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Forums - Gaming Discussion - How long before Xbox Division is no longer integral to MS long term vision?

if it is integral to their long term vision along with their mobile platforms failure is imminent



Talal said:
I will permaban myself if the game releases in 2014.

in reference to KH3 release date

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nitekrawler1285 said:

I am very aware that is why they got into the console business.  

I realize that they thought it was a huge threat in 1995 when Playstation was breaking new ground.  Generations later and billions of dollars spent and seeing the "growth" of the segment I don't think video game console sell well enough to replace the money they make selling windows and office in the PC market(at least not with loss leading tactics).  I also don't see consoles fitting well with the most common pc use cases be that getting work done or the more casual use cases(far better on actual pc, tablet or mobile)

With Office on mobiles I don't see the need for them to spend so much money on making devices themselves.  Other manufacturers are willing to do it for them. Just continue to make sure their enterprise software excellent and popular so no matter the OS you want to use Office to get the work done.  I think MS should look at IBM and others and be a software and services company.  I mostly feel this way because so far it seems all of their hardware responses to competitors have been very expensive failures.  

You argument would make sense if Xbox One was a game console. However, even MS presents it as an entertainment console. Their entire branding of Xbox since Kinect has been focused more and more on presenting Xbox brand as an entertianment console that also features the latest gaming.

Their goal is to create the perfect windows-based tv connected device. Thus helping cement Windows with users who will hopefully expand into phones/tablets and of course desire to keep the familiar at office as well.



Xbox originally came into existence because MS was losing PC gamers to consoles (specifically, PS/PS2). With the current generation, most games that are releasing on PS4 or XBO are also releasing on PC. This eliminates their original motivation for the Xbox.

I do expect "Xbox" to continue to exist, but I don't think it's coincidence that they've been placing more and more emphasis on non-gaming functionality of late. They want the Xbox to be the device of the lounge room, just as they want PC to be the device of the office or gaming den and Surface to be the device of mobile computing.

Should a time come when MS are forced to drop something, I do think Xbox will come first - it's not their core business, its purpose has been fulfilled, and they could just as easily develop a modified Windows for Media Centres as basically the equivalent of XBMC's XBMCbuntu. But they're in too stable a position right now to drop the Xbox any time soon.



By the end of this generation.



nitekrawler1285 said:

I ask this because of the seeming 180s that MS have been making on things it once saw as integral as of recent.  I'm sure everyone remembers the DRM being integral before being dropped before the console launched.  

Recently i'm sure many are aware of the Kinectless SKU incoming. Their defense for bundling it was that it was integral to the platform that all developers had one.  That is no longer the case. 

With this price cut it's easy to imagine MS losing more money on the console.  Why do I say more money?  Gregg Moskowitz of Cowen & Company asked Microsoft management to clarify why Xbox platform revenue grew $1.2 billion year-over-year in the second quarter, but at the same time related cost-of-goods-sold rose $1.6 billion.

Amy Hood, Microsoft's Chief Financial Officer, said that Microsoft is still in "launch mode" for the Xbox One and will continue to expand markets over the course of the year, implying the company could likely see costs exceed revenue in the near term.(http://www.fool.com/investing/general/2014/03/05/electronic-arts-titanfall-is-a-big-deal.aspx) Even if the component cost for Kinect is less than the 100 it is very likely they will have to change their production contract which is very expensive.  Not to mention money losing money from stocking already produced stock that has yet to be sent for sale. 

If pricecuts and hyped shooters fail like TitanFall failed I'm not exactly sure how much longer the Xbox  division will be integral to Microsoft moving forward.  For anyone whom would like to discuss me referring to TF as a failure I would provide this link: http://www.gamespot.com/articles/microsoft-titanfall-is-a-game-changer-that-will-help-sell-xbox-ones/1100-6418170/ to show the expectations on the title from MS.  

Anyone else think we will see a 180 on the division being integral to MS long term vision? It most certainly wouldn't be their first. If you do feel that way I'm particularly interested in how much in losses you think they will need to incur or a time frame. 


you did not get the article you are quoting.



Imagine not having GamePass on your console...

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DirtyP2002 said:

you did not get the article you are quoting.

  implying the company could likely see costs exceed revenue in the near term. 

How do you interpret this?    



superchunk said:
nitekrawler1285 said:

I am very aware that is why they got into the console business.  

I realize that they thought it was a huge threat in 1995 when Playstation was breaking new ground.  Generations later and billions of dollars spent and seeing the "growth" of the segment I don't think video game console sell well enough to replace the money they make selling windows and office in the PC market(at least not with loss leading tactics).  I also don't see consoles fitting well with the most common pc use cases be that getting work done or the more casual use cases(far better on actual pc, tablet or mobile)

With Office on mobiles I don't see the need for them to spend so much money on making devices themselves.  Other manufacturers are willing to do it for them. Just continue to make sure their enterprise software excellent and popular so no matter the OS you want to use Office to get the work done.  I think MS should look at IBM and others and be a software and services company.  I mostly feel this way because so far it seems all of their hardware responses to competitors have been very expensive failures.  

You argument would make sense if Xbox One was a game console. However, even MS presents it as an entertainment console. Their entire branding of Xbox since Kinect has been focused more and more on presenting Xbox brand as an entertianment console that also features the latest gaming.

Their goal is to create the perfect windows-based tv connected device. Thus helping cement Windows with users who will hopefully expand into phones/tablets and of course desire to keep the familiar at office as well.

They can present the machine that way all they like.  The Xbox market see themselves as gamers.  That will be the use case for it.  There is even some argument to be made that trying to make it an entertainment console is to blame for it's current sales.  

I understand their goal. I think their execution is flawed.  If they think a 4-500 dollar entertainment box is gonna win the enterainment console connect to tv then I think they are even crazier than I thought.  Especially with so many competitors like Apple/Google/Amazon in the 35-100 range.  

I think the strategy you mentioned for the future makes sense. Their current one.... not so much.



nitekrawler1285 said:
DirtyP2002 said:

you did not get the article you are quoting.

  implying the company could likely see costs exceed revenue in the near term. 

How do you interpret this?    


I had to explain this before.

http://gamrconnect.vgchartz.com/post.php?id=6002645

 

This is in German and I am too lazy to translate it again. I posted a much shorter version in english somewhere in this thread. try and find it.



Imagine not having GamePass on your console...

DirtyP2002 said:
nitekrawler1285 said:
DirtyP2002 said:

you did not get the article you are quoting.

  implying the company could likely see costs exceed revenue in the near term. 

How do you interpret this?    


I had to explain this before.

http://gamrconnect.vgchartz.com/post.php?id=6002645

 

This is in German and I am too lazy to translate it again. I posted a much shorter version in english somewhere in this thread. try and find it.

So even the increase in cost of goods rises above the increased revenue  they are making money?  That doesn't sound right.  I thought they meant launch  mode as in spending heavily to get marketshare.  

Edit: After running that post through google translate I get it. Shrunk profits would lead me to believe even at the 500 mark they are selling the console at a low margin though sales of the other products namely the 360 helped.  I will ammend my Post. 



Mr Puggsly said:

I think Xbox is integral to MS because its one of few things they have that appeals to younger consumers.

It can also be used as a vehicle to push other products. Such as Skype, MS's streaming music service, MS's TV programs, etc.

100% agree, it's very silly to say Xbox is any less integral to Microsoft than Playstation would be for Sony.

The only one of the big 3 that actually can't live without it's gaming segment is off course Nintendo, for Microsoft and Sony they're just integral to selling their other services/appealing to more markets.