Playstation made $17 billion from software last fiscal year. Assuming 2 billion were from 1st party content leaves $15 billion of taxable 3rd party revenue. 30% of that would be $4.5 billion.

While we don't have access to MS's full data, we're able to make logical extrapolations that get us reasonably close to the undisclosed numbers. Playstation making $4.5 billion from taxes implies that Xbox made $1-1.5 billion in the same period. Xbox-PC + GamePass will significantly reduce their 3rd party income. We don't need Microsoft's data to accept that the 30% cut is very important.

In hindsight, Sony supporting crossgen in the first two years wasn't a mistake. Games cost fortunes to make, PS5 had serious shortages, and the game engine tech wasn't evolved enough to make a huge difference that warranted full exclusivity. And I'm not sure yet that Nintendo's strategy here is better (that'll depend on production/shortages). PS4's popularity post PS5 launch made Sony a ton of money (even though hardware fell off a cliff) that the Switch 1 may not be able to replicate. Nintendo's high profit margins have more to do with their excellent software output, and less with console exclusivity. MK8 and BotW were Wii U games after all.

Sony made a bunch of mistakes, but I don't think early crossgen is one of them (in the context of shortage). Their PC support, mediocre midgen output, and high prices are the bigger problems.

Is it that much of a prediction when we already have $700 consoles? Digital only consoles at that. You want one with a disc drive, gonna be near $800 after taxes.

Once the flood gates have been opened by a single company regardless of what it is, there is no going back.

And those that have their preferred platform will always find a way to defend those kinds of decisions or eventually cave in. Just human nature.

If they aren't going to subsidize then why even bother with a next generation? It would put Microsoft further behind in the competition. It may just be time to give up if they can't do that. Otherwise, perhaps we will see some subsidies if they think that this really isn't a sinking ship after all.

Well, of course it's better to have console success and 30% taxable revenue streams on your platform. The thing is, to attempt that business model means your competing against Sony and Nintendo and Phil Spencer has said exactly these words. 

"we are not trying to out-console Sony or Nintendo"

"We are no longer trying to bring over players from other platforms to Xbox" 

The sales are getting worse and worse for Xbox and whilst they still have some third party revenue, with the sales they have that revenue is very quickly going to stop because the XBSS/X are now selling much worse than Xbone did in it's final year before it was discontinued. There is no way that developers are going to keep supporting a platform that is selling like XBSS/X is and MS know that. The only thing they can do is to make it work for them in a way where they are not dependant on hardware selling for Xbox App/Gamepass to be successful and that's what they're doing. Phil spencer has said himself they are finished with the standard console business models so why should we ignore him?

Phil and co's decisions are what kept damaging the Xbox brand. But the platform still does generate a respectable amount of money. As long as porting is easy, there would be no reason for most developers to stop supporting Xbox even if future hardware sells less than 20 million. Software revenue being under a third of what Playstation generates is not small money! Even 10% of that wouldn't be small enough to most 3rd party publishers who wish to maximize their software sales. Xbox's 3rd party support is arguably better than ever (ignoring the lack of exclusives, which is an industry wide thing).

Having "traditional" Xbox around also means that Xbox Game Studios will save 30% for every copy sold on Xbox, which is not insignificant. I just don't think traditional Xbox is weak enough to justify killing. Perhaps they were losing more money on hardware than I thought.

Can you play Mario Kart World on S1? How about DKB? Nintendo is doing what Sony said they could not, even though the S1 had a bigger install base than the PS4. I'd like to see that with PS6.

Look at how low MS had to drop the price just to get the 32 million it currently has. Holiday season 2023 the XBSS was reduced to 150$ and the XSSX reduced to 350$. Lets assume the XBSS/X sell 38 million lifetime, it means they only achieved 38 million with a console that was at one point only costing 150$. If 150$ won't get people to buy your console in the quantities you need then what's going to happen when your next one costs 600/700/ dollars.? 

Bold - They were losing a ton of money on the hardware. The 2TB XBSX is 730$ right now and I don't believe that's because of greed and price gauging. I believe the specs and sophisticated design of that box make it expensive to produce and 700$ is just close to what it costs to make. Also, manufacturing is a numbers game in the sense that, the more you manufacture the cheaper it is and the less you manufacture the more expensive it is.  

Everyone saying that Sony wouldn't do this. They just went full-on third party. The people in charge of Sony right now are the kind of lunatics who would absolutely do this. 

I think it’s good to bring this thread back now that Microsoft is planning on raising the prices of Xbox as follows:

Xbox Series S 512GB goes from $379.99 to $399.99

Xbox Series S 1tb goes from $429.99 to $449.99

Xbox Series X digital goes from $549.99 to $599.99

Xbox series X goes from $599.99 to $649.99

Xbox Series X 2TB Galaxy Black Special Edition goes from $729.99 to $799.99

So yeah…

Pretty valid prediction here.

With the Series X now costing $650-800 and the Ally X costing an eye-watering $1000, if there is a next Xbox (which I am doubtful of at this point) it is going to cost like $1200 and exist solely to milk every dollar from their most diehard loyalists.