This has disaster written all over it!!! No way something like this could work because that missing 5% is what a company like Samsung or Sega would need to justify the reason to build hardware in the first place. Because they'd also have to pay brick and mortars to house it in their stores. And pay shipping cost too!
The way I was trying to frame it, is that the 5% would get them the Windows & Xbox UI license, and cover some of the cost of production of certain aspects of the hardware, mainly with things like CPU/GPU/APU components that MS put in the orders and set up the wafers for (well, pay AMD or Nvidia or Intel to secure those wafers). That's the side MS would take care of, not SEGA or Samsung, because the idea I guess they'd all be sharing those wafers anyhow, so each of them are just pooling an amount towards it reflected in the licensing cost.
But outside of that cost, each company would still be paying for component production as regularly required; maybe they all also have that licensing fee cover some stage of production assembly that's also shared, then for specific OEM boxes they take what's been assembled to another warehouse to complete the production with their various hardware customizations. They can use their license for Windows & Xbox UI on any machine they produce though, and add some in-house utilities and software features to the desktop environment and Xbox UI specific for their particular product type. Shipping, distribution etc. would be their own logistics to handle, but these companies would be aware of how to handle those things.
In that sense I think it could work. But, we'll see if anything like that happens, in due time.
Yeah. Just ask yourself how many times have you encounter a "leaker" that suddenly not only knew about exclusivity status of multiple games, but also about entire hardware strategy (outside of hacks and Microsoft doxxing themselves during FTC trial)
Also ask yourself if concept of Microsoft "licensing" 3rd party "consoles" even make sense. How would they split profits from software sales, since Microsoft is currently taking 30%? How would be those manufacturers able to be price their devices competitively when they need to sell hardware at a loss to be competitive? What would even be incentive of those hardware manufacturers to make that kind of hardware? How would Microsoft secure it if they are not making that hardware?
It really seems like people are just refusing to use their brains so they can support narrative they made in their heads.
You're thinking about it like a traditional console business model. The entire point here is that they would move away from that. Yeah making it so Xbox runs Windows opens up the reality most will go to Steam for their game purchases but that's counterbalanced by MS putting their titles on as many platforms as can run them. Changing that business model also significantly helps them in negotiating a form of Game Pass for Sony & Nintendo platforms, similar to the sub services EA and Ubisoft have. They also make a lot more money upfront on the hardware sales, which balances out the likelihood of less units being manufactured.
How it works for OEMs, well that's a part still up for debate. I had some ideas but admit they aren't fully fleshed out. The idea of licensing out the hardware to OEMs only makes sense to me if MS designs a spec innovative enough to where OEMs desire to use it in their products, but that would be a tall order. They don't make their own GPUs, their own RAM etc. The innovation would have to come at the I/O and form factor level, but good luck there.
It's why I still think if anything like this happens, it'd be Microsoft manufacturing the hardware themselves still, at least to start, and open up to OEMs somewhere down the line. Maybe they develop some Xbox PC tablet with a cubic 3D AR folding display that takes off and patent the design to license it out later to OEMs. Who knows really.
Exactly this, it makes no sense what so ever. Microsoft could releaase an updated big screen interface that brings the Xbox interface to the Windows. Then you would just log in and your PC would work just like an Xbox. Then you can have more powerful gaming PCs that work just like an Xbox, while Microsoft sells Gamepass subs, and digital games through the Windows store.
They could do that; in fact they might probably do that too as an addition. But like with the Surface devices, they would have a level of optimization at the hardware/software level through vertical integration, plus ability to do some innovation with form factors and I/O features, that would make releasing Xbox hardware themselves a desire nonetheless.
Why is Joe Consumer buying a Sega Xbox for 600 dollars (or 899) instead of a PS5 for 500 dollars when they aren't even buying a Microsoft Xbox for 350 dollars?
Because the SEGA Xbox wouldn't need to sell console-level numbers to be worth it, and can double as a full-fledged PC. And in the SEGA example, they could design custom casings calling back to classic systems for nostalgia purposes, even with accompanying peripherals (USB-based of course, and compatible with general PCs).
Currently, Xbox has zero of these appeals and that's part of the reason its brand in hardware sales and whatnot has been declining so severely.
This is a good point.
It wont be Joe Consumer...it will be GAF User Joe. It will be a niche product.
I really would like to see what MS does that will get it mass market adoption.
Depends on what "mass-market" means. If it's not being positioned as a games console, suddenly 2 million a year is mass-market. Say if MS made 2 million Xbox NUC PCs for $999 and they have a profit margin of even $150 on each of them, that's $1.998 billion in revenue and $300 million in gross profits. They're spending less in hardware production, still generate decent revenue, and make profits off the hardware (something that isn't happening with Xbox consoles at current).
In actuality they could potentially make double the number of units a year and finesse more profit margins each one sold, but that would be on them to figure out.
Yeah, that’s the thing. MS can eat the $100-200 loss per box since in theory they would have made up on percentage of game sales and GamePass subs.
An OEM has to sell the box at a profit unless they have some sort of revenue sharing agreement with MS. So that XSX would be like $599-699.
MS can’t sell enough at $350…. Unless it’s a PC with like an Xbox compatibility on top I don’t see the point.
That's exactly what it's going to be.
And that was actually a success for what it was.