Actually she said new IP were critical, same as 1st and 3rd party exclusives

"At the same time, as we saw this past weekend at Showcase, a reliable pipeline of first- and third-party exclusives and new IP are critical to our success. We need to reassess the balance between these and our investment priorities for the next 5 years.”

Edit: Though I wouldn't be surprised if Obsidian are asked to make Fallout next. Afterall, neither Avowed nor Outer Worlds 2 were all that successful from what we saw, and we already heard that Outer Worlds 3 was not planned. Grounded was successful, especially for the small size of the dev team, so I'm sure it will continue as long as Grounded 2 does well.

I’m shocked at the 3% profitability margin. Here Satya and Hood wanted that at 30% lol. Phil and Sarah were clearly in desperation mode.

Massive change was always gonna be coming with the mess Phil left. That’s crazy that Asha even called them out mentioning being in this position from decisions made over the past 5 years.

Not good at all. I wonder how much better hardware sales would be if things were done better. Probably not a ton, but even another 10M consoles over the course of the generation would help as they get 30% of all sales from 3rd party. 

You are right. I missed that. Either way we will probably see quicker releases for the biggest IPs that we've seen long gaps with. 

They invested too much into getting tons of studios, and then put all the games on a subscription. The amount they were spending on creating gamepass content increased exponentially and with that the profit they were getting from each subscriber decreased. They tried to increase gamepass to $30 to fix this and there was a mass exodus of subscribers.

It's hard to make profit when so many of your fanbase are getting all your games so cheap. I stacked Gamepass PC at the beginning of this year for just £7/month. That's only a little more than the price of one game per year. They release just two games I'd purchase in a year and they're getting less money from me and that money has to be shared with other publishers.

How many fans do they have that would be spending $300+ a year just on their first party games? But instead just get gamepass which money needs to be shared with third parties.

I just don't see how they can have a high profit margin while giving away all their games day one on a subscription. Especially a subscription that sees them reportedly spend $1 Billion annually for third party content.

Microsoft was clearly hoping Game Pass would keep growing to like 100 million subscribers, which is unrealistic. We don't know how many subs there are, but after the last increase they lost millions of subs. I had Ultimate tier maxed out at 3 years before the last increase thanks to MS Rewards. That is now down to 2 years and a few months. Once it runs out I will probably switch to PC Game Pass. 

I could see them investing less in third-parties to help lower costs as they now have a steady stream of first-party games. 

It won't matter much but I am actually looking forward to the changes that Asha Sharma aims for. I think she has a solid understanding of the pretty shitty situation she finds herself in. Surely not all things she herited from Phil are bad and she can see some value in them, but from what I feel she seems to understand that she can't just keep the same course and call it a day, and that she has to make some sort of adjustments. What's the next Xbox going to be? The way I see it is that the horse power race is finally over and that it never had a chance of being succesful, so instead we are going to see a race about screen time, against the attention of PS and NS but also against streaming services, social media and other forms of entertainment. If Xbox can find a way to be convenient, to be easy to use, to be approachable if you want to call it that, then they can have some decent success. Secondly, it needs the power to keep the attention, so I think having exclusives is the right way to go. Xbox needs to find a new identity rather than being the Playstation in green. 

I would never swap places with Ms Sharma at the moment, not for the fattest, greasiest money ever. She has all the repect. 

Considering storage prices, there is only one option at the moment: be cheap. Don't go for end spec, rather be realistic. Let's be real, diminishing returns have already eaten the benefits of hardware power anyway. Power doesnt matter too much, innovation does. And on that front, Xbox has a large pool of highly creatve studios and developers to create interesting and funny new ways to play. This may not be Sharmas achievement but she definitely can work with it nontheless. So if you ask me, which you don't, but anyway, then Xbox should be reasonably affordable but with a lineup that can stand out among the competition and is as iconic as possible.

Yeah I pretty much agree with this take. Phil has spent nearly a decade on the business model of Game Pass being the Netflix of gaming, and needing exclusive content to bring in as many subscribers as possible. Even if that exclusivity was simply a major game being on Game Pass, such as CoD.

That ambition clearly didn't workout, and in a desperate move, tried to make Xbox a software focused business with "This is an Xbox" marketing and porting all first-party games to competitions platforms.

And somehow, this desperation move STILL didn't work. So in Asha's position seeing the absolute mess she inherited, things simply cannot continue as they have for nearly a decade. And you can't undue something that has been built up for years easily without radical change. That's business for you though.

No idea how this is going to play out, but you at least hope it'll be for the best.

Got a good laugh out of this one. Last I checked relationships are a 2 way street. Xbox has now given Sony 2 Forza games, a Halo game, a Gears game, so all 3 of their biggest franchises, plus a bunch of their smaller games, and they kept most Zenimax releases on Playstation even though they weren't required to. Sony has given them MLB: The Show because MLB was going to give the MLB game license to another publisher like 2K if they didn't, and Marathon only because Bungie requested no exclusivity as part of their acquisition deal. They have now even pulled their singleplayer games off of PC even though they were selling reasonably well, because there were reports that Project Helix would be able to play PC games.

What’s most surprising is that going third party didn’t help the in the way they were hoping.