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Resetting Xbox

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Re: Resetting Xbox

#231

Post by burnte »

rockyj wrote: post #24

This 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…

> - 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.

I saw this coming from day one. The instant they did Netflix for Games, it was going to gut their margins. And then the inevitable pullback, either holding new games for months or raising the price, was going to kill the value proposition.

They said "This will make us a mint" and celebrated the victory years too early.

Re: Resetting Xbox

#232

Post by WorldMaker »

VikingCoder wrote: post #83

"And we will streamline how we work across our tools, with a cleaner code base, shared services, and 50% reduced vendor spend." How will they achieve cleaner code, with fewer workers? Seems like a well-intentioned platitude.

They'll use a magic "Copilot for Game Dev" LLM genie that produces nothing but clean code.~

Re: Resetting Xbox

#234

Post by _verandaguy »

mattalex wrote: post #207
rockyj wrote: post #24

This 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…

150M at 5B revenue is not great: that's 3% margin! The bigger issue is that console manufacturer revenue is highly cyclical. This is hard to see in e.g. Xbox and Sony since they are both part of a larger conglomerate, but really obvious for nintendo. You generally have a cycle of - "Launch": high marketing costs, low/negative HW margins - "Mid-cycle": lowering manufacturing costs, large game sales, high margin DLCs -…

    > 150M at 5B revenue is not great
Considered as a raw percentage in a vacuum, sure, I guess, but we're talking about...

- A company which has undertaken a concerted, long-term effort to consolidate the industry under its umbrella (something they themselves call out as a problem in this post), reducing consumer choice

- A company which has captured a significant chunk of the console market. They're one of the big three (alongside Sony and Nintendo), and have been since the early 2000s, arguably, for crying out loud.

At a certain size (typically as measured by market capture) the expectation for growth needs to be reality checked. This is still $150M of pure gravy every single year. Sure, this is going to a corporation, but that's more money than most people could possibly dream of earning in ten lifetimes.

Every year. For a company that's already putting money towards opex in the form of developing new games and new content for existing ones, for a ridiculously broad portfolio.

To be clear: it is Microsoft's and Xbox's prerogative to pursue more profit, but I reserve the right to call this out as absurd under the circumstances.

If you want to make the argument that Xbox has suffered from a lack of focus in the past decade (... or even longer), or that there's been mismanagement (I would say since around the time 343 got created), then those are fair arguments, though I don't think those are justifications, on their own, for cutting thousands in headcount.

Allowing this org to balloon to fourteen levels of management on any vertical is a joke. Allowing the absorption of so much of the game dev industry and still being unhappy with $150M in annual profit after being such an active participant in the oligolpolization of console gaming is just a bit unserious.

Re: Resetting Xbox

#235

Post by tracker1 »

ryandrake wrote: post #210
tracker1 wrote: post #209

Earlier quoted context omitted.

https://www.reddit.com/r/marvelmemes/comments/17h76ej/so_a_i... Of course, it's not like you couldn't have done a google search yourself, if you really cared.

The top Reddit comment there pretty much sums this whole discussion up. I can't believe I dragged myself into this. It's just Gamergate again and again. I should have known.

So you think the character looks like a fashion model? Really?

Re: Resetting Xbox

#236

Post by sikim »

chrisfosterelli wrote: post #120
rockyj wrote: post #24

This 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…

With due fairness, these are two different sets of leaders and two different strategies. A lot of the strategy you outlined -- buying all these studios, replicating netflix, giving away day one games, raising game pass -- was a strategy put in place by Phil Spencer. Phil pushed for this investment with the promise it would pay off later for MS. He's talked publicly about having to convince Nadella to put up ungodly a…

Phil and the likes were too hands-off on these studios post-acquisition. They got too complacent enjoying steady paychecks over years of delays while working on their niche games that only highlight their artistic vision over generally fun gameplay. That's where they failed. The Activision/Blizzard acquisition and GamePass fumble were just a nail on the coffin

Re: Resetting Xbox

#238

Post by mrcwinn »

taurath wrote: post #170

> We will deliver success through a flatter organization that is built around makers (individual contributors focused on building), player-coaches (leaders who remain deeply involved in the work while developing their teams), and directly responsible individuals (DRIs) who own key decisions and outcomes. This is the new trendy management style - a few executive owners and then everyone else are expendable ICs, with a…

Give me a break. How many times has an IC complained about all the management layers to get something done? You can't have it both ways -- plenty of upward mobility, but no layers to the org.

Re: Resetting Xbox

#239

Post by WarmWash »

WorldMaker wrote: post #49
scott_w wrote: post #44

Earlier quoted context omitted.

Just looking at Sharma’s history, she rejoined MS in 2024. Xbox was struggling long before that, so I don’t see how anyone can blame Sharma for the past 10 years…

Xbox has been profitable almost continuously since a few years into the Xbox 360. It's fascinating how "profitable but low margins" equates to "struggling" to so many.

>It's fascinating how "profitable but low margins" equates to "struggling" to so many.

If one bank pays 4.25% on your savings and the other pays 3.25%, which one are you going to chose to put your money in all else being equal? Why is the 3.25% one not a good choice despite you still making money?

People inherently understand business, they use the same principles in their daily life, but they just get confused on making the connections.

Re: Resetting Xbox

#240

Post by taybin »

MisterTea wrote: post #51
hbn wrote: post #16

It was pretty rich seeing armchair video game industry analysts act like the new CEO was gonna usher in a new age for Microsoft's gaming division because she got to announce the updated logo and some games that would have obviously been in development long before she became CEO. Microsoft is never going to figure out gaming. It's more art than engineering and they can barely manage the engineering with all the interv…

> And between graphics almost certainly at the point of diminishing returns, and hardware prices like they are right now, I can't imagine there's a market to sell something more capable than current gen consoles. I haven't bought a console since the Xbox360 and Wii. But I have a friend who still games pretty heavily and is low income. He can not afford the latest PS5 and is still on a PS4. We were talking the other d…

I'm in software and I do alright, but I'm still on a PS4 too. Just can't justify the upgrade when there's still so many great old games available. Maybe when the next Horizon Zero Dawn comes out, I'll be forced to upgrade, but I'm taking my time about it.
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