Arkaign said:
The original XB1 plan was to exceed X360 marketshare, and not only that, to combine it with higher software sales (no used games, or heavily restricted used games, which in their mind = more people buying new games or older titles at a controlled price and $$ going straight through them instead of Gamestop/Ebay/etc). The other piece of the monetization puzzle was the media control and paywalled access to the various music/movies/tv sourcing. So these three pegs : (1)- Mass marketshare (which amortizes the R&D and initial marketing costs of the product over time to a much greater degree with huge sales vs. modest/poor sales) (2)- Restricted/controlled game sales to eliminate used/traded games outside of their direct control. (3)- Paywalls everywhere for all the multimedia functionality. Have all fallen away. Whatever models they had that the Xbox supporters within the wider Microsoft corporate offices were dreaming of have been ruthlessly shattered by their own lethal mix of arrogance, ignorance, and misunderstanding of how they achieved their gen7 success. Their entire gen8 plans were stratospherically ambitious, and the true financial data on exactly how much it cost to bring the XB1 to market would probably melt your brain if publically disclosed. We know from the financials leaked and officially released that the totality of the Xbox project from inception to OG release through 360 netted Microsoft somewhere around 3.5 billion dollars in the red. The last few years of gen7 showed modest profits, but nothing near enough to make up the losses of the previous years, and nothing near enough to make the effort a worthwhile enterprise to pursue if that was all they could get. So no, they didn't plan on JUST getting 360-levels of success, they were hoping for a billion console empire, a thousand-year fourth reich emblazoned with golden mountains of profits. 100M consoles to them would probably be seen as a failure on their own terms, and that's WITH the cards stacked the way they wanted with DRM, paywalls, etc. Post 180s, to achieve their same theoretical kingdom of cash, they might need 150-175M sold. I know how Western corporations are run in the realm of the Fortune 500. They waste money hand over fist. Hell, Mattrick probably got a golden parachute of untold riches and a platinum gulfstream jet on the way out the door, just because that's how they roll. Combining their pencheant for using benjamins to light their cigars and wipe their arses with their batshit insane plans for gen8 manifesting in ludicrous wastes of money like the NFL deal, Kinect2, etc/infinity, it's exceedingly doubtful that XB1 has a chance in hell of seeing a cent of profit even if it lasts a decade. ------------------ Back to your point, IF Microsoft sees the situation for what it is, and the tea leaves WILL get up the chain, because as each quarterly report comes in and they aren't seeing the flood of income that was promised to them arrive, there will be blood, yes heads on pikes all over the place until a reckoning is had. And that reckoning will involve a total transformation of the Xbox philosophy not simply from a PR perspective, but the business plan from the inside out. I can even chart it right here, what would streamline the whole shebang : (0)- Leave all markets outside of the US/UK. It's a waste of time even shipping anything over there, not to mention the advertising, hiring staff there, supporting the products after the fact, etc. Stick a fork in em, they're more trouble than they're worth at this point. (1)- Kill Kinect entirely other than supporting the ones already sold. Take the ones currently in warehouses and slap them in boxes with Windows drivers and sell them for $99 a pop as high end webcams for home and business use. (2)- Stop paying for any non-gaming advertising or licensing for anything to do with Xbox. It's a waste of money and isn't going to deliver anything worthwhile. (3)- Sell off some bunk studios like Rare, complete with IPs, so as to recoup some of the cash wasted on them. (4)- Port a bunch of Xbox IPs older titles to the PC through steam. Make them online-only a la Diablo3 if they're worried about piracy, and publish a 12 or 18 month exclusivity policy for new XB1 games so the Xbox fans don't cry too much about Xbox games being on PC. This would bring a ton of extra cash in alone. (5)- Immediately cease ALL moneyhat activities and DLC/exclusive 3rd party nonsense. It never pays off, and compared to spending that same $$ on new in-house IPS and sequels it's the stupidest thing imaginable. (6)- DO reinvest a lot of the $$ saved from the above into tons of new titles. Be smart about it, not everything has to be a $100M super AAA set-piece monstrosity. Get tighter teams, put smart people in charge, and shoot for a dozen 10-20M games AND a single massive AAA game per year. Bring back golden IPs like MechWarrior/etc. Put another team to work in porting OG Xbox games with a simple high-res job for 1080p/60fps and sell them for $5/pop through XBLG, as well as packaging them 5 at a time for $19.99 in stores. (7)- Start some things that really set you apart from Sony instead of just being a 'me-too' console. Give away 90 days of XBLG with every console sold. Pack in a 2nd controller and a half dozen of those XB OG games I spoke of above AND a coupon for any XB1 title published by Microsoft of the user's choice. (8)- Advertise in a more limited and focused manner, and co-sponsor local gaming tournaments that benefit top charities. Give consoles away to children's hospitals complete with libraries of family friendly titles. Offer free downloads for learning/spelling/math edutainment material for parents of young children. Overall there's a ton of things they could do to cut the fat, lower operating costs by INSANE percentages, and revamp the Xbox brand into a positive, exciting, and vibrant presence in the marketplace. Something tells me that's not going to happen though. The same predictable, stale, robotic Xbox brand will trudge forward, utterly oblivious at first to the quicksand they're walking into. Their solution to their problems will be to repeat the same actions like an insane person until it's too late. The last thing we'll hear is 'We're committed to the Xbox brand' right before we see the IPs announced being sold off, the petulant corporate titans having tired of the distraction and embarassment of a project whose entire history amounts to little more than a stain on their Bruno Magli shoes, and whose financial worth is akin to the change in their couch. |
I forgot to add :
(9)- Release a streamlined slim XBO with 1TB HDD (costs like $1/more per unit in bulk than 500GB) console with the HDMI passthrough stripped out, and make the price $279 or so. It's much more profitable to get good numbers out the door and in gamers hands if you have a decent attach rate. Pack in a 5-pack of $15/off coupons for XB1 games with the systems to juice attachment rate even more.
