The Future Of The Xbox Brand

Status
Not open for further replies.
24 Jun 2022
3,082
5,227
WARNING: This is a rather long read, but I broke it up into key segments if people would rather read sections at a time.

I am cross-posting this on NeoGAF and Icon-ERA so folks can read it wherever.

=================

1071px-Xbox_logo_%282019%29.svg.png

So, the first couple of years of this new console generation have been a pretty wild ride, particularly for Microsoft. At first it looked like they were going to have a gentle ride into the generation while perhaps getting more or less completely overlooked by Sony and the PlayStation 5, and if you look back at search trends, social media engagement, preorders etc. between the two platforms that idea bears out. It's not that Microsoft's promised games to fold into the new gen looked unappealing (to me, anyway); it's just that no matter what they did, it would always have to contend with what Sony was doing at *that* moment, and if there's one thing Sony has shown, it's that they do not stand still. They continue to build momentum for the PlayStation brand and consistently put out high-quality content for their customers, it's how they became the dominant player in the console industry to begin with.

But then, Microsoft decided to throw their hat in on a gamble. Two gambles, in fact. Personally I can't say if they were "inspired" by the acts of Embracer Group & Tencent or not, but the September before the launch of their Series X and S consoles, Microsoft announced they would be acquiring Zenimax, Bethesda's parent company. Then, just 16 months later, they announced the big(gest) one: they would be entering an acquisition phase for Activision-Blizzard-King, or ABK for shorthand. The legalities surrounding this particular acquisition are still ongoing, but (thankfully) I'm not interested in spending yet more time obsessed over a transaction that does nothing for my own bank account nor my wallet, unlike certain other individuals online.

Rather, there are a few developments which I've observed with Microsoft and the Xbox brand over the past two years that have led me to consider a most probable future for Xbox as a brand, where Microsoft will most likely take it, and the steps they'll take to get there. The key developments I've noticed which have led to my conclusions are as follow:

1: Development of the GDK​
2: The "strategic partnership" between Sega/Atlus and Microsoft Azure to make the former a "specialized" client of the latter's services​
3: The expressed interest from Satya Nadella viewing the benefits of Xbox brand around developer-centric cloud-powered development & programming models​
4: The existance of Valve's Steam Deck (and its evident commercial success)​
5: The involvement of Microsoft's Surface team in the development of Series X and S consoles​
6: The expressed interest from Microsoft to have GamePass on as many devices as possible, including rival consoles from Sony & Nintendo​
7: The (probable) underperformance of Series S in most retail markets (theory on my part, based on circumstantial evidence and coincidences)​
8: The initiative to build Xbox and PC versions of all 1P games for Day 1 (has been in effect for some years now)​
9: The expressed desire for increased games revenue and profit driven mainly through acquisitions of money-making IP to fold into Xbox division​
10: Expressed belief from Phil Spencer that they expect GamePass to "only" account for 10 - 15% of total games revenue going into the future​

Now, I've listed those points in no particular order, but the reason I listed them is because they all feed into what I believe Microsoft will do with the Xbox brand going into the future. The following things I expect to either begin happening or be in full effect of happening by 2025, and certainly by the time the 10th-generation of consoles would begin (assuming 2028 on my end). I will reference back to the 10 points listed above as needed while building out these ideas, but this might be a somewhat long read, if you can't tell already. So just break it up if you feel it's too daunting.

[1: MICROSOFT WILL PHASE OUT XBOX LIVE GOLD]

This one is probably a little more than obvious, not just because several "insiders" have suggested as such for over a year, but because Microsoft's (absolutely failed) attempt to double the price of XBL Gold last year (to drive attention to GamePass as a better value) more or less showed their long-term intent with regards this service.

While Sony handled rolling PS+, Extra, and Premium/Deluxe into a shared service better than Microsoft keeping GamePass & Xbox Live two distinctly different (and conflicting) services IMO, it doesn't change the fact that Microsoft eventually need to rid of XBL Gold and ensure that there is a GamePass tier priced similarly and providing similar benefits.

However, I think this also presents the opportunity for not just a Family Plan (which has also been speculated), but also a means of compartmentalizing GamePass content among different tiers of access. So for example, whatever the XBL Gold equivalent tier is formed for GamePass, would limit the selection of the library to say just a curated list of 100 games, that may cycle in and out every so often, but this tier now costs $4.99/month. It may still get new smaller-scale releases Day 1, but bigger releases perhaps not, or people on that tier would have to wait.

[2: MICROSOFT WILL CEASE BRINGING *ALL* 1P GAMES TO GAMEPASS DAY 1 BY 2025]

Continuing from the above, I think that as Microsoft will want to push GamePass out onto more devices, yet simultaneously bring more of their games to more devices Day 1 (I'll touch on that later), some changes will probably be made to this aspect of GamePass as a service. They know that other platform holders value software revenue from direct sales highly, and feel that certain content being in a service Day 1 will negatively impacts software sales, i.e the main revenue stream of platform holders off software sales.

Microsoft themselves probably do not want to cut too much into potential sales revenue of key 1P titles, either, and they already have a taste of what money 1P games can bring in on their own (outside of GamePass) i.e the early access release of Forza Horizon 5 in November 2021. If/when they acquire ABK, and upon seeing the sheer amount of money Modern Warfare generated on its own at launch, Microsoft would be absolutely moronic to damage that model (and risk losing out on a big chunk of that revenue) by throwing releases like MW2 into GamePass Day 1. It simply is not going to happen.

That's why I'm of the belief that certain key, big games will in fact skip GamePass Day 1 altogether, and enter the service when their traditional sales model has been maximized. So games like COD, TES VI, DOOM, Quake (assuming it's a traditional type of experience and not a F2P MP hero shooter) etc. won't have Day 1 GamePass releases going forward, but could see drops into the service (among the higher-priced tiers) within say 3-6 months of sale traditionally. Meanwhile, games like Pentiment or Grounded will most likely continue to see Day 1 availability in GamePass as well as individual sale outside of the service.

Even though games like COD will likely not be in GamePass Day 1, I can see people with GamePass subscriptions getting a slight discount on their purchase of games like COD, TES VI etc. redeemable at a specific future date (so they buy at full price, but get a rebate a bit later). Or, if you have a GamePass subscription, you get certain free weapons & items, early access to certain maps or DLC quests, or reward points redeemable towards in-game items.

And, since I'm of the belief that Microsoft will eventually work out a deal for some curated form of GamePass on other platforms (more on that later), then these benefits will end up in fact hardware-agnostic, i.e if you have a GamePass sub in general, you get the perks, regardless if you have the game on an Xbox, PC, PlayStation, or even Switch!! Now, I think Microsoft will have to establish some type of revenue sharing model with other platform holders to possibly do some of this, but that would be included in whatever curated form of GamePass they can get onto other platforms.

[3: PROJECT KEYSTONE WILL BE RELEASED BETWEEN 2023 AND 2025]

Companies investing tons of R&D into consoles that never see the light of day is nothing new. Sega became infamous for this with things like Neptune, Jupiter, and the 3DFX-based version of Dreamcast. 3DO/Panasonic had a similar situation with the M2 (which only saw release as an arcade board exclusively supported by Konami, and got like five games), and Atari had some big R&D sunk into the Jaguar 2 before that was cancelled.

However, IMO Microsoft's "Project Keystone" is different. It is meant to be a streaming device for GamePass content via the cloud; the purported reason it has been shelved is down to costs, but it could also be an issue of timing. Not simply in terms of costs, but in terms of ensuring enough flow of content by the time the device releases, or ensuring that xCloud is developed enough to a satisfactory point before releasing it (as Project Keystone would be relying on that).

Project Keystone, in all honesty, probably should have released in lieu of the Series S. It would not act as a hard tech floor towards Xbox Series software development since, unlike the S, it would not run native versions of games locally. It would have been even cheaper to manufacture and sell, and could more easily have been marketed as both a game streaming device and a multimedia box, similar to an Apple TV, and bundled it with a game-like remote (you turn it to the side similar to the Wiimote could be used, but have thumbpads on it for analog controls, side buttons that could replace triggers etc while still looking much like a remote when vertically orientated and those other features being usable for multimedia playback & navigation).

As something targeting the wider market, I feel it'd of been performing better sales-wise than the Series S is, and leave more budget for Series X systems to be manufactured in greater numbers. From my estimates, Series S and X are likely between 13.3 million to 15.5 million sold-through as of this time, leaning much more to the higher end of that figure (considering what time has passed). While I think that number would not be significantly higher if Project Keystone replaced Series S, you'd at least have a decent bit more Series Xs comprising that sold-through number, lower production costs for Keystone, and rid of the stigma among some devs that Series S is "holding them back" (as well as the existence of the Series S acting as a hard floor to Series software development, in a technical sense).

Plus, Microsoft would still have things like the All-Access program available, so that program itself along with Project Keystone could act as the cost-conscious entry points. Either get a Project Keystone for $149, or a Series X through All-Access in installments if buying a Series X at $499 is too much for you. Series S is redundant, limiting, and controversial in that scenario (in my personal opinion).

[4: MICROSOFT WILL RID OF MOST "SHORTCUTS" RELATED TO GAMEPASS BY 2025]

It's no secret that, if someone is interested in a GamePass subscription, there are a myriad of ways they can have it "pay for itself" without actually providing much in the way of their own money. There's the renowned $1 conversion, which actually just lets you convert up to three years of XBL Gold to three years of GamePass. There is the existence of MS Rewards points, which can be accrued in order to pay off months of GamePass, depending on how many points you get, and these points can be earned through things as simple as Bing searches. There are the regular free trail offers, which apparently don't keep a database record reference for the same people using multiples of them, meaning you can technically stack multiple months of GP for free with such a method. There are also the free month offers you can get by buying things like Doritos bags (I've gotten multiples of them from the big bags of Doritos purchased over the past two months).

All of these things may be great in terms of driving subscribers to the service, but in light of Phil's own words that GamePass on console is slowing down in growth, and these initiatives mainly being used by users on the console side of things, it also isn't rocket science to figure that these various methods for "free" GamePass hurt the ARPU (Average Revenue Per User) of the service. Which, ultimately, is what Microsoft are interested in: they want to generate as much money as possible through the service and that isn't going to happen if these free offers and shortcuts continue to exist.

Which is why I'm of the belief that virtually ALL of them will disappear by 2025. The only "shortcut" means for GamePass from that point on, will probably be tied to the All-Access program, which in itself will mean being tied to new Xbox peripherals, devices, or (potentially) partner company devices that can also access GamePass or Microsoft games content. Outside of that, expect heavily reduced shortcuts in the form of the other things; not that they will go away, just that MS Reward points, for example, will have significantly less value to them making it much harder to pay off months of GamePass through simply farming for them.

[5: MICROSOFT WILL START RELEASING NATIVE PORTS OF *ALL* 1P GAMES TO PLAYSTATION & NINTENDO PLATFORMS DAY 1 BY 2025]

This one is probably going to be a bit controversial for some of you, considering the idea that it would also symbolize them "giving up" in the space as a platform holder. After all, if you bring all your games to competitor platforms, especially Day 1, you're technically a 3P publisher at that point, no?

Well, yes and no. Yes, because that's the way it'll seem looking at it from the traditional console model. No, in that it won't mean Microsoft stops manufacturing Xbox consoles. However, they will refer to them more as Xbox "devices" rather than "consoles" (more on that later), and in a way they have already been maintaining some degree of 1P software support on rival platforms via Minecraft, Minecraft spin-offs, the Ori games, Cuphead, Deathloop, Ghostwire Tokyo, Elder Scrolls Online, and if/when ABK are acquired, COD. In fact, MS are even documented at least in passing suggesting they'd consider bringing COD to Switch platforms in the future, likely with native versions or combo native/cloud versions.

So, the pieces are already there and already set up to some degree, but I think around 2025 is when Microsoft will fully pull that lever. And, in what else some may consider controversial, I think it begins with them porting games like Starfield, RedFall and Forza Motorsport to PS5 consoles. Games like Pentiment and Grounded will get native ports to Nintendo's Switch 2 by or around that point, as well. And, yes, future 1P games like TES VI (despite the current rhetoric and public statements) will see native Day 1 ports for PS5 and maybe even Switch 2 alongside Series X, Series S, and PC.

Why? Because, again, I feel that Microsoft will transition Xbox as a brand away from a "console" (in the traditional business model sense), and more into a "device", a computing device that happens to be gaming-centric in design but otherwise not adhering to the typical console-orientated business model. Which will include eschewing any sense of platform exclusivity, and providing Day 1 access of their content on any device allowing. But this also will mean Xbox as a hardware device changing significantly in its own ways, which I'll touch on later.

[6: MICROSOFT WILL LEVERAGE THEIR GAMING POSITION TO NET MORE BIG 3P DEVS AS AZURE CLIENTS]

Let's go back to a bit earlier in the year, where Microsoft and Sega announced a strategic partnership for Sega studios to utilize Azure cloud resources. This was paired with Sega's "Super Game" announcement, which we're still waiting to see details and game footage of (although we know it involves the Crazy Taxi and Jet Set Radio IPs). Now, when this partnership was first announced, I *personally* thought it was going to lead to something analogous to the exclusive content Sega created for the OG Xbox. Stuff similar to Panzer Dragoon Orta, Outrun 2, GunValkyrie, Jet Set Radio Future, etc.

When it became quickly evident that was not the case, I actually was quite disappointed, especially when that was paired with the early word that they were in not seeking any type of exclusivity for Xbox from the ABK acquisition that was announced back in January. However, this was also a time in which I viewed Xbox as a brand much differently than I do today, and having been removed from that mentality for a while now, I can understand the implications of something like the MS & Sega Azure partnership for an indication of where that could lead.

See, Microsoft is in need of a growth market for Azure, as they have either saturated or are very close to saturating their traditional outlets. Gaming presents a "blue ocean" for the Azure space, so to speak, but Azure itself has very little traction with the game development community, especially among console-orientated developers and AAA devs in general. It's evident Microsoft would like to change that, so using the connections that Xbox and GamePass departments have with those same developers, can be useful in enticing those developers & publishers to become Azure clients, which would represent a lot of growth for their cloud division.

And as we've also seen with the Sega deal, these things can have trickle-down benefits for GamePass and Xbox platforms as well. It's a somewhat clever way to get more content for the customer-facing gaming initiatives of the brand while growing in the space that actually drives the larger pillars of the company forward.

[7: THE XBOX BRAND OF CONSOLES WIL BE REPOSITIONED AS GAMING-CENTRIC COMPUTER DEVICES]

This is maybe going to be the most controversial, but in my honest opinion, Xbox as a traditional gaming platform will cease to exist by 2025. They have spent going on four generations now either struggling to keep Xbox as a division above water, or repairing damage from self-inflicted wounds. Xbox has never led the industry in any generation when it comes to console sales, has never led in game division revenue, and arguably has never led in terms of industry-defining gaming experiences outside of maybe the original Halo trilogy and the early years of Xbox Live, as well as helping standardize UMA (Unified Memory Architecture) into an acceptable standard (older systems like the N64 had UMA as well but had severe bottlenecks in implementing it).

And that doesn't even begin to go into the relatively little profit Xbox as a division has generated over the years. Even with the current generation, while they track slightly ahead of XBO and 360 for life-to-date sold-through, they are very far removed from matching Sony's numbers for PlayStation 5, and will probably fall behind Nintendo's Switch 2 within two years, assuming the Switch 2 releases in 2023. Given the amount of financial investments MS have made for Xbox over the generations and especially with the roughly $80 billion they've spent in the past four years between acquiring independent devs, Zenimax and soon ABK, MS will likely accelerate their hardware-agnostic model for gaming to a new logical conclusion.

Many, if not all, of the pressures and scrutiny Microsoft continuously takes as a platform holder judged on the traditional console business model, would fold away if they were to brand and focus Xbox as a gaming computer device rather than as a games *console*. This also would actually benefit them WRT future gaming acquisitions; a LOT of the current pushback Microsoft are seeing from the ABK deal is in part due to the fact they are also a platform holder in the console space who adheres to the traditional console business model. The fact they do such in ANY capacity is part of what's creating so many headaches and threatens to unravel the ABK acquisition altogether. By transitioning away from this traditional console business model in its entirety, they suddenly face much less scrutiny from other platform holders, gamers, and even regulators.

However, doing that requires a few other radical changes, which I feel they will do either by 2025, or be in the process of doing by that time, as I reference below.

[8: MICROSOFT WILL ENABLE FULL-ON WINDOWS 10/WINDOWS 11 FUNCTIONALITY ON XBOX DEVICES (NOW XBOX COMPUTER DEVICES)]

One of those important changes on Microsoft's end, will be in providing full functionality of Windows on Xbox devices. This means you'll be able to use all the applications you can use on a Dell XPS or Asus desktop, for example, on an Xbox device. The only differentiating factor would be if the Xbox device has the hardware headroom to run a particular application at a particular setting.

To do this, however, also means Microsoft will HAVE to allow Steam, GOG, EGS and other game storefronts to run, access, and install normally on Xbox devices the same way they do on other Windows devices. It will also mean Microsoft has to decouple the Xbox storefront from Xbox consoles in one way or another; either build it in as a rebranding of the Windows Store (for games) accessible much the way you can access the Windows Store in Windows 10 and 11 (meaning the Xbox store would also need to be natively accessible in that same manner on ALL devices with Windows 10 or 11 installed), or freely allow Valve, Epic, CDPR etc. to make storefront launchers downloadable and accessible on Xbox devices with the same or similar level of embeddedness as the Xbox storefront, at costs in line with whatever the typical software developer license for Windows is.

As I already also alluded to, it also means they have to get rid of Xbox Live, or make it so that Xbox Live is not a requirement for online gaming on Xbox devices, and the same goes for GamePass. Microsoft simply cannot gate online MP behind a service if they do not do so on Windows. They may even just phase out the Xbox OS over time, with future Xbox devices, but for the meantime perhaps allow Series X and S units to dual-boot the normal Xbox OS or Windows 11.

[con't below...]
 
OP
OP
thicc_girls_are_teh_best
24 Jun 2022
3,082
5,227
[9: XBOX DEVICES WILL BE SOLD AT FOR-PROFIT MSRPs SIMILAR TO SURFACE DEVICES AND OEM NUCs]

And, since Xbox devices would now technically be classified as computers, it would allow Microsoft to increase the price MSRP on them to sell for profit directly on the device hardware itself. The trick is in making sure they are priced so that they can serve a low, low-mid, or mid-low end of PC gaming that GPU makers like AMD and Nvidia either don't prioritize or price their cards out of the market of. Keep in mind, Microsoft still would have the advantage of a box that has all the hardware needed to game as long as you have a monitor and a controller, whereas people building a PC still need to source their own GPU, CPU, cooler, fan, SSD, Blu-Ray drive, case, cables, motherboard, keyboard, mouse, controller, and monitor.

There's also the advantage of the console-like form factor which is simply not as easy to replicate with SFF PC boxes, for reasons such as limited R&D. I can see a world where a $699 or $799 Series X, for example, still does reasonably well if it dual-boots to Windows 11 with no compromises (although it would need to facilitate other things like upgradable RAM, eGPU support, and maybe upgradable CPU configs which leads into the next point). In such an environment you get clearly more performance than NUCs pricing closer to $1K (or even higher), and the same Windows functionality while being better gaming devices.

[10: 10TH-GEN XBOX DEVICES WILL BE INSPIRED BY STEAM MACHINES AND STEAM DECK]

If you ask me, Steam Machines were a smart idea from Valve, they just executed it very poorly. They made at least as many, if not more mistakes, as Panasonic & The 3DO Company made with the 3DO system back in 1993. Thankfully, they took time to step back, reassess their errors, and came out with a winner in the Steam Deck, which will grow into a very viable portable PC platform in the years to come.

Microsoft, unlike Valve, have firsthand experience in the console market as a platform holder, so they could use that to succeed with a take of the Steam Machines idea that actually works. I somewhat feel the Series in itself is a prototype of this, given the wildly different specifications of the Series S and Series X, but for their 10th-generation of console devices, I can see Microsoft going a lot further in terms of user expandability options, integrated Windows support & functionality, and even in terms of build accents/touches for a more premium touch, inspired by their Surface line of devices.

In simple terms, I can see Microsoft doing a two-device approach for 10th-generation as well. However, one will focus on a seamless console-like/laptop style of device developed with a slim profile and 2-in-1 detachable laptop form factor mobility in mind (think something like the Surface 2-in-1 detachable line of devices for an idea), possibly with specs targeting a Series X Pro (if Pro consoles for 9th gen are even a thing). For RAM, they can go with Dell's CAMM design, provided it gains standardization support from JEDEC, but it's the bandwidth advantages that brings (along with I'm assuming lower power consumption & Z-height space) which make it so suitable. Either that, or some future HBM-based memory will be affordable to utilize (if we're talking about production numbers maybe notably north of Surface devices but not to the scale of actual mass-market Xbox consoles of past generations, the costs of HBM may be worth it for the performance), although a mix of HBM & CAMM-based DDR would work best (since the latter can be upgraded in its capacity). Otherwise they could offer different configs, similar to Surface devices, with different CPU & GPU specs (CPU versions with different clocks, for example), different li-on batteries and power profile settings, and port I/O.

That lower-end device would be paired with another Xbox device taking the form of a SFF PC or just somewhat larger than that. I can see it using DDR6-based RAM for the CPU (which would be upgradable; at this point support for 64 GB or even 128 GB of RAM expandability may be expected), meanwhile the internal GPU could be a quite more powerful variant of whatever the smaller devices' GPU is, and utilize embedded HBM-based memory. In any case, it would need to be comparable in performance to whatever the PlayStation 6 ends up providing, however for this particular Xbox device the GPU would be upgradable. This gets a bit complicated because if they want a console-like form factor, that would technically limit what size of GPUs it could support unless either there are special enclosures for fuller-sized GPU cards to slot out the default GPU, or external GPUs would have to connect via eGPU (but the laptop variant would be able to do this as well, albeit with more limited external GPU support, if using a lower-performing CPU). Any GPU usable on a Windows PC would be usable on these devices as well, theoretically speaking. Additionally, in the case of this SFF-sized console Xbox device, the CPU should be socketed and upgradable, and even things like the Wifi module should be upgradable as well, plus the power supply (will be necessary if the internal CPU is upgradable).

With this type of design philosophy, I could see these next-gen Xbox devices maintaining good sales performance, provided there's the right balance of price. They would obviously be more expensive than actual consoles (remember, Microsoft would have a completely different business model for these devices by this point compared to how the Series S & X launched), but I couldn't picture a stock SFF-sized next-gen Xbox device costing $1,999 for example...well maybe unless it has built-in set-top-box hardware in it x3. Could also be an good excuse to reintroduce HDMI-IN functionality to Xbox devices in this case.

[11: MICROSOFT WILL CURATE GAMEPASS FOR APPROVAL ON SONY, NINTENDO, VALVE, EPIC, GOOGLE & APPLE SERVICES]

This is one of the other big things Microsoft will likely seek to do, but it comes with the condition of them transitioning the Xbox brand into a more general gaming-ready computing device, rather than pushing it as a "gaming console" in direct contention with companies like Sony and Nintendo. It also requires them to either decouple the Xbox storefront from Xbox devices exclusively, or allow companies like Valve & Epic to freely put their own storefronts on Xbox devices with all the same rules they abide with doing such on Windows operating systems.

By doing such, however, Microsoft should be able to provide curated versions of GamePass for Sony & Nintendo systems that just keep the 1P content in them, and this is an idea I've seen others float around for a while now in various discussions, so the idea itself is nothing new. Perhaps more interesting would be what a curated form of GamePass looks like for Steam, GOG, and Epic Game Store.

I do feel any curated version would probably scale back on what particular games can be Day 1 through it, but Microsoft will end up doing this themselves as they will want to maximize the traditional revenue model streams for the biggest of their releases, relegating Day 1 GamePass to smaller releases like the Pentiments and Groundeds of the world.

=================

And with that, I conclude my (pseudo) analysis on the Xbox brand, and where I firmly believe Microsoft will take the brand over the course of the next three to six years. It becomes clear to me that they want to prioritize Xbox more as a means of securing developer clients to leverage Azure for games creation, and that creating natural benefits for platforms like Xbox and services like GamePass. It is very clear that Microsoft as a company want to provide content for other hardware & software platforms as a third-party, and the best means of doing that would be in shifting the identity and branding of their own games console, and its business model, into something that does not actually compete with those other platforms whatsoever.

It becomes clear that Microsoft as a company value game revenue and profit through the traditional sales pipeline very much after all, as if recent performance of Modern Warfare 2 at retail is not proof enough of this. However, they also have enough data to show that a service like GamePass is useful for smaller games, so the company will shift to a model where the bigger games come to GamePass later on, and smaller games can still be released Day 1, the value proposition of GamePass shifting to the pricing discounts & extra content (including exclusive content) it can provide for subscribers. By coming to an agreement to make curated versions of GamePass for non-Microsoft platforms, these benefits become hardware and service-agnostic; they meet the player where they are as long as they have a GamePass subscription. And, in pushing a more fully hardware-agnostic model while leaving the traditional console business model behind, Microsoft will prioritize Day 1 native releases of 1P games onto Sony PlayStation, Nintendo Switch and mobile platforms alongside PC and Xbox, as long as the hardware can support the game (i.e maybe don't expect TES VI on Switch 2 Day 1 (unless it's somewhat near Series S spec), but it should easily be on PS5 Day 1 assuming it targets Series S & X specifications).

This is the future of the Xbox brand, of GamePass, and of Microsoft as a games maker in this industry. I fundamentally feel most if not all of the things speculated here will manifest into reality within the given time frames, because to me, given what I've observed and analyzed of the brand over especially the past two years, it simply makes the most business sense. And at the end of the day, Microsoft is a business; if maximizing their games revenue means completely dropping pretenses and eschewing the traditional business model for Xbox, turning it into a PC or "Surface gaming" style of gaming-tuned computing devices running Windows (and priced similarly to OEM computer devices as a result), they will do it! If that means readjusting the "all 1P games Day 1 in GamePass" commitment, they will do it. If that means opening up Xbox devices to be usable as Windows devices for competing gaming storefront and services providers, in order to aid in the curation of specific GamePass models integrated into 3P services, they will do it. If it means removing themselves from the traditional console business model and bringing all their content to PlayStation, Nintendo and mobile platforms with native Day 1 releases (hardware capabilities permitting), they will do it. And if all of that also enables a path to having some form of GamePass accepted on Sony and Nintendo devices...they will do it.

Like I said before, this will probably piss off "certain" console loyalists of the brand, who still feel the best path for Microsoft is to attempt "destroying" Sony and pushing Xbox with the same business model and branding they did during the OG Xbox & 360 eras, and tried doing with XBO. However, I don't think those individuals are actually paying attention to the subtexts of what people like Phil Spencer and Satya Nadella are saying or alluding to, especially over the course of this year. Much of Microsoft's ambitions for larger gaming growth lie in appealing to ecosystems other than their own, and finding ways to integrate into those ecosystems with as little friction as possible. So adhering to playing by the traditional console business model, and strong-arming their services to that model, is simply counter-intuitive to those growth ambitions. It doesn't mean Microsoft will completely abandon everything related to the usual console model (for example, they will still release new Xbox devices in time for 10th-gen that are notably more capable than the current ones or any "Pro" model refresh, and the top-end model being at least comparable to a PlayStation 6 in performance capability and with a lot of the usual R&D somewhere a mix of consoles from the past and what their Surface teams do for those products); however it is best to view it as they will step away from aspects of it which puts them in direct comparison to Sony and Nintendo, and this is probably the best move for all three companies.

I decided to write this to put out my own thoughts in observing the Xbox brand and Microsoft's gaming-related moves over the years, and my interpretation of them. So again, I cannot say with 100% certainty this speculation is going to turn out correct, but I feel roughly 90% sure that the vast majority of it will, as I am looking at things with how to adhere to Microsoft's own stated and projected goals within gaming going forward. And out of the three platform holders, it's Microsoft who I feel will undergo the most radical of transformations of their staple gaming brand(s), as they ultimately attempt to, in their own way, realize something Sega themselves dipped their feet in during the days of Master System, Genesis/MegaDrive and Saturn: acting as a 3P selectively for other platforms and still providing 1P content for their own platforms.

Except Microsoft has a chance to succeed (given their much stronger intent) where Sega failed in that type of strategy; it's just going to require a few massive shifts, including decoupling Xbox from the traditional console business model and brand identity marketing. Which, I feel, they have already gradually began doing.

But what do the rest of you think? Do you agree with my speculation (or at least some of it)? Disagree? What are your reasons as to why? I'm looking forward to seeing what's on your mind.
 

PlacidusaX

Veteran
Icon Extra
24 Oct 2022
658
481
If they fase out Gold and don't make multiplayer free... I am out of the Xbox ecosystem forever.
I haven't and won't start supporting overpriced rental services like GP.
 

Yurinka

Veteran
VIP
21 Jun 2022
5,271
4,627
I think next year they'll rise prices of consoles, Game Pass and 1st party games now that are going to start releasing big AAA next gen only games.

I think all regulators will approve the acquisition without asking MS do anything, and MS will use as excuse to fans that they'll release on PS all their future main Bethesda and ABK games (some of them maybe after timed exclusivity) because they do it to appeal the regulators, when the reality is that economically wouldn't make sense to make them full console exclusive.

I think this generation we'll see all major MS IPs moving to GaaS with a strong focus on microtransactions, paid dlc and season passes to compensate the revenue sink that is losing all these sales by putting their games on GP day one.

I think that by the end of this generation MS will make more acquisitions including a handful relatively big dev studios and publishers but of a scale way smaller than ABK. I also expect GP to be at slightly above 50M and the end of this generation, closing their distance with PS Plus and Sony's cloud gaming, which will continue ahead of MS.

I think that there won't be a Pro/X console review console and that they'll first add full Windows support on Xbox Series and that next gen console will start with full Windows support since day one (so literally will be a console shaped PC) and that this console will be their last console and that maybe that may be the first of a Steam Machines-like 3rd party licensed console shaped PCs that fits some specs they may do.

They may also do the same with portables: instead of making their own hardware, they may create some PC specs and a label that they'll use to license SteamDeck-like portables/hybrids made by 3rd party companies like Razer, Alienware or Asus.

I think Xbox Series will be the last generation with MS doing console exclusive games: starting the other gen, I think they'll go full 3rd party on consoles. I also think that MS will fight harder to have their own digital store on Apple devices, Android, PS and Switch without paying their platform holders a revenue cut: they want to pay 0% instead of 30%.
 
P

peter42O

Guest
Come on man........................and people thought that I wrote books. SMH.

Will read this later tonight or tomorrow.

Voted for -

- Phasing out Xbox Gold. This should have already been done in my opinion.
- Project Keystone releases. This is pretty much a guarantee but will probably be around the start of next generation so six years sounds about right.

Game Pass loopholes will probably be toned down but I don't see them removing them all. In all honesty, as long as I can sign up for a month and then cancel, they can eliminate all of this shit for all I care. I can see Game Pass being integrated into Steam at some point. This would be huge for Microsoft and Xbox because they could then eliminate the Windows Store on PC for gaming as it's horrible and those who play on PC go with Steam anyway.

Side note: I hope you do "the future of the PlayStation brand" at some point. You can also do one for Nintendo, I suppose. Meh, forget that. I have no interest in Nintendo. lmao.
 

PropellerEar

Veteran
Founder
21 Jun 2022
1,201
2,013
I don't see the plan in the current strategy of Xbox at all, feels like they're having panic mode.

Voted "no more 1$ deals" and "getting rid of gold".

But everything that would seem logical to me, they will prob do the opposite.
 
OP
OP
thicc_girls_are_teh_best
24 Jun 2022
3,082
5,227
I think next year they'll rise prices of consoles, Game Pass and 1st party games now that are going to start releasing big AAA next gen only games.

Yeah, either all three or one or two of the three is certainly likely. Technically, Psychonauts 2 physical on Xbox is already $70 (or was at its release), despite MS being the publisher.

So increasing the game prices to $70 will be the first of those things happening.

I think all regulators will approve the acquisition without asking MS do anything, and MS will use as excuse to fans that they'll release on PS all their future main Bethesda and ABK games (some of them maybe after timed exclusivity) because they do it to appeal the regulators, when the reality is that economically wouldn't make sense to make them full console exclusive.

It's quite interesting you're of the opinion regulators will approve with no concessions from Microsoft, because it certainly feels like concessions are going to be involved in some way (whether they're fair or not is another point of discussion).

But using that as a catalyst to justify in some public fashion to bring the big Zenimax & ABK games to PS (and IMO, Switch or its successor, depending on the scope of the game) would be a good way for MS to make that move.

I think this generation we'll see all major MS IPs moving to GaaS with a strong focus on microtransactions, paid dlc and season passes to compensate the revenue sink that is losing all these sales by putting their games on GP day one.

If that happens I'm going to be very disappointed. GaaS model can work for some games, but clearly not all. It's ruined Halo Infinite and acting as a parasite on Forza Horizon 5.

Maybe those are incidental cases but it already shows a pattern. And let's not forget, Sea of Thieves (another GaaS title) launched barebones and broken in some ways and took multiple seasons to right the ship.

I think that by the end of this generation MS will make more acquisitions including a handful relatively big dev studios and publishers but of a scale way smaller than ABK. I also expect GP to be at slightly above 50M and the end of this generation, closing their distance with PS Plus and Sony's cloud gaming, which will continue ahead of MS.

Personally, I think some of that depends on how this ABK acquisition shakes out, and what changes MS considers making to the Xbox business model. For smaller devs, I can see them wanting to court a sale of Crystal Dynamics from Embracer, possibly Asobo, Eidos Montreal, Certain Affinity and the team working on Contraband (forgot their name).

50 million or a bit north of that for GamePass by end-of-gen could realistically happen, the bigger question though is at what ARPU would those subs be at? Because at some point just raw sub counts are not going to matter as much to even Microsoft as what the revenue coming from those subs is looking like.

I think that there won't be a Pro/X console review console and that they'll first add full Windows support on Xbox Series and that next gen console will start with full Windows support since day one (so literally will be a console shaped PC) and that this console will be their last console and that maybe that may be the first of a Steam Machines-like 3rd party licensed console shaped PCs that fits some specs they may do.

Yeah, it just seems like the natural progression for their business model. The revenue MS get from 3P sales cuts on console is pennies to them compared to what they get from their other divisions. Allowing other storefronts on Xbox via opening up the platform (now as a computer device) to Windows may gut their own 3P revenue digitally, but they make up that and a lot more by:

-Potentially having additional 1P content through other acquisitions​
-Releasing all 1P content on Sony & Nintendo platforms Day 1 alongside Xbox & PC​
-Getting curated versions of GamePass onto Sony, Nintendo, and other platform storefronts​
-Selling Xbox devices at higher prices (increasing profit margins off hardware, since no longer going on the traditional console business model)​

And just consider the big revenue boosts they'll already see if/when ABK's revenue gets folded into the Xbox division's. MS would not miss that drop in digital 3P sales revenue. I didn't consider the possibility of Microsoft pulling a Valve/3DO and making a spec for future Xbox devices to then license out OEMs, but I should've considered it. Part of the reason they developed the Surface products was to set a sort of specification for laptop, tablet & portable touch devices in the PC space complimenting Windows performance features & capabilities.

They may also do the same with portables: instead of making their own hardware, they may create some PC specs and a label that they'll use to license SteamDeck-like portables/hybrids made by 3rd party companies like Razer, Alienware or Asus.

Can see that happening as well, although that would create an interesting arms race between Microsoft and Valve. Possible MS would let Valve handle that type of thing on the portables side and Microsoft takes lessons from Xbox, Surface & Steam Machines to implement a similar business model for more consolized gaming-centric PC devices.

I think Xbox Series will be the last generation with MS doing console exclusive games: starting the other gen, I think they'll go full 3rd party on consoles. I also think that MS will fight harder to have their own digital store on Apple devices, Android, PS and Switch without paying their platform holders a revenue cut: they want to pay 0% instead of 30%.

Definitely agreed on the first part, except I think it'll happen before this generation's actually over. It could actually provide a good reason for mid-gen refreshes on Microsoft's part, in actuality.

I know there's talks of MS restructuring Windows Store, and they of course have tried forcing Google, Apple etc. to open up their platforms to where they can put GamePass on their devices with the same level of integration Google & Apple's devices have, and not pay them a 30% cut. The former I think should be allowed; the latter however I still think should be something platform holders are allowed to implement.

As long as they allow 3P app makers to have fair access to OS APIs, and Google & Apple aren't suppressing the promotion and availability of 3P apps on their systems (basically, doing what Microsoft themselves did with Windows in the '90s to companies like Netscape), then the 30% licensing cost cut should be allowed IMO.

Come on man........................and people thought that I wrote books. SMH.

Will read this later tonight or tomorrow.

Voted for -

- Phasing out Xbox Gold. This should have already been done in my opinion.
- Project Keystone releases. This is pretty much a guarantee but will probably be around the start of next generation so six years sounds about right.

Game Pass loopholes will probably be toned down but I don't see them removing them all. In all honesty, as long as I can sign up for a month and then cancel, they can eliminate all of this shit for all I care. I can see Game Pass being integrated into Steam at some point. This would be huge for Microsoft and Xbox because they could then eliminate the Windows Store on PC for gaming as it's horrible and those who play on PC go with Steam anyway.

Yeah, things like the MS Rewards, a bit brash of me to think they will remove that. They can keep the MS Rewards around, but just lower their relative value in the ecosystem, so you have to do more of a grind to earn enough to redeem towards paying off months of GamePass.

Steam integration of GamePass would be a big boon for Microsoft, that's true. What terms they and Valve would need to come to I don't know, but they can come to an agreement. I think any curated version of GamePass on stuff like Steam would have to be priced lower, and companies like Valve can determine what MS games in the curated GP version for their platform are included, which Day 1 releases are allowed, and which games would come later.

But that's just for Valve's curated version, for example. The "main" GamePass (which would still be PC GamePass, & Xbox GamePass) would have the fuller 1P lineup and also whatever 3P games Microsoft can license for the service, though.

Side note: I hope you do "the future of the PlayStation brand" at some point. You can also do one for Nintendo, I suppose. Meh, forget that. I have no interest in Nintendo. lmao.

Actually have considered doing something on PlayStation, though I don't see Sony moving from the traditional console business model, so not a lot of things will change. I have speculated on ways they may integrate PC more into their ecosystem through vertical integration, but compiling all of that (and other stuff) into a comprehensive thread OP may be a good idea.

Nintendo is so glacial in making changes to their approach that I don't see a lot changing within the next six years other than maybe....I can't even come up with a quick example xD.
 
  • Like
Reactions: TubzGaming
OP
OP
thicc_girls_are_teh_best
24 Jun 2022
3,082
5,227
And I thought that I was meant to be the writer, God-damn-son. 😍

You gotta do a long-form passage at some point man, you've got me curious x3.

I don't see the plan in the current strategy of Xbox at all, feels like they're having panic mode.

Voted "no more 1$ deals" and "getting rid of gold".

But everything that would seem logical to me, they will prob do the opposite.

In terms of the things MS have probably already communicated publicly in some way, outing the $1 deals & Gold should definitely first up to bat for MS.

I hope MS are considering some of these things genuinely, it could do some real good for the brand image-wise, logistically, and in terms of revenue.


Thanks; I had most of this written over the last week but added a few things today. I might do one for Sony at a future date.
 
P

peter42O

Guest
[1: MICROSOFT WILL PHASE OUT XBOX LIVE GOLD]

This one is probably a little more than obvious, not just because several "insiders" have suggested as such for over a year, but because Microsoft's (absolutely failed) attempt to double the price of XBL Gold last year (to drive attention to GamePass as a better value) more or less showed their long-term intent with regards this service.

While Sony handled rolling PS+, Extra, and Premium/Deluxe into a shared service better than Microsoft keeping GamePass & Xbox Live two distinctly different (and conflicting) services IMO, it doesn't change the fact that Microsoft eventually need to rid of XBL Gold and ensure that there is a GamePass tier priced similarly and providing similar benefits.

However, I think this also presents the opportunity for not just a Family Plan (which has also been speculated), but also a means of compartmentalizing GamePass content among different tiers of access. So for example, whatever the XBL Gold equivalent tier is formed for GamePass, would limit the selection of the library to say just a curated list of 100 games, that may cycle in and out every so often, but this tier now costs $4.99/month. It may still get new smaller-scale releases Day 1, but bigger releases perhaps not, or people on that tier would have to wait.

The doubling price for Gold was more meant to get people to subscribe to Game Pass more than anything. The main two reasons why Gold shouldn't exist are -

1. Play Anywhere. Microsoft allows you to buy one version and get the PC/console version for free. Playing on PC includes free online co-op and multi-player. This is obviously paywalled on Xbox consoles. Having this while also having their Play Anywhere initiative is simply counter-productive and restrictive. Being able to play on PC AND Xbox without an online co-op/multi-player paywall is something that should have happened already.

2. It's fucking obsolete. It's 2022. Not 2005. No reason for an online paywall when you consider #1 and when you look at Games with Gold, it fucking sucks. Simply, Gold needs to be gone sooner rather than later. I do believe that it will be gone before the generation ends or at the very worst, as an incentive for when next generation starts in 2028.

[2: MICROSOFT WILL CEASE BRINGING *ALL* 1P GAMES TO GAMEPASS DAY 1 BY 2025]

Continuing from the above, I think that as Microsoft will want to push GamePass out onto more devices, yet simultaneously bring more of their games to more devices Day 1 (I'll touch on that later), some changes will probably be made to this aspect of GamePass as a service. They know that other platform holders value software revenue from direct sales highly, and feel that certain content being in a service Day 1 will negatively impacts software sales, i.e the main revenue stream of platform holders off software sales.

Microsoft themselves probably do not want to cut too much into potential sales revenue of key 1P titles, either, and they already have a taste of what money 1P games can bring in on their own (outside of GamePass) i.e the early access release of Forza Horizon 5 in November 2021. If/when they acquire ABK, and upon seeing the sheer amount of money Modern Warfare generated on its own at launch, Microsoft would be absolutely moronic to damage that model (and risk losing out on a big chunk of that revenue) by throwing releases like MW2 into GamePass Day 1. It simply is not going to happen.

That's why I'm of the belief that certain key, big games will in fact skip GamePass Day 1 altogether, and enter the service when their traditional sales model has been maximized. So games like COD, TES VI, DOOM, Quake (assuming it's a traditional type of experience and not a F2P MP hero shooter) etc. won't have Day 1 GamePass releases going forward, but could see drops into the service (among the higher-priced tiers) within say 3-6 months of sale traditionally. Meanwhile, games like Pentiment or Grounded will most likely continue to see Day 1 availability in GamePass as well as individual sale outside of the service.

Even though games like COD will likely not be in GamePass Day 1, I can see people with GamePass subscriptions getting a slight discount on their purchase of games like COD, TES VI etc. redeemable at a specific future date (so they buy at full price, but get a rebate a bit later). Or, if you have a GamePass subscription, you get certain free weapons & items, early access to certain maps or DLC quests, or reward points redeemable towards in-game items.

And, since I'm of the belief that Microsoft will eventually work out a deal for some curated form of GamePass on other platforms (more on that later), then these benefits will end up in fact hardware-agnostic, i.e if you have a GamePass sub in general, you get the perks, regardless if you have the game on an Xbox, PC, PlayStation, or even Switch!! Now, I think Microsoft will have to establish some type of revenue sharing model with other platform holders to possibly do some of this, but that would be included in whatever curated form of GamePass they can get onto other platforms.

This is where I disagree with you 100%. This IS their business model since 2018 and boom or bust, it's not changing. Doesn't matter what the game is. You're looking at this from a point of view where game sales matter. It should be obvious to everyone that this aspect doesn't matter to Microsoft. Will they still sell their games via digital and physical? Absolutely. Will they still offer early access? Absolutely. But these two factors are for those who either want to play the game long term while not playing many other games so it makes more sense to purchase the game outright and for those on PC, they would easily prefer to buy the games even at the increased price for the early access edition on Steam over playing them on Game Pass via the Windows Store.

As for other platforms, if Game Pass were to be on PlayStation, Switch or Steam (it's already on PC in general via the Windows Store), it wouldn't include any third party published games which means that their exclusives would obviously be day one on the subscription because would what be the point in subscribing on another platform if you still have to wait to play the game? For Nintendo, it would most likely be a streaming version, similar to what you can do now on Xbox consoles.

I know you believe that COD won't be on Game Pass and I don't see this happening unless Microsoft includes this guarantee as part of a concession. Anything short of a legally binding contract, not going to happen because once Microsoft goes back on what they said in 2018 blows up in their face because at that point, every Xbox fan and consumer including myself would then always be thinking, will this game be day one on Game Pass or not? It's way too much of a risk, would alienate their fan base which jumped into Xbox for Game Pass day one console exclusives and this would slow down the growth of Game Pass in general.

Microsoft will still sell millions of copies of COD and a shit ton of micro-transactions as well. Losing some sales in favor of a subscription would actually be more beneficial because if a consumer buys COD with the intent of only playing that for a year until the next COD and make no mistake, there's literally millions of COD players who ONLY play COD year round and they subscribe to Game Pass (most likely Ultimate at $15 a month due to the need of Gold), they would make more money every year on this single consumer via GPU compared to just buying the game outright. And this is before any micro-transactions.

Also, with King being in the mix and them being fucking massive in mobile along with Diablo Immortal and the upcoming COD mobile game, Microsoft could go into hibernation for a decade and still be a $2T dollar company because of this when they wake up. lol. This in of itself is why Microsoft won't deviate from their Game Pass subscription model.

[3: PROJECT KEYSTONE WILL BE RELEASED BETWEEN 2023 AND 2025]

Companies investing tons of R&D into consoles that never see the light of day is nothing new. Sega became infamous for this with things like Neptune, Jupiter, and the 3DFX-based version of Dreamcast. 3DO/Panasonic had a similar situation with the M2 (which only saw release as an arcade board exclusively supported by Konami, and got like five games), and Atari had some big R&D sunk into the Jaguar 2 before that was cancelled.

However, IMO Microsoft's "Project Keystone" is different. It is meant to be a streaming device for GamePass content via the cloud; the purported reason it has been shelved is down to costs, but it could also be an issue of timing. Not simply in terms of costs, but in terms of ensuring enough flow of content by the time the device releases, or ensuring that xCloud is developed enough to a satisfactory point before releasing it (as Project Keystone would be relying on that).

Project Keystone, in all honesty, probably should have released in lieu of the Series S. It would not act as a hard tech floor towards Xbox Series software development since, unlike the S, it would not run native versions of games locally. It would have been even cheaper to manufacture and sell, and could more easily have been marketed as both a game streaming device and a multimedia box, similar to an Apple TV, and bundled it with a game-like remote (you turn it to the side similar to the Wiimote could be used, but have thumbpads on it for analog controls, side buttons that could replace triggers etc while still looking much like a remote when vertically orientated and those other features being usable for multimedia playback & navigation).

As something targeting the wider market, I feel it'd of been performing better sales-wise than the Series S is, and leave more budget for Series X systems to be manufactured in greater numbers. From my estimates, Series S and X are likely between 13.3 million to 15.5 million sold-through as of this time, leaning much more to the higher end of that figure (considering what time has passed). While I think that number would not be significantly higher if Project Keystone replaced Series S, you'd at least have a decent bit more Series Xs comprising that sold-through number, lower production costs for Keystone, and rid of the stigma among some devs that Series S is "holding them back" (as well as the existence of the Series S acting as a hard floor to Series software development, in a technical sense).

Plus, Microsoft would still have things like the All-Access program available, so that program itself along with Project Keystone could act as the cost-conscious entry points. Either get a Project Keystone for $149, or a Series X through All-Access in installments if buying a Series X at $499 is too much for you. Series S is redundant, limiting, and controversial in that scenario (in my personal opinion).

I agree with you except for three things. First, I would NOT have sacrificed Series S as that would have been a horrible decision. Series S is a great current generation console for those who are casuals or have kids/families and don't need the more powerful and more expensive Series X. And if you don't have a great 4K HDR TV, then even more reason to buy the Series S over the Series X. Second, I think their streaming stick or whatever the hell it actually ends up being is further out than people believe. I believe that Microsoft will make sure the infrastructure is sound before they release Keystone. I also believe that there's still a chance that Keystone gets scrapped in favor of an APP on your Smart TV. If you have a pre-installed Game Pass APP on your Smart TV, there's really no reason for Microsoft to release Keystone. If we get close to 2028 and Keystone still doesn't exist in the market, even the low end Smart TV models by this time would have the APP. The lone exception would probably be Sony Smart TV's for obvious reasons but even then, you could probably just download the APP onto the TV as opposed to it being pre-installed. Third, while a lot of people want to believe that Series S is holding back games, it's such bullshit because in that scenario, how would it be Series S and not the 2013 base PS4/XBO consoles for all the cross-gen games? Not only that but a game like Gotham Knights wasn't held back by the Series S for two reasons - first, even if true, how the hell would that affect the PS5 version and second, the PC version wasn't much if any better. The culprit for this game was the untethered co-op and the game being structured and designed around it. Add in the fact that if the publisher doesn't give the development team time to fully and properly optimize and test out all the versions of the game, then of course there will be issues but none of them are on the Series S which is more than capable of holding it's own in regards to what it's meant to do which is 1080p/60fps. Once development studios get more time to optimize and start using the tech that's actually in the box, they'll be just fine.
 
P

peter42O

Guest
[4: MICROSOFT WILL RID OF MOST "SHORTCUTS" RELATED TO GAMEPASS BY 2025]

It's no secret that, if someone is interested in a GamePass subscription, there are a myriad of ways they can have it "pay for itself" without actually providing much in the way of their own money. There's the renowned $1 conversion, which actually just lets you convert up to three years of XBL Gold to three years of GamePass. There is the existence of MS Rewards points, which can be accrued in order to pay off months of GamePass, depending on how many points you get, and these points can be earned through things as simple as Bing searches. There are the regular free trail offers, which apparently don't keep a database record reference for the same people using multiples of them, meaning you can technically stack multiple months of GP for free with such a method. There are also the free month offers you can get by buying things like Doritos bags (I've gotten multiples of them from the big bags of Doritos purchased over the past two months).

All of these things may be great in terms of driving subscribers to the service, but in light of Phil's own words that GamePass on console is slowing down in growth, and these initiatives mainly being used by users on the console side of things, it also isn't rocket science to figure that these various methods for "free" GamePass hurt the ARPU (Average Revenue Per User) of the service. Which, ultimately, is what Microsoft are interested in: they want to generate as much money as possible through the service and that isn't going to happen if these free offers and shortcuts continue to exist.

Which is why I'm of the belief that virtually ALL of them will disappear by 2025. The only "shortcut" means for GamePass from that point on, will probably be tied to the All-Access program, which in itself will mean being tied to new Xbox peripherals, devices, or (potentially) partner company devices that can also access GamePass or Microsoft games content. Outside of that, expect heavily reduced shortcuts in the form of the other things; not that they will go away, just that MS Reward points, for example, will have significantly less value to them making it much harder to pay off months of GamePass through simply farming for them.

I don't actually believe that Microsoft will eliminate all of their shortcuts for Game Pass. Will they reduce them or how many times you can take advantage of them, probably but eliminate all of them? Nah. In fact, I don't believe that they eliminate any of them and instead, just reduce the frequency of when you can take advantage of them. Even if this does happen, my money would be on November 2028.

[5: MICROSOFT WILL START RELEASING NATIVE PORTS OF *ALL* 1P GAMES TO PLAYSTATION & NINTENDO PLATFORMS DAY 1 BY 2025]

This one is probably going to be a bit controversial for some of you, considering the idea that it would also symbolize them "giving up" in the space as a platform holder. After all, if you bring all your games to competitor platforms, especially Day 1, you're technically a 3P publisher at that point, no?

Well, yes and no. Yes, because that's the way it'll seem looking at it from the traditional console model. No, in that it won't mean Microsoft stops manufacturing Xbox consoles. However, they will refer to them more as Xbox "devices" rather than "consoles" (more on that later), and in a way they have already been maintaining some degree of 1P software support on rival platforms via Minecraft, Minecraft spin-offs, the Ori games, Cuphead, Deathloop, Ghostwire Tokyo, Elder Scrolls Online, and if/when ABK are acquired, COD. In fact, MS are even documented at least in passing suggesting they'd consider bringing COD to Switch platforms in the future, likely with native versions or combo native/cloud versions.

So, the pieces are already there and already set up to some degree, but I think around 2025 is when Microsoft will fully pull that lever. And, in what else some may consider controversial, I think it begins with them porting games like Starfield, RedFall and Forza Motorsport to PS5 consoles. Games like Pentiment and Grounded will get native ports to Nintendo's Switch 2 by or around that point, as well. And, yes, future 1P games like TES VI (despite the current rhetoric and public statements) will see native Day 1 ports for PS5 and maybe even Switch 2 alongside Series X, Series S, and PC.

Why? Because, again, I feel that Microsoft will transition Xbox as a brand away from a "console" (in the traditional business model sense), and more into a "device", a computing device that happens to be gaming-centric in design but otherwise not adhering to the typical console-orientated business model. Which will include eschewing any sense of platform exclusivity, and providing Day 1 access of their content on any device allowing. But this also will mean Xbox as a hardware device changing significantly in its own ways, which I'll touch on later.

Obviously, I disagree with this 100%. I understand what you're saying by pivoting away from a console to a device but the problem with that is the simple fact that their cloud streaming for consoles is using Series X consoles as the server blades. Their next generation console will do the same in order to upgrade their server blades. They do this with the start of every generation. It keeps consoles alive for those who have them, powers their server blades while still allowing multiple options.

But you believing that that they will release native ports to Sony and Nintendo platforms AND by 2025? Just wow. They can't even release a first party AAA title in 2022 but yet, believe that they can somehow pull this off even if they wanted to? LMAO.

Above all else, Microsoft doing this would completely defeat the entire purpose of keeping Xbox alive in 2017/2018 as opposed to just killing it off back then.

I would think that after acquiring Bethesda and especially ABK that talk of Microsoft being a third party publisher would be dead and buried but damn, you guys just don't want to give up that hope. All I will say is good luck with that.

[6: MICROSOFT WILL LEVERAGE THEIR GAMING POSITION TO NET MORE BIG 3P DEVS AS AZURE CLIENTS]

Let's go back to a bit earlier in the year, where Microsoft and Sega announced a strategic partnership for Sega studios to utilize Azure cloud resources. This was paired with Sega's "Super Game" announcement, which we're still waiting to see details and game footage of (although we know it involves the Crazy Taxi and Jet Set Radio IPs). Now, when this partnership was first announced, I *personally* thought it was going to lead to something analogous to the exclusive content Sega created for the OG Xbox. Stuff similar to Panzer Dragoon Orta, Outrun 2, GunValkyrie, Jet Set Radio Future, etc.

When it became quickly evident that was not the case, I actually was quite disappointed, especially when that was paired with the early word that they were in not seeking any type of exclusivity for Xbox from the ABK acquisition that was announced back in January. However, this was also a time in which I viewed Xbox as a brand much differently than I do today, and having been removed from that mentality for a while now, I can understand the implications of something like the MS & Sega Azure partnership for an indication of where that could lead.

See, Microsoft is in need of a growth market for Azure, as they have either saturated or are very close to saturating their traditional outlets. Gaming presents a "blue ocean" for the Azure space, so to speak, but Azure itself has very little traction with the game development community, especially among console-orientated developers and AAA devs in general. It's evident Microsoft would like to change that, so using the connections that Xbox and GamePass departments have with those same developers, can be useful in enticing those developers & publishers to become Azure clients, which would represent a lot of growth for their cloud division.

And as we've also seen with the Sega deal, these things can have trickle-down benefits for GamePass and Xbox platforms as well. It's a somewhat clever way to get more content for the customer-facing gaming initiatives of the brand while growing in the space that actually drives the larger pillars of the company forward.

Curious, why did you believe that the Microsoft/Sega partnership was going to lead to exclusive game deals or something? Even I never believed or thought that. At best, Microsoft would just get Sega's games day one on Xbox instead of years later.

As for Azure, I don't see them going nuts in regards to getting third party publishers on board to use the service. If anyone uses Azure, it's because that respective company believes that it's better than the alternatives. Also, I see Azure being more for companies that have nothing really to do with publishing games.
 
P

peter42O

Guest
[7: THE XBOX BRAND OF CONSOLES WIL BE REPOSITIONED AS GAMING-CENTRIC COMPUTER DEVICES]

This is maybe going to be the most controversial, but in my honest opinion, Xbox as a traditional gaming platform will cease to exist by 2025. They have spent going on four generations now either struggling to keep Xbox as a division above water, or repairing damage from self-inflicted wounds. Xbox has never led the industry in any generation when it comes to console sales, has never led in game division revenue, and arguably has never led in terms of industry-defining gaming experiences outside of maybe the original Halo trilogy and the early years of Xbox Live, as well as helping standardize UMA (Unified Memory Architecture) into an acceptable standard (older systems like the N64 had UMA as well but had severe bottlenecks in implementing it).

And that doesn't even begin to go into the relatively little profit Xbox as a division has generated over the years. Even with the current generation, while they track slightly ahead of XBO and 360 for life-to-date sold-through, they are very far removed from matching Sony's numbers for PlayStation 5, and will probably fall behind Nintendo's Switch 2 within two years, assuming the Switch 2 releases in 2023. Given the amount of financial investments MS have made for Xbox over the generations and especially with the roughly $80 billion they've spent in the past four years between acquiring independent devs, Zenimax and soon ABK, MS will likely accelerate their hardware-agnostic model for gaming to a new logical conclusion.

Many, if not all, of the pressures and scrutiny Microsoft continuously takes as a platform holder judged on the traditional console business model, would fold away if they were to brand and focus Xbox as a gaming computer device rather than as a games *console*. This also would actually benefit them WRT future gaming acquisitions; a LOT of the current pushback Microsoft are seeing from the ABK deal is in part due to the fact they are also a platform holder in the console space who adheres to the traditional console business model. The fact they do such in ANY capacity is part of what's creating so many headaches and threatens to unravel the ABK acquisition altogether. By transitioning away from this traditional console business model in its entirety, they suddenly face much less scrutiny from other platform holders, gamers, and even regulators.

However, doing that requires a few other radical changes, which I feel they will do either by 2025, or be in the process of doing by that time, as I reference below.

You're way too into console sales as being the only metric that matters when it's not, especially for Microsoft. Both the Xbox Series consoles and PlayStation 5 for that matter are already form factor PC's so I don't really understand why you believe that Microsoft will go in this direction especially halfway through the current generation.

As we've discussed before, you (and others) keep bringing up the previous generations so im going to make it as simple as possible. Pre-2018, look at Xbox as if it never existed because that's basically what it was compared to now. All their changes, acquisitions, etc. started in 2018 was in order to get where they're at now and be more set and prepared for the future.

[8: MICROSOFT WILL ENABLE FULL-ON WINDOWS 10/WINDOWS 11 FUNCTIONALITY ON XBOX DEVICES (NOW XBOX COMPUTER DEVICES)]

One of those important changes on Microsoft's end, will be in providing full functionality of Windows on Xbox devices. This means you'll be able to use all the applications you can use on a Dell XPS or Asus desktop, for example, on an Xbox device. The only differentiating factor would be if the Xbox device has the hardware headroom to run a particular application at a particular setting.

To do this, however, also means Microsoft will HAVE to allow Steam, GOG, EGS and other game storefronts to run, access, and install normally on Xbox devices the same way they do on other Windows devices. It will also mean Microsoft has to decouple the Xbox storefront from Xbox consoles in one way or another; either build it in as a rebranding of the Windows Store (for games) accessible much the way you can access the Windows Store in Windows 10 and 11 (meaning the Xbox store would also need to be natively accessible in that same manner on ALL devices with Windows 10 or 11 installed), or freely allow Valve, Epic, CDPR etc. to make storefront launchers downloadable and accessible on Xbox devices with the same or similar level of embeddedness as the Xbox storefront, at costs in line with whatever the typical software developer license for Windows is.

As I already also alluded to, it also means they have to get rid of Xbox Live, or make it so that Xbox Live is not a requirement for online gaming on Xbox devices, and the same goes for GamePass. Microsoft simply cannot gate online MP behind a service if they do not do so on Windows. They may even just phase out the Xbox OS over time, with future Xbox devices, but for the meantime perhaps allow Series X and S units to dual-boot the normal Xbox OS or Windows 11.

While this obviously this lines up for you with #7, yeah, I don't see any of this happening whatsoever.

[9: XBOX DEVICES WILL BE SOLD AT FOR-PROFIT MSRPs SIMILAR TO SURFACE DEVICES AND OEM NUCs]

And, since Xbox devices would now technically be classified as computers, it would allow Microsoft to increase the price MSRP on them to sell for profit directly on the device hardware itself. The trick is in making sure they are priced so that they can serve a low, low-mid, or mid-low end of PC gaming that GPU makers like AMD and Nvidia either don't prioritize or price their cards out of the market of. Keep in mind, Microsoft still would have the advantage of a box that has all the hardware needed to game as long as you have a monitor and a controller, whereas people building a PC still need to source their own GPU, CPU, cooler, fan, SSD, Blu-Ray drive, case, cables, motherboard, keyboard, mouse, controller, and monitor.

There's also the advantage of the console-like form factor which is simply not as easy to replicate with SFF PC boxes, for reasons such as limited R&D. I can see a world where a $699 or $799 Series X, for example, still does reasonably well if it dual-boots to Windows 11 with no compromises (although it would need to facilitate other things like upgradable RAM, eGPU support, and maybe upgradable CPU configs which leads into the next point). In such an environment you get clearly more performance than NUCs pricing closer to $1K (or even higher), and the same Windows functionality while being better gaming devices.

Microsoft has trouble selling a $500 Series X but yet, you think they would actually sell these now computer devices for $800 or so? I'm sorry man. We've had some great debates but man, reading a lot of this stuff sounds more like you're looking at what Microsoft is doing through the eyes of Sony to be honest. Like, console sales are everything and they've never been #1 so they must go third party or put Game Pass everywhere or this or that.

The worse part is you believing some of this stuff is happening by 2026 or some shit. They can't even release a game in 2022 yet you believe that all of this or most of it will come to fruition within 3 or 4 years? You gotta be putting me on. lol
 
P

peter42O

Guest
[10: 10TH-GEN XBOX DEVICES WILL BE INSPIRED BY STEAM MACHINES AND STEAM DECK]

If you ask me, Steam Machines were a smart idea from Valve, they just executed it very poorly. They made at least as many, if not more mistakes, as Panasonic & The 3DO Company made with the 3DO system back in 1993. Thankfully, they took time to step back, reassess their errors, and came out with a winner in the Steam Deck, which will grow into a very viable portable PC platform in the years to come.

Microsoft, unlike Valve, have firsthand experience in the console market as a platform holder, so they could use that to succeed with a take of the Steam Machines idea that actually works. I somewhat feel the Series in itself is a prototype of this, given the wildly different specifications of the Series S and Series X, but for their 10th-generation of console devices, I can see Microsoft going a lot further in terms of user expandability options, integrated Windows support & functionality, and even in terms of build accents/touches for a more premium touch, inspired by their Surface line of devices.

In simple terms, I can see Microsoft doing a two-device approach for 10th-generation as well. However, one will focus on a seamless console-like/laptop style of device developed with a slim profile and 2-in-1 detachable laptop form factor mobility in mind (think something like the Surface 2-in-1 detachable line of devices for an idea), possibly with specs targeting a Series X Pro (if Pro consoles for 9th gen are even a thing). For RAM, they can go with Dell's CAMM design, provided it gains standardization support from JEDEC, but it's the bandwidth advantages that brings (along with I'm assuming lower power consumption & Z-height space) which make it so suitable. Either that, or some future HBM-based memory will be affordable to utilize (if we're talking about production numbers maybe notably north of Surface devices but not to the scale of actual mass-market Xbox consoles of past generations, the costs of HBM may be worth it for the performance), although a mix of HBM & CAMM-based DDR would work best (since the latter can be upgraded in its capacity). Otherwise they could offer different configs, similar to Surface devices, with different CPU & GPU specs (CPU versions with different clocks, for example), different li-on batteries and power profile settings, and port I/O.

That lower-end device would be paired with another Xbox device taking the form of a SFF PC or just somewhat larger than that. I can see it using DDR6-based RAM for the CPU (which would be upgradable; at this point support for 64 GB or even 128 GB of RAM expandability may be expected), meanwhile the internal GPU could be a quite more powerful variant of whatever the smaller devices' GPU is, and utilize embedded HBM-based memory. In any case, it would need to be comparable in performance to whatever the PlayStation 6 ends up providing, however for this particular Xbox device the GPU would be upgradable. This gets a bit complicated because if they want a console-like form factor, that would technically limit what size of GPUs it could support unless either there are special enclosures for fuller-sized GPU cards to slot out the default GPU, or external GPUs would have to connect via eGPU (but the laptop variant would be able to do this as well, albeit with more limited external GPU support, if using a lower-performing CPU). Any GPU usable on a Windows PC would be usable on these devices as well, theoretically speaking. Additionally, in the case of this SFF-sized console Xbox device, the CPU should be socketed and upgradable, and even things like the Wifi module should be upgradable as well, plus the power supply (will be necessary if the internal CPU is upgradable).

With this type of design philosophy, I could see these next-gen Xbox devices maintaining good sales performance, provided there's the right balance of price. They would obviously be more expensive than actual consoles (remember, Microsoft would have a completely different business model for these devices by this point compared to how the Series S & X launched), but I couldn't picture a stock SFF-sized next-gen Xbox device costing $1,999 for example...well maybe unless it has built-in set-top-box hardware in it x3. Could also be an good excuse to reintroduce HDMI-IN functionality to Xbox devices in this case.

Reading this segment, holy shit. You really see Microsoft going out there. lol

Compared to what I see Sony doing future wise for PlayStation, im not even in the same stratosphere as you. Like, holy fuck dude!!! 🤯

[11: MICROSOFT WILL CURATE GAMEPASS FOR APPROVAL ON SONY, NINTENDO, VALVE, EPIC, GOOGLE & APPLE SERVICES]

This is one of the other big things Microsoft will likely seek to do, but it comes with the condition of them transitioning the Xbox brand into a more general gaming-ready computing device, rather than pushing it as a "gaming console" in direct contention with companies like Sony and Nintendo. It also requires them to either decouple the Xbox storefront from Xbox devices exclusively, or allow companies like Valve & Epic to freely put their own storefronts on Xbox devices with all the same rules they abide with doing such on Windows operating systems.

By doing such, however, Microsoft should be able to provide curated versions of GamePass for Sony & Nintendo systems that just keep the 1P content in them, and this is an idea I've seen others float around for a while now in various discussions, so the idea itself is nothing new. Perhaps more interesting would be what a curated form of GamePass looks like for Steam, GOG, and Epic Game Store.

I do feel any curated version would probably scale back on what particular games can be Day 1 through it, but Microsoft will end up doing this themselves as they will want to maximize the traditional revenue model streams for the biggest of their releases, relegating Day 1 GamePass to smaller releases like the Pentiments and Groundeds of the world.

I believe that Game Pass will be on Steam eventually and I can see a streaming only version for Nintendo. I don't see Sony accepting Game Pass because if they were, they would have done so already. Epic needs to get bigger for Microsoft to feel it's worth putting Game Pass on there. I don't know shit about Google's and Apple's services since I don't care about either so I won't comment on either.
 

Sircaw

Pro Flounder
Moderating
20 Jun 2022
5,366
9,391
After reading all that, just want to say, excellent thread Thicc and props for actually taking the time to post all of that as well as thinking about it all beforehand.
I totally agree, excellent post but stop trying to share the praise,

This post has nothing to do with that @PropellerEar dude, stop trying to give him credit.
 

Yurinka

Veteran
VIP
21 Jun 2022
5,271
4,627
It's quite interesting you're of the opinion regulators will approve with no concessions from Microsoft, because it certainly feels like concessions are going to be involved in some way (whether they're fair or not is another point of discussion).

But using that as a catalyst to justify in some public fashion to bring the big Zenimax & ABK games to PS (and IMO, Switch or its successor, depending on the scope of the game) would be a good way for MS to make that move.
No regulator asked for concessions, is MS who said 'they are open to make concessions' (I think MS is again bullshitting and is only a way to justify to their fans the release on rival consoles games from the publishers they bought and something they already planned to do as they said because it's the only way that their acquisitions of publishers would make sense economically, and also would match with their strategy of slowly abandoning Xbox and moving to other platforms and become a full multiplatform 3rd party).

MS as a whole is huge, bug MS in gaming is not that big. And in the gaming markets where he's more relevant or has potential to be relevant (consoles, game subs, cloud gaming) after the acquisition would continue behind others and wouldn't be in a position to perform monopolistic actions because wouldn't have enough market power. And in the case of game subs and cloud gaming they are small markets that will grow but won't be that huge, for several reasons they won't dominate the market and always will be secondary.

If that happens I'm going to be very disappointed. GaaS model can work for some games, but clearly not all. It's ruined Halo Infinite and acting as a parasite on Forza Horizon 5.

Maybe those are incidental cases but it already shows a pattern. And let's not forget, Sea of Thieves (another GaaS title) launched barebones and broken in some ways and took multiple seasons to right the ship.
Forza 8 is also confirmed to be a GaaS. The last Fallout and Elder Scrolls also were GaaS. So the only two big selling MS IPs who have to move to GaaS are Gears and Doom.

Personally, I think some of that depends on how this ABK acquisition shakes out, and what changes MS considers making to the Xbox business model. For smaller devs, I can see them wanting to court a sale of Crystal Dynamics from Embracer, possibly Asobo, Eidos Montreal, Certain Affinity and the team working on Contraband (forgot their name).

50 million or a bit north of that for GamePass by end-of-gen could realistically happen, the bigger question though is at what ARPU would those subs be at? Because at some point just raw sub counts are not going to matter as much to even Microsoft as what the revenue coming from those subs is looking like.
I think that after ABK instead of chasing EA or Take 2 will go for acquisitions like the ones you mention.

Regarding GP ARPU, I think they'll first remove or highly reduce the offers of free months and $1 deals limiting them to 1 time per account and hardware. Then they may merge the base GP and Gold. For the same price of GP they'd also include Gold, which now wouldn't be purchasable separatedly but you'd be required to have GP to play online on Xbox.

Yeah, it just seems like the natural progression for their business model. The revenue MS get from 3P sales cuts on console is pennies to them compared to what they get from their other divisions. Allowing other storefronts on Xbox via opening up the platform (now as a computer device) to Windows may gut their own 3P revenue digitally, but they make up that and a lot more by:

-Potentially having additional 1P content through other acquisitions​
-Releasing all 1P content on Sony & Nintendo platforms Day 1 alongside Xbox & PC​
-Getting curated versions of GamePass onto Sony, Nintendo, and other platform storefronts​
-Selling Xbox devices at higher prices (increasing profit margins off hardware, since no longer going on the traditional console business model)​

And just consider the big revenue boosts they'll already see if/when ABK's revenue gets folded into the Xbox division's. MS would not miss that drop in digital 3P sales revenue. I didn't consider the possibility of Microsoft pulling a Valve/3DO and making a spec for future Xbox devices to then license out OEMs, but I should've considered it. Part of the reason they developed the Surface products was to set a sort of specification for laptop, tablet & portable touch devices in the PC space complimenting Windows performance features & capabilities.
Yes, I think they can do this but Sony and Nintendo won't allow to have GP or a MS store on their platforms. Sony and Nintendo only would allow GP on their platform once MS does a Sega and stops being a console manufacture and completes their transition to be a full multiplatform 3rd party publisher, start to release all -or at least the console ones that the console can run- MS games day one on the Nintendo and Sony console and stores (so MS would pay the 30%), if GP only includes MS games and any payment from GP or related DLC/MTX/season passes on their platform also gives the 30% to Sony/Nintendo.

Can see that happening as well, although that would create an interesting arms race between Microsoft and Valve. Possible MS would let Valve handle that type of thing on the portables side and Microsoft takes lessons from Xbox, Surface & Steam Machines to implement a similar business model for more consolized gaming-centric PC devices.
I think MS can't stand that Valve got the most PC gaming western market and that they are also leading PC portables, so I think MS will fight them hard in both fronts. MS will want to dominate the OS and gaming store markets in both home and handheld PCs.

As long as they allow 3P app makers to have fair access to OS APIs, and Google & Apple aren't suppressing the promotion and availability of 3P apps on their systems (basically, doing what Microsoft themselves did with Windows in the '90s to companies like Netscape), then the 30% licensing cost cut should be allowed IMO.
I think that unless some regulators or justice force Apple, Google, Sony and Nintendo to allow other stores and/or payment methods on their systems without paying the platform holder the 30%, they won't allow it by themselves. I think Epic, MS and now Elon Musk/Twitter & Paypal (plus maybe soon also Meta/FB/Instagram/Whatsapp) will fight for this very hard.

Actually have considered doing something on PlayStation, though I don't see Sony moving from the traditional console business model, so not a lot of things will change. I have speculated on ways they may integrate PC more into their ecosystem through vertical integration, but compiling all of that (and other stuff) into a comprehensive thread OP may be a good idea.

Nintendo is so glacial in making changes to their approach that I don't see a lot changing within the next six years other than maybe....I can't even come up with a quick example xD.
I think Sony and Nintendo will continue doing pretty much what they do. Sony will continue growing in all areas investing more in everything: a more powerful PS6, more generations of PSVR improving the tech, more iterations of PS+ and their cloud gaming, more mobile games, more PS exclusives than ever before, more investment supporting indies, more PC port and some rare case where they release day one on PC (but not with Uncharted or God of War, I mean like with games like that rumored game with NC Soft, which would basically would be an PC Asian F2P MMORPG with a skin of a Sony IP).

Nintendo I think that in the next generation Nintendo will 'invent' (according to fanboys who always think that Nintendo invented everything) 4K and trophies. And that will invest more in theme parks, toys and movies but regarding games and platforms will continue as always. I think they'll release a 'next gen' Switch 2 with the hardware that was rumored for Switch Pro (slightly more powerful Switch capable to scale to 4K) and that some years later will release a proper successor with a more different concept.
 
Status
Not open for further replies.