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[LavitzSlambert]

It certainly can contribute to revenue growth if you have a hardcore userbase to tap into, but in terms of userbase size, no an even more expensive device is not going to move the needle. Gaming is a mature industry and in the US, Japan, and Europe, we are seeing most people who enjoy gaming are already part of that audience.

If anything, a lower cost model to sell to other countries is the way to go. Look at Black Myth Wukong hitting up Chinese gamers. We will continue to see Microsoft and other companies that are focused on growth try to enter new markets and expand access to their software catalogues by increasing the amount of devices that can play their games.

They can do this by porting the crap out of everything, but that costs additional money and doesn't scale well with the additional sales. There is another way, and that's why Microsoft is leaning fully into software by purchasing ATVI and will maintain a smaller presence in the hardware market (higher margin focus), but they will be making their money with recurring revenue and being the middleman as largest publisher in the industry. They want to get a cut from whoever creates gaming content, period. This is exactly what Microsoft has always done, and the future is looking good for them as a company, if not as much for the Xbox brand itself.

Sony is moving toward simultaneous releases for some games and a shorter timeframe for their PC ports, as well as cashing in our their most popular franchises to get people who watch shows or movies into the games, and vice versa. Look at Uncharted and The Last of Us, that is the model they are chasing and it fits well with the rest of their business.

Where's Nintendo, you ask? They are licensing their IPs and partnering with other companies in areas outside their own competency to continue building their brand, the Disney way. You have movies, theme parks, and an absolute deluge of official licensed Nintendo toys and other products. In fact their licensing revenue has basically quintupled over the last few years, and you can see them do little experiments (like Alarmo). I wouldn't be surprised to see Nintendo TV series (especially aimed at kids) in the coming years. With all that said, I don't think Nintendo cares about growth the same way Microsoft and Sony do - Nintendo is very profitable as it is, and the company culture is still very conservative.

Anyway, long winded post but the point is there are many different ways of making money from people that's not releasing significantly more expensive consoles. This site really hates Phil Spencer, but he is dead on about business sense and you can already see all major companies making moves in this direction and in agreement with how to continue their business success.

 

[Gambit2483]

We're not growing the market at all....

Eh, If anything Nintendo is growing the market, esp with younger gamers and the female market...but of course as usual Nintendo doesn't count

 

[ChorizoPicozo]

It certainly can contribute to revenue growth if you have a hardcore userbase to tap into, but in terms of userbase size, no an even more expensive device is not going to move the needle. Gaming is a mature industry and in the US, Japan, and Europe, we are seeing most people who enjoy gaming are already part of that audience.

If anything, a lower cost model to sell to other countries is the way to go. Look at Black Myth Wukong hitting up Chinese gamers. We will continue to see Microsoft and other companies that are focused on growth try to enter new markets and expand access to their software catalogues by increasing the amount of devices that can play their games.

They can do this by porting the crap out of everything, but that costs additional money and doesn't scale well with the additional sales. There is another way, and that's why Microsoft is leaning fully into software by purchasing ATVI and will maintain a smaller presence in the hardware market (higher margin focus), but they will be making their money with recurring revenue and being the middleman as largest publisher in the industry. They want to get a cut from whoever creates gaming content, period. This is exactly what Microsoft has always done, and the future is looking good for them as a company, if not as much for the Xbox brand itself.

Sony is moving toward simultaneous releases for some games and a shorter timeframe for their PC ports, as well as cashing in our their most popular franchises to get people who watch shows or movies into the games, and vice versa. Look at Uncharted and The Last of Us, that is the model they are chasing and it fits well with the rest of their business.

Where's Nintendo, you ask? They are licensing their IPs and partnering with other companies in areas outside their own competency to continue building their brand, the Disney way. You have movies, theme parks, and an absolute deluge of official licensed Nintendo toys and other products. In fact their licensing revenue has basically quintupled over the last few years, and you can see them do little experiments (like Alarmo). I wouldn't be surprised to see Nintendo TV series (especially aimed at kids) in the coming years. With all that said, I don't think Nintendo cares about growth the same way Microsoft and Sony do - Nintendo is very profitable as it is, and the company culture is still very conservative.

Anyway, long winded post but the point is there are many different ways of making money from people that's not releasing significantly more expensive consoles. This site really hates Phil Spencer, but he is dead on about business sense and you can already see all major companies making moves in this direction and in agreement with how to continue their business success.

so....like the Series S?

 

[Katatonic]

This says to me that MS is scared Sony is successfully encroaching on the PC market.

 

[eerik9000]

This isn't a dig at Sony. Phil has been saying this since they announced Series S back in 2020. Plus, Xbox themselves just launched a $600 console themselves. Whoever wrote the article is a ragebaiting idiot.

 

[Astray]

He didn't say anything about Sony. The websites inferred it. He just made a general comment about the prices of consoles do not support a model where they are $1000+. The whole Sony part is conjecture from the article writers, what he is probably speaking to are the mass rumors of the unsubsidized console that everyone was speaking about from XBOX, but that's my conjecture .

That can be something he meant tbh.

 

[Cyberpunkd]

Doesn't read like a PS5 Pro dig to me. Reads like they're advertising their thinking: they're not looking to grow the console market. Which means sense, because it hasn't grown in 10 years.

Yes, but then you can try to extract more value. It’s the basics of Sales: you either have more clients or you increase the deal size.
Spencer is incapable of doing it even though he has a backing of a company valued at multiple times more than Sony.

 

[Cyberpunkd]

This isn't a dig at Sony. Phil has been saying this since they announced Series S back in 2020. Plus, Xbox themselves just launched a $600 console themselves. Whoever wrote the article is a ragebaiting idiot.

Yes, it is. He is salty AF all that Microsoft money cannot buy him the advantage he wants, even after getting CoD. Sometimes he is better at hiding it, sometimes he isn’t.

 

[hououinkyouma00]

You have the cheapest console and you're not growing the market that way either.

This. Xbox is the most inept company it’s almost hilarious. I don’t feel like they think literally anything through.

Before the Xbox defense force comes out. I like (liked) Xbox. I’ve bought multiple Xbox consoles sometimes multiple times (OG, 360, 360 Slim, XB One, One S, One X, Series X, Series S). Halo and Gears are also both in my favorite games/franchises of all time.

The brand has no identity anymore, and has some of the worst messaging I’ve ever seen. They cant even all come together on what they want to do.

 

[Zacfoldor]

Remember these words when the next Xbox comes out.

 

[DenchDeckard]

Can't believe this Chode of a journalist twisted Phil's words this way. There's plenty to attack MS for but by the looks of it, this is a complete twist of what he has actually said.

A lot will fall for it and use it as another excuse to attack the guy.

 

[Dr. Wilkinson]

“We’re not going to grow the market with $1,000 consoles.”

Probably referring to consoles in general.

This. He’s talking about the fact that the PS6 and next-gen Xbox are likely to be $800 console at this point. And without disc drives, I’m sure. Good luck selling 100+ million consoles at that price. Especially since we’re now in the reality of economics where consoles no longer get price drops throughout their lifespan.

Console market will surely shrink this gen compared to last gen, and so on in the future.

 

[Dr. Wilkinson]

Remember these words when the next Xbox comes out.

He’s speaking in general. That regardless of who makes them, extremely expensive consoles are not going to grow the market from where it is today. It is likely to remain stagnant. Not that his company won’t stay in the console market and be subject to high price devices, as well. That’s just how things are going to go, regardless. It’s inevitable given the price of building high-end machines.

Everyone overreacts so much around here…

 

[ByWatterson]

They're not growing the market at all piss off

 

[Jormatar]

They are in a rough spot when they can't grow their market even with 200$ console.

 

[Dr. Wilkinson]

They're not growing the market at all piss off

They are in a rough spot when they can't grow their market even with 200$ console.

I’m sure everyone here is aware he meant in general, that consoles are not growing in install base from one generation to the next. That they are stagnant. And certainly will remain so as they will no doubt be near $800+ by the next cycle.

But I suppose the urge to be flippant or cute is difficult to ignore . So here we are, indefinitely I guess.

 

[ByWatterson]

I’m sure everyone here is aware he meant in general, that consoles are not growing in install base from one generation to the next. That they are stagnant. And certainly will remain so as they will no doubt be near $800+ by the next cycle.

But I suppose the urge to be flippant or cute is difficult to ignore . So here we are, indefinitely I guess.

Yeah I know but we're all just tired of hearing the same blowhard wannabe visionary tell us the future after he personally has flamed out over and over.

 

[Banjo64]

Since when did Phil start sounding like a gap year hippie?

 

[yogaflame]

I have a feeling this thread will not age well

 

[HeisenbergFX4]

But theyre planning to launch a nextbox that cost 1k

Which they know wont grow the market

 

[reinking]

Eh, If anything Nintendo is growing the market, esp with younger gamers and the female market...but of course as usual Nintendo doesn't count

I didn't say anything about Nintendo or Sony. I was saying that MS/XB is not growing the market. Their acquisitions are at best shifting ownership in the market and at worse shrinking it.

 

[DarkstarRising13]

You are not growing the market because the gaming industry is in a state of arrested development still making games from the PS360 era. Still unable to innovate beyond the same Ubisoft open world formula. Most people look at how games have simply failed to evolve and see no reason to jump in.

As the head of the biggest banking publisher, he should be giving his teams a mandate to innovate like gta3 did back in the day. But nah he’s content with putting out the same games that even the hardcore don’t feel like buying anymore let alone capture the imagination of a new audience.

It’s depressing watching the half life 2 documentary because it shows how little we have changed in 20 years. It’s still the same damn game.

Considering the company that made that tiresome open-world formula is on the verge of bankruptcy and the sales of their games are collapsing, I think gamers are getting tired of this same formula and want something new. If they go bankrupt, hope they take that stupid and repetitive open-world formula with them.

 

[Oppoi]

I’m sure everyone here is aware he meant in general, that consoles are not growing in install base from one generation to the next. That they are stagnant. And certainly will remain so as they will no doubt be near $800+ by the next cycle.

But I suppose the urge to be flippant or cute is difficult to ignore . So here we are, indefinitely I guess.

Why do you act like Spencer needs someone like you to explain everything?

 

[S0ULZB0URNE]

Nobody is selling $1000 consoles.

Thread is a nothing burger.

 

[cebri.one]

 

[Polygonal_Sprite]

Switch 2 will be less than half of that and eat up more of Xbox’s market share.

 

[Bumblebeetuna]

Dumb clickbait headline. Pro isn’t $1000 and he is speaking generally. Not to mention, literally no one is expecting the Pro to “grow the market”. It’s for dedicated hardcore console gamers who are already part of the market. Use your heads, people.

 

[Shrap]

This is a thoroughly unhinged response to a CEO saying “I think the industry is headed the right way by providing more affordable access to gaming”

Lmao, what the heck is going on here?

It's been over a decade and the dude has reduced the brand and himself to nothing but a shadow of itself.

It was also a joke. Phil ain't an actual ghost yet even if he looks it.

 

[jm89]

If it isn't just a generic response, he may be responding to the pc like console people are getting their hopes up about.

 

[DavidGzz]

I feel like this quote guarantees no Xbox next year especially if it's supposed to be a true next gen system and not a half step unless MS is eating 200+ of the cost.

 

[noob smokes]

Which they know wont grow the market

Then whats the point what do they hope to achieve with this

 

[HeisenbergFX4]

Then whats the point what do they hope to achieve with this

They hope other products might grow their market like this fabled handheld much the same way Sony likely figured the $700 Pro wasn't going to grow their market

100% assumptions on my part.

 

[Topher]

This says to me that MS is scared Sony is successfully encroaching on the PC market.

Why would Microsoft care about Sony in the PC market? The only space where Microsoft and Sony are direct competitors is consoles.

 

[jm89]

This says to me that MS is scared Sony is successfully encroaching on the PC market.

I think it's more they are scared that all the people not interested in pc but consoles will head to playstation if Xbox consoles is no more.

 

[eerik9000]

Yes, it is. He is salty AF all that Microsoft money cannot buy him the advantage he wants, even after getting CoD. Sometimes he is better at hiding it, sometimes he isn’t.

His remark about $1000-dollar consoles not growing the market is honest, and not a snark or dig at Sony. They already tried it with the power narrative of the One X and they failed. They went to the opposite direction with Series S and failed again. Their conclusions from the failures, however, are completely wrong. The problem is not that Xbox is inaccessible, the real problem is that nobody cares about the Xbox brand anymore. They don't know how to differentiate themselves from PlayStation's brand and products to entice consumers to choose them. They have no idea what makes Xbox special. So much so, that now they are saying everything is an Xbox. And that is why their latest "every screen is an Xbox" push is bound to be another failure.

 

[Skelterz]

Your not really growing the industry by developing 200m dollar games and putting them in game pass either really .

 

[Ozriel]

But theyre planning to launch a nextbox that cost 1k

Source?

 

[Pfroebbel]

How does that fit with ‚biggest generational Leap‘?

 

[Dr. Wilkinson]

How does that fit with ‚biggest generational Leap‘?

It seems like 75% of this thread is just people completely not understanding what his larger point is.

 

[ap_puff]

The Steve Jobs quote regarding Microsoft having no taste never rang more true.

They have attacked this by thinking lower prices in all aspects will result in success and market growth - cheaper console, and cheap subscriptions (to the extent that they were practically giving it away for free for a period if time). All while completely disregarding the aspects customers value most and get customers talking - progress, innovation and quality.

What that's resulted in is attracting a subset of consumers who have no taste, in some cases no money, and importantly no influence. And then they act all confused, pointing fingers at the competition along with the market environment, when actually it's a "problem" they created for themselves and themselves alone.

I think it's a little more nuanced than that.

MS made a bet that if they lowered the barrier to entry and got enough momentum, they could turn the market into a money-losing competition, then they could outlast the other players and essentially cannibalize the market until they were the last platform standing. Essentially they would be Country Buffet and everyone would come to them because it cost $10 to eat whatever you want, while at another restaurant you pay $70 for a single steak dinner.

The problem isn't that their customers don't have taste or money. MS actively cultivated them not to value the games they receive, and that was on purpose. The problem is that they had really shit execution. Sure they had Country Buffet but they kept coming out with half cooked food that had no salt on it (halo infinite) or weird shit like surstromming that no one would want to eat(pentiment).

 

[MacReady13]

Mobile phones are ubiquitous already.

Was there no point that logic kicked in between when you thought this up and clicked ‘post’?



What do you think their whole Cloud push was all about?
What do you think their most recent ad is all about?

Bloody hell

If mobile phones are everywhere, and Xboxes are now mobile phones, then pack it up- Xbox is the clear winner!

It baffles my mind how people just cannot see this- consoles are made to play games on tv. Majority of people who want to play console games (these are the games Microsoft WANT to release) want to play them sitting on their asses on a fucking tv. Not on a mobile phone. Not on a handheld mini pc. They want a fucking box sitting near their tv to play their games. Sony has proven it. Nintendo has proven it. Heck Microsoft showed it during the 360 era! But cause they’re losing in the console space, all of a sudden EVERYTHING is an Xbox now.

Fucking pathetic. And yes, i thought for about as long as Microsoft did in releasing that brain dead ad before posting my reply. No matter which way you look at it, Microsoft is trying to tell people you don’t need a console anymore to own an Xbox, you can get a phone/tv etc as an Xbox. Ubiquitous or not they’re far more expensive and play far less games than a console does.

Either way, enjoy renting your games on a firestick or squinting whilst playing COD on the newest iPhone. Hopefully no one is trying to call whilst you turn off to play a game!!!

 

[JackMcGunns]

You have the cheapest console and you're not growing the market that way either.

Warrior mentality, he didn’t say that either.

 

[Sintoid]

...but with 600$ handheld...

 

[Ozriel]

Either way, enjoy renting your games on a firestick or squinting whilst playing COD on the newest iPhone. Hopefully no one is trying to call whilst you turn off to play a game!!!

Ironically, you’re a lot closer to that future than I am

Majority of people who want to play console games (these are the games Microsoft WANT to release) want to play them sitting on their asses on a fucking tv. Not on a mobile phone. Not on a handheld mini pc. They want a fucking box sitting near their tv to play their games. Sony has proven it. Nintendo has proven it. Heck Microsoft showed it during the 360 era! But cause they’re losing in the console space, all of a sudden EVERYTHING is an Xbox now.

People want to play games. Console or PC hardware is the standard way, and most of the existing market is conditioned that way. That’s how I play my games too.

This conversation is about the industry taking steps to add those who can’t afford the hardware, or who have left their hardware behind when in transit.

you can get a phone/tv etc as an Xbox. Ubiquitous or not they’re far more expensive and play far less games than a console does.

People already own mobile phones. Might as well add the cost of the house or the couch to the price of gaming if you’re going to talk about baking in the cost of the mobile phone that’s already in everyone’s pocket. This isn’t 2001.

A Fire TV stick costs $30. The browser or app on Smart TVs or Chromebooks or MacBooks costs $0.

But cause they’re losing in the console space, all of a sudden EVERYTHING is an Xbox now.

Phil has been pushing Cloud streaming as the next big thing since well before this console generation.

Article from 2018…

Microsoft’s new gaming cloud division readies for a future beyond Xbox

Cloud services seen as the future of games

www.theverge.com

And the other time when Phil crazily claimed Amazon and Google would be his main rivals, back in 2020.

Given how his boss is so crazy about the Cloud/Azure stuff, I suspect they’d be pushing this same strategy even if they were selling way more consoles.

 

[Unknown Soldier]

Microsoft Gaming CEO isn't growing the market at any price so I'm not sure why he thinks he can talk some shit

 

[adamsapple]

This says to me that MS is scared Sony is successfully encroaching on the PC market.

 

[Klayzer]

Microsoft Gaming CEO isn't growing the market at any price so I'm not sure why he thinks he can talk some shit

Somehow, pointing out that obvious fact makes you a warrior, go figure. It's fascinating, how far some Team Green fanatics will go to shield Phil from criticism.

The hardware is on literal life support, yet he still has fans deflecting for him.

 

[ZehDon]

Yes, but then you can try to extract more value. It’s the basics of Sales: you either have more clients or you increase the deal size.
Spencer is incapable of doing it even though he has a backing of a company valued at multiple times more than Sony.

Missing the forest for the trees. The size of a console generation in cumulative sales hasn't grown for two generations, meaning there's no new customers to entice, and no new money coming into the industry. There's two ways to handle this: diversify and expand, or price gouge your existing base. When faced with this same problem after the Gamecube, Nintendo chose to diversify. Likewise, Xbox chose to change up and diversify because they lost the console wars with the Xbox One and they know it. They can't beat PlayStation head to head, as their Series console numbers show. So today Xbox software sales are 90% digital, where the margins are quite a bit higher, allowing them to make more money per sale per console without overcharging. They've created recurring revenue streams through Game Pass instead going full-EA with MTXs. They're offering their games on two platforms universally day one - PC and Xbox - as well as starting to offer their games on other platforms, allowing them make more money per title, divorcing their overall financial success from hardware sales.
Sony chose to go the other way: charge more and deliver less. So, they charge more for their games, hardware, and services, doubled down on re-releases and paid patches, and over-extended their brands, like TLOU and Horizon.

Yes, it is. He is salty AF all that Microsoft money cannot buy him the advantage he wants, even after getting CoD. Sometimes he is better at hiding it, sometimes he isn’t.

Reads like you're projecting. When Redfall flopped, Spencer had a pretty candid discussion where he explained that Xbox lost the worst generation to lose: the one where people built their console digital libraries. And he's absolutely correct. Now, they're shifting Xbox to something else rather than simply shuttering the brand. They've been open about that for a long time now, yet, people seem pretty salty that Xbox is trying to evolve to stay alive rather than simply trying the same thing again and going out of business.

 

[Majima Everywhere System]

Phil sux, but I doubt the PS6 is as much money as the pro. I’m worried it will be less powerful, cheaper, and full of magic.

PS5 Pro feels like an off cycle release to prove a point- people want solid performance, you can’t see the difference anymore, and costs for better hardware will be too high to try going that route in 3 years.

 

[Cyberpunkd]

Spencer had a pretty candid discussion where he explained that Xbox lost the worst generation to lose: the one where people built their console digital libraries. And he's absolutely correct.

Where’s the data? Because I had PS4 Pro only last gen, and yet I bought XSX twice before settling for PS5.