(Business Perspective) Does MS really need Xbox Hardware?

[Pemalite]

Azzanation said:

1) There is good competition like Nintendo and Sega, and there is bad competition like we have seen with Steam and EGS. I also don't understand your comparison with Steam and Physical media. Valve were still selling physical media and if you remember, you can buy physical PC games that offered a Steam Key. Valve wasn't competing with Physical media; they were using physical media as well.

Epic Game Store and Steam competing isn't bad.

Correct. Valve was still selling physical media, because they still wanted to sell games. - This is the point of competition. Valve was definitely competing with Physical.

It's like Microsoft selling Microsoft office on MacOS, Microsoft is competing with MacOS, but they will still happily make money off that platform when they can.

Azzanation said:

2) The point here is that you have Nintendo and PC that will be competing for those PS Customers. If Sony say no to Xbox games just because they want to see MS die, then expect a huge marketing push for Xbox games going on Nintendo and PC. Thats a 30% cut Sony is giving up on future Xbox titles. Makes no sense to say no. 

You assume that if Sony denies Microsoft I.P on their platform people will go Nintendo and PC?
They also won't. They will also just go without.

Microsoft's I.P currently isn't exactly setting the world on fire.

And it's not just Microsoft's I.P that Sony can deny, it's Microsoft's services, all of them.

Azzanation said:

3) Again, 360 lost billions, the consoles were over engineered and were sold at massive losses. The only thing keeping Xbox afloat was their services, which ironically is their entire focus moving forward. The hardware just dwindles behind. Hardware sales does not equal profit, it's the software and services that have to make up the cost of the consoles. The moment they release a new console; they are already billions in debt which they have to recoup with software and subs. That is not Spin or a Lie. Thats a industry fact.

The consoles initially lost money, but the 360 did become profitable.

It's actually the normal business model for the market.

But without hardware, Microsoft can't sell services, that is the point of "vertical integration". - It is why Apple is so successful and why it is such a fantastic business model.

Retail supermarkets do the same thing, they will heavily discount a few items and even loose money on them, which will attract customers into their store where they will sell a lot more other products and turn a profit.

You need to look at the bigger picture here mate and you failing to do that.

Azzanation said:

4) I am not sure if you are agreeing with me or disagreeing with me on that response. I am pointing out that its not just Xbox who make mistakes in the industry. You are reinforcing my point here. As for the Xbox making themselves look bad, i agree, that point I made is a conspiracy theory. Hence why I said i wouldn't be surprised and also digressed.

I don't disagree with all your points and statements, I also don't get into the habit of rehashing the same lie even when it's been disproven.

Just because I have initiated a quote and replied, doesn't mean I am disagreeing with something, often it's an expansion on the original point, not everything is binary in this world.