What Microsoft should do to stay competitive.

[EricHiggin]

Azzanation said:

EricHiggin said:

As the saying goes, if you're not winning, you're losing. That is the case here with consoles, even if XB profits are growing.

You can only milk the same cow so much. Eventually you need more cows.

This was said over and over tonight in the podcast. XB needs to grow gaming or eventually they're going to 'run out of milk'.

The console pie really hasn't grown much for decades. Continually splitting the pie isn't sustainable, especially if you keep getting a smaller slice.

Especially when it comes to business. It's about growth and how to make even more money, not just making the same amount of money as last gen. Sony is also in a tough spot with shareholders. They need to make more money than the PS4 because that's what the investors want to see, growth, and because PS4 set the bar high, we are now seeing Sony make decisions like expanding games to PC because how else are they going to top the PS4? They won't, by just doing the exact same thing the PS4 did. They need to expand to grow, otherwise the PS5 will sell exactly the same as the PS4 and not increase their shares.

All console brands today are making profits, however is it enough for all 3 to grow? No. Hence the radically shift to PCs and Mobile. 

Yes.

To show MS a presentation where you make $4 bil this year, $5 bil next year, and $6 bil the year after, will get you thrown out. MS wants to see more like $4 bil this year, $6 bil next year, and $10 bil the year after, and so on. There's growth, and then there's GROWTH, and this is MS we're talking about.

Yes.

PS has become too important to SNY now, so they want big expanding profits, but it's even worse for them. They see the major backing MS is giving XB in terms of purchasing power through acquisitions, and it looks like once again, MS decided not to pull the plug and is standing behind XB going forward.

PS really has no choice but to grow and grow quickly, because if they don't, all XB needs to do is keep growing and wait and they will eventually win. Not next year, not this gen, but eventually. This also means its not all that smart for PS to build a wide variety of different hardware because it's too much time and money to waste up front for little profit down the road, until they can sell (new) games on them anyway. They have to do something just like what XB is already doing, which is port old and new games to other platforms. It's far cheaper, quicker, and makes much larger profits.

This totally makes it seem like XB and PS are just greedy, but XB did it because MS can't just bail them out every time they are in a bit of trouble, though they do have the money to easily do that. Where as PS at this point is basically being forced into it because SNY don't have anywhere near the same income or cash on hand like MS does. Not like SNY is tiny or doesn't want the extra profits, but the truth is most of those SNY profits are going to have to go right back into growing PS or eventually they're going to be in trouble because XB and MS can just wait it out as they grow.

Now there would be room for 3 if they were still just console waring and not content waring, that changes things considerably, or if size wise they were more equal. SNY could live with PS profits before, but they can't now when they're up against a giant like MS, making the massive moves they're making with XB. Same with Nin before SNY showed up. That led or even forced Nin into a blue ocean strategy eventually. The profits always matter, and do matter for XB, but they matter more now than ever for SNY. MS just wants bigger XB profits at this point. SNY needs big PS profits.