[hnlmorg]

I don’t think Microsoft have any interest in hardware consoles. They get their money from Xbox subscriptions so for them it’s more about pushing Xbox live rather than hardware.

I get their move though. Hardware is an expensive business and full of risk.

[scheeseman486]

I was referrinng to how the repurcussions of the failure of the Xbox One are still felt 2 generations on, with it seemingly going to end in Microsoft's divestment from the console business.

Though how that'll play out will be different, given Microsoft's portfolio is far wider than Sega's ever was and the weird hybrid-with-PC state of their games portfolio.

[hnlmorg]

Xbox One sold 58 million so it’s a bit of a stretch to call it’s a failure.

The thing you’re missing is the exact point I made in my previous comment:

Microsoft’s strategy is to own the software stack. They’re not really a hardware company. Xbox One was more about leveraging Microsoft as a platform. And Xbox Live is a very competitive and highly popular service. You don’t need an Xbox for Xbox Live. But you do need a subscription to Microsoft for it. The Xbox was just there for people who still wanted to pay the upfront cost for a dedicated gaming system but it was never Microsoft’s priority.

This is also fully in line with how Microsoft has pivoted most of its business over the last two decades: Microsoft Office and Azure AD are great examples of how Microsoft have switched emphasis to subscription-based services.

Much as I prefer physical hardware, it’s hard to deny that Microsoft’s approach is the the future. PlayStation might appear like they’re more successful than Xbox today but in a generation or twos time, people won’t be buying new hardware like they are today. We are already seeing this trend in fact. And Microsoft have a massive head start in the subscription games market. So unless Sony switch gear soon, they’re more likely to go the way of Sega than Microsoft are.

As for Nintendo, it’s hard to guess what will happen there but I suspect they’ll weather the change in consumer habits because they have both the IP and the unique position of being more positions as kids toys than grown up gaming devices.

[scheeseman486]

Xbox as a console is a failure in as much that it's coming third in a market of three and that in response to that, Microsoft are significantly changing their strategy, something they probably wouldn't have done if they were market leader.

But I agree with you on all points and I think the direction Microsoft are going in is the right one, though they should have done it sooner, the Series consoles have felt rather superfluous. They should have been working on adding a solid console UI to Windows a generation ago.

[hnlmorg]

> Microsoft are significantly changing their strategy, something they probably wouldn't have done if they were market leader.

You have cause and effect the wrong way around there. Microsoft have been pushing this strategy from the start.

There’s a reason they partnered with Sega to put Windows CE on the Dreamcast. And their failed attempt at XNA on the Xbox 360. It was always about owning the software layer rather than them being a dominant hardware manufacturer.

If they cared about hardware then you’d see Microsoft PCs. Instead we have decades of IBM-compatible clones, some half hearted attempts at Windows Phones, which they again didn’t manufacture the hardware for, and a few Surface Pros which are basically just templates to inspire HP et al into action.

The Xbox was always about software dominance but at the time MS knew they had to get their software onto the consoles first.

Whereas Sony was originally a hardware company. They didn’t even own any studios when the first Playststion was released (hence why they released an SDK for the Playststion while Sega still expected 3rd party developers to write assembly like their in house teams were)

So the difference in hardware sales isn’t at all surprising when you factor that in.

If you look at Xbox Live subscriptions you’ll see just how hard Microsoft are pushing this strategy. And to get where they are with it, it cannot have been just a reactionary approach due to coming 3rd in hardware sales. The fact that Microsoft Windows has been pushing Xbox Live for literally years too is further proof of that.

Also when you look at some of the controversial decisions regarding the Xbox One, which MS backtracked on, those unpopular design choices make much more sense when you think of the console as a fat terminal for subscription-based games.

I’m honestly a little worried for the future of the Playststion because if things pan out the way they’re going presently, Sony might just end up an OEM for Xbox Live compatible devices.

> They should have been working on adding a solid console UI to Windows a generation ago.

A lot has been said in the past about Microsoft’s design team and not just for the Xbox One. They’re the only billion dollar company that consistently gets UI more wrong than Amazon.

30 years ago I honestly think they were best in class for designing UIs. But somewhere around XP they lost their way and they’ve been getting worse at it with each coming year.

[scheeseman486]

If Microsoft could have a large piece of the console market, they would have taken it, corporate strategy be damned. Whatever got them into the market (and you're right, they did it as a long term power play for the living room) doesn't mean Microsoft has some kind of purity of vision or grand unchangable plan, their corporate culture is notoriously factional and fragmented. They aren't a hardware company... until they are.

There are risks to giving it up too. Make the Xbox open and Steam could potentially gobble up what's left of a la carte game distribution on PC. Xbox Live is inevitably going to die, why pay for online services when every other store offers them for free? All that's left is Game Pass, but the long term viability of subscription models for games is shaky, they're getting more subscribers but they aren't hitting their target numbers and they need to scale for it to be able to turn a profit.

There's the cloud and they're in a great position to compete there, but I remain unconvinced that it's good enough. It's less a primary way to play games and more a value-add, most people, even casuals, seem to treat it as such. And what about them owning the software layer? They don't even have a monopoly on running Windows software anymore, at least in the domain of games. I suspect this might be a problem for them down the track.

The way I buy their games is as Microsoft only as publisher, since I buy them on Steam. I play them on my Linux PC. In a way, they're already Sega post-Dreamcast.

[hnlmorg]

> If Microsoft could have a large piece of the console market, they would have taken it, corporate strategy be damned. Whatever got them into the market (and you're right, they did it as a long term power play for the living room) doesn't mean Microsoft has some kind of purity of vision or grand unchangable plan, their corporate culture is notoriously factional and fragmented. They aren't a hardware company... until they are

You’re making a hypothetical point here though. And not only hypothetical, but one that flys directly against all of the actual behavioural evidence we do already have.

> There are risks to giving it up too. Make the Xbox open and Steam could potentially gobble up what's left of a la carte game distribution on PC. Xbox Live is inevitably going to die, why pay for online services when every other store offers them for free? All that's left is Game Pass, but the long term viability of subscription models for games is shaky, they're getting more subscribers but they aren't hitting their target numbers and they need to scale for it to be able to turn a profit.

You’re completely missing the point of what Xbox Live is here. It’s not just support for online play, it’s “free” AAA games and game streaming. It’s Steam, Google Strava and PlayStation Plus all rolled into one. It works on PCs, tablets and even Meta Quests too.

That’s why MS are buying studios and why the Xbox is less relevant. Hardware becomes irrelevant if you’re streaming the games to customers.

It also got a massive user base already. In fact they’re the leading online gaming service provider. And if you read any of the market analysis for this online gaming services, streaming and gaming from non-traditional gaming hardware (eg portable devices and XR headsets), those markets are set to explode in popularity over the next 10 years.

Apple knows this too, which is why they have Apple Arcade. But Apple are focused on hardware lock-ins while Microsoft are focused on software dominance.

> There's the cloud and they're in a great position to compete there, but I remain unconvinced that it's good enough.

They already dominate there ;)

> It's less a primary way to play games and more a value-add, most people, even casuals, seem to treat it as such. And what about them owning the software layer? They don't even have a monopoly on running Windows software anymore, at least in the domain of games. I suspect this might be a problem for them down the track.

Competing for operating system dominance is a thing of the past. Outside of server licensing, no one charges for desktop operating systems any more and mobile operating systems have always been a free bundle. Plus with more and more applications being web-based, half the time the “operating system” is just a web browser.

Microsoft knows this, which is why Edge is based on Chromium and why Windows 11 is a free upgrade.

These days real revenue is generated from subscription based services. Hence the Office 365 and the Azura AD examples I gave. Hence why Apple are moving into subscription services. Hence why Adobe products are now subscription based. Whereas what you’re describing is the industry 10+ years ago.

> The way I buy their games is as Microsoft only as publisher, since I buy them on Steam. I play them on my Linux PC. In a way, they're already Sega post-Dreamcast.

That explains why you have very little understanding of Xbox Live and Microsoft’s pitch for subscription based gaming services. :) I don’t mean that in a negative way, just that you haven’t really explored cloud gaming yet so haven’t been exposed to just how large that market already it.

Personally I much prefer your way of gaming too, albeit I’d almost always opt for physical copies if any exist. I’m definitely and old school gamer. So I can’t say I relish this new future where you don’t own the title you play. But like it or not, that’s where the industry is going.

Have a read about some market analysis for online gaming services and popularity of gaming platforms. Quite a lot of them are going to be industry-aimed and thus not free to read but there’s enough resources out there that you should get an idea of what I’m talking about. The whole console industry is on a verge of a significant shift. It’s like the shift from cartridge to optical disc. Or from single use circuit controlled games to ROM cartridges.