(Business Perspective) Does MS really need Xbox Hardware?

[DonFerrari]

Machiavellian said:

Ryuu makes a good point about Xcloud that I believe we all forget. Its run on Xbox series X hardware. This means that MS will continue to need to make Xbox hardware which give developers a platform to support in order for their cloud solution to be viable in the market.

I guess if MS decides to leave the console market they could very well work the servers to use different HW even more with almost all titles available on PC, but yes at this moment it would be unnecessary extra cost, but for a next gen it could make sense (not that I think they won't release a new console or that it wouldn't make sense to use it for cloud).

Machiavellian said:

DonFerrari said:

I don't need Xbox personally, but you are wrong on X1 or Series burning money from MS. They may not have high profits (MS doesn't show the numbers), but the HW itself hardly is losing more than 1 or 2 games worth of profit, so considering the 10+ average it console sells and the subscriptions the HW itself is advantageous to MS.
Regarding needing MS to keep Sony in check I don't believe in it, PS2 dominated the market with easyness and still had price, quantity and quality while PS4 had a much stronger competitor in X1 and didn't cut prices besides once and in PS5 situation is similar regarding sales and besides the price increases due to inflation/exchange ratio there is no interest from either MS or Sony to cut prices at the moment.

Think about the PS3 and the message Sony put out during that time.  You would work 3 jobs to get this device.  You are mistaken if you believe that if Sony totally dominated the market that they would make the same decisions in the absence of MS.  I doubt we would have seen PS services anywhere near what they are today compared to MS pushing internet and Games with GOLD.  There are a lot of things Sony has done in response to MS compared to what they traditionally do. Even the PS4 is a direct result of how well the XBox 360 performed because building an extremely complex hardware device that makes it difficult for most developers to extract all the power out of the machine was never a good business decision.

So yes, the PS4 and PS5 are direct results of Sony pushing the advantages they have to make sure to keep ahead of MS and while you personally as a PS gamer believe MS has no impact on Sony direction, history show different.

I know that time very well and that phrase was both poorly done and severely misrepresented. The way it was told was "This console is so great that you would be willing to work a second job to buy it", but yes I can certainly see that Sony had arrogant thought thinking at the time that allowed them to not do the right processing and direction. Still PS3 was sold at 200 dollar loss (while PS4 was 50 from release and PS5 50-100) so it was more like they were so confident they would be selling great that they burned a lot of money instead of they priced as high as possible, because even if PS didn't had a direct competitor (it did, but considering how much marketshare they had) they know that if they fuck to much a substitute product can come (just like they came when Nintendo and Sega fucked up).

I'm not saying they would make the same decisions without direct competition (MS or otherwise), I just said that the price of the console and games wouldn't go 1k USD and games 100 USD if MS stopped launching consoles.

I have no doubt that XBL really put pressure on PSN improving (even if I don't care about MP I totally credit MS for both the good things that Gold brought as well as the bad ones such as paid online, that nowadays is likely impossible to disappear). I can't be sure if PS4 architecture is a response to X360 being a lot simpler or they seeing that the type of architecture of PS3 was dead, but sure I'm willing to credit this decision from competition pressure.

And just to close I don't think MS have no direct, it certainly does, I do think that without MS moneyhatting a lot of games during X360 and even for titles they didn't the fact they gone multiplatform because X360 was a viable platform pressured Sony to rely a lot less in 3rd parties than in the past (and possible expend more on securing key marketing/temporary exclusivity deals) and power up their 1st party. That is why I said I don't need Xbox, because I'm not interested in its first parties or even the route of more GAAS (that Sony is also taking and I don't like), not that the market itself doesn't need Xbox or a strong competitor to PS.