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Sony FY22Q4 Earnings Report - 6.3m PS5 sold, 61% YoY growth (~340 HW growth)
- Thread starter reksveks
- Start date
Varteras
Member
I don't believe they are legally required to answer a singular congressman's letter requesting sensitive details. Even if they do respond, they're likely to tell him to "Eat Shit" in the nicest way possible.
Captain Toad
Banned
DenchDeckard
Moderated wildly
Maybe I want to be CUCKED, Dench! Did you ever think of that?! What about MY feelings?!
Eotheod
Member
Great response, thanks heaps!
I definitely agree with your views there, in that as long as there are at least contenders in the market the market stays relatively healthy. It's why I don't foresee anyone "leaving" because there is still a crap ton of money to make from what is the largest entertainment industry. Microsoft, despites it's current failings, is still going to compete because even a 3:1 ratio is getting you nearly 20-30 million consoles sold right now. That's pretty damn good profits and enables further expansion in existing userbase.
Obviously the landscape is changing, that much is clear. Where it all goes from here who knows, but I'm glad that content is king as it is what we the consumer is here for. Just really happy the indie space is doing so fucking well, incredibly healthy and actually an appropriate career instead of a pot luck one. Yes, still some luck built into getting your title out and seen, but it's far and away easier then 15 years ago.
I...I still don't get your point? That's the movie industry, and worse it was a Sony film too. So you are saying Sony listens to social media?
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Mr Moose
Member
Yes. MS/Xbox too. Not sure about Nintendo, I think they'd rather copyright strike their fans.
TLZ
Banned
No pandemic. But some were saying Switch had shortage problems the first couple years.
Captain Toad
Banned
Nothing that different than most previous console launches and nothing comparable to what PS5 and Xbox Series went through launching at the start of the pandemic and then the global chip shortage.
It took me and many others a few days or weeks driving around to find a Switch on retail shelves after launch. Badically no one found a PS5 sitting on store shelves for literally years following launch.
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TLZ
Banned
I know. I remember. But I do remember people struggling to find a Switch too. Maybe it was an exaggeration.
ANIMAL1975
Member
ChorizoPicozo
Member
the end of sausage party really fuck me up.Congratulations to all my fellow shareholders.
StealthGoblin
Banned
That is true, but specifically talking about the Series X, I don’t really understand why they are having production difficulties now. They should have secured enough production capacity and the box itself isn’t hard to put together.
The only thing I can things I can think of are:
- They are putting a significant amount of that hardware in azure blades
- They have a high failure rate
Outside of that they should be producing more.
MasterCornholio
Member
Well there's an idea for a sex education class. Just got to get some things from the lunch lady.
Panajev2001a
GAF's Pleasant Genius
Maybe, hopefully it does not happen. This is a scenario that, like the Activision-Blizzard one, sees the bigger corpo showing its Borg like colours and attitude: it is ultimately about content starving their competition by removing multiplatform content from the board (or at least having the ability to do so, to control the profits of your competitors) instead of creating content.
With all the studios they bought and the purchase of Zenimax (it is incredible that with their bringing games to everyone speech we are about to see DOOM, the poster child brand for multiplatform development, become exclusive to MS platforms only or cut a sizeable portion of them which would have never happened if Zenimax had stayed independent) they absolutely have enough to build upon and nurture and grow organically. Cheering for them to buy another large publisher like S-E, From, or Capcom is like cheering for Borg assimilation…
ArcaneNLSC
Member
Except PlayStation's trajectory is this...Random thought, but the lines at the end of the chart reminded me of this
And Xbox's is like this...
Baki
Member
Sony is one of the biggest employers in Japan. I can 100% see the Japanese government intervening to protect Sony and Nintendo. Japanese government intervention was the reason why MS didn’t try a hostile takeover of Nintendo in the 90s.
buenoblue
Member
It's not about cool t shirts and looking good. This is business
ArcaneNLSC
Member
This that live action Sausage Party movie end scene?
Heisenberg007
Gold Journalism
thicc_girls_are_teh_best
Member
Best MS can do this gen is just be consistent with their 1P releases in quality and quantity, and build up some real powerhouse IP brands.
In hindsight, yes.
Series S has low demand globally, and MS may have screwed over their wafer allocation due to being too bullish on its outlook. If you go back to their Hot Chips presentation in 2020, they said the reason they did the S & X design split was because they predicted wafer costs and assembly costs would not reduce low enough this gen in relation to previous ones. But, they likely meant this in relation to their own case, because they historically have never produced volumes of consoles annually comparable to Sony outside of the 360 generation. So, they don't enjoy the economies of scale on pricing discounts for certain components the way Sony does. I think them wanting to fit Series X hardware into the server side was part of a plan to address that, as it would naturally increase production volume, but that doesn't do much if demand is lowering on the consumer market side.
Microsoft wanted Series S to capture the casual and mainstream market early on in the generation, instead of waiting until near the midway point and latter end phase of the gen where those sorts wait to jump in when the price of the system is more mass-market friendly. Anyone who claims otherwise is lying; why else would you develop a lower-powered companion system for a $299 MSRP from Day 1? $299 today is the new $149 and in fact if you look historically, the PS1 price was cut to $149 in March of 1997, a little over two years after it came to market and around the time more of the casual/mainstream audience started buying systems. That is the price reduction model Microsoft wanted to replicate with Series S, for the similar uptick in customers, but from Day 1 instead of 2+ years after release, because they did not foresee Series X reducing in price by this point to serve similar purpose.
However Series S has more or less failed at accomplishing this purpose and while it's been getting price cut promotions, it's not out of demand, but as a means to move accumulated build-up of supply. I think another inspiration behind MS's 2-system approach this gen was seeing the enthusiasm for the One S and One X strategy in 2016 & 2017; both of those helped pick up on slagging XBO sales and helped with improving the brand's optics among the fanbase, so I think that's when Microsoft decided to take that approach for Series S & X. But if so, then (and this is my own theory) it might mean a big chunk of Series hardware development did not really get into gear until late 2017, and this probably also impacted the SDK as, at the time, MS were readying DX12 Ultimate, and they wanted to unify the dev process between the console & PC, resulting in the GDK (which might still be having issues for all we know :/).
IMO it would explain a lot about the nature of software development we've seen for Xbox, or the insistence to bolster about RDNA2 features as AMD were finalizing them, getting members of the Surface team to develop the systems, the very different internal builds between the two systems that are largely incompatible (as in things like the motherboard design), etc. I think Series X and S had a much more "compressed" development time than the PlayStation 5 from an architecting POV, and I think that's been proving true in the various performance of a lot of 3P titles between the two systems, plus the fact Sony's 1P seem to have gotten more impressive results out of PS5 so far than MS's 1P have with Series S & X.
But I'm not saying the Series S or X are badly engineered systems or "messes" design-wise; I just think their design phase more closely resembles the R&D time (and maybe budget) for a new PC custom OEM laptop release, and maybe that should be expected considering the Surface team helped on designing the systems. However there are limitations to that approach if you're designing a games console and the PS5 wasn't inhibited by those type of limitations, which has ultimately been to its benefit and will remain to its benefit for the rest of the generation.
And, do I think Microsoft designing/making the Series S might have acted as a compounding factor, a constraint? Potentially. I mean they are already mandating S versions of games in order to release them on the X, and there are lots of things outside of texture quality and resolution which don't scale easily across systems with performance gaps as wide as the S and X. I feel Series S presents other constraints too, obviously, such as logistics with system production volumes; during the March 2021 - November 2021 phase, I don't remember how well Series X supply was, but if there was any period Microsoft should have prioritized Series X units to customers as much as possible, it was then. PS5 was starting to feel the chip shortage crunch pretty badly around then IIRC, and I think general momentum for Xbox was at its peak. But Microsoft likely did not have as many Series Xs out as they could've, partly due to also needing to utilize the S wafers they already paid for.
You need to keep in mind that those companies actually have to want to sell to Microsoft, though, and I doubt most of them have any interest regardless of what money MS offers. Capcom's games perform magnitudes better on PS than Xbox sales-wise, same with From Soft's and Sega's. At least Sega have a historical business relationship with Microsoft going back to the Dreamcast, so if there is a publisher from Japan MS could have a chance at, it would be them.
Even so, I do strongly doubt it would happen. Unlike COD, Sonic games actually have real presence on Nintendo's systems. Most Nintendo fans pretty much consider Sonic a Nintendo mascot, and Nintendo hardware as Sonic's home. That's usually reflected in sales splits of Sonic games across the three platforms, too. I'm sure some bogus 10-year Sonic deal would not fly with Nintendo the way the COD one did.
There's also a brand reputation/perception issue to be considered. What would it look like to their peers, if Capcom, From (MS would have to go through Kadokawa for them, anyway, and run into contention with Bandai-Namco, who publish most of From's games) or Sega sold to Microsoft? The public chaos MS have created over ABK isn't going to go away, and I don't think their responses to being told "no" go over well with the more conservative Japanese businesspeople who run and have ownership in publishers like Capcom & Sega. There are personal business relationships they would consider, too. It's not always about having the money to flash around to buy up whatever you want.
Agreed. I do think they'll eventually try for at least one, maybe two Japanese publishers, but are going to be very careful in how they message that and handle things. They would be very proactive (not reactive, as MS have been with ABK) in ensuring real grounds where that content can still go to where it has more or less always been going, particularly with the big IPs. So say they get Capcom, Sony aren't going to suddenly take Monster Hunter off of Nintendo platforms; they'd keep that as-is. And I don't think they would take Street Fighter away from Xbox, either.
Maybe they could even just keep those publishers as subsidiaries separate from SIE, maybe a step beyond what they've done with Bungie IIRC. One of the bigger concerns with regulators in these kind of acquisitions is around if other companies can still access the content in a way where the new owner isn't acting as a gatekeeper. That was an issue I brought up with MS buying ABK; it doesn't really matter if they release COD and other games on PS, Sony effectively lose out on negotiating with ABK for content opportunities because it would all go through Microsoft, and Microsoft would never allow a deal that in any way brings no benefit to Xbox or Game Pass.
I kind of feel like the CMA's concerns regarding the contracts Microsoft were handing out like candy to other companies were at least partially in the same space. Those companies would just be beholden to Microsoft's own solutions for accessing the content, and on Microsoft's terms. So said companies would lose a means of working out deals with ABK themselves in a way that the companies could become actual competitors in the market for Microsoft, and Microsoft having that power and control over the content of ABK would just naturally provide them too much an advantage.
Sony would probably want to avoid that if they were to buy a large Japanese publisher and the best way to do so without divestiture, would probably be to make that publisher a subsidiary under Sony Corp but not SIE itself. That way a Capcom or Sega or whoever, who obviously do business with the other console makers as well as platforms like mobile and PC, can still operate relatively autonomously from SIE itself. Their revenue stays separate of SIE's, but PlayStation is obviously still getting those games. However it would also still allow companies like Nintendo to engage in business talks with those publishers for say a co-development game exclusive to the Switch, or a bid on marketing rights for a new Monster Hunter. If SIE would want those marketing rights for PlayStation they'd have to outbid Nintendo on it, but only with the money from their own allocated budget(s).
I think Xbox will ship between 6-8M XB this year. Potentially they will be outsold by 3 or 4:1 this year if PS5 hits the 25M milestone.
Based on their FY call, they also mentioned large R&D investment into PlayStation and their cloud ambitions. We might see PS5 cloud streaming this FY.
Personally, I am wishing for a PSP 3 with AMD Z1 extreme. I hope some of the R&D budget is for this.
The Q-Lite as least based on what's been rumored doesn't really sound like my thing, but I do think it should at least be capable of native PS4 gaming. Just seems like a no-brainer.
Xbox is probably lucky if they are at 20 million sold-through; I personally think they only managed at most 17.8 million sold-through by end of last year. Doubt they moved 2.2 million in 3 months, specifically non-holiday months.
Can they hit 28 million by the end of the year? Depends on if talking shipped or sold-through; the latter I heavily doubt, unless Starfield is just THAT big of a hit. They don't have any advantage in terms of big 3P games for exclusives or marketing rights, for example.
Sanepar
Member
I still don't believe in 20 mi. Probably 17-18mi is a safe bet. At least 2:1
FrankWza
Member
For a lot of us, it was first guessing. It's just incredible how now it's being blamed for other xbox issues. They were out here trying to set precedents in the console market when they've never even sniffed 100mil and had to take back their "world's most powerful console" almost immediately after launch. Stick to one sku and do it right instead of 2 and getting lots of things wrong.
thicc_girls_are_teh_best
Member
17 - 18 million is something I'd of said at the end of 2022, but it's been almost four months since then; very likely they have hit or crossed 20 million sold-through by now. If they manufacture roughly 8-9 million systems per year that's an average of at least 2 million per quarter, although for Jan-March it's possible they went under that amount and would have to make up for it later in the year.
If they're above 20 million by now it is not by very much, and again, chances are they could be somewhere below that in sold-through but would be above 19.5 million sold-through at the very least.
That would've been the preferable approach, for sure. I think MS just wanted to do something to look different, but something should've told them if Sony wasn't considering that type of approach, there was probably very good reason market data-wise why they weren't doing so. Same with Nintendo, for that matter.
Yes they're smaller companies than Microsoft so that's one reason they probably didn't consider the two-system model but they've also been much more successful in console/gaming hardware overall compared to Microsoft so that would be the biggest factor leading them to their reasonings.
Daneel Elijah
Member
Not to be the devil's advocate, but Xbox situation was, and still is, not the same as Nintendo and Sony's situations. I did not like the S/X strategy, and we have seen some problems arise from it. But I can see why they took that choice. The reality is that Xbox were selling their consoles mostly on "value", with many flash sales instead of being more on quality. When the PS4 Pro and the Switch didn't have any reductions in years, the One X was easy to find a lot cheaper than they were at launch. So going even more on the value proposition with the S make sense, if only seen for the US market. They knew that going frontal with Sony would mean a hasty defeat, and to be left in the dust even faster than they are with just the Series X. They knew that going with just the S would be even worse. But they also saw that unlike previous generations, the concept of a second console makes sense and worked out well with Nintendo Wii and Switch. Just a question of price point and good marketing. So they tried the same.
The reality is that the PS5 has crazy demand, and that Xbox would have needed a lot of great games to push back on that, and they have yet to deliver the goods. Bethesda helped, but is not good enough on it's own. For me the biggest strenght of the Series S is that it make people that would have never taken a 500$ Series X the question: How much are you ready to pay for a Xbox console? I have to admit that a really cheap S is in my plans in the future. And it works well with their Gamepass plans. Once again, the games are the problem. Not enough true hits that makes the console evidence. Starfield is the closest to that in the near future for them.
It is easy to complain but in their place, what could have been done? They could have made a 800$ BOM Series X, but if it is to have the Falconeer as launch game what is the point? In their place I would have tried to go first, but we know that they didn't had the games necessary to even try. They had to go the same year as Sony. They had to not be beaten on price and/or power because that would have been a repeat of the PS4 generation. I can't reproach them to try, but I regret the S Ram configuration. This will be a problem for them the whole generation if I understand it right. In a sense it was doomed to failure, but a good one, that made them new customers. Like the PSvita in a sense if you see what I mean. Xbox really needs to fix their issues and give us games. I hope that their conference is not just CG but dates for all of the games they have already shown.
Bragr
Banned
VR2 and the stagnated PS Plus subscribers must be an issue here. But of course, they are still extremely healthy.
But if I remember correctly, Nintendo doubled Playstation's net income last year.
It's all the services they are paying for, and all the super-expensive games. Nintendo is earning so much from their extreme software sales it's completely bananas.
I really wonder where Xbox stands. I would imagine they are losing money.
But if I remember correctly, Nintendo doubled Playstation's net income last year.
It's all the services they are paying for, and all the super-expensive games. Nintendo is earning so much from their extreme software sales it's completely bananas.
I really wonder where Xbox stands. I would imagine they are losing money.
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GHG
Gold Member
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thismeinteil
Member
Insane Metal
Member
That's... kind of disturbing
thicc_girls_are_teh_best
Member
Yeah, I can see this argument as well, certainly. They knew what they had to do in order to make XBO more attractive last gen, part of it involved some rather steep price cuts just to try moving the needle. But those weren't going to be enough so they redesigned the system with the S and since they were going with a mid-gen refresh anyway, did the X. Although, if you also look at that situation, it could be just as easily argued that if the XBO had the performance people would have accepted at a price comparable to PS4 (or for costing $100 more, a clear performance advantage) out of the gate, they would have done much better and not needed a redesign on the base model or price cuts. Though it may have made their mid-gen refresh a bit trickier to pull off.
For the comparison to Nintendo's Wii and the Switch, those being the "2nd console" of their respective gens, yeah I can see that comparison as well. But the reason why it worked for those systems was because they clearly offered something that was different from the norm, and offered high quality games that could not be had on PlayStation. The combination of those things is what helped them do so well (and I would say the Switch has done it a lot better than the Wii, it hasn't had the dramatic cliff of a drop-off the Wii did around 2011).
Maybe Microsoft thought Game Pass was going to be that "hook" for Series S combined with the cheap entry price but Game Pass is, ultimately, just a utility. It's a feature, but the games being offered were exactly the same as on Series X but ran worst, and most of those games were the same as those on PlayStation but ran worst as well. And, Microsoft had very few exclusives to push the new Xboxes at launch and through most of the first two years as we've now seen. XBS just hasn't had enough of a unique value proposition to put it over the Switch/Nintendo as a second platform option for most gamers, and like you said, they haven't demonstrated they have the chops to compete head-on with Sony and keep pace, let alone beat them, at that game. They haven't really shown or demonstrated that since the 360, and that was only for the first 4 or so years, partly helped by PS3's late release and early development & software issues plus the extremely high price.
Honestly, they probably should have done what I've been suggesting for a while now: just make Xbox a PC-style device primed for console-like gaming. Take a page from the NUC/mini-PC market and combine your console experience with it. Do what Valve tried to do with Steam Machines, but actually succeed. I would say Microsoft understand the PC hardware market much better than Valve, because they've had the Surface division for well over a decade by now, and work closely with GPU & CPU manufacturers to ensure Direct X features are supported on their processors.
By all accounts, the PC gaming market should be Microsoft's, but they've spent the better part of 20+ years trying & failing to dethrone Sony because of a threat to PC from gaming in the living room, that became outdated like a decade ago. I think if they took Xbox hardware down that path, especially after the XBO generation, we probably could have seen some truly inspired Xbox gaming systems designed around PC gaming and enriching that experience, and bringing a lot more value proposition unique to them in the market (the ability to run Windows 10 & 11, for example) and getting rid of a lot of the things that have been plaguing the Xbox division for years now.
Instead they are still obsessed with trying to out-PlayStation PlayStation, but the gap between the two brands is larger now than it's probably ever been, and I would say the gap between the 1P teams in terms of big AAA gaming production ability is larger now than it has ever been, too. How long will it take to see a Microsoft 1P game with the production values, scale and immersion at the level of HFW and Burning Shores? Because RedFall isn't it, Starfield won't be it, Forza's not it, Halo's not it. And that's just one Sony 1P out of many.
I guess that's partly why they wanted to shift to buying big publishers, for both that reason and also for having some mass-market, well-known IPs under their name to boost Xbox's profile (and also to benefit their push with Game Pass and cloud gaming). But the path for that type of growth through acquisitions looks like it's closing, and Microsoft will have to make do with building up to those types of games with the 1P they already have.
Nollywood hit different.
64bitmodels
Reverse groomer.
consistently mediocre trend chasing sequels that take forever to come out? Most new IP being also trend chasing junk that becomes irrelevant in a couple weeks? A few gems inbetween made without MS intervention?
yeah no thanks. They need to hire someone who has a pulse on what gamers want. Fire the spender and the swamp ass booty and get some real gamers in who understand the market
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Davesky
Member
Captain Toad
Banned
Japan has all sorts of laws. If you think they won't look twice at a huge American corporation trying to aquire Japanese companies, you're wrong.
Daneel Elijah
Member
I mostly agree with what you said before this part. Xbox did not have the advantages that the Switch had to be a second console. But it was worth the try. The second part is were I get lost. How could making a PC like experience that would be even less of a console that the Xbox series X is would help them? I can't see them selling millions of those PC, and the price would make them a niche that would have to be taken in consideration by their first party, making games marginally harder to make. I would love a 1000/1500/2000$ Xbox like device, but when a Series X who is sold at loss can't sell well compared to a PS5, I can't see this work out well enough to change the situation. Unless they are sold a loss too. But it would be weird to see Xbox going that route.
Heisenberg007
Gold Journalism
Series S was a juvenile idea. It's the type of idea you get when you're sitting with 4 friends in your dorm room, all stoned.
"Dude, we should have 2 products: one expensive, the other cheap. So we get both types of customers. The one who has money, and the other who don't have money."
Totally ignoring all the other variables that are involved.
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Daneel Elijah
Member
And those type of ideas gave us Apple, Google...
There has been problems that arise from this S/X strategy, yes. But they got more customers than they lost from it in my opinion? As I said earlier, what would have you done instead?
Heisenberg007
Gold Journalism
Have they? They have sold fewer consoles than Xbox One launch aligned in key markets like US and UK.
What's worse is that because of Series S, they have generated even less revenue than they did during the Xbox One launch.
Just follow Sony's blueprint, especially the ones they deployed while recovering from the PS3 generation.
Have one SKU, empower your first-party developers by streamlining in-house tech and tech sharing and creating an excellent production pipeline, and create must-have games. Just respect your console, that's it. It'd work.
If there was no Series S, they'd be getting games like Baldur's Gate 3 on launch, along with PS. Now it's pretty much a timed exclusive for Sony and they didn't even spend a single penny to get it lol. Similarly, if there was no Series S, I reckon Redfall would be 60 FPS and look much better on Series X. Less negative PR and more positive results for Xbox.
Daneel Elijah
Member
If they wanted to do that they would have done so a long time ago. And yes it would have been better long term, or at least better for my tastes. But I do not think that a Series X alone would have been more successful than the X/S in numbers. And their loss of revenue is compensed by the Gamepass that the Series S bring. The games are the problem more than the hardware. More games and better ones would have made the S a better proposition too. I do not like the S/X strategy, but understand why they tried it. The loss of focus is minimal during the cross gen period so they are only now really seeing the problems that the Series S may bring in that regard. And they could have made a Series S with more Ram to fix some of the issues that it made to devellopers. This is more a execution problem.
DenchDeckard
Moderated wildly
So what are they projecting for the next quarters? Will this momentum continue or do they feel it was an explosion of customers being able to finally purchase ps5s freely, or stuffing the channels to prep for the next few quarters?
as this is shipped and not sold through. I doubt they would be daft enough to report sell in numbers to end users next quarter.
as this is shipped and not sold through. I doubt they would be daft enough to report sell in numbers to end users next quarter.
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Heisenberg007
Gold Journalism
25 million PS5s.
DenchDeckard
Moderated wildly
Nice comfortable to 65 mill in four years...that will take them ahead of ps4?
Heisenberg007
Gold Journalism
Yes, that'll take them ahead of PS4 launch aligned. They are now only 1.5 million behind PS4. The game has closed by like 70% in just the last 6 months.
DenchDeckard
Moderated wildly
Amazing achievement if they pull it off and I'm sure they will. They are on fire.
Panajev2001a
GAF's Pleasant Genius
I think we will see them sustaining momentum with some key first party releases, a showcase highlighting some strong new titles they hope to release end of this year and/or next year at some point, as well as the famous slim model at a price cut (same as launch price or slightly lower would make most sense, no model with built in Blu-Ray but bundles would be available).
The slim model, smaller and lighter, should allow them to reduce manufacturing costs and shipping fees/improve shipping volumes (more consoles per container/pallet) which should allow them to meet the demand they want to stimulate and be more profitable too in the long term.
Panajev2001a
GAF's Pleasant Genius
It does explain why cross generation period was lasting so so long too.
DeltaPolarBear
Member
To be honest, this idea had been around for at least 2 gens already. When ever someone create a gaming thread demanding that Sony/Xbox created a $1000 console for next gen, at some point someone would say there is no harm just making a cheap console for the "peasants" while the rich gamers get their super hardware. This is not new and get brought up as often as DC comic writers trying to kill off Superman in their meetings.
The fact that Xbox went and did it was the crazy part. My opinion from then was the same as now, that it was insane and that Xbox will pay the price for insanity.
Tomi
Member
And when you see that switch is actually much cheaper than ps5 those are megaton numbersPS5 looking at that 150 million like
DeltaPolarBear
Member
Just to explain further, one reason why Series S didn't make sense, was because in all the threads where it is proposed, no one in the thread actually said they would buy one; the weaker SKU only exists for "other" people to buy, in order to justify the mythical $1000 super-console that the posters actually want.
At no point does someone who ask for Series S to exist, actually requested it for their personal use. That is a red flag.
At no point does someone who ask for Series S to exist, actually requested it for their personal use. That is a red flag.
thicc_girls_are_teh_best
Member
Yep. MS killing Scalebound, Phantom Dust reboot, releasing Crackdown 3 the way they did, ReCore the way they did, not locking down Cuphead...all of that has caused a build-up of resentment now compounded by disappointments like Halo Infinite, and (what looks to be a disaster) RedFall. And all of that is over the span of 6-7 years at this point.
Oh and not to mention, games they showed in 2019 & 2020 like Everwild, Hellblade 2, State of Decay 3 etc. still MIA.
I'm telling 'ya, Game Pass is NOT making up for the loss in sales revenue on Xbox. Heisenberg 007 & I went over some reports and data months back, to try figuring out Game Pass annual revenue (at least for 2022). The amount I felt comfortable landing at was a little over $2 billion in annual revenue. I'll post a portion of the convo & process below:
Heya; so for Nintendo's numbers, I know Statista has it at "more than 36 million" current NSO subscribers, so considering the basic price is $20 for a year of NSO, that means their 2022 revenue was likely at least $720 million off the service. That IS assuming everyone has an annual sub (technically speaking some could have 1-month subs or 3-month subs at the time the total sub count was tallied), but I'd assume given the cost savings for a 1-year sub vs. 12 1-month subs ($20 vs $48), I doubt any significant number of people are choosing the shorter-duration amounts.
There's also the fact some people will be subbed to NSO+, which is more expensive than base NSO. Same for the Family Plan. Honestly I can't claim what likelihood there is of people paying for a 1-year NSO sub vs. the Family Plan vs NSO+. I guess just to be safe, and conservative, let's say 80% of the subs are the 1-year NSO, 10% are on the Family Plan, 5% are NSO+ and the last 5% are non-committals (1-month, 3-month subs, etc.).
So...
NSO: 28.8 million * $20 = $576,000,000
Family Plan: 3.6 million * $35 = $126,000,000
NSO+: 1.8 million * $50 = $90,000,000
Non-Committals: 1.8 million * $6 (average of 1-month and 3-month) = $10,800,000
The sum of that would be $802,800,000. Again I'm being conservative in the NSO+ and Family Plan amounts in particular, and could be slightly undershooting the non-committals, but I do think the vast majority of NSO subs would be the basic 1-year annual offer.
So, if using that as a working example, can add it to the Sony #s you provided and it gives us $3,960,465,787. That leaves the remaining
$3,839,534,213 for Xbox services. But that is "Xbox services" as in both Gold and Game Pass itself, and again that's just with including the working Nintendo services revenue numbers I threw up; there's a high chance I'm lowballing Nintendo's numbers by maybe $100 million or so.
In FACT....I just found something really interesting...this source that shows that in the CADE leak, for 2021 NSO made up 31% of Nintendo's $3.054 billion software revenue for that year, off a base of 32 million subscribers. In other words, that $946.74 million from NSO alone that year! Scaled to 32 million subscribers, that gives you $29.585625 per sub.
Assuming there's no real reason that per-sub ARPU would drop over the course of a year, and that NSO saw 4 million additional subs in 2022, then a good baseline to figure 2022 NSO revenue at would be ~ $1.065 billion. So we should probably move forward with that number, actually.
$3,157,665,787 + $1,065,082,500 = $4,222,748,287. Reduce that from the $7.8 billion and that leaves $3,577,251,713 for Xbox services. Now we know there's been some transfer from Gold subs to Game Pass, but there are STILL some people on Gold, and it has to be a decent number. I'm having a really difficult time finding any reports for Xbox Live sub counts; MS stopped reporting XBL subscriber counts YEARS ago, and if you want a picture of things prior to Game Pass, you have to go all the way back to 2017.
One number I came across was 2017 sub counts being at 52 million. That included XBL Gold and Silver, so I think we can be safe and go 50/50 on that; 26 million Gold, 26 million Silver. I think due to Game Pass over the years, that Gold number would have probably come down by at least 50%, to 13 million, and let's just say they are all $40 annual discount subs.
That would bring XBL Gold sub revenue at $520 million. So the $3.577 billion already drops down to $3,057,251,713. But...there is also Elder Scrolls Online
ESO's sub count in 2022 was around 22 million. Its premium sub cost is ~ $140 a year (monthly cost reduces to $11.67). Fallout '76's sub count in 2022 was around 13.5 million. Their premium sub (Fallout 1st) costs $99 for a year sub. I'd assume most people subbing to the premium tier of either game is paying for a year-round sub, but maybe 10% are non-committals, so we'll just reduce them from the revenue count.
ESO: 22,000,000 * .25 = 5,500,000 * $140 = $770,000,000 * .9 = $693,000,000
Fallout '76: 13,500,000 * .25 = 3,375,000 * $99 = $334,125,000 * .9 = $300,712,500
Combined, ESO & Fallout '76 would account for another $993,712,500 of Xbox's services revenue. Again, these ESO+ and Fallout 1st estimates are my own, assuming only a portion of the sub bases for both would be on the premium subs, but those who are, the vast majority would be in for the whole year via the annual sub options (some small portion may only check them out for a month or two before dropping it, some extreme ones would pay the whole year through the monthly cost, but I'm ignoring those and cutting 10% off the totals in those instances as a result).
Altogether, the $3,577,251,713 that is left for Xbox when removing the Sony and (probable) Nintendo services numbers are reduced to $2,063,539,213 for Game Pass when you ALSO remove the (probable) XBL Gold, ESO+ and Fallout 1st services revenues. At least, that's what I feel comfortable with rolling on. Assuming sub count is still where they last reported, 25 million, then the ARPU from Game Pass is $82.54. That's almost $40 below the regular yearly asking price for basic Game Pass, and about $97.46 under the asking price of Game Pass Ultimate. But more troubling would be just how low that total revenue for Game Pass actually is.
Could go into speculation from here on with that point but this was already way longer than I intended it to be. Anyway if you have some insights off what's been shared, feel free to send them through. Or if you can find better sources for XBL MAUS prior to Game Pass in older fiscal reports, that'd be appreciated as well. Hope this has been useful!
Not claiming this is 100% accurate; had to take some liberties here and there but tried keeping it in good faith. But yeah, if that's their Game Pass revenue, and that's somehow able to compensate the drop in sales revenue, then they would have to be moving less than 34 million pieces of software a year at $60. Which actually, they COULD be moving that amount or much less than it, but the Game Pass revenue is just revenue, not net profit. There are still expenses they'd have to cover for in operating costs and licenses, payouts to devs & pubs with content on the service based on certain terms of contracts, or in the case of games where they just flat-out paid for getting in the service or covered development of, parts of the revenue would be to make up for those expenses.
I agree with you that it's a software issue with Xbox; not necessarily in quality. They HAVE quality games over there. But they lack many (or really, any) mass-market big-name IP with strong selling power and mindshare appeal among a large part of the market. The one IP they had left in that style, Halo, is in a proverbial coma and may never come out, let alone return to prominence. It's one reason they went and bought Zenimax, and want to buy ABK.
So through Zenimax they do theoretically have some of those type of IP, like Fallout, TES, DOOM, Quake etc. However, NONE of those have games coming anytime soon (to our knowledge), and they are all still very much multiplats strongly associated with PlayStation for the time being, until Microsoft actually does release new installments exclusive to Xbox platforms. Even then it would take some effort to build up that brand association between them and Xbox/Microsoft.
Is there any word that the detachable disc drive model is in fact a slim revision? That would be awesome, but I've seen some people say if it were a Slim, they couldn't use the current plates for the models already on the market, and there's probably some good money in providing those.
So Sony'd have to make another line of plates for the Slim model, but I do also kind of think that's a small reason to rule out the detachable drive model not being a Slim.
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