[ActionHank]

It’s because of the idiocy of p&l tracking. The hardware, store, and games all need to be independently profitable.

Once they are, they all need to be more and more profitable.

Finally when it’s no longer profitable fire half the people and strip it for parts.

They’re already dead, they just don’t know it yet.

[websap]

They lose money on every dollar they invest overall in xbox as a business. They pretty publicly documented this (which is unusual for Microsoft).

Overall gaming is a dying business. Everyone has a pretty powerful smartphone in their pockets, and there are so many platform vying for attention. AAA gaming is becoming a smaller fraction of the overall gaming pie, so I would expect prices to go up. Mobile gaming usage is up from 42% -> 55% from 2017. Even based on analysis from Steam's data, Indie games are 48% of sales, vs 24% in 2018.

[surgical_fire]

Good. AAA should die, and the earth where it had grown should be salted.

Gaming is fine. Remove AAA from the equation, and current gaming is perfectly fine. Indies are plentiful and offer a great experience. Even lower-budget games from larger companies are fine without being plagued with every horrible practice (e.g.: microtransactions).

Also, the past 4 decades of games are still available. Hell, I would probably need two lifetimes to play all games in my queue list.

It may not be the infinitely profitable industry that attracts the likes of Microsoft, and that is a good thing. In fact, I view Microsoft failing in gaming as a hopeful sign for the health of videogames.

[reisse]

> Overall gaming is a dying business.

What? Both PC and mobile markets are growing by any reasonable metric, and consoles are propelled by stellar Switch 2 sales.

The gaming market is ripe with money, it is total failure on Microsoft side that they failed to capture any of that. Xbox is on life support, and Windows platform tax is captured by Steam, where Valve funnels it into Linux to make its own platform.

[inigyou]

I think mobile gaming should really be considered as a completely separate industry. It's not comparable at all.

[thegrim33]

Sounds like an opportunity then for you to create a competing company that functions the way you feel it should function. If that's what people value, you'll take all the business since you're the only one offering it.

[darth_avocado]

> Sounds like an opportunity then for you to create a competing company that functions the way you feel it should function

Sure, if one has millions and millions in capital. Because why would an investor put a money in my company that works the way it “should” according to me if it produces lower profits as compared to my competitors?

[lotsofpulp]

Because buyers choose to spend less money, so if a business comes around that can offer the same product/service at a lower price, the investor will want to own a piece of that business rather than the one that is about to lose buyers.

[saghm]

Right, because we never see investors making decisions that are suboptimal in the long term because they're too focused on short-term gains. Everyone is perfectly rational, and high initial costs have never discouraged anyone from trying to displace an established dominant player; it's purely because the dominant players are perfectly efficient and don't ever try to rent-seek.

[lotsofpulp]

I did not claim any of that, so not sure if your reply is misplaced.

It’s an easily observable fact that throughout the previous decades, investors have invested in businesses that reduce profit margins. Amazon being one of the most famous with the slogan “your margin is my opportunity”, but also Walmart, Costco, and other businesses that end up winning because they delivered acceptable products or services at lower prices.

[saghm]

No, my reply was not replaced. You were replaying to a thread where someone was told that they should start a competing business to Microsoft to displace the Xbox, and when the obvious response of how much money was needed to start such a business, you replied with a hand-waved explanation of how investors would be interested if it would eventually lead to a return on investment. You said something that was not technically incorrect in a vacuum but completely ignored the context behind what the person was actually asking, so I was pointing out why your response wasn't particularly relevant or helpful.

I understand that you weren't the one who initially claimed they should start a business, but if you're going to jump into a thread where someone is told something nonsensical and defend the nonsense by ignoring the context, it's reasonable for others to also jump in and call that out.

[inigyou]

There are reasons people don't start businesses. Besides all the regulations, there's the constant struggle to pay rent.

[ozgrakkurt]

You have to be delusional if you think you are in that class that can spin up an xbox competitor

[EA-3167]

What people value is subject to marketing and long-term manipulation, not to mention a poverty of competition.