SSN Breaking news-Microsoft to exit the gaming business if Gamepass is still mid by 2027

[MeachTheMonster]

As with most things you dummies post, this was taken out of context and put in a tweet for you to run and share Have you ever reached the conclusion, sir, that Xbox "lost the console wars," to Sony and Nintendo?

A. Have I reached that conclusion?

Yes.

Q. And what does lost the console wars mean?

A. In a relatively fixed market size of console games globally, we have no opportunity to kind of improve our third-place standing.

Q. Why launch a Generation 9 console?

MS. WINKINSON: I'm going to object to asked and answered. I think you asked him the exact same question.

Q. How much money did Microsoft invest to develop and launch the Generation 9 Xbox console, ballpark?

A. I don't have a good answer for a specific amount that we invested, maybe a billion dollars.

Q. Why -- what is your understanding of why Microsoft invested a billion dollars to compete with a Generation 9 console after it had lost the console wars?

A. There are three billion people who play video games on the planet. The industry is about $200 billion in revenue, all up, most of those players playing off of console.

For us, we felt we had an opportunity to help connect player and creators of games, and the creators of the games are building games on our console. Without having a console in the market, you'd really have no developer engagement to help us connect players' engagement across all devices.

Q. Given that, what you just said, is having a console offering a necessary part for Microsoft Gaming to compete in the gaming
industry today?

A. No.

Q. How does that reconcile with what you just said about needing to offer a console for developers, et cetera?

A. Keeping our console relevant and engaged with developers, I believe gives us the best opportunity to be relevant in the future of gaming, but there are other options that you could take, other strategic decisions you can make that are not
continuing to build the console.

Q. The decision that you have made as the leader of Xbox/Microsoft Gaming that Microsoft Gaming should continue and will continue to invest in console; is that right?

A. We're continuing to invest in the
Xbox console, yes.

Q. Okay. And why are you continuing to invest in Xbox console despite your conclusion that you lost the war?

Continued below.

 

[Legal]

Needs more data to come a good conclusion.

You’re probably gonna see additional SKUs like gamepass mobile, gamepass cloud only, gamepass family, etc depending on what happens with ABK.

They seem behind on the timeline based on other leaks so this may be pushed a little bit, but ultimately if they’re able to get 6 really good first party games on the service by then, but other 3rd party games I think people will sign up and see value.

In some ways it what folks see when they get a ps5 and haven’t played much of last gen and go wow Spider-Man, god of war, got, etc are really fun. Glad I did this.

With regard to mobile, it’s a smaller fee you can easily see a set it and forget scenario like with NYtimes cook book or other smaller subs.

Definitely agreed on the bolded.

Frankly, as an external party, we just don't have enough info to truly make a call one way or another about their plans and overall health.

My primary concern, especially with the idea of expansion and additional SKUs, is that that's a lot of plates to have spinning at once. An underrated aspect of a subscription service's success is simplified customer options. For example, Netflix is basically asking you threw questions to dictate what plan you need: whether or not you want to live with ads, how many screens you watch on, and/or if you care to have 4K and/or Dolby Vision viewing options. Currently, Microsoft is essentially asking you if you want most of the GamePass library, or all of it? I'm thinking that outside of region specific plans (like cheaper ones for India, for example), there's probably going to be elimination of some the current plans to effectively have the new SKUs completely replace the current selection of them solely to avoid customer confusion (similar to the confusion people have over the current PlayStation Plus tiers), and close as many potential pricing loopholes as possible.

 

[MeachTheMonster]

Q. Okay. And why are you continuing to invest in Xbox console despite your conclusion that you lost the war?

A. Because our console -- we have developers that focus on our console platform and we believe that we have the opportunity to make games that are running on our console available to more players across more devices.

Q. So, in your view and understanding of the strategy for gaming, you have chosen to continue offering an Xbox console into the future as part of your strategy, correct?

A. We have chosen to continue to build Xbox consoles as part of our strategy, correct.

Q. And I take it, am I correct, that your objective in continuing -- one of your objectives in continuing to offer consoles is to do so in a manner that makes as much economic sense for Microsoft as you can, correct?

A. In our inroads in the gaming industry all up, yes

Q. Is Microsoft Gaming presently planning to launch a Gen -- strike that.

Is Microsoft Gaming developing a Gen 10 console?

A. We are not currently developing a Gen 10 console.

Q. Have you started discussing among the gaming leadership team and the Microsoft senior leadership team about offering a
Generation 10 console?

A. We have started early discussions on what a next generation could look like.

Q. Have you discussed a launch date 24 for Gen 10 Xbox console?

A. We have roughly talked about 2027 or 2028 as potential launch years.

9 Q. And as of today, is it your understanding of Microsoft Gaming strategy and plans that Microsoft will continue to develop a Gen 10 console?

A. I think that question remains to be answered. For planning purposes, we are assuming that Gen 10 would happen until it's proven that it should not.

Q. What are the factors that would potentially lead you to no longer offer a
Gen 10 -- strike that.

What are the factors that would lead you as leader of Microsoft Gaming to decide, you know what, we're just not gonna do anymore consoles, we're not gonna offer a
Gen 10?

A. If we're not able to gain relevance off of console and expand the market opportunity for us in Xbox, I would not encourage us to do another console.

Q. I think you said, it is your current planning at Microsoft to grow off console and develop a console device, right, for Gen 10?

A. Those two are very -- they're both big concepts and they're kind of unrelated. I would say the first one is an imperative, our business must grow off console otherwise this business makes no sense for us.

The second consideration of I have to keep teams focused on what we might be
able to do so that we have the opportunity to make a decision on a Generation 10 console down the road.

Q. Do you agree with the projections that are expressed in this chart?

A. I do not believe that that is what the future Xbox business would look like.

Q. So, Ms. McKissick is wrong?

A. This is a presentation from our devices organization to the gaming leadership team, so this is the view from the team that
is chartered with building our hardware on
what the future business would look like.

I can fairly safely say that if we do not make more progress than this off of console, we would exit the gaming business.

Q. And how wrong is she by 2030? How would you rearrange the chart basically to
make it more accurate for your projection of 2030?

A. I wasn't trying to make a projection on 2030, I was saying if this were the outcome that we were trending towards, we would not continue in the business, so the numbers would go down. So, I wasn't trying
to make a counter prediction, I was just saying if this were the outcome, we would --
I don't believe we'd still be in the business.

Q. And what outcome are you driving towards so that you could still be in the business?

A. Well, a majority of our customers are found off of our own hardware.

Q. By 2030?

A. I would hope by earlier than 2030. So, when you asked me if I agreed with this chart that the light green and blue depending on what colors you see there would have to be much larger much earlier.

Q. And when is it your goal to have a majority of Xbox subscribers off console?

A. I would say by FY26, '27 that we should be in that position or we'd have to make a different decision with the business.



Q. If it doesn't work out to gain efficient share in mobile, would Microsoft then have an incentive to start pulling some of these levers to ensure that business can survive in the 200 million TAM for console?

A. If you look at Microsoft as a global business and its scale, the Sony business inside of Microsoft is really no more meaningful than the Xbox business, it's not a -- the size of business that Microsoft is pursuing with all of its resources. Our pivot in this business is to constantly talk about three billion gamers, $200 billion in revenue top line and our ability to be a
participant in that growth. I don't -- in any world where we would not succeed on mobile and PC and decide that we would go backwards to a closed device flat TAM market and invest our resources there, I would not advocate for that.

Q. So, it's either -- I want to be clear about this, in three to four years,
it's either that Microsoft succeeds --Microsoft Gaming succeeds in going to achieve what you think it needs to achieve in the vision for mobile and PC or said shutdown was too draconian, but -- or what?

A. I'll call it divesting of what we have. My view is if we don't succeed on mobile, that it's really been caused by the two mobile platform holders excluding us from distributing our service. And we see that today where Apple blocks us from launching on their platform, through their store, I should say, and Google really constrains our ability to succeed. And how we're trying to counter that is to acquire some popular mobile content to help us create some allure for gamers that we can then use to have some engagement on those platforms where we might be able to use cloud and other distribution to gain a foothold on those platforms. Because if we don't gain a foothold on mobile, there's really no future for us, in Microsoft investment in gaming.

Q. Do you think that thesis that you just expressed --

THE COURT REPORTER: I'm sorry. Can you say that again?

Q. Do you think that thesis that you just expressed is understood in the marketplace --

A. No.

Q. -- about Microsoft Gaming?

A. No. No, in terms of -- in terms of trying to drive excitement with our customers and our developers and our partners, I try not go out with the Phil doom and gloom conversation about where we are. But I know from the time I took this job, Satya, one of the first conversations I had with him is, he wasn't sure why we're in the gaming business. But at that point, in the Xbox One generation, he said we clearly are -- we're out of position with our product, so let's go try to fix that and then decide what we should go do. And we've made progress through innovations like Xbox Cloud Gaming and Game Pass and shipping our games on PC. But we will reach the asymptote of where we can make progress definitely on console, we're probably already there. We will ship probably half of the consoles that PlayStation does this next year. And if we
don't, so we have to make progress in mobile. But I don't go out with that on my kind of gaming T-shirt when I'm doing PR.

It’s not about gamepass hitting those actual numbers. That was a random projection from the hardware team.

The conversation is more about where microsft sees their business going. Also keep in mind this is him trying to convince regulators why they NEED to buy activision.

He’s basically saying the same thing he’s always said. Xbox future growth is mobile/pc/cloud.

Console market is stagnant, there’s billions of gamers elsewhere. For Microsoft to be successful they need to reach those billions of gamers off console.

Anyone trying to make money off of gaming sees this. Which is why even sony is investing huge to grow off of consoles, cause consoles themselves are just not growing in popularity or adoption.

 

[Pressure]

Definitely agreed on the bolded.

Frankly, as an external party, we just don't have enough info to truly make a call one way or another about their plans and overall health.

My primary concern, especially with the idea of expansion and additional SKUs, is that that's a lot of plates to have spinning at once. An underrated aspect of a subscription service's success is simplified customer options. For example, Netflix is basically asking you threw questions to dictate what plan you need: whether or not you want to live with ads, how many screens you watch on, and/or if you care to have 4K and/or Dolby Vision viewing options. Currently, Microsoft is essentially asking you if you want most of the GamePass library, or all of it? I'm thinking that outside of region specific plans (like cheaper ones for India, for example), there's probably going to be elimination of some the current plans to effectively have the new SKUs completely replace the current selection of them solely to avoid customer confusion (similar to the confusion people have over the current PlayStation Plus tiers), and close as many potential pricing loopholes as possible.

It’s definitely an interesting dilemma.

From the pc market you obviously have telemetry data from billions of win x machines, but you run the risk of having too much data. Not all data is good.

In the console space you’re kinda stuck trying to determine if you’re lagging behind because you don’t have some of the similar movie game style titles that Sony does or is it better just to attempt to differentiate yourself, but Also maintain engagement.

I think that’s where the streaming services really make you think how to approach the dilemma.

Long gone are the days of full episode drops where folks would subscribe for a month or so a trial and watch an entire series. I often wonder if that’s the same fear with shorter games. Can you put them out frequently enough to maintain subs or do you want to prioritize games where people sink hundreds of hours into them.

That said, MS is pretty well versed on the financial aspects of a subscription service and cloud services so the focus really should be simple and down to bringing the right games to market.

 

[Lord Beasley]

You see it. the overabundance of sub services got these niccas voltroning up to survive. I canceled my Starz sub because it's now available under paramount+, more will follow

it was actually showtime, but the same still applies

 

[Gizmo_Duck]

it was actually showtime, but the same still applies

Not just them, HBO is licensing out their content to Netflix. Its all fukked up

 

[↓R↑LYB]

The fattest blunt will be smoked the day MS leaves the gaming industry

Y'all nikkas are insane

How is having less competition in gaming a benefit to the consumer? Do y'all not remember the bullshyt $600 PS3 with that shytty store front, shytty OS, and shytty online experience? And if you didn't like the price you should get a second job and pay for it.

Y'all putting your faith in Sony when they've shown they'll fukk over the consumer for profit too.

 

[Gizmo_Duck]

How is having less competition in gaming a benefit to the consumer? Do y'all not remember the bullshyt $600 PS3 with that shytty store front, shytty OS, and shytty and online experience? And if you didn't like the price you should get a second job and pay for it.

And it still beat xbox

 

[winb83]

Honestly I hope y’all get what y’all are asking for.

When companies no longer have to compete that’s when they show their true colors and start engaging in foul behavior. Happens like clockwork.

 

[Gizmo_Duck]

Honestly I hope y’all get what y’all are asking for.

When companies no longer have to compete that’s when they show their true colors and start engaging in foul behavior. Happens like clockwork.

They aren’t competing now

 

[humminbird]

100 mil is the golden number for any streaming service
the only way they could possibly reach this is if they put it in TVs like movie streaming services do
even then it's still not guaranteed
they're crazy

 

[Hater]

 

[Jaguar93]

In the future gamepass will be on Nintendo/PlayStation consoles. Along with Xbox controllers.

 

[Mook]

I mean man, outside of Gears and Halo, they really didn't bring much the last twenty years and those titles fell off in regards to their consistency by not being able to produce great sequels. Not to mention other shooters like Call of Duty being the era's defining shooter games during those years.

The simple question though is, was anybody really needing an Xbox in the first place and even more relevant - do they now? When the Xbox dropped it was because of Halo, then the 360 dropped it was because of Gears. Nothing to note since then as the other big action games took over - back in 2007 which was more than 15 years ago.

Starfield this year was supposed to be that game, but it only now has barely outsold Final Fantasy XVI (which had a lot of protest) and still at best sits as the 5th highest selling title this year. That ain't moving the needle in the way they need. If that took 10 years to make, that's not a good sign if they need something in the next three years (2027).

They haven't been able to create any enormous exclusive console-must have FOMO since Gears of War and Halo to be honest. After the 360 generation, most FPS gamers went to PC straight up while relying on Playstation and Nintendo for all the other games. Sports games are basically PS-dominated and has taken a lot of people's needs for online team games. Nobody needs exclusive Microsoft shooters anymore.

Again, 2027 is three years away and they're going to need something big. At this point, I don't see it. They'll need to find something fast and easy to make that's groundbreaking. That kind of innovation doesn't come around often.

As a company, maybe Microsoft goes the Nvidia route and steps away from gaming to focus on AI and put more resources into ChatGPT as they may be starting to engage in an AI war with Google after they purchased OpenAI.

So that's three big competitors in different markets, 2 of which (Apple and Sony) they're getting out-gunned and the other (Google) is a monster when it comes to the internet and now they're basically direct competitors for internet search space. At this point they're spread thin and kind of, well, mid at everything except they got ChatGPT (and hopefully the acquisition of OpenAI don't end up like their other acquisitions).

Sometimes you got to learn you can't swim with fish and you may have to pull your resources because you're getting spread too thin.

If Microsoft does end up leaving the space, I'd personally love to see a Sony and Nintendo all out war.

This is a garbage ass post and everyone that dapped it should be banned. Only halo and gears? Really you clowns?

5th best selling game, yeah for a game that you could otherwise PAY 10 BUCKS FOR THE LITERAL SERVICE THIS THREAD IS ABOUT YOU IDIOT.

Now on to the thread. It's things like this that make me believe more we live in a simulation. I'm a fukking loser nobody but if I show you 100 million subs and Phil Spencer says that's a failure and we should exit in 3 years if that's all we got... Bro my mind would instantly think we just bought Activision and your dumb ass can't make 100M users profitable? FIRED. I'd fire his ass asap.

PHILLIP SPENCER IS A GOD DAMN MORON AND I ONLY LEARNED HE EXISTED THIS WEEK.

 

[Gizmo_Duck]

This is a garbage ass post and everyone that dapped it should be banned. Only halo and gears? Really you clowns?

5th best selling game, yeah for a game that you could otherwise PAY 10 BUCKS FOR THE LITERAL SERVICE THIS THREAD IS ABOUT YOU IDIOT.

Now on to the thread. It's things like this that make me believe more we live in a simulation. I'm a fukking loser nobody but if I show you 100 million subs and Phil Spencer says that's a failure and we should exit in 3 years if that's all we got... Bro my mind would instantly think we just bought Activision and your dumb ass can't make 100M users profitable? FIRED. I'd fire his ass asap.

PHILLIP SPENCER IS A GOD DAMN MORON AND I ONLY LEARNED HE EXISTED THIS WEEK.