(Business Perspective) Does MS really need Xbox Hardware?

[DonFerrari]

Machiavellian said:

DonFerrari said:

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:

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.

It doesn't work that way, MS already put in the investment in their server farms for the Xbox hardware, that means if they drop that hardware and do not have 100% backward compatibility it would be a problem for the service since you are supposed to be able to play backwards and forwards as MS stated.  SO yes, MS will continue to invest in Xbox hardware for their server farms and if they are already investing in that hardware they will continue to release that hardware to retail because it keeps customers within their eco system, MS still make a cut on every game sold on Xbox hardware, they still get their cut from MS store and games sold on the Console and they continue to tie customers to their services.

I do not know what company you were watching but both Sony and MS money hat during the 360 days, it's    the standard business model in the games industry.  Sony did not rely less on 3rd party games, they have always been able to get 3rd party exclusive games especially from Japan because one, they have always been the market leader and 2 it was tough and still is tough to get any exclusive games from Japan over Sony.  What allowed the 360 to gain on Sony especially in the US more than any other country is how hard it was to develop for the system.  The 360 in the first 2 years was outperforming the PS3 in most multplat games and it allowed the 360 to gain significant market share.  If not for the RROD, MS success would have been much bigger but those stubbles allowed Sony to maintain and keep their market share lead.

It's not a question if you need MS first party games, it's the fact you need MS in the market to make sure Sony is always aware and fighting to keep MS in third place.  In the absence of MS, Sony would be a much different company and if you thought the PS3 was expensive, I bet you the PS4 would have been a grand if MS was not in the market.  There is a distinct difference between the you wanting any of MS games than MS keeping Sony innovating and competing like a startup.  That benefits you as a gamer on their platform.  Even now, I just purchased PS+ because Sony is selling it for 36 bucks for the whole year

Wouldn't be possible for MS on next gen HW instead of making the server being a Xbox HW being a generic computer and "emulate" for BC?

I wasn't dissing on MS regarding moneyhat, and I know Sony also does, but before PS3 that wasn't something they needed to care as most relevant games would be naturally exclusive and at worse multiplatform. When MS gone very aggressive on X360 (as they should) it forced Sony to answer with more investment on their 1st party. And sure Sony still relies heavily on 3rd parties, but they have improved their 1st party output by a big margin from PS2 to PS4.

For PS4 being 1 grand the only way I see it being possible would be if the internal cost was over 1k. PS1 dominated the market and still PS2 came with low price, PS2 dominated the market then PS3 came with 200 loss per system, PS3 struggle to tie/late win and PS4 had the lowest loss per system ever (weaker system to have a small entry price), PS4 had a healthy lead on X1 and PS5 had a little bigger loss than per system.