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shikamaru317 said:

I think it's a bit of both. Yes, some developers are skipping Xbox simply because Xbox has the lowest install base, or because they are Japanese devs and believe there aren't enough fans of Japanese games on Xbox who will purchase their games. To a degree, it is about sales with Square Enix, I think they skipped Xbox on the FF Pixel Remasters because the Xbox ports of FF7, FF8, FF9, FF10/10-2, and FF12 didn't do all that well. Even with a Gamepass boost, TA has most of them with only about 20-30k players, only FF7 did better with over 50k players. Xbox gamers likely skipped them due to Gamepass game overload and because most of them were simple ports with very little done to enhance them graphically, let alone mechanically. To Square that tells them that Xbox gamers just aren't interested in old ports and thus are skipping the Pixel Remasters on Xbox since they too are just old ports that have been AI enhanced to improve the original pixel art slightly.
 
However, that doesn't tell us the whole picture about Square's poor treatment of Xbox. While they may have a good reason for not porting the pixel remasters, not everything they fail to port is backed by such logic. Before the FF Gamepass deal was ever a thing, FF Type 0 HD and FF 15 both sold fairly well on Xbox, which should show Square Enix that enough Xbox people will buy brand new Final Fantasy games to more than cover the cost of the port and turn a profit on the port. Type 0 HD on True Achievements has more players than most of the FF7-12 ports did without being on Gamepass like those were, while I'm pretty sure FF15 had over 100k TA players before it went into Gamepass, while VGChartz sales data indicates lifetime sales for the Xbox version between 1.5-2m copies. Square has all the data they need to know that brand new FF games perform well enough on Xbox, and yet they were willing to sell Sony both an initial timed hat deal on FF7 Remake and then later a lifetime exclusivity deal once the timed hat deal was about to expire, plus a timed hat deal on FF16 which also may grow into lifetime before all is said and done. That is more than just business, you don't skip a platform where sales data of the previous AAA FF game indicates sales of well over 1m copies just because of business, there is something personal Square has against Xbox there.

Then there is the Dragon Quest situation. DQ11 did pretty well on Xbox and Gamepass, with over 50k players. That should be a large enough base to start to release future DQ games on Xbox without Xbox needing to hat Gamepass deals on them, and yet the upcoming action RPG Infinity Strash: Dragon Quest- The Adventures of Dai, is skipping Xbox. Being an action RPG, it is likely more suited to the Xbox playerbase than the turn based DQ games are, and yet Square seems to be refusing to port it without a Gamepass hat from Phil. And on Phil's end, it seems like he has had it with Square constantly having their hands out asking for Gamepass money, we haven't seen a single Square Enix gamepass deal from Xbox in nearly a year now afaik, not since Guardians of the Galaxy, and it has been even longer since he has paid to get a JP Square game onto Gamepass, none of those since Octopath Traveler 21 months ago. Maybe it's retribution for Square extending the FF7R timed hat into a lifetime deal with Sony, hard to say.

No matter what way you look at it, the relationship between Xbox and Square is rapidly deteriorating. Phil seems to be concentrating most of his Gamepass JP hat money into niche developers, Namco Bandai, Capcom, and Sega/Atlus these days, publishers who aren't out there making exclusivity deals with Sony left and right like Square is these days. Meanwhile as Square and Sony grow more and more close, a Sony acquisition of Square seems more and more likely, especially if the regulators do pass the Activision-Blizzard deal. 

So the smart money it would seem is to not waste money on Square.  If you are working with a company and they refuse to support your product, then you take that money and put it into something else.  The funny part is that everyone keeps believing every company is up for sale.  Who knows if Square is up for sale and as the market leader even if ABK closes for MS, it still presents a case that purchasing Square for the market leader could harm the market.  

At best who cares, Square clearly has shone that their main target system is Sony and there probably nothing Phil can do about it.  So instead go make a bunch of deals with other companies and new markets.