Could the Xbox Scarlett be Microsoft's last Console?

[Jtbrig7390]

This story is a good read and ill add my opinion at the end.
https://metro.co.uk/2019/11/23/next-...are-item-0-280

That time is almost upon us once again, the time when console platform holders will begin hyping their next wave of gaming hardware. In the next 12 months we’ll surely see Microsoft and Sony taking to stages, talking about graphics, processors, GPUs, teraflops; flashing nondescript images of console circuitry which will mean little to any of us and playing highlight reels of impressive looking games that may or may not be representative of actual software. The talk, trailers and occasional barbs make it seem like they’ll be promoting a WWE wrestling event. Yes, next year, the console wars begin again, and for Microsoft I personally feel that this may be their last roll of the die. Let’s get the obvious out of the way first, the Xbox lost the current generation in a big way. Microsoft provided further evidence that third system syndrome is real, with the Xbox One joining many other underperforming third efforts such as the Atari 7800, PlayStation 3, N64, and Sega Saturn. I find the last console in that list intriguing as the more I thought about the endeavours of Microsoft in the console space, the more I saw similarities with Sega. Both saw their early entries enter generations with more powerful hardware (Master System/Xbox) than the market leader (NES/PlayStation 2) and despite finding success in certain Western regions, and gaining strong cult followings, they were never quite successful enough to truly challenge the incumbent rulers of the console division at the time.

The successor to that console was therefore a plucky underdog. Both the Mega Drive and Xbox 360 came to market early and captured its key rival’s core audience for a while in one of the most evenly contested hardware battles of all time, against what was commonly considered technically superior opposition in the SNES and PlayStation 3. But while many fans were made, and the consoles were undoubted successes, both efforts by Sega and Microsoft ultimately ended losing to Nintendo and Sony, respectively, in the long run – underpinned by the Mega Drive and Xbox 360 underperforming in Japan.

You can even look at the add-on hardware Sega and Microsoft have offered. Both decided to release hardware to augment their existing, and most successful, consoles with peripherals which reflected what was in vogue. For Sega the rise of CD storage and NEC’s success with the PC Engine CD-ROM necessitated the birth of the Mega CD, while Microsoft saw the rise of motion controls and Nintendo’s success with the Wii and felt that Kinect was a viable way to increase the system’s lifespan. Both add-ons were initially moderately well received but were later looked back on as mistakes (though the Mega CD has gone full circle and has something of a cult following now, I expect Kinect to do the same). And lo, they were the first of many missteps that ultimately doomed their next system. The reasons for the relative failure of both the Xbox One and Sega Saturn are too numerous to document, but in both cases you can pinpoint the E3 before their respective console launched as the time when their fates were sealed. For Sega, the console was perceived as underpowered compared to its rival, with a focus on 2D that was considered old hat, confounded by a price that many punters balked at.

All Sony needed to do at E3, to put PlayStations in gamers’ homes, was utter one phrase: $299. For Microsoft, the console was perceived as underpowered compared to its rival, with a focus on motion controls that was considered old hat, confounded by a DRM strategy that many punters balked at. All Sony needed to do at E3, to put PlayStation 4s in gamers’ homes, was utter one phrase: that the console could operate offline and used games wouldn’t be a problem (It did help that it was cheaper too). Before we get to console number four, let’s take a diversion into the PC space. Both Sega and Microsoft saw their key franchises released on PC while fighting fiercely in their respective console wars.

For Microsoft this was expected to a degree, with Halo, Forza, Gears Of War, and more making their way to the platform. For Sega, it was less expected, but not seeing the PC as a threat to their console business they saw fit, under the Sega PC brand, to release games in series such as Sonic The Hedgehog, Virtua Fighter, Sega Rally, and more. With all that in mind we know precious little about Microsoft’s Project Scarlett, but from what we do know about Microsoft’s strategy we can compare it to Sega’s fourth and final major system, the Dreamcast. The Dreamcast aimed to course correct following the missteps of the Saturn and much of this can be seen on Microsoft’s side too, as they prepare their next console. The rapid acquisition of development studios to bolster the next Xbox’s portfolio is an approximation of Sega’s purchase of Visual Concepts, their partnership with studios such as Azure and Appaloosa, and the reorganisation of their internal teams.

Then there’s the desire to have a Halo game launch with their new console, which mirrors Sega’s decision to do the same with Sonic. Halo Infinite is Scarlett’s Sonic Adventure. Sega certainly wooed gamers by saying all the right things back in 1998 and Microsoft have been doing much of that over the past few years. But one thing that Microsoft have going for them that Sega didn’t (aside from the mountains of cash unrelated to gaming, in comparison to Sega’s near bankruptcy) is Game Pass. Game Pass has been a hit, the Ultimate version, which combines Xbox Live and the PC pass is a masterstroke. In time, this will be further complimented by what we are led to believe will be a best in class streaming service.

It currently leaves the Xbox brand in a very strong position. With Game Pass, Project xCloud, and Microsoft’s mighty coffers, the next Xbox surely couldn’t go the way of the Dreamcast, could it? Actually yes, it could. Phil Spencer certainly hasn’t shied away from suggesting Xbox games could go multiplatform. You have Cuphead and Ori on the Switch, the aforementioned PC support which now includes Steam, and finally Phil mentioned this year that he wouldn’t mind Gears Of War appearing on PlayStation. It seems to me that Microsoft have hedged their bets for the next generation, and should their next box fail, they’re well positioned to join Sega as a software-only company when it comes to next generation hardware. Xbox Two going the way of the Dreamcast? Stranger things have happened…

While Microsoft has carved out their on part of the pie and have gained a fan base. All 3 generations of Xbox have came in dead last when it comes to sales compared to the other systems. Even when Sony was at their worse the PS3 outsold the 360 in all markets besides the US and the overall sales of the PS3 was higher than the 360 even tho it was just by a little.

What I honestly don't get is why they are trying for a 4th time to reach the Japanese market. The Xbox One was being outsold by the Vita.

Now I honestly hope they stay around and don't go pure software like SEGA because Competition is good. The thing is Microsoft (IMO) has copied SEGA's playbook dam near step for step and we all know where that ended.

I think the next generation of consoles will be very interesting to watch but I will say this despite what Phil Spencer says the Xbox Scarlett needs to be a home run. Also (IMO) they should just keep the name Xbox Scarlett, Its already a known name.

What do you think Microsoft needs to do to stay in the console market? and how do you think Next gen will play out?

[dope_danny]

I think if its another flop like the xbone they are just going to go full digital storefront. Why waste money on making hardware when you can still have a pay for entry ecosystem while selling your next gears of halo game to more customers across more platforms. I think gamepass is the live experiment to test the ground already just in case.

[Tech614]

I think if its another flop like the xbone they are just going to go full digital storefront. Why waste money on making hardware when you can still have a pay for entry ecosystem while selling your next gears of halo game to more customers across more platforms. I think gamepass is the live experiment to test the ground already just in case.

I mean, you say this but they are literally pissing money away trying to make Xbox relevant. You think gamepass is making them money when netflix doesn't even turn a profit? Consider all the AAA games on there they have to pay publishers for, on top of losing sales of their own first party games by putting them on there at release on top of often giving away 3 months for $1 and other absurd deals.

Xbox has always been a money pit for MS, and it looks like they are doubling down on losing money into the black hole now more then ever. MS is a company with loads of disposable income so it's highly likely it stays around as a "prestige" brand of sorts even though it's never going to be a profit driver for them.

Go digital only wouldn't help them, because they're loss leading out the ass and losing as much money with digital services as they are with hardware.

[Skizzit]

Nah. There is one huge difference between Microsoft and Sega, Microsoft is a much, much larger company with many different divisions. Even if the next Xbox is a failure, they can easily afford keep that part of the company afloat. They will continue to make new versions of the Xbox even if it is just to keep the brand alive while to search for other ways to make a profit in the gaming industry. Also, if they did want to focus mostly on their digital store front, they would almost have to keep the Xbox around to support it. There is no way they would be able to compete with Steam and the Epic store if they made the Xbox store PC only.

[Jtbrig7390]

Even if the next Xbox is a failure, they can easily afford keep that part of the company afloat.

Microsoft is a public traded company.

Doesn't matter how much money they have, If Scarlett bombs as hard as the XB1 did they will have to fold that division up. Share Holders have been requesting for the division to be shutdown for ages, It makes Microsoft little to no money.

It will reach a point where they will have to listen to share holders or risk losing lots more money.

So Scarlett needs to be a home run and while Game Pass is great value they are making nothing off it.

[Vash The Stampede]

I mean, you say this but they are literally pissing money away trying to make Xbox relevant.

You mean Microsoft hasn't pissed away money at something that doesn't work? Let me check that out with a Windows Mobile phone.

You think gamepass is making them money when netflix doesn't even turn a profit? Consider all the AAA games on there they have to pay publishers for, on top of losing sales of their own first party games by putting them on there at release on top of often giving away 3 months for $1 and other absurd deals.

Nobody does anything for nothing. Most of the games on Xbox Game pass are financially dead, so if publishers can make a few pennies then they'll be more than happy to throw their games on there. The few modern games on there are there to get you hooked.

What do you think Microsoft needs to do to stay in the console market? and how do you think Next gen will play out?

Xbox is dead and Microsoft should just embrace PC gaming. By embrace I mean not with extinguish as the final result, as they have a tendency to do that. As for the console market, it won't make it through the next generation without losing majority of the audience. With the PS5 rumored to be $500 I can see a lot of PS4 gamers keeping their PS4 for a while longer, while some might migrate to PC. Microsoft will obviously try to merge Windows gaming with Xbox, but that'll fail horribly. Xbox Scarlett will be a glorified Windows 10 PC specialized for gaming.

[Miyagie]

Netflix and not making profit.... lol

[Jtbrig7390]

Netflix and not making profit.... lol

That would be correct, Netflix isn't making a profit.

https://www.forbes.com/sites/greatsp.../#2baf8875ed0b

Hell Amazon was running for almost 10 years before making a profit.

[Sughs]

I have been saying for years, there's no actual reason to own a XBox. And with things like PSNow improving by the month there's no big reason to own any 8th or 9th generation console either. Specially since all 3 consoles require subscription to play online. And this is coming from someone who spent countless hours defending consoles' place in the market against PC eltists up until the end of the 6th generation.

Just play everything on PC, sub PSNow for Sony single player exclusives(even if 1 year or 2 after they release) and I guess if you like to play the 35789057th Zelda/Mario/Pokemon buy a Switch.

[Jtbrig7390]

I have been saying for years, there's no actual reason to own a XBox. And with things like PSNow improving by the month there's no big reason to own any 8th or 9th generation console either. Specially since all 3 consoles require subscription to play online. And this is coming from someone who spent countless hours defending consoles' place in the market against PC eltists up until the end of the 6th generation.

Just play everything on PC, sub PSNow for Sony single player exclusives(even if 1 year or 2 after they release) and I guess if you like to play the 35789057th Zelda/Mario/Pokemon buy a Switch.

Actually there is a few big reasons for some to own a console.

1) Cheaper
2) Ownership. I own all the physcial games I buy (besides online only titles clearly) and the vast majority of my games can be playable without net.

[Sughs]

Actually there is a few big reasons for some to own a console.

1) Cheaper
2) Ownership. I own all the physcial games I buy (besides online only titles clearly) and the vast majority of my games can be playable without net.

My PC was 900€ 6 years ago and I only changed the GPU for ~200€ this year. Kicks any PS4 Pro hard. If you add up 6 years of paying to play online and games costing 10-20€ more overall on consoles... It goes way beyond my spent 1100€ and the console owner played all those games without mods, lower graphic settings, etc.

[Miyagie]

That would be correct, Netflix isn't making a profit.

https://www.forbes.com/sites/greatsp.../#2baf8875ed0b

Hell Amazon was running for almost 10 years before making a profit.

They make profit but spend that money in a instand for more movies and shows.

[Zyky]

I don't see any console being the "last console". As technology gets better, graphics will get better, they'll move into a different era, into VR as that grows(honestly they should get their foot in now to VR consoles before it's too late).

[Tech614]

They make profit but spend that money in a instand for more movies and shows.

That's not how profit works, lol.

Netflix is spending more money then they're making. That is not making a profit... it's the exact opposite.

And just to keep this on topic, Netflix seeing their bubble about to pop isn't great news for Xbox which is trying to use game pass loss leading as a selling point. They'll be able to keep it up for a bit, until the investors take note and realize what is happening and then Phil Spencer will get his ass served up to them to explain why he is spending all this money and bringing in so little revenue.

[NatePsy]

I'd be more than happy to see it bomb, means more exclusives can stop being exclusives and finally come to PC.

[Rogalicus]

I'd be more than happy to see it bomb, means more exclusives can stop being exclusives and finally come to PC.

They are coming to PC either way thanks to Phil.

[kaelleria]

Shutting down the Xbox hardware would be foolish. I'm a firm believer in game streaming... as an alternative for those that don't want a console or as an on the go addon.

The gaming segment for Microsoft made over $10b in revenue in 2018. A most of that came from services, but a sizable chunk of that also came from hardware sales and game sales for Xbox. No hardware, no incentive for publishers to put games on their platform and no incentive for people to use their services.

There are still plenty of people that will want local hardware (we have enough of them on this forum) so I don't see a physical console Xbox going away for a long while yet.

[Skizzit]

I don't see any console being the "last console". As technology gets better, graphics will get better, they'll move into a different era, into VR as that grows(honestly they should get their foot in now to VR consoles before it's too late).

The biggest reason as to why gaming consoles will eventually be a thing of the past is that PC gaming continues to gain in popularity. The Xbox One and PS4 are already pretty much just stripped down gaming PCs. Eventually there will be little reason to separate consoles and PCs. I would not be surprised at all if within a couple generations the newest Playstation is just a PS branded PC.

I'd be more than happy to see it bomb, means more exclusives can stop being exclusives and finally come to PC.

I was always one of those people who hated exclusive games but lately I have begun to see them in a different light. Now games that are only exclusives because Microsoft or Epic or whoever bought the rights after the game was complete or nearly complete I still hate, but games that are developed by studios owned by Sony or Microsoft and are made specifically to be exclusives I have way less of an issue with. Mainly because they tend to be the types of games that probably would never had been made if the hardware manufacturer had not ponied up the cash in the first place. Talking games like Uncharted, God of War, and Horizon Zero Dawn. Games built from the ground up to be well made, single player gaming experiences. None of that "live service" stuff or truckloads of day one DLC. Far less profit in those kinds of games if the only goal is to make a game and then sell said game for a single price. Sony however is perfectly willing to produce these kinds of games because even if they will never make a ton of profit from the sales of the game itself because they are system sellers and will more then pay for themselves in the long run. Do I wish we lived in a world where the idea of just having a great idea for a fun game, developing said game, and then simply selling the game and moving on to the next game idea was the norm? Absolutely, but that isn't the case so really the most likely place to get those kinds of game is from exclusives.

- - - Updated - - -

The gaming segment for Microsoft made over $10 in revenue in 2018. A most of that came from services, but a sizable chunk of that also came from hardware sales and game sales for Xbox. No hardware, no incentive for publishers to put games on their platform and no incentive for people to use their services.

Over 10 dollars!?!

I know it is a typo, but it was pretty funny.

[Temp name]

I'd be more than happy to see it bomb, means more exclusives can stop being exclusives and finally come to PC.

All xbox games will come to pc anyway though.. All their big releases already do.

[Stardrift]

Nah. There is one huge difference between Microsoft and Sega, Microsoft is a much, much larger company with many different divisions. Even if the next Xbox is a failure, they can easily afford keep that part of the company afloat. They will continue to make new versions of the Xbox even if it is just to keep the brand alive while to search for other ways to make a profit in the gaming industry. Also, if they did want to focus mostly on their digital store front, they would almost have to keep the Xbox around to support it. There is no way they would be able to compete with Steam and the Epic store if they made the Xbox store PC only.

Do you not understand how companies work? They'll see it as red numbers and figure to toss it instead.