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Resetting Xbox

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Re: Resetting Xbox

#271

Post by chrisfosterelli »

_verandaguy wrote: post #262
chrisfosterelli wrote: post #257

Earlier quoted context omitted.

> 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. That actually seems... tiny? Xbox is nearly 17,000 employees. That's like $8k in profit per employee. That's worse than big box retailers and like 1/100th of what is common in big tech and (to the letter's point) far worse than their bigg…

At some point you end up hitting the law of diminishing returns. I think this is a case of that.

I agree that at some point you do, but again I think the fact that Sony Playstation is doing this with larger annual revenue, less studios, AND better margins is an indicator that it isn't the problem here.

Re: Resetting Xbox

#272

Post by forbiddenvoid »

CyanLite2 wrote: post #264

GamePass has awful choices of game, save or one two. Nobody wants to pay $35 a month for games (that sporadically disappear) which can be purchased outright at full retail price for $70.

I mean, no one except the 30 million or so people who are paying for it. I'm quite happy with the GamePass selection, and I consider it an excellent value for me.

Re: Resetting Xbox

#273

Post by delecti »

spenczar5 wrote: post #245
_verandaguy wrote: post #234

Earlier quoted context omitted.

> 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 thre…

> This is still $150M of pure gravy every single year. The issue is rate of return. They are evidently spending $4.85bn on Xbox per year. The US federal interest rate is 3.5% so if you just put that money in US bonds you would get about $175M per year of much purer simpler gravy.

But the revenue is coming out of the same org. That $5bn revenue only exists because of the $4.85bn expense. That money doesn't exist to put into bonds unless it's coming out of the games org. They can only make their margin percent look better by making their absolute margin $150mm worse.

Re: Resetting Xbox

#276

Post by scott_w »

WhereIsTheTruth wrote: post #85
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…

Ratio of consoles sold Xbox vs PS5 was 1:3 before that, after that it fell in the 1:10 territories (december 2025) Using Phil as a scapegoat and Sharma as the savior is disingenuous.. and is honestly pretty consistent with how i view Microslop: opportunists, tasteless, and visionless executives, shareholders and fanboys The fall of Xbox started before the launch of thier current gen: - HW: they announced 2 SKUs, with…

I need to be clear that I’m not presenting Sharma as a saviour. Honestly, I don’t know if her decisions are correct or if Xbox can even be saved at this point.

You said it yourself, Xbox was being outsold 3:1 by PS5 which is still shocking numbers given the investment, and the fact that PS5 was having trouble selling units at the same rate as they’d been selling PS4s.

Re: Resetting Xbox

#277

Post by botanrice »

maples37 wrote: post #66
whizzter wrote: post #40

Earlier quoted context omitted.

The pandemic and scalpers really destroyed peoples apetite for the "new thing" when this generation came out, and with that boost missing studios saw little point in going exclusive perpetuating the vicious cycle, it's just in the past few years that there's really been exclusives for this generation that didn't also support older consoles. And even then, already the PS4/XbOne generation added stratification making i…

Microsoft also didn't do themselves any favor with that naming scheme. In the current generation (I think?), you have: - Xbox X - Xbox S - Xbox Series X - Xbox Series S Compared to: - PlayStation 5 - PlayStation 5 Pro or: - Nintendo Switch - Nintendo Switch OLED - Nintendo Switch Lite Anyone who's literate in English (and knows that OLED means "nicer screen") can immediately rank the PlayStations and Switches into "g…

I've had an Xbox I got from a friend and I legitimately don't know which Xbox it is lol

Re: Resetting Xbox

#278

Post by narnarpapadaddy »

ChadNauseam wrote: post #252
butlike wrote: post #58

Earlier quoted context omitted.

You can blame her for the last 10 years because she's CEO _now_. That's what you do. You blame the head of the organization for the organization's problems.

That doesn't make much sense to me. How can you blame someone for a problem they didn't cause?

Because it’s their job to fix it. If they don’t, the axe falls again.

Humans often think in terms of deontological ethics. Corporations operate in terms of consequentialist ethics, and the only consequence that matters is that the numbers go up.

Re: Resetting Xbox

#279

Post by artyom »

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…

Those metrics are hugely misleading because they account for current fiscal year revenue and margins.

For Xbox being what it is today, which is mostly about the subscription and not the hardware console or the exclusives, you have to compound their acquisition frenzy of 2018-2020 or so, which totals about 75 billion+.

They didn't want the developers nor the catalog. What Microsoft wanted is to change the economics and dynamics of the entire games industry, to make it Netflix-like (play what's in the catalog today, pay monthly even if you don't play anything) vs. what Steam offers (purchase once, own "forever", even if it's de-listed).

But that didn't play out. Optimistic estimates put total revenue for Xbox since then in the 20B ballpark. At a ~5% margin (as other commenters have pointed out) the profit is about 1B dollars.

It means that after almost a decade, the entirety of Xbox is in the red for about 74 billion dollars, which is 74 billion away from breaking even.

Steam still dominates PC gaming. Xbox consoles can't be more irrelevant today.

This isn't about over-hiring or AI. It was a bet at the executive level that went horribly wrong. They can still do things like selling IPs at a bargain to compensate, but still. Horribly wrong.

Note: Microsoft doesn't publish hard factual data so the numbers above are somewhat speculative (e.g. "analysts data")

Re: Resetting Xbox

#280

Post by dcrazy »

Narishma wrote: post #222
mattalex wrote: post #207

Earlier quoted context omitted.

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 -…

> "Mid-cycle": lowering manufacturing costs, That was true historically but is no longer the case. Even last gen manufacturing costs didn't go down as much as they used to. This current gen they actually increased multiple times.

And they have hiked the prices of the current gen very late in the cycle to reflect component costs.
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