(Business Perspective) Does MS really need Xbox Hardware?

[Azzanation]

Machiavellian said:

Here is the point I believe you are missing Azz about Cloud streaming.  Think about when Sony was promoting PS Now and when MS came out with Gamepass.  The difference between the two was that MS created a download games service first instead of trying to promote XCloud.  How did Sony respond, they did double down on PS Now to compete, no they created PS+ instead because even Sony realize that Cloud streaming is not where the market is going anytime soon.

Why would Sony push PSNow when they are the market leader in high end consoles? They are not going to cut into their own lunch until they are pressured in doing so. PSNow exists for a foundation of the future. Was never meant to replace hardware anytime soon.

You keep bringing Google up but that boat has already sailed.  They failed, dropped Stadia and probably will not revisit it if ever.  It doesn't matter what they intended to do, the market wasn't ready for a full on cloud streaming service and it probably will not be ready for a very long time.  Why has Sony really done nothing with PS Now.  The main reason why Cloud steaming like PS Now and XCloud has not taken off because its a huge investment in hardware to get it working on scale and its not driving revenue.

Google failed on their buisness model not because of Streaming. They failed in offering better deals and benefits to their customers. Example: Lack of games, High game prices and over promises.

So this drives my point.  The industry isn't going towards cloud streaming as a main gaming platform but more as a supplemental add on to existing hardware.  Its there to allow people to continue to experience their games when they are not on local hardware or they want to continue the experience on their mobile device while out or about or maybe when the main TV is in use.  What Cloud streaming is not is a replacement for local hardware because the experience isn't there, the investment isn't there even from MS or Sony and current ISPs make it expensive for the average household to support.

At the moment it isnt, but this isnt about now, its about later. How many people go out to buy Blu Ray Players and Movies on Disk now that they have options like Stan and Netflix etc. Think about the average person not the hardcore audience here.

So by the time streaming replacing hardware is a thing where MS could rely on it to drop local hardware, every OEM would be dropping local hardware.  MS as the 3rd wheel cannot dictate the market.  We seen how bad that went when they came out with the Xbox one.  The 3rd place vendor has to always provide near or better experience then the leader or what happen is exactly what happen with the Xbox one.  

Xbox wasnt the 3rd wheel leading into the XB1 gen. Thats debatable. Cloud isnt ready yet, but the way the industry is moving forward, we are seeing corps double down on buying publishers and studios because qauntity of content is what drives Streaming services.

During the ABK merger with the CMA, MS stated they can only support 1000 UK users on XCloud at one time.  That in itself should tell you how much MS is not in a position to go full XCloud if the second biggest region for Xbox sales is that limited in XCloud support.

At the moment. You ignore the fact Technology will always improve.