The Smartphone Killed the Xbox(ravi64.com) |
The Smartphone Killed the Xbox(ravi64.com) |
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I blame the rise of "Institutionalized Marketing Departments" inside tech companies dominated by careerist middle-managers who've never actually created any marketing themselves. They just hire and manage creative, ad, PR and branding agencies. The branding agency hires a naming consultancy for a million dollars who has a bunch of hipster creatives brainstorm a short-list of very clever names, do surveys and analyses overflowing with data (and false precision) then package it into an incredible pitch presentation delivered by their most attractive hipster with the coolest foreign accent. All to sell some "too clever by half" high-concept name - because that's the only way to justify their million dollar fee.
I'm pretty sure Sony didn't pay anyone a million dollars to spend three months coming up with "You should name the Playstation 3's successor... Playstation 4."
The exclusives ship has sailed for the Xbox now so the best they can do is try to compete with the new Steam Machine with what will essentially be a PC and allow all storefronts.
It seems Valve has gone for an entry-level machine while Xbox is going for a premium one so it'll be interesting to see how it all pans out.
> Ed Fries (VP, Game Publishing): And then somebody says, “What about Sony?”
> Jeff Henshaw (Software Design): Microsoft had owned the den and the office. And the thought of Sony owning the rest of the home is offensive to Bill [Gates].
> Ed Fries: Bill kinda pauses, and he thinks, and he says… “I think we should do this.” And Ballmer’s like, “yeah, we should do this!” And then they start getting excited and it starts going back and forth. “We should do this!” “We should let these guys do this!”
In Zero to One, Peter Thiel argues that Microsoft and Google were so bent on competing with each other for its own sake (Bing, ChromeOS) that they allowed Apple to dominate the next generation of computing with the iPhone. This seems like another part of the same story.
Yes, the ps5 has sold like 85 M units, so it has the larger market share, but the xbox is "killed"? Please.
> It could generate real-time graphics far beyond anything ever seen before.
No. The ps2 was on par with a budget pc.
Also, it’s a 5 year old console. I’m surprised they are both going this strong.
The XBox business never recovered from the XBox One - which was a huge fail on almost every dimension. And that was the worst generation to fail on - because PS4 didn't fail. While PS4 wasn't perfect, it didn't have the critical issues PS3 did (high cost, extremely difficult to program, reliability). It was also the generation when the console business stabilized and platform ecosystems (subscriptions, online-only games, backward-compatibility) greatly increased user loyalty and platform lock-in.
While the XBox Series X generation returned to hardware, cost and feature parity (or close enough), Playstation had already pulled away enough and thanks to social stickiness (friends buy what other friends have), any lead compounds. Also - while it's a more minor issue - I have to mention... after screwing up the "XBox One" name (yeah, calling the third generation "One" won't confuse anyone), they screwed up again naming the next generation (WTF does "XBox Series X" even mean? What other "Series" are there?).
But the real reason why MSFT is no longer committed to the console hardware business is that hardware margins are much lower than software, subscriptions and cloud services. It brings down the corporation's blended gross margins. That's why they spent $100B buying game studios. Even giving Sony a cut, it still maths out better.
MSFT will continue to do console hardware but they're changing their strategy to still reach their margin and revenue goals with the #2 or #3 hardware platform. That means there's no reason for MSFT to go 'all-in' on the next-gen hardware (meaning they'll won't intentionally plan to incur tens of billions in losses in the first three years of a new generation and make it up in the last four years). But console hardware is still huge for Sony and existential for Nintendo - so they will go into deeper and longer hardware losses. XBox execs have already indicated that the form factor of their platform hardware is going to change for the next generation. Industry insiders interpret that mean they're giving up going head-to-head against Sony on the traditional console form factor.
