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Resetting Xbox

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Re: Resetting Xbox

#501

Post by teachrdan »

corimaith wrote: post #485
georgeecollins wrote: post #410

Earlier quoted context omitted.

Sure, 3% is terrible. But the point is you spent a fortune buying all these studios-- aka key strategic intellectual properties-- and then you manage them badly. Then you just sell or shut them down at their absolute bottom and you end up just destroying value. Older forms of media understand this. WB loses money and its still really valuable because people see the potential of Batman, Harry Potter etc. IP studios ar…

The mismanagement here was actually Microsoft giving studios free reign and they flopped with projects like Starfield. This needs to be understood really within the larger industry trend of quality decline of AAA, which I suspect has to do with changes in overall dev culture and discourse than corporate decisions. There hasn't been a time when developers have been more disconnected from their audience than now.

> There hasn't been a time when developers have been more disconnected from their audience than now.

I'm curious what you mean by this. It seems like gamers have never been more vocal and there have never been more avenues (social media, short form video platforms, etc.) for them to voice their opinions than we have now.

How exactly do you know that developers have never been more disconnected from their audience? And how would that be relevant to declining AAA game quality when it's the responsibility of management and leadership to ensure the quality of the final product?

Re: Resetting Xbox

#502

Post by bschwindHN »

Microsoft, as always, has no taste. And they think they can MBA their way into making fun games.

The Xbox was my main gaming platform from around 2005 to 2018, and the experience got worse and worse as time went on. At this point in time, I really don't know why you would choose an Xbox over another console or just PC gaming.

They can try to "reset" but from the outside it just looks hopeless as long as Microsoft is involved.

I'll stick with Steam and Nintendo consoles. At least Nintendo still recognizes the importance of a fun gameplay loop, even if they struggle at other things like good online services.

Re: Resetting Xbox

#503

Post by cortesoft »

2OEH8eoCRo0 wrote: post #52
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…

Compulsively chasing only the highest margins has been toxic for the country as a whole.

"Chasing the highest margins" is almost the entire point of a market based economy, and is the main selling point for capitalism. I get your complaint, but if you reframe it I think it isn't the real problem here.

The whole point of a market-based economy is to allocate resources to making things people actually want. How does the market figure out what people want more of? Well, profit margin. If someone is making a lot of profit selling something, that is a really good sign that people want more of that thing. Other people see the high profit margin, and move to get into that business. More of that thing is created, and people's demand is satisfied.

The high profit margin is the signal (and the incentive) to get more of that thing.

In other words "Compulsively chasing only the highest margins" can be rephrased as "investing in things that people want more of"

Re: Resetting Xbox

#504

Post by genxy »

dcrazy wrote: post #280
Narishma wrote: post #222

Earlier quoted context omitted.

> "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.

The cheapest xbox should cost 129. Instead it is $399. That is how consoles work. It gets cheaper, the back catalog grows and now you have a mass market item that ideally could source games from anywhere.

Consoles losing physical media and not allowing 3rd party app stores, or gasp, the ability to run user programs is going to kill the consoles. Expensive and marginal future utility.

Re: Resetting Xbox

#505

Post by breezybottom »

adithyareddy wrote: post #186
foepys wrote: post #159

Earlier quoted context omitted.

Billion USD grocery chains operate on 2-3% margins just fine...

If you're a grocery chain you know exactly how much an item costs and exactly how much you sell it for. You also simply order more or less stock of the item depending on how it's selling. If you're a video game company, you invest millions of dollars in a project up front, for years, and you don't know until after release whether you: - Make back all the money you spent plus a healthy profit on top. - Just break even…

Food prices can change significantly depending on natural disasters, diseases, supply chain issues. There's more uncertainty than you acknowledge.

Re: Resetting Xbox

#506

Post by MarkSweep »

3eb7988a1663 wrote: post #452
folkrav wrote: post #356

Earlier quoted context omitted.

Split Fiction is fantastic. My wife, about 0% gamer when rounded down, is still talking about it months later. I had a blast too - the game manages to be extremely fun and a decent challenge for both gamers and non-gamers alike. We'll be replaying it, but swapping characters next time. When we played it, we had just finished It Takes Two, which was also great, but Split Fiction immediately dethroned it. I can't wait…

Is Split Fiction easier? While I thought the platforming in It Takes Two was fairly pedestrian, it was challenging enough that I was unable to get the other half to tough it out to the end.

Split Fiction has a couple of mechanisms that make it accessible for people who are not experienced gamers. There is a general "reduce damage done by enemies" setting that make dodging attacks unnecessary. If you get stuck on something, there is a "skip to next checkpoint" button. This is very helpfully for the one or two really oboxiously hard parts. This is an improvement in accessibility over the developer's previous game It Takes Two.

I'd highly recommend Split Fiction, both for its game play and story. It is also superior to It Takes Two in that there is no part where the games "to continue playing, press X to dismember your daughter's anthropomorphic stuffed animal to make her cry". That was a jarring and unpleasant shift in tone for an otherwise mostly light-hearted game.

Re: Resetting Xbox

#508

Post by pandaman »

weakened_malloc wrote: post #483
pandaman wrote: post #393

Earlier quoted context omitted.

Acquiring a game studio only makes sense if you see a way to make it grow either by providing capital or better management. E.g. Activision acquired Treyarch in 2001 for $20M, which was probably 4-5x of its annual profit at the time. Seeing that very few people played (or even heard of) Die By The Sword or Draconus you could imagine that there was still a room to grow so there was a good chance you break even on your…

> What was Microsoft plan to increase profit? IMO, at the time, it was to buy ABK and make CoD an Xbox exclusive. That clearly didn't play out when everyone screamed about it being (rightly!) anticompetitive, and so they had to resign themselves to accepting that day 1 gamepass exclusive was going to be their way to get people to switch over from PS. That also didn't work. The 'K' part of ABK was also probably going…

Even if they had made it exclusive, $70B is too much for this. CoD sales would fall - not everyone buying it would go out and buy an Xbox, Xbox hardware sales would raise. Let's be optimistic and say every CoD player (including ones who already bought Xbox ) goes out and buys another Xbox and then buys 2 xboxes in the next generation. So it's ~20M more Xboxes sold. To break even on this investment in 10 years MS has to make ~$2400 from each console sold over lifetime ($68B - 10*$2B annual profit = $48B over 20M extra units). Of course, if each sold Xbox made that much money they would not sell them for $400, they'd pay you to get one.

Re: Resetting Xbox

#509

Post by cortesoft »

jshen wrote: post #340
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…

That's a 3% margin which is unsustainable. It's less return than you can get from buying treasuries, which means that if they don't improve it they will go out of business.

This is the frustrating thing reading these comments, where people seem to assume that any profit margin is good enough to sustain a business.

People see a 3% return and think, "Well, they aren't losing money so there is no reason they can't just keep doing business as usual." What this idea is missing is that the investors in a company aren't choosing between "keep my money in this company" and "sit on the cash", they are choosing between "keep my money in this company" and "invest my money somewhere else"

In other words, you aren't just looking at direct returns on an investment, you also have to think of the OPPORTUNITY COST of the investment. By keeping their money invested in a business making 3% returns, they can't invest that money somewhere else.

Re: Resetting Xbox

#510

Post by cwel »

aranelsurion wrote: post #420
jfim wrote: post #399

Earlier quoted context omitted.

Would they be counted as active players on steam if they're being played on game pass though?

They wouldn’t. Only people without GamePass subscription and no desire to get it for even a month or two would buy the game on Steam.

> Only people without GamePass subscription and no desire to get it for even a month or two would buy the game on Steam

So the majority of people?

I jest, but I honestly don't know anyone who consults the GamePass offerings before making a decision on whether or not to buy a game. It's Steam or pirate.

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