K
KeplerL2
said Xbox Series stopped selling at a loss a while back. You don't know that would achieve 30% profit margin even if that were not the case. Rest of your post is speculation and guessing as much as anyone's. And yeah, I fully acknowledge I'm speculating. I just don't see a Microsoft developing first party hardware at cost with no close ecosystem to capture profits backing it up. Makes no sense to do that while undercutting OEMs by 20% either.
Of course everything is speculation. Difference is if that speculation is based on facts or console warring. IF the OEMs are building higher spec Consoles, MS wouldn't be undercutting them. They would be only undercutting if the specs were same. The OEMs would have to have more higher spec SKUs with more Ram, storage, clocks etc, to justify their price. The special edition 2 TB Series X for $799 isn't undercut by a 1 TB Series X for $649. The Xbox Ally X at $999 isn't undercut by a Xbox Ally at $599. Higher specs justify higher prices. Besides, most of the form factors OEMs will be building are Xbox PCs, Xbox Laptops, and Xbox Handhelds. Mas would be handling most of the Xbox Consoles and Xbox Cloud.
MS revenue capture mechanism is Gamepass and xCloud Buy and Stream. The Console acts as a foundation for the ecosystem, a developer target baseline for optimization.
Seriously how do you just come out with these figures and keep a straight face? I mean for starters 100hours is likely towards the end of the bell curve instead of the middle! There is a reason GFN put a 100 hour cap on per month, its to cull the 1% using a disproportionate amount of the service. Probably shared accounts with huge hours.
Also what efficiency gains specifically? What about power price rises? How are they going to depreciate the new hardware, for that matter is it a complete changeover, staged, scaled up etc etc. You have NFI. And your profit margin, big enough range there?? You are just throwing darts at the wall. You have stated you have no links to MS other than your mod duties (and shill duties here), so I'm taking you at your word you don't have MS whispering in your ear.
Someone is triggered.....
MS is advertising unlimited Cloud Gaming for their Gamepass tiers. I just went with the 100 hour number because that's the average of some1 who might play 3 hours daily, and it's what Nvidia cap is. The number was used to illustrate a point. If xCloud costs are 3 cents an hour, then $3 for 100 hours. Most users may not even use more than 20-30 hours a month.
The fluctuations in the profit margin range depends on lots of factors, if the user is subscribed to Essential at yearly $80 price, that comes out to $6.66 per month. Or if they're paying $10 monthly. Or if they're paying $15 monthly for Premium. Or Ultimate at $30 month or cheaper conversion. How many games that Cloud only user buys from Buy and Stream or if they only stick to Gamepass catalog.
Jez noted that they're already testing PC based hardware for xCloud. That PC based hardware is very likely Magnus, which is dual purpose, for use on both Xbox PCs and Xbox Consoles. More specifically, they will probably use Magnus paired up with the 192 CU AT0 die. The GPU being paired up with 2-4 Magnus SOCs, running 2-4 instances. It's how Nvidia runs GFN.
It took them 6-8 months to replace all One S server blades to Series X server blades, globally by July 2021. However, they may not do full replacement rapidly this time, since games will be cross gen for a while. Regardless, the community will be able to find out if a Magnus based hardware is at play. The creator of Better xCloud, REDphx, also a mod, data mines and keeps track of any new changes in the xCloud PWA web app.
As for efficiency gains, RDNA5 is 4-5 times better performance per watt. And being able to use AV1 hardware encoders to encode the streams will also bring cost reduction. Higher visual clarity without having to increase bitrate beyond 15-20 Mbit for 1080/60.
So this part is my theory, that MS will also do a 40-44 CU S tier console with Magnus AT3. Even if Magnus AT0 runs four 40-44 CU instances with the new S profile, each instance would be far more powerful than a Series X. And running 4 instances also means more capacity per server blade. They could fit 12-16 instances per server blade rather than the current 8. More efficient cooling with less server racks needed for the same around of users.
So yes, Magnus brings efficiency gains in pretty much every area vs running Cloud Gaming off of Series X servers.
So, if this is just a PC, why wouldn't everyone just go with PC Game Pass which is currently like half the price? I wonder how this will play out. No pay to play online would reduce the value of Game Pass as well. I think people are getting their hopes up for some possible misinformation.
PC Gamepass is marked for death, reportedly going away next year. They're de-emphasizing it everywhere. And the Coming Soon to Gamepass infographic stopped mentioning it.
And
the device is still a Console, with GDKX optimized games.
Hiroki Totoki says the company has to “proactively work on” making more games multi-platform…
www.videogameschronicle.com
In terms of hardware, he noted that "cost reduction in this console cycle is really difficult to come by" compared to previous generations, due to the increased price of components, and implied that console prices wouldn't be dropping while it looked for ways to improve margins.
"How can we, given the situation, put our product lines together to make it affordable, without relying on steep discounts, to reasonably sell them to continue our commercial journey on a sustainable basis?" he asked. "I personally think that's important, and there is an opportunity in that."
PS profit margins used to be around 12-13%, dropped down to 6% for few years. He got them back up to 16% by mid 2025. I'm not gonna go through specific Sony investor financial filings but I believe the target Totoki set was at least 15%. As in the minimum for overall, hardware subsidizes would cut into that.
www.ign.com
