If you've followed me for a bit then you know I've talked about how Game Pass will become the main entry point into the Xbox ecosystem via any device in the future.
But I want to step back a bit and do a quick thread on Xbox's next gen consoles.
1/
But I want to step back a bit and do a quick thread on Xbox's next gen consoles.
1/
While the above is very much true and Game Pass is the future of Xbox, it's worth bearing in mind that their console business is still very important and will continue to be during next gen.
Xbox wants to grow beyond console, but it needs to maintain console too.
Xbox wants to grow beyond console, but it needs to maintain console too.
Xbox One has 50m+ installed base but Xbox Live has nearly 100m MAU. A good chunk of that is PC and Mobile and that number will continue to grow as Game Pass & xCloud become more accessible and offer more value
But right now, the majority of subs (XBLG and GP) are on console
But right now, the majority of subs (XBLG and GP) are on console
On console:
Xbox charges a platform fee for each third party game sold on console, including for DLC
The majority of the 10m+ Game Pass subs are on console
XBLG, used by half of Xbox owners, is also exclusive to console
Most of this $11.6bn revenue is generated from console
Xbox charges a platform fee for each third party game sold on console, including for DLC
The majority of the 10m+ Game Pass subs are on console
XBLG, used by half of Xbox owners, is also exclusive to console
Most of this $11.6bn revenue is generated from console
Xbox cannot benefit from third party sales on PC/Mobile, given tiny share of Windows Store, just from first party.
It cannot benefit from Xbox Live Gold subscriptions off console.
It can benefit from game pass off console, but the service hasn't achieved scale just yet.
It cannot benefit from Xbox Live Gold subscriptions off console.
It can benefit from game pass off console, but the service hasn't achieved scale just yet.
This is why Microsoft needs to focus on two things.
1. A competitive console offering this holiday that has wide appeal this year and through the generation.
2. Retaining current Xbox console owners, either through last gen consoles or via upgrading to next gen Xbox consoles.
1. A competitive console offering this holiday that has wide appeal this year and through the generation.
2. Retaining current Xbox console owners, either through last gen consoles or via upgrading to next gen Xbox consoles.
Microsoft is taking a unique approach to this next gen console launch, with multiple options.
- Supporting last gen consoles with software and services (One S/X)
- Introducing a low cost next gen console (Series S)
- Introducing a power focused next gen console (Series X)
- Supporting last gen consoles with software and services (One S/X)
- Introducing a low cost next gen console (Series S)
- Introducing a power focused next gen console (Series X)
The goal here is to provide a product that appeals to current base & new buyers.
The Series X will offer the most power of next gen consoles.
The Series S will offer less power overall, but the same next gen games and experience at a lower cost.
Both are advantages over PS5.
The Series X will offer the most power of next gen consoles.
The Series S will offer less power overall, but the same next gen games and experience at a lower cost.
Both are advantages over PS5.
Game Pass is of course the secret sauce, especially for Series S due to its low price point.
Series S can very much pitch itself as the cheapest way to jump into next gen, with an expanding library of games available via Game Pass.
Both for new buyers and existing owners
Series S can very much pitch itself as the cheapest way to jump into next gen, with an expanding library of games available via Game Pass.
Both for new buyers and existing owners
The Halo delay will certainly have an impact on launch sales, but that may not matter too much to people who are more interested in next gen COD or NBA and see Series S as the best and cheapest way to access that.
Especially if Series S is far cheaper than PS5 / Series X.
Especially if Series S is far cheaper than PS5 / Series X.
In other words:
- Game Pass on any device is indeed the future entry point to the Xbox ecosystem, but right now it provides the most value and is most accessible on console.
- Console is still where Microsoft generates most of its revenue through software and services sales.
- Game Pass on any device is indeed the future entry point to the Xbox ecosystem, but right now it provides the most value and is most accessible on console.
- Console is still where Microsoft generates most of its revenue through software and services sales.
- While the Halo delay will have an impact, Xbox can still win out in terms of power (Series X) and price (Series S) and overall value (Game Pass).
- I personally think PlayStation has the best proposition right now for core console gamers, but it's worth watching Xbox.
- I personally think PlayStation has the best proposition right now for core console gamers, but it's worth watching Xbox.
Oh and as a disclaimer the Xbox Series S hasn't been announced or priced at all. I'm just going off news articles and leaks to come to the conclusions above.
Thanks.
I haven't done a breakdown like this for PlayStation, but I did do a thread on the PS5 Future of Gaming event here-
I haven't done a breakdown like this for PlayStation, but I did do a thread on the PS5 Future of Gaming event here-
