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Microsoft has been on the back foot.
Sales in Japan were even looking strong, as Microsoft described themarket as its “fastest growing” region.
The current generation of Xbox Consoles.
This past week, Microsoft didn’t sell thousands of Xbox consoles in Japan.
Not even hundreds, but instead,dozens.Meanwhile, the PS5 sold almost 40,000 units.
That’s a dire comparison that is near impossible to gloss over.
The current generation of Xbox Consoles.
Yet, Microsoft’s monthly active gaming users continue to swell.
The problem with this expansion is that it’s largely horizontal, rather than vertical.
By all accounts, Xbox is more profitable and has more revenue flowing through it than ever before.
The Logitech G Cloud for Xbox Cloud Gaming is decent, but without offering native play, the value proposition is debatable.
The monthly active user base has grown by huge amounts too, creating opportunities for recurring billing.
But Xbox Game Pass can’t grow like Netflix without a Netflix-like volume of addressable endpoints.
And that is a huge problem.
The PC Game Pass app has improved, but overall, it’s still awful.
And what exactly does that mean?
Well, essentially, that refers to having enough devices out there that can even useXbox Game Pass.
And right now, there simply isn’t enough.
The console is where the Xbox experience began, it cannot be forgotten.
Well, let’s examine that for a moment.
2022 was one of the dryest years in Xbox first-party game delivery in years.
It’s hard to know exactly what Microsoft’s goals are with its games these days.
A breakdown of our feedback on the Xbox experience.
Is it Xbox Game Pass engagement, or is it retail sales?
Hi-Fi Rush, Ghostwire: Tokyo, and Pentiment none of these games saw physical releases.
Will Microsoft blame the developers for not selling enough digital units?
Will Xbox be running up that hill?
Why should these games sell units, when they’re in Xbox Game Pass?
And if they’re not performing in Xbox Game Pass, who is then to blame?
And then there’s theXbox Cloud Gamingaspect of the equation.
However, the experience still isn’t good enough in various ways.
And again, at that point, I’m simply going to use my Xbox anyway.
The problem here is, the execution of this ambitious effort just isn’t good enough so far.
With diffuse objectives and split investment, the distractions risk undermining the console core of the gaming division.
Can Microsoft expand horizontally AND vertically?
What we’re seeing with the Xbox platform in recent years is the investment to meet that multi-modal future.
Microsoft doesn’t have infinite resources, though, despite its market cap.
Services likeBing Chatwhich are powered by ChatGPT, are reportedly costing an absurd $700,000per dayto run.
I’m sad to report that very little has been addressed in any meaningful way.
In fact, we actually lost a feature this week in the Twitter sharing tools.
Essentially putting us back at square one.
We asked for more support from Japanese studios.
Localization remains a prevalent problem too that fans on other platforms don’t have to deal with.
And yes, this survey isn’t scientific.
Localization remains a chicken-and-egg scenario too probably.
Why invest in improving regional language support when none of your customers are there?
Well, how will you get customers if your regional language support is trash?
And really, therein lies another major distraction.
I can’t help but feel like Xbox is stretching itself thin.
Xbox has been open about expanding to PC and Mobile for years.
PC Game Pass in particular is seeing a large push.
It’s more like a coalescence of smaller problems leaving Xbox consumers feeling second-rate.
I have no idea, but the evidence we have isn’t exactly encouraging.
It’s hard to see how the franchise, which Spencerpreviously describedas critical to Xbox, has a future.
Why would I use Xbox Cloud Gaming in a handheld over something native like the Nintendo Switch?
And right now, Microsoft isn’t.
It’s hard to deny the balance sheet, which Microsoft has to share as a publicly traded company.
Yet still, I worry.
Xbox consoles compete with PlayStation.
In summary, the strategy of expanding to other platforms makes complete and total sense.
It’s even desirable, but it shouldn’t come at the cost of what is already there.
In summary, the strategy of expanding to other platforms makes complete and total sense.
It’s even desirable, but it shouldn’t come at the cost of what is already there.
But, you know, it shouldn’t have to be ahackjob.
All of these things require developer bandwidth to resolve, and it comes at a cost.
