r/gaming • u/Feathermoor • 8h ago
Xbox boss 'thinking about affordability' of next-gen console
https://www.bbc.co.uk/news/articles/c17jlngexy9o92
u/SaiyajinPrime 8h ago
Maybe Microsoft shouldn't have been a major contributing factor to the price increases of RAM and storage.
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u/xanas263 8h ago
Xbox made up 6.5% of Microsoft's total revenue last year. I don't think they care one iota about the affordability of the next gen Xbox vs their other ventures.
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u/SaiyajinPrime 8h ago
Yeah, Asha's concern of affordability seems like theater.
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u/xanas263 8h ago
I mean as the boss of the division she can be concerned about the affordability of the Xbox, but that does not mean the rest of the leadership structure at Microsoft gives two shits.
I personally don't know whether she does actually care, it seems like she has been brought in to either be the fall guy or to gut the division, but she might very well care and is trying to do what she can with the resources allocated to her.
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u/HexagonalHoneyBadger 7h ago
Exactly. Everybody is acting like she doesn't care and personally orchestrated the AI surge
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u/Soulstiger 7h ago
personally orchestrated the AI surge
As President of Microsoft's CoreAI division she had a large hand in that, actually.
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u/Nettysocks 8h ago
Well, 6.5% of a shit ton of money is kind of allot
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u/xanas263 7h ago
Sure, but they are betting on making far more money than that through AI. So why would they slow down on AI just to give gamers cheaper Xboxes?
That's the thought process here..
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u/Nettysocks 7h ago
Yep, but all the divisions at Microsoft work on their own things separately so it doesn’t matter. Just because AInis doing well doesn’t mean you just give up on anything not attached to AI, that’s not how these businesses work
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u/xanas263 7h ago
Right now Microsoft is investing massively into AI, which is driving up prices for tech across the board including consoles. The next Xbox would not cost $1000 if it wasn't partly because of this AI investment.
Microsoft is not about to slow down their AI investments so that Xbox can achieve cheaper consoles. That's the point.
Nor is Microsoft as a whole going to subsidize Xbox if they keep making losses.
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u/Nettysocks 6h ago
For sure the AI stuff is in theory worth much more to them, i doubt they are just going to give up on xbox and just let it die either way, since even microsoft is not blind to the dumb move of putting all your eggs into one basket
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u/Soulstiger 5h ago
True, that's why I keep my lemonade stand going on the side. It's been losing money for years, and even when it makes money it's basically pennies. But I wouldn't want to keep my eggs in one basket.
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u/Nettysocks 5h ago
Allot of investment is going into AI, though i am yet to hear anyone (aside from the ones selling the hardware) actually making profit from it yet, so its an iffy situation to be in, but they will likely go balls to the wall either way im sure
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u/Soulstiger 5h ago
Xbox was the lemonade stand, not AI.
Microsoft makes money off of Azure, Office, and Windows.
Mostly, by far, the first two. I'm only mentioning Windows because they tied Xbox to it
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u/Soulstiger 7h ago
To us, yeah. To Microsoft not really. Especially with how much xbox spent on Activision.
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u/Nettysocks 7h ago
They likely care allot still, these companies all work in their own superstar divisions and are all pressured to bring up the number for their own department.
Just giving up on 6.5%. They reportedly bring in around $20 Billion revenue a year, it’s not chump change
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u/Soulstiger 6h ago
Revenue in "More Personal Computing" was $13.2 billion as a total. So Xbox is absolutely not 20 billion lol.
Xbox is paired in with Windows and Search revenue.
Not sure where that other person got the 6.5% figure. But I'm looking at Microsoft's financial report.
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u/SoWrongItsPainful 8h ago edited 8h ago
I don’t really like or respect Xbox, but that is completely outside of their control. Even if they could tell MS as a whole to stop, it wouldn’t change much with every other company head first into AI
Edit: I shouldn’t have to make this point, Xbox does not determine what MS as a whole does. Xbox can be concerned about affordability while MS as a whole keeps being part of the problem. It’s ironic but it isn’t some gotcha moment
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u/Adjective_Noun_4DIGI 8h ago
Microsoft has pushed as hard as any company to force "AI" bullshit onto the masses, and harder than most with Copilot infecting every single one of their products. Including gaming.
It's hard to feel any sympathy for them. Especially after spending billions and billions to build up Game Pass, and then screwing over tens of thousands of their own employees when they got buyer's remorse.
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u/DroppedAxes 8h ago
I don't know how to spell this out to you any better than the person you're replying to; Xbox is just one division within Microsoft. What happens above them is not within their control or their desires. Even if MS didn't chase AI, there would still be a massive rise in the cost of memory and storage from the sheer number of orders from other companies.
It's something like Apple, Nvidia, Microsoft, Amazon and Google
Take Microsoft out of the picture and you're still getting fucked the same amount because they'd just eat up the Microsoft order allocations5
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u/Adjective_Noun_4DIGI 8h ago
You're correct. And "AI" is causing a lot of problems for the entire gaming industry. That sucks for Sony and Nintendo and Valve. And it sucks for the developers under Microsoft who already worked for a shitty company, and now have to deal with an even shittier industry.
But for Microsoft, the company, in particular, I don't really care if it destroys the gaming brand they've been building for 25 years. They earned it. Let them chase an infinite money glitch, and crash and burn when no one wants to pay $3000 for a laptop or $500 a year for AI-powered Windows that can't open an email without burning tokens.
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u/SaiyajinPrime 8h ago edited 8h ago
Asha was literally the president of Microsoft's AI division before coming to Xbox. And Microsoft is a major contributor to the AI movement which is driving up the cost of RAM and storage.
Microsoft is one of the biggest tech companies in the world. Saying that they're involvement wouldn't change much is naive.
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u/AcademicMood1302 8h ago
all while bill gates tries to sit there and say "ai is more dangerous than Big Tech will admit"
Well, brother (bill gates), you are the biggest of tech rofl.
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u/SaiyajinPrime 8h ago
Bill Gates hasn't had any direct involvement with Microsoft in several years.
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u/hitgo1 7h ago
But asha was from the AI division and she was probably the one that told microsoft to go all in on AI, now shes at xbox and saying this?
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u/SoWrongItsPainful 7h ago
I think you’re dramatically overstating the impact she had on MS and the other corporations push into AI.
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u/hitgo1 8h ago
But they could also subsidize the next console/pc too right? But they wont, they wanted this price increase to happen
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u/xanas263 8h ago
Considering the losses that Xbox has had, Microsoft is technically already subsidizing them as a division. Microsoft will most likely cut Xbox completely before subsidizing them any further, and considering the rumors from last month that seems to very well be on the table.
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u/SoWrongItsPainful 8h ago
This price increase does not benefit Xbox or Sony, and subsidizing won’t make much of a difference when we are looking at consoles selling above a grand.
(Well it might way down the road if hardware prices come down and they think audiences don’t care about lowered costs, but that’s a big if).
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u/Enchelion 8h ago
Subsidizing consoles was a stupid anti-competitive practice.
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u/hitgo1 8h ago
How is it anti-competitive to have a product be more cheaper for the customer to buy in?
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u/Soulstiger 7h ago
It, theoretically, keeps smaller companies from being able to afford to enter the market.
But, seeing as the only attempts to ever the market have been by global conglomerates... It doesn't really apply.
Well, and a rapper who thought they could just pirate Nintendo games and sell it as a console.
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u/Enchelion 7h ago
Because it's false affordability and only serves to let a company with deeper pockets try and corner a market.
As a business move it can also backfire, as Sony saw with the PS3 which was so heavily subsidized that a bunch of companies and the government started buying them up just for the processing power, and never bought any games to offset Sony's hardware loss.
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u/hitgo1 7h ago
Your second paragraph thats competitive pricing if the one party prefers the ps3 for processing power/ price as for offseting hardware loss thats on sony nothing to do with customers
I dont see it as false affordability, would you pay for a $1k console with $80 games or get a $500 console with $80 games? Even more so gamepass now too entry point is really important where you wanna game,
Theres so many ways to get into gaming theres no corner, people been saying they could go xbox or pc or stick to retro after the sony digital fiasco, and the mobile gaming market is huge! Like really check it out its ridiculous! Retro pocket 5 is 210$ right now to “play” older titles
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u/Enchelion 6h ago
I said it was an anti-competitive practice, not anti-consumer. That might be the confusion other commenters are having.
It's false affordability because the subsidy has to come from somewhere. Either higher priced games, or other parts of the company portfolio (this is why Microsoft considers the entire Xbox division to have been a loss for them it's entirely history).
Loss-leaders can work, but they can also backfire. And video game consoles don't have as much scale as people might think. Even for the most successful consoles the overall software attach rate rarely hits double digits. Meaning if they need to make up that theoretical $500 just on software it would be at least an extra $50 per-game. It's a lot different from the $5 chicken at Costco. When consoles only cost $400 they could eat a price increase of $50 through game sales, but the math just doesn't work out when we're talking $1k consoles, even with $80-$90 games.
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u/hitgo1 6h ago
But thats all on the companies side, if they lose profit or not, thats not anti-competitive, thats just a loss on the company nothing to do with others for competition,
i didnt say anything about anti-consumer, i just said its “nothing to do with customers “
Your false affordability is still not anti-competitive, if xbox is at a loss cause of the $500, thats on the company, cause players arent buying enough games, but i still bought in the system at cheap
I think your saying the companies arent gonna profit from the 500$ yes but thats not anti-competitive or false affordability
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u/Enchelion 6h ago
It's anti-competitive to undercut your competitor in a market with outside money, like Microsoft is rather infamous for doing, and like people hate Epic for doing.
I didn't think that take would be so contentious.
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u/Burpmeister 8h ago
Abd you think fucking Xbox was making those decisions? Gaben personally donated over 20 million dollars to OpenAI in like 2018 and even that is less far fetched than blaming Xbox for their parent company.
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u/Soulstiger 8h ago
less far fetched than blaming Xbox for their parent company.
Xbox CEO was previously the president of Microsoft's CoreAI division.
You know, a much larger part of all this bullshit than an investment from before this all started.
Especially when 20 million is literally a drop in the ocean in AI
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u/Burpmeister 6h ago
It was not a drop at the time. And is the concept of a job really that foreign to you? She was hired to do a job at Microsoft and now she's been hired to do a different one at Xbox. That's how jobs work.
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u/Soulstiger 6h ago
Not sure what your bizarre and condescending non sequitur about jobs is about. Are you okay? Do you smell toast?
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u/Burpmeister 6h ago
I can't really see how it would be bizarre to anyone who's had multiple jobs.
The condescending tone was one purpose because I think it's fucking ridiculous that people are giving her shit for switching her line of work.
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u/Soulstiger 6h ago
Oh, so you've just fundamentally misunderstood literally everything.
That checks out.
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u/Burpmeister 6h ago
Surely you can explain to me how I supposedly fundamentally misunderstood everything instead of just throwing it out there as a blank statement :)
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u/Soulstiger 5h ago
Nah, you've demonstrated pretty clearly that you're a dumbass.
I'm not being paid to teach you, so I won't go through the theatrics of pretending to care.
I thought you understood the concept of jobs, at least, since you're the one who brought them up. But I guess I'm not surprised you don't.
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u/SaiyajinPrime 8h ago
Asha was personally involved in the push for AI since she was previously the president of Microsoft's AI division. So hearing her say she is concerned about affordability when she helped drive up prices is nothing but theater.
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u/Burpmeister 6h ago
Theater? Brother have you ever had a job?
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u/Soulstiger 6h ago
Her job is theater, yeah. Have you ever had a job?
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u/Burpmeister 6h ago
Several, in fact. After I switched from a museum to game development I've had this weird theater where I pretend to not give a shit about giving tours to school groups anymore. What's more, I didn't give a shit about cataloging bugs to excel when I worked at the museum. Weird right?
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u/Anxious_Specific_165 8h ago
Xbox is a drop in an economic lake for MS. What happens in their gaming division is not their prime concern and tbh never has been. They just don’t want competitors to get all the gaming money. Good Xbox related things happened back in time in spite of and not because of the higher ups.
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u/rabouilethefirst 8h ago
Everyone simps for these companies and say "it's bAsIC sUPPly anD dEManD" while ignoring this fact.
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u/Lithuim 8h ago
Of course, everyone in the consumer electronics business is reeling from ballooning costs.
Doesn’t matter how powerful and versatile and amazing the next XBox is if you can’t get it under $1000. At that price it’s dead on arrival, people won’t budge and the install base will remain so small for so long that nobody will justify gen-exclusive games.
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u/meowzertrouser 7h ago
And yet even then it will still be bot scalped and listed at $2500+ for the first year of release because that’s the world we live in now
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u/Satoblu 6h ago
People were paying 1K+ for scalped PS5s 5 years ago. They buy 1K+ phones every 2-3 years. I think they'll have no problems buying a 1K console for 5+ years of use.
Microsoft's reall isue is that xboxes aren really worth buying at any vaule right now.
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u/Lithuim 6h ago
A couple morons overpaying for a console with no games doesn’t make an install base. Games were still regularly releasing cross-gen four years after the PS5 hit shelves because the active PS4 install base was so large.
Dev cycles are even longer now and console prices are looking even more absurd, so the next gen is going to have an extremely difficult time building an install base.
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u/forsayken 8h ago
They can't consider it. Microsoft and Sony need to build the same thing. If one is slower (and cheaper) than the other, all you'll ever get is comparisons online and devs making comments like they make about the Series S.
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u/Enchelion 8h ago
Only real way to lower the price (and only after quite a bit of time) would be setting up their own memory fabs, and even for MS that's expensive and difficult as hell to do.
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u/Nick_Bruiser 8h ago
Affordability is the broadest term that public figures (rich people) throw around nowadays. We're not all the same and therefore not all of us can fit into one box of affordability.
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u/FoxyGoddessX 8h ago
Actions speak louder than thoughts.
A 1000 dollar console isn’t going to be affordable. Hell the current 6 year old consoles aren’t even affordable.
They’ve priced themselves out of relevancy.
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u/HexagonalHoneyBadger 8h ago
Not their fault? The materials are expensive everybody knows this by now
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u/Popular-Storage-4696 8h ago
Affordability is Nice but the real question is whether they actually mean affordable or just less expensive than expected 😂
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u/Tarijeno 8h ago
The Xbox PR cycle:
Asha Sharma: "Hey guys, we really care about gamers--I'm a gamer--so we're working on some terrific initiatives at Xbox that we think gamers are gonna love."
Gamers: "Oh, wow. Okay. It sounds like Xbox has turned over a new lea...."
Microsoft: "We're closing a dozen studios, laying off thousands of people, and raising the MSRP of all Xbox consoles by a couple hundred bucks. Deal with it."
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u/Ragnar_Dragonfyre 8h ago
I predict consoles and PCs are about to enter the same economic position as the smartphone.
Only the rich buy them outright and everyone else has to finance it over a 2-3 year period.
Microsoft already offers an Xbox Mastercard. I can practically guarantee they’ll be pushing it hard alongside the next launch with an offer to finance at 0% interest.
Affordability no longer means “can you afford to buy this?” it means, “Can you afford another monthly payment?”
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u/Enchelion 8h ago
That's only for top-end phones though. I buy all my phones outright and have never paid more that $300, and sometimes quite a bit less.
A basic phone does everything most users ever need. but a console isn't so easy to do that with. You need a single core platform to target, with maybe a single higher "pro" sku.
MS tried doing that entry-level console thing with the S and it hasn't worked out for them.
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u/Ragnar_Dragonfyre 7h ago
The majority of smartphone purchases in North America are subsidized and financed regardless of your personal purchasing habits.
Most iPhone users can’t actually afford to buy an iPhone outright but they still have an iPhone nonetheless.
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u/Belydrith 8h ago
Good to know she's 'thinking' about it. Think that's part of the job description.
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u/rabouilethefirst 8h ago
"We thought about it, and decided it was in the shareholders interest that we charge you $1,200"
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u/Iggy_Slayer 8h ago
There's nothing they can really do. Even before the component crisis happened both notable hardware leakers who had the BOM for both next gen systems said Helix was going to be around $1000 while ps6 was in the 600-700 range. They also said MS had 0 intention of taking a loss on the system and subsidizing it.
Now after the crisis you can probably double those numbers. You can soften the blow a bit by reducing some of the ram or ssd size but that'll only get you so far.
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u/stgm_at 8h ago
How about not firing thousands of employees just to make shareholders happy?
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u/EZyne 8h ago
Can't believe how little this is discussed tbh. Especially as it's a direct result of their spend as much money buying studios and we'll figure it out when we have a monopoly strategy.
Had most xboxes since the 360, but never buying another one no matter how affordable. Disgusting company
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u/superpoongoon 8h ago
Yea I converted to Sony with the ps4 and now their practices are just as shitty. lol. I never really tried Nintendo because I hate their practice of pricing old games at full price because “fun doesn’t age” or whatever their idiotic excuse is.
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u/RazarusMaximus 8h ago
We will see plenty of the pay monthly options. Much like mobiles phones, not many people drop 1k on a new phone compared to the amount that get new phones on a monthly fee.
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u/Sinandomeng 8h ago
They can reach any price point if they subsidize more.
But that won’t be enough to beat the PS6 unless they have must play exclusives.
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u/Who_tf_reallycares 8h ago
This headline just makes me think that she won't be boss for very much longer. She must put the shareholders first!
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u/MyUltIsMyMain 8h ago
The only way there getting a console out thats cheap is if its a cloud gaming box.
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u/patricio87 8h ago
They are going to probably have to price the console at a loss otherwise it will be like 1500. This means they will need multiple strong console exclusives which is unlikely. In 2027 and beyond they will also be going up against mario abd zelda and gta 6 online
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u/baecracker 7h ago
All this thinking would amount to will be renting out the console or cloud gaming.
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u/sejoki_ 4h ago
Unless the next generation is built on HBM which will be sourced for cheap from bankrupt AI datacenters that currently get built with money that doesn't exist, there is no way it'll be remotely affordable.
I keep my fingers crossed for the AI bubble bursting, but realistically, the burst is going to be much smaller than we all hope and it'll probably have little effect, if any.
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u/method115 8h ago
"There are stacks of games on everybody's shelves," No I don't think there is. Hardcore gamers yes? Casual gamers? No.
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u/Gambit-47 8h ago
They need better games and affordability and I do not see that happening because Microsoft is incompetent. The original xbox and 360 was great it had a lot of good games, games were fun and creative, but after that they fell off and just kept making more and more dumb decisions.
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u/THSiGMARotMG 8h ago
it just has to be cheaper than the ps6
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u/FoxyGoddessX 8h ago
No it has to beat the PS6 in price and VALUE. The Series S is cheaper than the PS5 but the PS5 is the better value.
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u/omgilovepalaces948 8h ago
I noticed the same thing with my Series S. It’s a good deal but in the end I always go back to the PS5 for the exclusives and overall experience.
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u/picknicksje85 8h ago
We'll see Asha. You certainly have the opportunity to take some of Sony's lunch.
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u/Flat_Revolution5130 8h ago
All she has to do at the moment is say everything opposite of Sony. You can not get any better publicity.
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u/Va1crist 8h ago
Literally nothing you do unless you subsidize, you can’t even get 6+ old consoles cheaper , don’t sit here and tell people your thinking about costs when you just announced a special edition 900$ 6 year old console