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[The Information] Nadella considered winding down Gaming (Xbox) business in 2021; chose to pursue an acquisition-based strategy instead
- Thread starter HeisenbergFX4
- Start date
nowhat
Member
Hey, sometimes you gotta help a brother out.
Humdinger
Gold Member
So rather than winding down Xbox, Nadella bet 80+ billion on acquisitions that were expected to drive GP subs at 40% growth annually to 100 million by 2030? That seems rather ... ambitious and/or delulu. GP is now stalled at around 30-35 million (?), with the highest churn rates in the entertainment industry. That seems like a rather bad and expensive bet.
GHG
Member
Heisenberg: ' $20 is the tier which gets day 1 games'
Adam: 'PC GP is $11 and gets all the day 1 games too'
G: 'sO wHy ArEn'T yOu On pC'
I admire your ability to bypass the actual misinformation and try to gotcha an individual.
You'll make a great PR person, G
You accused him of lying - false, that's exactly what you're paying.
You say its "misinformation" - false again, it's what you're paying.
The easy way to solve this (which would in fact make it misinformation since nobody would be paying it) would be for everyone paying the price he quoted to switch over to the platform which would enable you to get the same thing but for less money. But you won't. And to make matters worse, instead of taking advantage of the cheaper option, you're just referencing it when it's convenient for you to run defense for a 3 trillion dollar corporation.
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Astray
Member
It's far likelier that Phil and co made the aggressive plan because Satya wouldn't accept anything less.
It's a classic corporate case of overpromising to get a strong budget.
Humdinger
Gold Member
If so, I don't imagine Satya is too happy with Phil (or with himself, for going along).
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adamsapple
Or is it just one of Phil's balls in my throat?
Wait wait wait ... the fuck are you talking about lol.
What does it matter what *i'm* paying as an individual when the poster was incorrectly stating that the $20 tier is the only one which gets day 1 games?
That is an *OBJECTIVELY* incorrect statement. You cannot skirt around it any way.
A new low for you, G.
Astray
Member
He probably is not, hence them now scrambling to deliver his edict from on high and get Halo on Playstation 5/Switch 2.
Insanemaelstrom
Gold Member
Agreed. Series consoles initially rode the wave of next gen hype( mainly because A. PS5 existed, B. Because you couldn't buy a ps5). But once ps5 stocks normalised, series consoles stopped selling. Also worth mentioning that series consoles were stupid cheap during 2023 holiday season and still didn't move the needle. Clearly they expected something from both starfield and the discounts they offered were a last ditch effort to drive up hardware sales. When even that failed, they had no answer to higher ups as to why they aren't selling games on more successful platforms. Personally I believe ms going 3rd party would have happened even without Activision acquisition.
They did have some great games. Age of empires games, Forza motorsport games( besides theatest one), forza horizon games, flight simulator, etc. But the issue is almost all of them are better suited to pc and were also available day and date. Why would anyone buy an Xbox for them?
Bethesda was great before 2020. Prey(2017) was brilliant, dishonored games were brilliant, fallout 4 was great(imo), and they had way more hits than flops. MS was unlucky that their quality started declining just when they were acquired. ABK, still prints money and CoD for all its fault doesn't have a competitor yet. So that will give them a tidy profit. The struggle is that ABK growth has slowed down. It is stagnant, while Xbox and Bethesda are declining, which makes for a really bad financial report in a market that wants continuous growth.
Well, how would you feel about a man who conned you out of 80bn?
Astray
Member
He probably is not, hence them now scrambling to deliver his 3P publishing profits.
Humdinger
Gold Member
Not so good. Also, I would wonder about my own judgment. And where I got 80 billion dollars from.
GHG
Member
Wait wait wait ... the fuck are you talking about lol.
What does it matter what *i'm* paying as an individual when the poster was incorrectly stating that the $20 tier is the only one which gets day 1 games?
That is an *OBJECTIVELY* incorrect statement. You cannot skirt around it any way.
A new low for you, G.
But here's the thing, he didn't say it's the only one.
Strictly speaking, if we are talking about consoles (which is predominantly what this thread is about), then yes, that is the only price which also gets you day one games.
Incidentally, that's also the exact price that you're paying.
Burger King
Member
I think Phil Spencer's days are numbered.
Maybe Nadella is waiting to fire him to give something to the angry shareholders when they publish the next results.
Maybe Nadella is waiting to fire him to give something to the angry shareholders when they publish the next results.
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Trogdor1123
Gold Member
I don’t know about Nintendo and steam being competition. Nintendo really does its own thing alongside the others and steam is on different hardware. Your point still stands though for sure.
I still want strong competition in this sector. That being said, the ps2 was utterly dominant and look how that turned out. Maybe a push towards more competition in software, rather than hardware, would be good.
PhillMeCream
Member
This is what happens when you have numbnuts with MBAs who don’t game running the show
Gamer_By_Proxy
Member
I think as soon as the CMA basically stopped CoD from being exclusive, Xbox should have walked away from the deal. But I guess they saw enough value in King to keep going.
I also think they should have made a clear line of demarcation where they say Xbox Game Studios games come to GamePass Day 1, but Bethesda and Activision games come to GamePass 1 year later.
Clear messaging, and a predictable GamePass release schedule.
I also think they should have made a clear line of demarcation where they say Xbox Game Studios games come to GamePass Day 1, but Bethesda and Activision games come to GamePass 1 year later.
Clear messaging, and a predictable GamePass release schedule.
adamsapple
Or is it just one of Phil's balls in my throat?
It's also interesting question. Nadella being MS CEO must be a smart person, what kind of pie in the sky Xbox execs bring for him to bait.
kyoji
Member
WOOF.
GHG
Member
'but he didn't say it's the onnnlyyy oneee'
'striiictlyyy speakingggg about the consoleessss'
You can add as many qualifiers and filters to make yourself happy, G.
It will continue being a factually incorrect statement and you will continue to be factually incorrect as well.
What are you doing? You're the one who claimed he said its the only one. You even bolded and underlined it for emphasis.
There's nothing factually incorrect about what he said regarding the $20 tier considering that is very much what applies to you and the other remaining Xbox console users.
But like I said, you all have the power to make his statement incorrect if you wish.
Mibu no ookami
Demoted Member® Pro™
It was obvious they were paying pandemic prices for ABK and they had an out. I was stunned they didn't take it when the CMA initially stopped them.
ABK was never worth 70 billion and the valuation over the next 5-10 years is only going to drop, especially if true competitors do come out that erode market share for CoD.
ABK was worth 35 billion dollars in 2018... think about that. Nadella doubled down on Xbox because Spencer promised him he could turn Xbox into the next Netflix. Netflix is worth 361 billion dollars... what is 70 billion next to that?
But by the end of the decade, Xbox won't be worth half of that.
A revival of Medal of Honor, a competent Battlefield, Sony coming out with SOCOM across PlayStation and PC... lots of things can chip away at CoD and Microsoft isn't even focused on improving CoD, they're focused on how to make more money from it in the short term...
laynelane
Member
Does goty level games count?
They also "give" dependable products, the console and controller, that's worth the money I paid. That and the games are the reasons for Sony's market share, plus a long history of providing customers what they want.
Gamer_By_Proxy
Member
Hell with the cheater issue CoD has now, it wouldn't surprise me if they're losing some people to Marvel Rivals.
Bobby Kotick and Lulu made out like bandits. They're the real winners.
Mibu no ookami
Demoted Member® Pro™
GamePass is massively dangerous to the industry (and to a degree so is the F2P model).
If major studios could go back in time and restrict their content to Netflix they absolutely would. Netflix has shrunk the pot and what we're seeing now is all these streaming services are increasing in cost to try and regrow the pot, but it's massively segmented. You can just pay for what you want cancel it and move on to another service temporarily. The constant stream of revenue isn't there.
It impacts cable tv and movie theaters.
Now there's this race for regional sports content to make up the difference too. It's going to fail. People will just stop watching.
Sony had the right idea with their subscription service because it doesn't detract from premium sales. It's long term sustainable, but expect those free games to get worse and worse each year as to not condition people to wait for even 3rd party games.
HeisenbergFX4
Gold Member
In all fairness the fake Heisenberg
PC GP is $11.99 and gets all the first party games 1.
Heisenberg007
was replying to a question about console users, how I read it anyhow
Gamer_By_Proxy
Member
I've been to the movie theater about once in the last decade, and it was to take nieces and nephews to Moana 2 during the Thanksgiving holiday . . .
you can also tell these streaming services are trying everything and everything cause you get deals on them everywhere. I have a bunch of them them but they're either free with something like walmart+ or cheap through a cell phone provider, etc.
kyoji
Member
This was impossible, 3rd party werent keen on putting successful ip's day and date on a sub model, its why you didn't see many big 3rd party games on GP before the aquisitions happen, despite what some users on gaf + the media would have had you believe. I Posed the question years ago right after Xbox series game showcase reveal what MS was going to do? and there answer was to buy the 3rd party support to add to their service. Unfortunately for them this had massive implications and they will now be the new 3rd party broker. its not a negative but its not a 4d chess move like xbox fans now try to spin it as. They lost in terms of market share, branding etc. fair and square to Sony, and now this is the best possible outcome for them.
adamsapple
Or is it just one of Phil's balls in my throat?
GHG when reading the above:
The moment you have to start adding qualifiers, you know you're probably wrong, G
In all fairness the fake Heisenberg
That's fine in a vacuum, the post he's replying to is calling out the 100m sub goal, which was never said to be for console only. GP has been on PC about as long as console and would naturally include both in that tally.
Hell, if GP gets on PS or Switch, that would be counted towards the 100m too.
digoutyoursoul
Member
Breaks my heart to see what it’s turned into and even worse, how many sold their souls to pretend to cheerlead them along the way.
If I lived in my parents basement the stereotype would be complete.
If I lived in my parents basement the stereotype would be complete.
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GHG
Member
Lulu was the real hero.
She really made them believe that she was on their side and wasn't in it for the money.
laynelane
Member
I'm going with delulu lol. Nadella and any others that supported this really come across as people who are not only clueless about gaming and gamers, but also disinterested in learning - eg. attempting to change how people consume games (Game Pass) while never thinking of things like how games differ from other media/products that people use subscriptions for (like movies and music).
Insanemaelstrom
Gold Member
If you have an Xbox console and want gamepass with day 1 games for a year, how much will that cost you per month?'but he didn't say it's the onnnlyyy oneee'
'striiictlyyy speakingggg about the consoleessss'
You can add as many qualifiers and filters to make yourself happy, G.
It will continue being a factually incorrect statement and you will continue to be factually incorrect as well.
Agreed. While gamepass effects are still being discussed, forever games are also ruining the industry. Why innovate when you keep one gane going forever filled with mxts that earn you more profit than actual game sales.
Yup. Also consider if a series becomes popular, Actors, directors, the studio in general will demand more money not to mention budget increase to produce higher quality stuff. On cable, channels would charge ads more for the same slot, paying off the increase. On Netflix, because subscription are stagnant, you have to recover the money by making cuts elsewhere or by increasing sub cost( which you can only do upto a certain point). Also, because subscription are stagnant and money source is budget cuts or increasing sub price, the pool of money you invest in shows and movies is stagnant. So instead of producing fewer higher quality stuff, you spend the money making more lower quality stuff( more preferable in part because you have to keep adding new shows constantly or risk people just subscribing for a month and then ending it once they have watched whatever they want). You can to keep making content and that rush, imo, surely affects the quality. It is even worse for games as instead of months, like in the case of tv shows and movies, games take years to produce.
Yup. There are too many subscriptions for too many things, and with rising costs, something has to give.
Agreed. Ps plus remains a supplement rather than the main focus. Not to mention it maintains the value of their products.
GHG
Member
The moment you have to start adding qualifiers, you know you're probably wrong, G
No qualifiers necessary, it's exactly what you're paying.
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Mibu no ookami
Demoted Member® Pro™
I don't know. It might have worked.
There was a period of time where so much media was pushing for GamePass, likely connected to Microsoft PR to the point where people were trying to pressure Sony into matching GamePass...
Jim Ryan who has been tarred and feathered on forums across the internet saved gaming... Had Jim Ryan turned PS+ into GamePass, the subscription model would have won out at great cost to the industry.
Astray
Member
That would only create internal issues where these XGS guys would be pissed about being the only guys missing out on higher bonuses for making more cash on Sony and Nintendo platforms.
Humdinger
Gold Member
Yes. It also seems to me to be another instance of MS chasing a trend - be like Netflix - rather than create something original themselves. Same thing they did with chasing the motion-control trend with Kinect, after Wii made a big splash. And then they spend 80+ billion buying other people's stuff, because their own stuff isn't much to look at, only to have that flop, too.
Things just aren't going according to plan at MS headquarters.
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Gamer_By_Proxy
Member
Sucks for them
. Maybe keep it off playlstation and nintendo.MS dug a hole stating any thing will be Day 1, at least my idea would limit the damage. They can figure out other ways to pay the devs.
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Mibu no ookami
Demoted Member® Pro™
I like how you said forever games and not just F2P games like I mentioned. It's the CoDs and the Maddens too. They're a blight on gaming, but people buy them...
Netflix is pretty smart. They're going for low cost programming from foreign countries, France, Spain, Korea. What they'll do is they'll create successful shows, but they'll cancel them because they know people aren't likely to cancel.
What was the last big domestic Netflix franchise? Probably Wednesday, which was a low budget comedy horror. This is why they were okay with letting The Witcher go to shit, because they were more than okay with the show ending. It doesn't make sense to keep high budget shows going for a long time. If a show has more than 3 or 4 seasons and isn't Stranger Things, it's almost certainly going to be low budget.
It'll be interesting to see what happens to Netflix post Stranger Things and if there is a subscriber hangover.
I think subscription services are going to have a tough time in 2025 and 2026. I think we were set to have a bit of a Hollywood resurgence this year, but after these wildfires, who knows how much that will slow things down.
PS+ is basically a loyalty program rather than a competing service.
adamsapple
Or is it just one of Phil's balls in my throat?
Astray
Member
I think the lede that's being buried here is that Xbox as a platform is likely a massive moneysink and an albatross around Microsoft's gaming ambitions.
A platform that underperforms and makes a billion in profit instead of five does not prompt management to think of sunsetting it on multiple occasions. You would be hearing about initiatives to improve margins, or smaller changes in direction.
But a platform that actively loses money every year absolutely would invite this level of scrutiny.
Consider this, even if pre-ABK Microsoft Gaming was covering its costs and break-even, the ABK deal should have pushed up that profit level because ABK in itself was profitable. But they're still playing games with the financial reporting and not mentioning profit/loss even after ABK was merged.
Whatever is going on internally, it's absolutely not pretty viewing.
A platform that underperforms and makes a billion in profit instead of five does not prompt management to think of sunsetting it on multiple occasions. You would be hearing about initiatives to improve margins, or smaller changes in direction.
But a platform that actively loses money every year absolutely would invite this level of scrutiny.
Consider this, even if pre-ABK Microsoft Gaming was covering its costs and break-even, the ABK deal should have pushed up that profit level because ABK in itself was profitable. But they're still playing games with the financial reporting and not mentioning profit/loss even after ABK was merged.
Whatever is going on internally, it's absolutely not pretty viewing.
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laynelane
Member
Jim Ryan and others in the industry have been very direct about the effect Game Pass has on IPs and the industry (still remember Kotick calling it value destructive}. I don't think it would have worked simply because what works for Office, Windows, movies, shows, etc. doesn't work for games. It's why Game Pass eventually stagnated and the financial downsides ensure other publishers won't even consider it.
To me, this was an attempt to change the industry to a form that would favour a massively wealthy corporation with no consideration for the health of that industry (eg. games and quality) or customer needs and wants. It's no wonder Sony and others didn't follow along.
DenchDeckard
Moderated wildly
Nadella "thought" about winding down Xbox.....
It seems to be happening.
It seems to be happening.
Mibu no ookami
Demoted Member® Pro™
If Sony conditioned their gamers to only play games out of PS+, it would have pushed 3rd parties into a situation where they had to sell their games to Sony and Microsoft for reduced value.
I think you'd see day 1 PC premium sales with console ports coming a year later or so. Either way, it would have resulted in an industry crash that would have involved PC gaming too.
Again, Jim Ryan is an absolute hero for standing his ground. Gaming needs a massive rewrite and apology to him.
onnextflix5
Member
Nah they will have one more go at consoles and hope cloud takes off soon.
GHG
Member
That is pretty much what a qualifier is you silly goose
If you were trying to be objective, you would have corrected yourself long ago.
Stop waffling.
Insanemaelstrom
Gold Member
Mentioned that because my two forevery games( gt7 and Helldivers 2) are amazing, I also spend my gaming hours mainly playing them. I have decreased the time I spent playing new games massively in the last two years because the few hours to play games I do get I end up playing games I am already familiar with( mainly gt7) like it is comfort food. And I don't think I am the only one.
Couldn't agree more. Cancelling shows is more profitable for Netflix as compared to running them. And personally I think that's a big issue and in an alternate future where gamepass actually took off, I believe it would have been a bleak reality for gaming as a whole.
Netflix is now like comfort food, as long as it doesn't become too expensive, people are happy leaving ,whatever crap show netflix releases, running in the background. People have been trained to mindlessly consume.
Yeah, especially if the current financial crises doesn't improve. People are already having trouble having basic needs fulfilled, can't imagine them subscribing to so many services that only seem to be getting worse while costing more and more.
Yeah, and since Sony is known for its single player( and what I mainly played pre-helldivers 2), it is also optional for around 50% of their playerbase( I recall Sony stating that 59% of their player base only plays single player games a few years back and I think that is true even today).
I think otherwise personally. Hardware is winding down but software seems to be picking up. Xbox executives are now thinking why spend so much money supporting a loss making hardware when we can make far more profit making games for far more successful hardwares. It is a change in priority, currently, rather than decrease in operation
adamsapple
Or is it just one of Phil's balls in my throat?
Dr. Samuel Hayden
Member
These people are totally delusional. Just sell Xbox to someone else if you're gonna continue treating it so incompetently.
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