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Resetting Xbox
21–30 of 981 posts
Re: Resetting Xbox
#22It is neither possible nor desirable to own every great independent studio. We have also learned that we are not the best home for every type of studio This is shockingly self-aware for microsoft
...more like > We can't afford it, and it's a bad investment anyway
>> We can't afford it
But they've already spent the money. They spent about 70 billion on activision blizzard. That was and still is an outrageous amount of money that will take fever to break even let alone turn a profit.
Re: Resetting Xbox
#23>Today, in some parts of the company, work passes through as many as 14 layers of management.
Not even national security institutions operate like this
Re: Resetting Xbox
#24This is a total mess IMHO.
- The make around 5 billion in revenue per quarter - The problem according to them is profit margin - around 150-160 million
So first of all, they are big! Secondly they are not at a loss. They just have a "thin, non-growing margin". So to fix all this they are trimming down, so they can "return to growth" (which I think is ridiculous).
Some points -
- They are huge business even now - 5 billion per quarter revenue is no joke
- They did not have to buy all those studios
- They looked at Netflix, and wanted the sweet monthly subscription cash stream
- Then they did not have to give away popular games day one on Game Pass
- And finally, they did not have to raise Game Pass prices to improve the profit margins. Of course, consumers pulled out.
- Once again, short term vision, crazy decisions, bad spending spree and a constant need to "make numbers go up" and who has to pay for all this?
Re: Resetting Xbox
#25Earlier quoted context omitted.
...more like > We can't afford it, and it's a bad investment anyway
>> We can't afford it But they've already spent the money. They spent about 70 billion on activision blizzard. That was and still is an outrageous amount of money that will take fever to break even let alone turn a profit.
They can't afford to buy every other successful studio, which means that their anticompetitive moat has to be competitive. Otherwise, they could have made the whole thing profitable the usual Microsoft (monopolist) way.
Re: Resetting Xbox
#26At some point, the games industry decided it wanted to be interactive Hollywood, and the consequences are entirely predictable. Meanwhile, Nintendo just quietly shipped 3.8 million units of Tomodachi Life in two weeks, and 4 million of Pokopia in five. They're making actual games. Sony's obsession with prestige cinematic bloat, like Xbox, has also put them in a slow-motion death spiral that's going to become painfull…
To some extent - but you can't get away with Hollywood Accounting Practices in the same way.
Also one must consider the likes of Hideo Kojima who can sell ~7 million copies of a new IP that is effectively a cinematic Walking Simulator as an Auteur acrimoniously splitting from the traditional studio system.
Clair Obscur: Expedition 33 also shipped over 5.4 million copies as a AA, in what is also arguably an interactive cinematic on-rails RPG.
Re: Resetting Xbox
#27Earlier quoted context omitted.
...more like > We can't afford it, and it's a bad investment anyway
>> We can't afford it But they've already spent the money. They spent about 70 billion on activision blizzard. That was and still is an outrageous amount of money that will take fever to break even let alone turn a profit.
Just because they already spent the money yesterday, it does not follow that the best decision today is to just carry on as if was still the correct decision. Yes they cannot get that 70B back, but if they have to choose between:
1. a long dragged out distraction over decades trying to make it work
2. a painful but quick 40B write down and the ability to refocus the company on better projects tomorrow
.. then they are, quite rightly imo, going to pick #2. In fact I would assume this going to be the next announcment.
Re: Resetting Xbox
#28> We will reduce management layers to no more than 5, and where possible, 3.
This reads like something from The Office.
Re: Resetting Xbox
#29This is a total mess IMHO. - The make around 5 billion in revenue per quarter - The problem according to them is profit margin - around 150-160 million So first of all, they are big! Secondly they are not at a loss. They just have a "thin, non-growing margin". So to fix all this they are trimming down, so they can "return to growth" (which I think is ridiculous). Some points - - They are huge business even now - 5 bi…
Game Pass was never a sustainable business model. People liked it because when a new game came out, they could buy a month of game pass for like $15, play through the game in a couple weeks, and cancel. It was a really good deal because Microsoft has spent the past decade+ trying to recover from their terrible fumble of the Xbox One launch, so they were subsidizing gamers to come back to their platform.
With the money being spent on AAA titles these days, they are not going to make any money without increasing the price of Game Pass majorly. The big price bump they quickly backtracked on was an attempt to make Game Pass somewhere closer to being profitable.
Re: Resetting Xbox
#30This is a total mess IMHO. - The make around 5 billion in revenue per quarter - The problem according to them is profit margin - around 150-160 million So first of all, they are big! Secondly they are not at a loss. They just have a "thin, non-growing margin". So to fix all this they are trimming down, so they can "return to growth" (which I think is ridiculous). Some points - - They are huge business even now - 5 bi…
Well this is the new Xbox boss, Aska Sharma trying to course correct her own actions after pushing out Phil Spencer (and team). Phil had a deep understanding of the game world about profit margins and how the Xbox is essentially a stake in keeping Microsoft in the minds of consumers, a place in the home. Aska has a shallow understanding and sees only the financials and wanted to increase profits. Now she is burning it all down to try and “reset” and replace people with LLMs to increase profit margins. I imagine she will be pushed out herself end of year or next Spring (2027) once her naïve plan back fires.