revenue from the Xbox Marketplace.
 

Serenity

Member
You're forgetting the revenue from the Xbox Marketplace.

No I'm not. If I understand correctly all customers can access the xbox live market place but only x1/360 customers have the option to pay a xbox live gold fee. That's what I meant when saying console customers give MS more options to spend money. I guess MS invisons a future where they have a majority market share in mobile and the pc gaming space because as thing stand now I can't see enough of an increase in volume from mobile or pc to offset a decline in gold subscriptions.

But the future will tell. Good discussion.
 

Sydle

Member
What will happen to gold? Will it only be on Xbox while all other platform don't it or will Gold be required across all platforms?

They haven't given any details to my knowledge.

Will be interesting to see what they do and, of course, how people react.

No I'm not. If I understand correctly all customers can access the xbox live market place but only x1/360 customers have the option to pay a xbox live gold fee. That's what I meant when saying console customers give MS more options to spend money. I guess MS invisons a future where they have a majority market share in mobile and the pc gaming space because as thing stand now I can't see enough of an increase in volume from mobile or pc to offset a decline in gold subscriptions.

But the future will tell. Good discussion.

I think this is why Spencer is saying he's focusing on developing more first-party IP, trying to come up with games to draw more people to the platform (which is Windows 10). I think the cross-buy, or unified app, value prop is to get people to go digital, so MS takes a bigger slice of the sale.

There is the possibility they offer a Gold level subscription on PC to get "free" games every month, or perhaps Gold discounts on any digital purchases that more than pay for the membership fee. They could also build more games with seasonal models and DLC that increase revenue per game. With a potentially larger audience to sell to (all of Windows 10) then maybe that more than offsets the losses from no longer requiring Gold for MP. I'm glad it's not my problem to figure out.
 

Sydle

Member
Paco, you are incorrect. MS stopped reporting those numbers because they are bad. Period.

I guess we'll see. If they revert back to consistently reporting hardware metrics in their financials at any point in the future then I'm wrong. Until then I'll go with their statement and there's nothing else to discuss.

From what I read they're focusing on the service-level metrics and mentioned they may occasionally talk hardware sales.
 

Matt

Member
I guess we'll see. If they revert back to consistently reporting hardware metrics in their financials at any point in the future then I'm wrong. Until then I'll go with their statement and there's nothing else to discuss.

From what I read they're focusing on the service-level metrics and mentioned they may occasionally talk hardware sales.

Not really anything to see. Companies are not in the business of downplaying successes. If the numbers were good, they would be shouting them from the rooftops. But they aren't, so they are not.
 

Hubble

Member
Hello paco,
It's great that you defend your opinion with so much verve.
And I even share parts of your vision about the future of Xbox. I think MS does not care about Xbox. Stakeholders don't, Nadella doesn't and Spencer is the poor piggy who has to dance and laugh so gamers think the brand has a future. Okay, it will have a future, but not as box. Maybe as a sub-brand for gaming in the all-bright and unified future. And that's fine. (that was a lot of future, my apologies).
Funny thing is that MS presents cross-play as the next big thing. Apple is doing it for years. Google does it of course. Even Sony does it.
I know, I know W10 is much bigger in scope and will change everything when it comes belated to the party, even key figures. Got it.

Problem: we are living in the present. (now)
So, how can we know if Xbox does well if all we get is talk about metrics that might be relevant in years to come?

Plus: if I was Nadella and Subscriptions and Services were so damn important to me - why shouldn't I be interested in the amount of people buying my product. Who else should use my service if not my customers?


This must be a joke post. Microsoft and Nadella has said the company is increasingly focusing on Xbox and gaming in general, whether it's mobile, PC, etc., as a focus.
 
Not really anything to see. Companies are not in the business of downplaying successes. If the numbers were good, they would be shouting them from the rooftops. But they aren't, so they are not.
It is this simple to me as well. Microsoft ran wild last generation in this regard. Sony is doing the same thanks to worldwide numbers (they are more silent in terms of NPD though).

If it is notably good, talk. If it is notably bad, shut up and change how success is measured.

There may be other variables involved but that is the core of it.
 

Y2Kev

TLG Fan Caretaker Est. 2009
LOL, Queso's "narrative."

The new narrative to me is that people buy consoles for "services." Since people obviously buy consoles for "services," we will solely report about "services." Also would anyone like to hear about number of treasures found in Tomb Raider? Well, probably not. Since it's most likely like 1 million or something.

The shift to "services" just means to me that Xbox as a hardware platform is on its way out. It will be an "ecosystem" because the console model is p. bad. I mean, Sony gets that. Hence PS Now. Or do we continue to have to believe that's for "backwards compatibility."
 
I feel like Fable Legends, KI, Gears Ultimate, Halo Wars 2, and Sea of Thieves are a step in the right direction, as well as MS published games like Ashen and Cuphead, but they have a ways to go before they can fully sell their vision.

Looks like they are putting their B games on PC and not the ones that can move consoles.
 

Hubble

Member
LOL, Queso's "narrative."

The new narrative to me is that people buy consoles for "services." Since people obviously buy consoles for "services," we will solely report about "services." Also would anyone like to hear about number of treasures found in Tomb Raider? Well, probably not. Since it's most likely like 1 million or something.

The shift to "services" just means to me that Xbox as a hardware platform is on its way out. It will be an "ecosystem" because the console model is p. bad. I mean, Sony gets that. Hence PS Now. Or do we continue to have to believe that's for "backwards compatibility."

Phil has already confirmed a next gen Xbox, so I don't think much will change.
 

Y2Kev

TLG Fan Caretaker Est. 2009
I'm pretty sure there will be a PS5 too. I'm not so sure about PS6.

edit: And I'm sad about that but I will get over it.
 
Man, I've read a lot of dumb shit on GAF over the years.

This is next level stuff right here.

If it helps, imagine it being said in the cartoon voice of your choice.

There's a reason why the reporting metric changed, but even if you bought all that, the highest arpu users are the ones buying hardware, your online service, and your software. If you have no box, then it is less likely you are converting into the system--PC is ruled by Steam, i.e. A platform not under your control.

So the best measurement is still people tied to hardware and services. Since your box is trailing, it's certainly valid to change directions, but it's not because it no longer matters, it still does.
 

RexNovis

Banned
If it wasn't already obvious MS has also started to mandate Microtransactions in their first party games. Why do y'all think that is? Because they can no longer rely on market share and tie ratio to carry them to profitability. Or are people going to seriously argue this is some other part of a master plan for growing their Xbox live ecosystem?

Microsoft has spent this entire gen being reactionary. Every move that they have made every decision they have announced since after their initial disastrous launch has been a reaction to the competition. Why would a company so focused on their future plans of a platform agnostic ecosystem bother being so reactive to the competition of another platform? Why would they forgo profitability for market share by consistently undercutting their competitor if that isn't an important market for them?

Defensive over your narrative. I can't imagine why you're holding onto it to the point of crafting some sarcastic chain of events, but it's not worth it.

Obviously Microsoft operates on money like all other businesses. The Xbox division falls within the Windows division now (for over a year now actually), with Phil reporting to the head of Windows, and they've decided to measure its success based on its new role to play in terms of supporting growth of the 3 business pillars as assigned by Nadella--Windows, Office, and Azure. He re-organized every part of the business to support one or more of those pillars, with no other divisions acting as their own separate businesses any longer. It's not hard to connect the dots of the leading growth indicators of game sales and Live users to more Windows usage and Windows Store sales.

I know people don't like change, but the changes they've made are logical and sensible for a service model that's suppose to be helping with the growth of Windows and revenue from its store.

"Are you tired of things like facts and projections interfering with policy? Are you tired of the now overshadowing the as yet undetermined and unpredictable future? We here at Microsoft believe in a different future. A future where success is measured by whatever you choose regardless of its current or potential impact. A future where we all work together to support an ideal ecosystem where things like success and growth no longer dominate our lives. A future where everyone has a right to happiness regardless of their performance.

Microsoft: the change you can believe in."

This ad brought to you by the campaign to elect Phil Spencer for Corporate Congress.
 

Bgamer90

Banned
I'm pretty sure there will be a PS5 too. I'm not so sure about PS6.

edit: And I'm sad about that but I will get over it.

Yeah, I'm not sure if we will still be tied to consoles in 2027+. Just too far out. So many things can change in a 10-12 year period.
 

allan-bh

Member
I believe that Xbox brand is important for Microsoft and Satya Nadella talked about that.

Of course that purely in terms of revenue or profit is small, but is a product that attracts people for Microsoft ecosystem and resonates with young people. I remember reading a while ago an article about how Xbox is the coolest brand that MS have and that's helpful for the consumer business of the company.

I doubt Microsoft will leave the console arena, what they are doing is improving the integration between all Xbox Live platforms, what is intelligent since Windows is a important piece of the games universe.
 

Sydle

Member
If it helps, imagine it being said in the cartoon voice of your choice.

There's a reason why the reporting metric changed, but even if you bought all that, the highest arpu users are the ones buying hardware, your online service, and your software. If you have no box, then it is less likely you are converting into the system--PC is ruled by Steam, i.e. A platform not under your control.

So the best measurement is still people tied to hardware and services. Since your box is trailing, it's certainly valid to change directions, but it's not because it no longer matters, it still does.

Change that to the best customer is one who has MS hardware and services and you're on the money. Why not start with reaching them on a broader range of devices and bring them into the larger ecosystem over time? And, of course, not everyone will want to go "all in" on MS hardware and services, so why not give them an option on where they would like to sit in the ecosystem while still giving them the option to purchase games?

It's crazy to me that there are people who either doesn't understand such a simple concept or are just rejecting it. Neither mindset makes sense to me. Who the fuck wants to keep buying so much hardware every generation just to play all the best games?
 
I've really enjoyed the back and forth, surfer. I come here to get assumptions challenged and to be forced to think through things thoroughly. So thanks.
Same here. I realize debate is adversarial by nature, but I hope you don't think of me as your adversary. I love arguing with people because in the end — assuming they're doing it correctly — either I get to teach them something, or I learn something myself. So no matter the outcome, everyone always walks aways a winner. \o/

Just shy of 40 3rd party games reached that threshold. I would call maybe 4, tops, of those "shovelware" which is the term you used I was referring to. Very little "shovelware" had any kind of sales success.
Yeah, like I said, I was using the term ironically, sorry. So of those ~40 though, how many were the traditional million-selling, third-party franchises? I was under the impression that the core referred to successful third-party Wii games as shovelware because it was stuff like Boom Blox or even Just Dance, rather than "real" games like BattleDuty and AssCreed. But again, I really don't pay much attention to Nintendo, so I may be entirely off base here.

Guitar Hero and Rock Band were cultural phenomena in the US. They couldn't make enough for a couple years there, then it cratered. You can see it in the chart. Instruments sold with Software in the bundles is counted as software revenues, not accessories.
Oh, wow. Then yeah, I could see that adding up pretty quickly then. So does that mean any Kinect and Move hardware that included software was being tallied as software rather than accessories? I imagine that could contribute a significant chunk to revenues as well, especially Kinect.

In that case, will PSVR headsets then counted as software revenue, assuming they're bundled with some? Then in theory, it could become "the next Rock Band," and move a bunch of hardware "disguised" as software, yes? I mean, there's no way for us to say for sure either way — just as there was no way to be certain when Rock Band was gearing up for launch — but it seems like the potential is there, as least. Or like you said, it's possible. :D

Oh, speaking of PSVR, I know you can't speak too freely, so just hypothetically… Sony have been indicating they plan to price the headset "like console hardware," which implies they'll be selling the hardware at or near cost, and they and their friends in retail will be profiting on the games instead. So in your considered opinion, would retail be on board with that pricing strategy, or do you think it would be more likely that they'd demand a little cut for themselves? If so, how much do you suspect they would consider a reasonable amount? $50 a unit? $100? What kind of retailer margin do you suspect would be agreeable to all parties involved? None/nominal/significant? Just hypothetically, of course.

Oh, another thing retail will need to consider when "requesting" margins — and I'm sure you're aware of this — is the fact that especially initially, most PSVR software won't be packaged at all. The vast majority will likely be $10-$20 "experiments" on PSN from smaller devs. Ubi have indicated interest in VR, but EA said they had "no plans" to support it. It seems a bit shortsighted for them to have no plans whatsoever, but regardless, it doesn't sound like they'll be jumping in with $60 titles at launch. So while PSVR may move a good bit of software, it seems like a comparatively small amount of it would be moving through GameStop and Walmart, which may influence what they look to earn on the hardware. Again, I'm sure you're aware of this; just clarifying for anyone who may be following along.

You know I can't tell you that. It was a lot.
Sorry, I didn't, or I wouldn't have asked. Basically, I have an unlimited supply of questions, but I fully appreciate that the supply of answers &#8212; and goodwill <3 &#8212; is finite, and I'm certainly not looking to get you in to any trouble. If you're unable to respond to any of my queries, just say so, and I may be sad, but I certainly won't fault you for it.

No, handhelds were not a significant part of the spike. Same trend chart, this time console only.

hNsNBEb.jpg
Wow, that's kinda crazy. The "DS family" sold like 155M units. That's like having an entire PS2 slapped down on top of everything else that was happening at the time. I'm really surprised it didn't have more of an effect. Was the DS just not particularly popular in the US? Did it not move software? Was it just not packaged software? Again, don't follow Ninty, but I really thought the DS was a bit of a phenom. Was that not the case?

LOL, I'm not discussing the health of the console market. I keep typing this.
Yeah, fair enough. I try to really look at the whole system and how it interacts with itself to really understand what's going on with it. I know it's the NPD Thread and all, but even they make the distinction between handhelds and consoles. You said your "main point" was that we'd have more packaged sales if we went back to having more packaged releases. While I don't dispute that, I guess my main point is that handhelds &#8212; and probably rhythm games &#8212; have gone away and aren't coming back, so to include them in any talks of "rebuilding former glory" strikes me as a bit foolhardy. If we're agreed that handhelds aren't coming back, then why are we including them in our analysis? If we're going to talk about what we can do to grow the market, it seems like we'd wanna ignore things we don't really have any control over, like fads, if that makes sense. Anyway, I guess we're just still focused on different things, for whatever reasons.

Regression to the mean is, at its most basic, is a technical way of saying things even out over time.

Look at the 1993 to 2006 trend in that chart. Some bumps in the road, but generally, you can throw a line in there and have a pretty good chance of being close to any particular year's performance.

But then 2007 comes along, huge spike. Kotick says "games are recession proof" people go nuts thinking that video games will grow forever and hundreds and hundreds of games are made, shovelware and not. But then, in 2009, you start seeing the regression to the long term average, which we again hit in 2012.

And what happened in 2012? People were screaming that the death of consoles was here, no one would buy PS4 or Xbox One, Mobile was king blah blah blah. Companies stopped investing as much in developing games.

But since then? Well, we've come down even farther below the mean, but signs are that sales should now grow back to the old average trend... back to regressing to the mean. But this can only happen if there's a normal distribution of content available. Which there isn't. Which is my whole and only point.
So basically, you think there aren't "enough" games being released at retail these days &#8212; even when we consider the fact that handhelds and rhythm games have died out &#8212; because pubs are gun shy? So you think retail is being underserved at the supply end? Do you disagree that smaller games have been shifting to digital-only or digital-first distribution, or is it more that you disagree about whether they should be doing so? (As in, that's what's happening, but you think it's a bad move.)

I don't think so. But agree to disagree.
Oh, uh, see above. lol

Meaningless as in the substitutional buyers are more than made up for by the buyers who wouldn't have bought anyways.

Meaningless in the math, not meaningless as in unimportant.
Let's try coming at this a different way. Of our 2M digital Star Wars buyers, how many would you estimate were incremental buyers, and how many substitutional?

Couple really good points you make here. Yes, digital has a long tail but like you say ONLY when those titles are promoted. Discover-ability of catalog in digital is a huge challenge. When you go to Walmart or GameStop, you look at the shelf, and EVERYTHING is there, right? You look around, see some old game you remember wanting to play and you might pick it up.

On digital it's much more challenging because people have to seek out catalog, unless that catalog is promoted on a storefront page or through a sale.
Okay, then I think I'm even more confused. lol You seem to be agreeing that it's tough to get a good tail on a digital release, mostly because the consumer can only see a handful of apps at any given time on a digital storefront. Older releases just sorta sell themselves at GameStop, but you gotta work for it on PSN, right?

But I thought you were initially saying that the reason digital is able to increment sales by a whopping 25% is because they effectively had a lot more foot traffic, so they had more people wandering in and buying whatever.

But how can both things be true? If 35% of your day-one sales are digital, and the ratio just drops from there, then digital is even more front-loaded than physical, which makes sense, given the discoverability issues of catalog on the digital storefront, right? So if 90% of our 2M digital Star Wars sales come on day one, how can you seriously argue that a "meaningless" number substituted? 2M people &#8212; give or take &#8212; had no real interest in the game and only bought the game because they happened to be in the store at just the right time, and these happenstance digital buyers all wander in on launch day, every single time? That seems a bit far-fetched.

There are some mental barriers for some people that if a title is digital only on the Consoles, that it somehow cannot be worth $60. Or that people want the ability to sell/trade a game once it's priced higher than $20. And far too many people are disc based buyers. To try and make a big budget, $60, AAA type game digital only in 2015 is not feasible. Perhaps in 10 years it will be.
Yeah, again, you just seem a little more focused than I am. You're talking about "big budget, $60, AAA-type games," and I'm talking about "games." You're right &#8212; and I conceded previously &#8212; and there is no reason whatsoever for BattleDuty to skip a physical release. That would be ridiculous.

But I'm not only talking about BattleDuty. I'm talking about video games, collectively. When I say a game might find more success by skipping physical release, I'm talking about games like Yakuza 5. A game like that may only have a potential audience of 300k in the entire US. If they determine they can pass 95% of those users with a digital release, doing a physical release to reach those last 15k users may not seem so appealing or even necessary. Another thing to consider is that the digital release is being priced at $40, which puts $28 in Sega's pocket, about the same or maybe a bit more than they'd pocket on a $60 physical release. So by not including physical, they keep the end price point for the user down, which makes their product that much more appealing, while retaining the same margins for themselves. That means even though they've limited themselves to 95% of their total users, a lot more of that 95% are likely to bite, so they'd probably end up with more, equally-profitable sales when it's all said and done.

Which actually raises another interesting point. So, $PUBLISHER can price their digital offering at $40 and net the same money as a $60 physical release, yet they price the digital release at $60 anyway. Now, conventional wisdom holds that $PUBLISHER does this because they're a bunch of greedy motherfuckers, but you and I know that $RETAILER plays a vital role in contemporary distribution. Personally, I would imagine that $RETAILER may not be too pleased if the more convenient option also had a significant price advantage, so I would also imagine that there exists non-insignificant pressure from $RETAILER upon $PUBLISHER to keep digital prices near MSRP, allowing $RETAILER a fair chance to compete. Would you agree that this is likely to be another situation where the conventional wisdom is off target, at least when it comes to the ultimate cause of digital prices?

I do not think that it is fair to assume that average sales grow over time (which is why there's a very strong correlation between release count and total sales. If average sales grew over time, the correlation would be lessened).
Fair enough. Growth is hoped for, but I guess it's unreasonable to "expect" it.

But what I really hear you saying is that digital distribution is INCREMENTAL to the Packaged sales and growing the overall pie? Hmmm, where did I hear that before lol. Told you we agree.
Well, I'm saying that digital sales are both incremental and substitutional, and that if either type of sale was occurring at such a low rate as to be "meaningless within the data," I would've guessed it to be the incremental sales.

Incremental - Increasing or adding on. "A "fuckton" of additional sales" = Incremental sales. We're saying the same thing.
Miscommunication. lol When I say a "fuckton" of additional sales, I mean, "far too many to be chalked up almost entirely to incremental growth." It's very difficult for me to imagine that a significant number of those 2M digital Star Wars buyers were previously saying, "No, seriously, I'm not getting up. Fuck that game, and fuck Amazon too!" IMO, those are the "incremental" sales that were created by the digital option. All of the non-hermits merely substituted for digital. At least, that's what makes the most sense to me linguistically. Is there a jargon file I can reference? lol

Not at all. They are meaningful. But I'm saying more of those are additive to the pie than substitutive.
Yeah, we're just not communicating here. Again, what incremental/substitutional split would you assign to the 20% of sales that come digitally? When you say "substitution is meaningless within the data," I hear, "Like, 99.99% of those two million sales wouldn't have existed at all if not for the digital option." What do you really mean? What's a meaningless value here? 1%? 10%? 90%?

I do not think 40% will be achieved this cycle. As for the future, it depends on what offerings are made for the next gen and what consumer choose. I do not dispute the 20%.
Cool. Thanks for clarifying.

Ehhh, if you have a bad game, nothing will save you. The development costs absolutely dwarf packaged distribution costs. If you're going to lose money, you're going to lose money regardless of a packaged version.
Well, sure, but with packaged, you'll lose that much more. :p My real point is that adding a physical release sets the break-even point on your project "higher," and the higher price points that seem to come along with a retail release can serve to make your product less appealing overall.

I think you might be overstating the costs of Packaged distribution by a significant factor.
I think we're mostly just talking about different games when assigning significance, but since you mention it, are you able to share anything on what a minimum print runs actually costs up front in terms of dollars, and how many copies that buys you?

Kind of. The addressable audience is certainly bigger when doing a Packaged release. You also get more press coverage and only with a disc will a portion of the game buying audience consider your game to be a "real game". Best you can do is tailor your offerings to multiple consumer segments.
Oh, I'd certainly agree with that, and indeed, I thought that's what I'd been arguing for. lol In many situations, a physical release totally makes sense and you should definitely do it, but in other situations, a physical release may represent significant effort to collect some fairly high-hanging fruit. Yes, more physical releases means more physical sales and more sales overall, but you wouldn't seriously argue that every indy game out there would be better off launching physically day and date, would you? That's what I meant by games being able to find more success by skipping physical, at least at launch.


I disagree for the simple reason that their November last year was inflated by sales that should have occured in October '14.
There was a reason why their October was so low then (about 160k), they announced a killer $399 bundle for early November (ACU+ ACBF for free) as early as mid October 14, and then during the last week of October they announced the $50 price drop, effective on that bundle.
Sony sorta did the same this year, no? They announced a cut on three "big" bundles at the beginning of October, but the only one that was actually available in October was the Uncharted collection. That should be perfectly appealing, but in fact, they "only" sold 130k of them at the reduced price point. So during that same month they sold another 140k consoles bundled with TLoU at $350 or Taken King at $400. (I'm pretty sure on those price points; right?) So that tells me that only offering bundles limits the appeal of your console fairly effectively.

Anyway, my point is that Sony are likely getting some delayed gratification this year, because they effectively said that all of the good bundles would be discounted next month.


Your analogy is terrible.

Everything considered it indicates to me that the success of the Microsoft gaming division is no longer based on the sales of a single device. Nadella wants Phil to focus on growing Xbox as a service and has set goals in place to measure the success of that effort, which aligns with everything they've said about wanting to evolve the brand to allow customers to play their games on multiple (Windows 10) devices.
whynotboth.gif

PR works, ladies and gentlemen.
And how!
Spanky.jpg
 

Sydle

Member
whynotboth.gif

They said that Live users were the primary metric, not the only one, and sometimes they may share hardware sales.

Their reasons to change the primary metric make more sense than sticking with one that was tied to a more narrow model that's just part of the picture going forward. I don't understand the adversaries.

I'm pretty sure there will be a PS5 too. I'm not so sure about PS6.

edit: And I'm sad about that but I will get over it.

Why does that make you sad? We're still going to get games and they're likely going to be more accessible. I don't think we're losing anything.
 

Welfare

Member
Didn't MS say that if the Xbox hardware brought in a lot of revenue for a quarter, they would bring it up?

We will get numbers
once a year
.
 

Matt

Member
They said that Live users were the primary metric, not the only one, and sometimes they may share hardware sales.

Their reasons to change the primary metric make more sense than sticking with one that was tied to a more narrow model that's just part of the picture going forward. I don't understand the adversaries.

...I don't even...
 

Sydle

Member
...I don't even...

Lawd

Where are you getting hung up? This is so simple it's just blowing my mind that people are having difficulty grasping their reasons for it.

What is another service-based metric that makes more sense than number of users? What other primary (read: most important) metric do you assign to the Head of Xbox that signals he's doing his job to attract more gaming users to the broader Windows 10 platform? I'm seriously asking, because it seems you know something I don't and I'm eager to learn.
 

RexNovis

Banned
They said that Live users were the primary metric, not the only one, and sometimes they may share hardware sales.

Their reasons to change the primary metric make more sense than sticking with one that was tied to a more narrow model that's just part of the picture going forward. I don't understand the adversaries.

Oh so does this mean you've now changed your mind about them giving HW numbers? Because before you said that would prove everyone else right: that MS is avoiding HW sales because they look BAD.

If MS suddenly switches back to sharing hardware numbers as their primary metric then I'll stand corrected. Until then I'll stick with all of the evidence that they are changing their gaming initiatives, going from a stand-alone Xbox business to one that is part and parcel to the success of Windows.

So now you've decided even if they do start relaying HW sales again you're still right. Convenient that.

Puzzle me this Paco: you have literally every single person here disagreeing with you including developers/insiders would be in a position to know for a fact. Your only "proof" is PR speak. Consequently the exact same PR line that MS has been peddling since the release of Windows 8. But all the sudden now that PR speak matters and it just so happens that it also coincides with an announcement that lets them avoid releasing incredibly poor figures. I refuse to believe you can't connect the dots here. Hell this same exact strategy has been done countless times by countless other companies. MS is pulling from an established playbook.
 
I think Paco is both right and wrong.

He's wrong in the idea that MS aren't providing numbers because they're not bad. They are not announcing numbers because if they do they will be compared with PS4 sell through which is unfavorable for them.

He is right though in that MS is shifting their focus to a more platform agnostic "Xbox"
 

RexNovis

Banned
I think Paco is both right and wrong.

He's wrong in the idea that MS aren't providing numbers because they're not bad. They are not announcing numbers because if they do they will be compared with PS4 sell through which is unfavorable for them.

He is right though in that MS is shifting their focus to a more platform agnostic "Xbox"

Well yes. The latter is true but it doesn't make the former true which is exactly what he's arguing.
 
He is right though in that MS is shifting their focus to a more platform agnostic "Xbox"

Well sure. Nothing wrong with that.

Nothing wrong with focusing more on certain metrics over others.

But to say something like sales of its hardware isn't worth tracking is laughable.

Microsoft has tens of millions of dollars invested in hardware inventory, production, comarketing agreements, retail agreements, etc. of course sales and inventory of hardware is important information.

And if Microsoft was really as far down the road as is being asserted, how does that jive with the launch of Tomb Raider, a console hardware exclusive, single player focused, video game able to be played on only one platform?

In ten years, if MS goes down the truly agnostic road, we can see what metrics are most useful. That day is most certainly not today.

If MS doesn't want to talk hardware sales, that's fine. But to assert that it's silly to discuss them and we should be talking about users as if an Xbox One owner has the same value as a customer as a Windows phone owner or a Windows 10 owner or an Xbox 360 owner? Cmon now.

An Xbox One customer will be MS' most valuable gaming customer. Right now, the best way to know how many of these very valuable customers exist is to, you guessed it, track sales of hardware.
 
Well sure. Nothing wrong with that.

Nothing wrong with focusing more on certain metrics over others.

But to say something like sales of its hardware isn't worth tracking is laughable.

Microsoft has tens of millions of dollars invested in hardware inventory, production, comarketing agreements, retail agreements, etc. of course sales and inventory of hardware is important information.

And if Microsoft was really as far down the road as is being asserted, how does that jive with the launch of Tomb Raider, a console hardware exclusive, single player focused, video game able to be played on only one platform?

In ten years, if MS goes down the truly agnostic road, we can see what metrics are most useful. That day is not today.

Dont disagree in any way.

In fact saying the Live Users is the new metric because platforms agnostic strategy is just false. Or does he think MS will try to charge PC users for Gold again?

That said the unifying of Windows and Xbox is coming.
 
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