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Xbox Head Phil Spencer Said "The Business isn't About Selling How Many Consoles "

Forums - Gaming Discussion - Xbox Head Phil Spencer Said "The Business isn't About Selling How Many Consoles "

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Do you agree with Phil

Yes 15 29.41%
 
No 27 52.94%
 
In between 6 11.76%
 
Somehow 1 1.96%
 
I don't have any clue 2 3.92%
 
Total:51
LudicrousSpeed said:
The business is about revenue and profit. Selling more consoles certainly helps that, but it isn’t the only factor. Nintendo made a lot of money selling much less console amounts during the N64-GCN era.

You’re going to see all three companies go all in on subscriptions and recurring revenue. It’s the future, just like it has become in pretty much every other entertainment avenue. It will become less and less about selling the boxes.

Those profits came from Nintendo selling tens of millions of handheld HW, which led to tens of millions of SW sold from that HW. It definitely didn't come from underperforming home consoles.

And yes, digital subs and sales are important, but it is the combination of both that and physical retail that makes one very successful. And more boxes sold means more profit from HW and higher potential for sales of physical and digital goods.



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DonFerrari said:
outlawauron said:

Those subscriptions are huge money makers though. Live is successful and likely lifts the entire bottom line. I don't think MS breaks down the numbers like Sony does in that regard, but if PS+ subscriptions bring in more revenue than all of Nintendo, then surely MS is doing just fine.

MS hides it under 10 feet. But if we use a rule of thumbs with PS4 having about 45% PS+ subs, then with X1 I think about 50% would be a good measure (so 15-20M subs to gold).

PSNow is under 2M, so Gamepass probably also on the 1-2M subs.

SW sales still makes most of the revenue, and for that if they don't have the platform they miss most since most of the SW sold on Xbox is 3rd party.

Gamepass is probably closer to 4m. 



The business is about selling your more subscriptions.



He is right. Buying a console and throwing it in a closet or buying a couple of games for the console isn't going to help Microsoft or Sony much.



JRPGfan said:
Halo is also releaseing on PC.... and they wont rule out "other competing platforms" either.

To me this says, MS has stopped careing about hardware sales.
As long as they sell the game + service, they dont care where its sold.

Yes.  They have essentially said this outright.  

And, it makes sense.  Consoles sales are notorious money losers.  Why not let someone else make (or lose) a few pennies on hardware, while you make recurring subscription revenue?



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thismeintiel said:
LudicrousSpeed said:
The business is about revenue and profit. Selling more consoles certainly helps that, but it isn’t the only factor. Nintendo made a lot of money selling much less console amounts during the N64-GCN era.

You’re going to see all three companies go all in on subscriptions and recurring revenue. It’s the future, just like it has become in pretty much every other entertainment avenue. It will become less and less about selling the boxes.

Those profits came from Nintendo selling tens of millions of handheld HW, which led to tens of millions of SW sold from that HW. It definitely didn't come from underperforming home consoles.

And yes, digital subs and sales are important, but it is the combination of both that and physical retail that makes one very successful. And more boxes sold means more profit from HW and higher potential for sales of physical and digital goods.

Except that nobody has ever made an real money on sales of consoles.  They're a loss leader.  They're used to get you in the "store", so you'll buy the other merchandise (software, subscriptions, and peripherals) where they make real money.  

But, your other points are right.  Selling consoles is an important part of the overall recipe for success, as the industry works now.  But, with MS selling subscriptions to PC users, and games to users of nearly every platform, the recipe is changing.  And, in that context, Phil's statements make sense.  



thismeintiel said:
LudicrousSpeed said:
The business is about revenue and profit. Selling more consoles certainly helps that, but it isn’t the only factor. Nintendo made a lot of money selling much less console amounts during the N64-GCN era.

You’re going to see all three companies go all in on subscriptions and recurring revenue. It’s the future, just like it has become in pretty much every other entertainment avenue. It will become less and less about selling the boxes.

Those profits came from Nintendo selling tens of millions of handheld HW, which led to tens of millions of SW sold from that HW. It definitely didn't come from underperforming home consoles.

And yes, digital subs and sales are important, but it is the combination of both that and physical retail that makes one very successful. And more boxes sold means more profit from HW and higher potential for sales of physical and digital goods.

Phil - "If you think about games that are in development today, most of the studios out there are using engines that span multiple platforms, whether it’s Unreal or Unity. Many of the games are using engines that are on multiple platforms. You’re probably shipping your game on four or five platforms if you’re trying to reach as many customers as possible anyway. You’re going to ship on PC, which means multiple GPUs. You’re obviously going to ship on PlayStation, you’re going to ship on Xbox, you’re going to ship on Switch."

More games on your platform means more opportunity for success. The more people who purchase a certain platform, the more reason to put your games on it. The reason isn't so much about how many people PS has playing consistently, while that does come into play to some degree, it's the fact that there's close to 100 million PS4's out there, vs half that many XB1's. 

There is also customer/consumer loyalty to take into account. While it matters less with casuals in western nations, if you live in a country where your internet is garbage or just weak, you're much more likely to end up a fan of PS or Nin vs MS if they keep pushing in the digital services and cloud direction. Customers from poorer countries with less options tend to be more loyal overall. If they were able to buy a certain companies hardware and physical games for an extended period of time, odds are good they will stick with them if possible when they can go digital through the cloud later on.

MS seems to understand the long game from a tech perspective, they just don't understand it from a present consumer's perspective overall and how that leads to a future customer worldwide. Either that or they're just more worried about making money, and focusing on digital is a safer bet vs physical in terms of profit in general.

Last edited by EricHiggin - on 13 June 2019

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Snoopy said:

He is right. Buying a console and throwing it in a closet or buying a couple of games for the console isn't going to help Microsoft or Sony much.

He's right?....Can you envision any other scenarios aside from the 2 you mentioned that might draw into question how stupid this idea is in 2019? If you buy a console and smash it in the parking lot is literally an equivalent to one of your 2 arguments as to how Phil Spencer is right. Out....standing.



Chinese food for breakfast

 

Is niche console OK ?

I know some people hate niche games.

Sounds weird theory.



I’m aware that Xbox has been under new management since last gen, but they clearly didn’t have this philosophy when their hardware sales numbers were actually more competitive. I only disagree because I think their metrics for success are far more vague than putting out hard sales numbers, and I feel that they’re implying that putting out hardware numbers somehow equates that company’s console not being consistently used by the majority of its buyers.



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