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chakkra on 26 April 2023
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Zippy6 said:
shikamaru317 said:

I think you're right. I've been suspicious for awhile that Xbox may be self-sabotaging supply in order to give Sony a hugely better Holiday season and 1st quarter 2023 than Xbox, just so that Xbox looks like a sad wounded puppy in the eyes of the regulators, in order to help get this acquisition through. If Xbox looks like it's getting curbstomped by Sony in the 2 most recent quarters, the regulators might see it and be more inclined to think that Xbox needs ABK in order to compete. What if they've just been storing up tons of Diablo 4 and Starfield Series X bundles, instead of selling those Series X chips in Q1 and Q2, just to make Xbox look wounded, then they unleash those units as soon as the acquisition is closed, in June for Diablo bundle and September for the Starfield bundle? And if they announce a Series S price cut down to $250 on the June Xbox showcase too, even better, it needs a sales boost too. Would be great to have a huge Q3 and Q4 after how poor the first two quarters of the year are looking to be. 

I really don't buy the idea that Microsoft self-sabotaged hardware sales on purpose. For one I don't think they have ever directly mentioned 2023 sales to the CMA so it seems a bit of a silly move in the off-chance that they look at it and it is decisive in their final decision. Especially as the first time Microsoft has publicly acknowledged a decline for Q3 themselves was the day before the deadline. But secondly and more importantly their growth forecast for this current quarter is again predicting hardware being down YoY. I think there is a genuine problem.

They are forecasting "low to mid teens" growth for content and services in this current quarter but "mid to high single digits" growth in gaming revenue as a whole. So a range of 11-16% for content and 4%-9% for gaming.

Only the absolute best case scenario for hardware that fits this forecast, maximum gaming growth and minimum content growth, results in growth for hardware. If gaming revenue grew by 9% and Content revenue grew by 11% then hardware would see 2.1% growth. Anything else that fits the numbers Microsoft gave will see a decline in Hardware. So it wouldn't seem a massive improvement to the hardware situation is imminent.

FY23 Q4 Forecast Possibilities

If we continue to drop the "mid to high single digits" growth for gaming below 7% it obviously just gets even worse for hardware. Unless MS is knowingly putting out false forecasts which I believe would be illegal then they are not expecting hardware to suddenly return to growth.

Do you honestly believe that if there was a genuine problem with their manufacturing line, Bloomberg (and the whole media, actually) wouldn't be all over it by now? 

I only see two options for this 1) They are intentionally not manufacturing enought units, or 2)The demand is simply not there.

And about their forecast; companies very rarely get those numbers down to a T (they didn't for this forecast) so just because they are forecasting a growth of about 4%-9% for gaming, doesn't mean the actual numbers can't end up being either above or below those expectations. Furthemore, the fac that they keep not giving guidelines for hardware tells me that they 100% know that it is going to be down YoY, so that also tells me that they 100% know the reason why it is going to be down.