The live-action Halo series was so good. Anything else like it these days? I also liked Pantheon, Arcane, Atlas (2024), I Am Mother, Tau, and probably some others I'm forgetting. Total sucker for advanced tech/magic systems that are consistent.
(I even like some kids' shows too, like Tales of Arcadia and Miraculous Ladybug, just for having consistent tech/magic systems... also Daniel Spellbound)
That was probably one of the worst video game adaptations I've ever seen. Especially in comparison to recent additions like The Last of Us. No disrespect.
To be fair last of us after season 1 was pretty bad too. Halo got better in season 2 but the awful first season killed it. Other then fallout and arcane there haven't been any good game adaptations (on TV). I'd go as far as say that twisted metal was more fun than any of them.
The Last of Us season 2 was fine. They didn't follow the chronology and structure from the second game and it suffered because of it. People who didn't play the games probably didn't notice this.
It wasn't anywhere near the (low) quality of Halo season 1. Did they continue to show Master Chief's face in season 2? Because that alone ruined it for me. And they didn't even get his appearance right!
The architectural differences that made a console more compelling than a standalone PC are largely gone. (Nintendo is a bit of an exception here, but they were always playing a different market than Sony and MS anyway)
This means it's harder and harder to say "here's a unique experience you only get on Xbox" (or Playstation for that matter)
The price advantage is going away fast, especially with talk that next-gen consoles will top USD 1000.
All they have left is their prestige first-party products, which they don't seem to really know how to use effectively. Some of them have solid cultural penetration, and could spawn broader media franchises with the right handling.
Step outside an echo chamber and you'll see that in most countries, including East Asia and the Middle East, if you take a walk around any big mall, you don't see kids pestering their parents to buy them a PC. They ask for a PlayStation or an Xbox or a "Nintendo" (yep that's what people still call the Switch)
In conbinis, there are Xbox and PlayStation gift cards hanging from the shelves, in the local currency.
There are accessories for PS/Xbox/Switch everywhere, more than PC gaming accessories.
And it's not because the PC stuff gets sold out while the consy stuff gathers cobwebs: If that was the case the consoles would stop getting restocked after a few months, but they keep stocking newer stuff. Meanwhile I have to hunt around and specifically request for Razer or Mad Catz or other PC-specific brands.
> The architectural differences that made a console more compelling than a standalone PC are largely gone.
If you go hang out at someone's home, nobody says "Let's go to my bedroom desk and play something on the PC", no they crash on the couch and turn on the TV and fire up FIFA or some other normie shit.
> Step outside an echo chamber and you'll see that in most countries, including East Asia and the Middle East, if you take a walk around any big mall, you don't see kids pestering their parents to buy them a PC.
This is still the case in the U.S. for the most part. The point is moreso that barrier to entry is lowering. The SteamDeck is a PC/console and a good example of a possible trend in that direction.
It feels like the problem was the market ended up in a race to the bottom and so most of the made-for-PC controllers just sucked. The best option was to buy your preferred console controller and use that with PC.
> Meanwhile I have to hunt around and specifically request for Razer or Mad Catz or other PC-specific brands.
Since you mention conbinis, I'm guessing you're in Japan. Having just been there, game software is receding from the smaller hobby stores, and then in the tech stores like Bic Camera, the PC gaming stuff is one floor down.
> The architectural differences that made a console more compelling than a standalone PC are largely gone.
No, the main driver is still there. People do not want to build and maintain PCs. Your 14-year-old nephew doesn't want to do it, either. People want to turn on a box and play a game. I am technical and I want absolutely nothing to do with maintaining a PC. I'll take the console experience every single time.
The performance cap on a console makes a big difference to me which is why I only play on the PC. It’s also not rocket science, you can just buy a good gaming PC. Games look an order of magnitude better on the PC in some cases.
You’re mostly correct but there’s truth to the original statement. Back in the PlayStation/N64 through to PS3/Xbox 360, consoles were so different to each other and PCs that porting games was a major task that resulted in very different outcomes.
Since the PS4/Xbox One, they’ve been similar enough in underlying architecture that engines like Unreal have been able to smooth over the differences enough to make multiplatform technically viable. It’s meant companies like Capcom with RE Engine have made a huge success out of selling across all platforms, including PC. That freedom for publishers is a problem for console manufacturers who have fewer 3rd party exclusives as a result.
People can buy a prebuilt pc running steamOS automagically updating itself with immutable images.
The advantage of consoles are:
- No minimum/recomended config to check and insurance that a game or an accesorry bought for a console gen will work well for that console gen. In term of game compat this is something Steam tried to with the steam deck but has no way to enforce really and the biggest one imho. When you buy a brand new "budget" computer in the price range of a console you usually knownyou won't be able to play some of the upcoming AAA titles at least woth decent graphic quality.
- availability in retail stores
- ability to sell games in the second hand market but I don't think this is something that is here to stay with the disappearance of physical medias
This is why I've never gotten any of the more recent consoles (since the N64 or so)... many of my friends have them, and every time we try to turn them on to play a game they start updating and rebooting and updating... I can play games on my computer, which I have other incentives to keep up to date, so the maintenance time is amortized; just double click and it works.
My take is that almost nobody has a standalone PC anymore, especially kids. Kids these days all start with iPads, them maybe they move up to Macbooks once they get to high school or college. Other than the local LLM fanatics I see here on HN, I have no idea who's buying those PC towers anymore, they seem like fringe relics from the past century.
People who want their games to look prettier and run smoother than what you can get out of the thermal and power budgets of laptops would be the ones still buying the desktops. If you additionally value a not too noisy environment home, then water cooling is way better and more accessible in the desktop form factor (though this is still niche at least for the gpus where all-in-one units are basically non-existent). Laptops are by all means nice toys as well, but on the go phones are better entertainment while in transit, and once you're somewhere you left the comfort of your home to experience it's rarely for your gaming hobby (however it might be a setting where you're reminded that computers are still relatively cheap compared to certain music instruments or sports equipment).
I know the theories about Microsoft selling Xbox or spinning it off are common on the internet these days. They might even make sense from a high level business prospective. However, I don’t understand how they could do it from a technical standpoint without still having huge leverage on the company buying it. Xbox runs a customized version of NT, DirectX and HyperV as far as I know. Any company buying it would have to get some licensing deal from Microsoft to further develop and maintain NT and HyperV or rely on Microsoft doing the development which both seem unrealistic for any company to wanna pick up, or for Microsoft to give away. I know they don’t really care about Windows these days, but still.
I’m sure if they are forced to (legally or otherwise) they can find a solution, but it would be a thorny thing to split.
In this case it is none of the above and it is about deals on selected ip characters for movie/shows production but there are many ways to "buy" stuff. In theory Microsoft could just shutdown the xbox divisions and just sell the XBox brand + some selected IP rights. The buyer would be free to use whatever tech they decide on next iteration of console/OS.
Yes, I know that this article is about IP rights for Netflix shows and movies. OP said they initially thought it was for all of Xbox, which is a theory that's been gaining traction online in gaming and tech spaces that Microsoft is trying to sell the Xbox business maybe to Tencent, a Saudi fund or private equity[0]. There were a bunch of threads about it on various gaming subreddits.
It's clear they're planning on taking a big swing with this new Project Helix, and it doesn't feel like they would bring in Asha Sharma just to sell off the division. Gaming is about to change completely in the post-AI era, and this kind of IP will be invaluable to capitalizing on that potential.
We'll see if Microsoft will regret this or if they are actually capable of making some dynamic decisions going forwards
Netflix saturating the landscape with poorly executed adaptations of Microsoft owned media properties is almost certainly not worth the short term dollars for long-term erosion of their perceived value, especially without some certainty of securing complementary title launches. Given the shuttering of studios to right-size for the cambrian explosion of slop for COVID era hardware, Xbox probably wouldn't be able to make that capital work for them any better than sitting on licences until they accrue nostalgia.
The majority of GOT isn't hot naked sexy people or swords: it's conversations in rooms. Most good shows are conversations in rooms, which is why it's so surprising we've lost the ability to produce and write them.
Babylon 5 demonstrated that you can keep absolutely everything else crappy (effects, costumes, heck acting and even cinematography), so long as you're good at conversations in rooms.
I don't think you understand the appeal of Halo if you think it can be about people talking in rooms. Halo would have to be something far more complex, like Band of Brothers.
Exactly: it would have to be like Band of Brothers, or like Space: Above and Beyond from the 90s, but with a 2027 budget and effects. Or screw the effects: just good 2027 talking-in-rooms writing is nearly enough.
The Halo universe offers a lot to mine from, just like the Star Wars Universe did for Andor. It's just waiting for the chosen one writer to be allowed to do the job. Who's the JMS or Tony Gilroy for the Halo universe?
Anything could be game of thrones (early seasons) if it well written. You don't really need any Halo rights if you have good writers and can make a good show. The point of having Halo rights is they let you produce a mid show but have an automatic audience.
It seems that way, but it's not that easy. Starcraft competitions are still on tv in South Korea 28 years later because they got the balance just right, and all the dirty little details of that universe.
In theory you can make any sci fi show about future humans and a couple other species going to war. Should be straightforward.
But getting the balance of that universe right in terms of little details is tricky: Halo has done the heavy lifting already.
> Starcraft competitions are still on tv in South Korea 28 years later because they got the balance just right, and all the dirty little details of that universe.
Are they? I thought after the pro league failed it's transition to SC2 and the GSL ended that it mostly went to streaming platforms.
Halo and Starcraft are both about the Terrans going to war with alien species.
Same old story, right?
But getting the balance of technologies, motivations (e.g. jihad-dynamics), and nitty-gritty details (e.g. the splinter factions) right is the trick: it's much easier to do wrong than to do right.
Not trusting in Netflix at the moment to deliver (though I own some stock). Fallout, which Amazon exexuted, was on par with Andor ( a Disney series) in my book. Case by case deals make sense to me.
Fallout on par with Andor??? Wild take. The only thing Netflix has ever done that comes close to Andor imo is Bojack. I felt Fallout had one good season then quickly became rudderless and at this point is half a notch above all those shows that I can't even remember how many seasons I've watched because it all blends together.
Beef, Dark, Mindhunters, The Haunting of Hill House, Midnight Mass, and Narcos are also in the same tier as Andor for me. Black Mirror also although it didn’t start with Netflix.
Andor is in a league of its own imo. Once in a generation kind of show.
But it is similar to Fallout in that it was able to break out of its universe. Andor is enjoyable even if one hates Star Wars; Fallout is enjoyable even if you dislike gaming.
I fundamentally do not understand the direction of Xbox. Microsoft seems to lack the commitment to any strategy and seems unwilling to wait for investments to pay off before trying to cut perceived losses.
There are rumours that Microsoft is internally demanding 30% margin from Xbox, and the gaming industry simply doesn't operate with those types of margins long term and it's not even in a position to dictate industry pricing.
It's like the entire company is only satisfied with being #1.
The whole thing is very confused and lacks consistency. The latest rumours are they are going to break up its Game Pass subscription offering so there are different subscriptions for multiplayer, cloud, games, etc. Isn't that the opposite of an effective subscription strategy?
I love Steam but this is just backwards. If it was about recouping fixed costs the threshold would be 10k not 10M with the rate dropping down to 15 or 20% after that.
Game revenues follow a power law type distribution so they're hurting indies and leaving money on the table.
Valve targeted the big releases / industry players specifically because the context in which Valve added that was where all the big players were making their own store fronts: EA Original/App Ubisoft launcher, Blizzard Battle.net. And Epic Game Store, where Ubisoft (or another big player I forget) was talking about abandoning their launcher for Epic which has a lower revenue cut like ~12%. So it seemed Valve made that change to shore up keeping the big industry players releasing on Steam.
Valve isn’t trying to make a bunch of games with AND pay for/off all the studios they bought, all while trying to advertise and compete with Sony and Nintendo in hardware.
Steam just sits back and takes money, for the most part. The hardware/software/advertising spend is probably a drop in the bucket compared to MS.
I initially misunderstood OP. However the more I think about it, the more it seems similar though. If Steam is charging game developers a 30-20% cut, that must mean those game developers margins are higher than 30-20% or there will be no point selling on Steam. It seems that Xbox would be expecting their Studios to operate at the same efficiency as others in the market then, no?
No, they’re not even remotely the same. The retailer keeps 30% of the retail price and, out of that, they pay for the upkeep of the store. It’s not 30% pure profit, it’s not even gross profit given they need to pay the card processing fees out of that 30%.
I’m not following how that is a response to what I said. I’m not talking about Valve’s profits. I’m talking about the profit of the game developers selling their games on Steam.
I think I understand why Microsoft costs are higher than others due to their a spending spree, so the break even is much higher.
You said “they’re similar” and I’m refuting that by pointing out that they operate very differently. One is a retailer and one is a developer/publisher. Their operating models are different, so you can’t point at two percentages and say “they’re similar” in any way.
If you're talking about the margins of a video game sale, the gross margins on that are like 99.9% in absolute terms.
You don't seem to understand the difference between the margins on a sale and the averaged margins once the studio development costs are included.
If the store takes 30% you are still left with 70% gross margins but if you have development costs, you maybe only have enough sales to break even or just barely be profitable. A 30% margin on the entire studio means the studio must produce guaranteed successes consistently.
It might also not be obvious but if Microsoft imposed 30% margins, those are a floor, whereas a fee reduces the ceiling. They are not the same even if we assume the target is met.
You’re confusing 2 different things. Microsoft isn’t demanding a “cut,” it’s demanding its business units achieve a 30% profit margin on its investment. I think industry standard is closer to 10% once you factor in games that don’t make a return on their investment.
If development studios can break even with a 30% distribution cost on steam - the studios xbox owns that presumably pay 0% for distribution on the xbox platforms should have a minimum of a 30% profit margin.
Game development costs - GTA for $2 Billion - sound like they might be a little bloated.
This type of internal financial management is a sign that the people running Microsoft aren’t interested in how any of the divisions actually work or making strategic decisions about their portfolio. They’re accountants pushing the difficult decisions down
And the actual margins are about 3%. No one in gaming makes the sorts of margins that Satya is demanding Xbox makes. It's pretty clear to see where this goes. I'm also not sure that the unionization pushes in their studios isn't the real story.
I was really hoping Sing would have a more Producers sort of vibe. Failing theater and director. It was there for the taking, but apparently Disney doesn't think Springtime for Hitler is a good look?
it's easy. imagine a bunch of execs with kids. the execs don't play any video games. their kids aren't allowed any screentime. okay, now they're trying to make a product whose primary audience is Bart Simpson.
While I agree, a confusing part for non gamers, is to differentiate Xbox, the games console, from Xbox, the business unit, from Xbox, the Microsoft games publishing business.
Only Xbox, the games console, is having a bad time, the publishing part is doing great with movie licenses, and all the studios that belong to Microsoft, regardless where they sell their games.
As someone who was a die hard Xbox fan since the original all the way up to the One X… Microsoft are just terrible. Getting rid of exclusives, constantly focusing on the wrong things, it’s just a mess. Terrible leadership.
XBox was fine up to the Xbox One -- that's when the XBox was co-oped for some broader push for the living room computing and broadcast television integration right at the time this was on the out.
The next failure was Xbox Live. The video game market is a hit-based market with big tent-pole franchises doing large launches. For a modern example, look at the hype around GTA6. Launches sold games and exclusives sold consoles. Microsoft put huge game launches on Xbox Live for their relatively low monthly cost and lost millions on those launches.
They also bought a bunch of game studios which is a terrible strategy for a console maker. Meta made the same mistake with the Quest.
It's was never the lack of commitment to a strategy -- it was just having the wrong strategy to begin with.
In the XBox One gen they bet big on an ill-advised (but then-trendy) strategy to 'own the living room', devoting hardware CoGS to add TV / DVR features. It was a great strategy - for MSFT - but not so much for gamers. By 2018-19 it was clear they'd lost the hardware platform battle. The only bright spot was Game Pass which was working pretty well thanks to PC / XBox + web synergy. So, they went for a BIG strategic bet. An all-or-nothing, high-risk, high-reward gamble to move 'up the stack' from hardware by turning Game Pass into the "Netflix of Games". Forever being Pepsi to Sony's Coke wouldn't matter because content was where all the margin and sweet recurring revenue was anyway.
So MSFT spent over $100B acquiring game studios and... it didn't work. While it seemed like a reasonable bet in 2018-19, it's now clear no one can be the Netflix of games. The unit economics don't work because people watch a lot more new movies and shows in a year than they buy new games (the top ten console games capture over half the revenue). MSFT bet that a large number of gamers would keep paying >$20 - $30 / mo but after the COVID shutdowns ended, ASP growth stalled below $20 and the higher the ASP got, the more the churn went vertical. Oops!
Without that context, nothing makes much sense. But when you understand they're now dealing with the aftermath of that all-or-nothing gamble, it does. XBox isn't going away but MSFT is also done "investing big to win" in gaming. Now Sharma's job is to recoup as much of that $100B as possible by 1) Selling the shit out of all the evergreen hits they own like CoD, and 2) Milking their large library of non-hit titles to harvest as much revenue as she can while spending as little as possible.
The other subtext here is that if you manage to build a dominant multi-platform subscription business with a tens of millions of gamers paying $25-$30/mo and low churn. That's a high-margin business with flywheel effects that smell like Office365 and throw off enough cash to easily service that $100B in debt. But without that high, sticky ARR, gaming is a much lower margin business than any of MSFT's stable of winners like Azure. It's not that XBox is a bad business, it's that it's competing against much higher margin business units for each incremental dollar of investment.
But I feel sorry that Xbox gets so much criticism. Xbox itself may have weak game sales because of Windows integration and Game Pass, but separate from that, the first-party games got poor reviews. Microsoft’s wrong strategy (sales shrinking because of Game Pass) is part of it, but Microsoft also failed at quality control for its first-party titles.(like redfall,starfiled etc...)
For the amount of risk in creating film or television adaptations of video games, doesn't seem like an amazing deal for Netflix, but I guess I also wouldn't offer exclusivity on something of mine at that scale for that much time in a quickly developing time like the present.
Regardless, I think the cracks are showing in all entertainment industry. I don't understand why anyone has been buying an XBOX after the 360 given home computing accessibility only got better around the time that generation ended. The line between a console like an XBOX and PC was already extremely blurred back then, and it still doesn't make sense to me to buy a gaming device where your software is tied to a specific generation's hardware. I just wanted to say that since while I don't think this licensing would be a good deal for either party, I resent Microsoft's arrogance about how they think their place in this industry is permanent.
> I don't understand why anyone has been buying an XBOX after the 360
There are many valid reasons people still buy consoles. It's cheaper than a gaming PC, easier to use, has optimization for games, and consoles usually have many exclusives. I have both and I still prefer my PS5 over my PC.
Based on the headline my first thought was "Dumb MSFT!" but after reading TFA, the list of major properties is long and we don't know the proposed terms or counter on critical elements like ancillary rights, cross-media, sub-licensing, theatrical, international and, most-importantly, back-end participation. Just one of these terms can double or halve a deal's value, so we have no way to tell if $500M is crazy high or crazy low.
For example, the deal Sony Pictures made which gave Netflix all global film and sequel rights to KPop Demon Hunters with zero back-end participation on the billions of dollars Netflix is now certain to earn from KPop is widely considered by experts the single worst streaming deal ever made. And that was just one unproven animated kids musical. XBox has proven mega-IP like Minecraft, Call of Duty, Warcraft, Halo, Diablo and Elder Scrolls as well as lots of unproven properties - any one of which might become the next KPop Demon Hunters.
Xbox spent $70B for Activision-Blizzard not that long ago, going through a protracted anti-trust process so a $500m buyout would be acknowledging that they made a severe financial error
> so we have no way to tell if $500M is crazy high or crazy low.
Well, lets take just one of those examples, Minecraft.
Cost apparently $150mil to make, and so far, has earned around $960mil. So if we use the usual doubling of the cost to get to the real cost with marketing and everything, it cost ~$300mil, so that is about $660mil profit.
Now of course that gets split, Xbox wouldn't get 100% of that, but still, even if it got 50%, thats still most of the way to the $500mil they turned down, on just ONE film, and only factoring in the theatrical release profit, not including any money it would have made on merch, or streaming, or anything else.
Good analysis but a 50/50 split after costs would be unusually high. That level of back-end usually requires investing significant capital in a film. It's a high-risk business like VC where most releases lose money which is (hopefully) offset by a few outsized hits.
The shape of a pure IP license deals is typically be more like ~10% share after costs. But that's generally for a property like Fallout with at least some known value. Beyond their hits, MSFT has a back catalog of game titles with unknown cross-media potential large enough to make the likelihood of a break out like KPop fairly high. I suspect the deal stalled at $500M offer / $800M ask over theatrical back-end with a minimum production guarantee.
But this isn't a normal IP license deal nor just a streaming rights or distribution deal, it's an exclusive IP library production deal which has different dynamics. MSFT spent over $100B acquiring game studios in an ill-advised strategy to turn Game Pass into the "Netflix of games". It's now clear no one can be the Netflix of games. The unit economics don't work because people watch a lot more movies and shows in a year than they buy games. To earn back $100B, MSFT bet a large number of gamers would pay >$20/mo but ASP growth stalled below $20 with too much churn.
Now Sharma's job is to recoup as much of that $100B as possible selling the shit out of all the ever-green hits they own like CoD and milking their massive library of IP non-hit titles for whatever it's worth. Netflix sees this and thinks "Why not toss in a low-ball offer with no back-end and no production guarantees to see how hungry they are for cash." If I'm Sharma, I've only got two really bankable assets, top title revenue and a back-catalog of IP with unknown value, essentially lotto tickets. Most will be losers and the tricky part is it costs money to audience test each IP and get an educated guess on if it has cross-media potential and then a lot more money to produce any that look good.
My guess is the deal fell apart over minimum production guarantees. Netflix says "We'll give you $500M and we'll cover all the downside costs but also own ALL the upside." Sharma says "So, you'd be tying up exclusive rights to all my IP and you can control your downside costs by simply not testing or producing any but the safest-bet IPs. Okay, but if any of those become the next KPop, I'd like a little back-end upside and I want some guarantee you're going test at least half the back catalog and actually produce a couple of the unknowns." Netflix does the math and says "You want us to guarantee spending ~$20M in development testing plus ~$100M in production on top of $500M for rights. Hmmm, what's the price to just invest as much or little as we want and still own all the upside?" MSFT comes back with "If promising to spend $620M feels 'too rich' then the buyout to tie up our library, develop all or none, and keep all the upside is $800M. Alternatively, let's talk about splitting the IP into the known and unknown with a different back-end and MPG for each pool, or maybe a sliding scale, like you pay no back-end on anything until after you've earned 3X its prod cost?" Netflix: "Yeah, nah. $500M, take it or leave it."
In reality, they were probably already deep in negotiating the pool splits, back-end rates and sliding MPG scales with Netflix hoping MSFT under pressure makes a Sony-sized IP mistake and MSFT trying not to become the industry's next cautionary tale. Even the infamous Sony/Netflix KPop deal was something like $125M to buy a 'first-look' right on just a sub-pool of unknown IPs in development with a buyout option on any that they liked for exclusive worldwide distribution (theatrical & streaming) with no back-end - and not just on the first release but all derivatives, forever. II...
> In a statement to Puck, Xbox said, “We have received record-breaking interest in our I.P.; Netflix is a valued partner and we are excited for the forthcoming release of our Minecraft and Diablo animated series together, among other adaptations.”
My eyes are about to roll out of my head. Stale intellectual property can make unexpectedly good money for a little while, but this ain't exactly Mickey Mouse. Even Mickey Mouse is out of steam by now.
> but this ain't exactly Mickey Mouse. Even Mickey Mouse is out of steam by now.
Hasn't Mickey Mouse been out of steam since the 50s? He is a normal guy and you need to base any short about someone else to make it interesting. Like the squirrels or Donald Duck...
500 million sounds actually pretty cheap for amount of IP they must hold at this point. Some it very big some of it future potential. Even 800 million would have been cheap. They simply do have big catalog of things.
104 comments
[ 0.46 ms ] story [ 18.2 ms ] thread(I even like some kids' shows too, like Tales of Arcadia and Miraculous Ladybug, just for having consistent tech/magic systems... also Daniel Spellbound)
It wasn't anywhere near the (low) quality of Halo season 1. Did they continue to show Master Chief's face in season 2? Because that alone ruined it for me. And they didn't even get his appearance right!
The architectural differences that made a console more compelling than a standalone PC are largely gone. (Nintendo is a bit of an exception here, but they were always playing a different market than Sony and MS anyway)
This means it's harder and harder to say "here's a unique experience you only get on Xbox" (or Playstation for that matter)
The price advantage is going away fast, especially with talk that next-gen consoles will top USD 1000.
All they have left is their prestige first-party products, which they don't seem to really know how to use effectively. Some of them have solid cultural penetration, and could spawn broader media franchises with the right handling.
You're out of touch.
Step outside an echo chamber and you'll see that in most countries, including East Asia and the Middle East, if you take a walk around any big mall, you don't see kids pestering their parents to buy them a PC. They ask for a PlayStation or an Xbox or a "Nintendo" (yep that's what people still call the Switch)
In conbinis, there are Xbox and PlayStation gift cards hanging from the shelves, in the local currency.
There are accessories for PS/Xbox/Switch everywhere, more than PC gaming accessories.
And it's not because the PC stuff gets sold out while the consy stuff gathers cobwebs: If that was the case the consoles would stop getting restocked after a few months, but they keep stocking newer stuff. Meanwhile I have to hunt around and specifically request for Razer or Mad Catz or other PC-specific brands.
> The architectural differences that made a console more compelling than a standalone PC are largely gone.
If you go hang out at someone's home, nobody says "Let's go to my bedroom desk and play something on the PC", no they crash on the couch and turn on the TV and fire up FIFA or some other normie shit.
This is still the case in the U.S. for the most part. The point is moreso that barrier to entry is lowering. The SteamDeck is a PC/console and a good example of a possible trend in that direction.
Sure, there are advantages to using a keyboard+mouse in a FPS game but it’s a much different gaming experience than a handheld controller.
Since you mention conbinis, I'm guessing you're in Japan. Having just been there, game software is receding from the smaller hobby stores, and then in the tech stores like Bic Camera, the PC gaming stuff is one floor down.
No, the main driver is still there. People do not want to build and maintain PCs. Your 14-year-old nephew doesn't want to do it, either. People want to turn on a box and play a game. I am technical and I want absolutely nothing to do with maintaining a PC. I'll take the console experience every single time.
And you don't need to build a PC to have a PC.
Since the PS4/Xbox One, they’ve been similar enough in underlying architecture that engines like Unreal have been able to smooth over the differences enough to make multiplatform technically viable. It’s meant companies like Capcom with RE Engine have made a huge success out of selling across all platforms, including PC. That freedom for publishers is a problem for console manufacturers who have fewer 3rd party exclusives as a result.
With the notable exception of the original Xbox, which used mostly standard PC hardware [0] and ran mostly standard Windows [1].
[0]: https://en.wikipedia.org/wiki/Xbox_technical_specifications
[1]: https://en.wikipedia.org/wiki/Xbox_system_software#Original_...
The advantage of consoles are:
- No minimum/recomended config to check and insurance that a game or an accesorry bought for a console gen will work well for that console gen. In term of game compat this is something Steam tried to with the steam deck but has no way to enforce really and the biggest one imho. When you buy a brand new "budget" computer in the price range of a console you usually knownyou won't be able to play some of the upcoming AAA titles at least woth decent graphic quality.
- availability in retail stores
- ability to sell games in the second hand market but I don't think this is something that is here to stay with the disappearance of physical medias
This is why I've never gotten any of the more recent consoles (since the N64 or so)... many of my friends have them, and every time we try to turn them on to play a game they start updating and rebooting and updating... I can play games on my computer, which I have other incentives to keep up to date, so the maintenance time is amortized; just double click and it works.
My take is that almost nobody has a standalone PC anymore, especially kids. Kids these days all start with iPads, them maybe they move up to Macbooks once they get to high school or college. Other than the local LLM fanatics I see here on HN, I have no idea who's buying those PC towers anymore, they seem like fringe relics from the past century.
I’m sure if they are forced to (legally or otherwise) they can find a solution, but it would be a thorny thing to split.
[0] https://www.theverge.com/games/962837/microsoft-xbox-spin-of...
We'll see if Microsoft will regret this or if they are actually capable of making some dynamic decisions going forwards
Babylon 5 demonstrated that you can keep absolutely everything else crappy (effects, costumes, heck acting and even cinematography), so long as you're good at conversations in rooms.
The Halo universe offers a lot to mine from, just like the Star Wars Universe did for Andor. It's just waiting for the chosen one writer to be allowed to do the job. Who's the JMS or Tony Gilroy for the Halo universe?
In theory you can make any sci fi show about future humans and a couple other species going to war. Should be straightforward.
But getting the balance of that universe right in terms of little details is tricky: Halo has done the heavy lifting already.
Are they? I thought after the pro league failed it's transition to SC2 and the GSL ended that it mostly went to streaming platforms.
Same old story, right?
But getting the balance of technologies, motivations (e.g. jihad-dynamics), and nitty-gritty details (e.g. the splinter factions) right is the trick: it's much easier to do wrong than to do right.
Fallout is great example of a subset of their IP making a huge turnaround. Halo is not.
To sell all the IP at once is grave mistake. They would easily make more on separate deals. Netflix not taking it all at 800m seems like a mistake.
For 12 years of rights.
But it is similar to Fallout in that it was able to break out of its universe. Andor is enjoyable even if one hates Star Wars; Fallout is enjoyable even if you dislike gaming.
so they switch course midway to focus at AI
It's like the entire company is only satisfied with being #1.
The whole thing is very confused and lacks consistency. The latest rumours are they are going to break up its Game Pass subscription offering so there are different subscriptions for multiplayer, cloud, games, etc. Isn't that the opposite of an effective subscription strategy?
Game revenues follow a power law type distribution so they're hurting indies and leaving money on the table.
Valve targeted the big releases / industry players specifically because the context in which Valve added that was where all the big players were making their own store fronts: EA Original/App Ubisoft launcher, Blizzard Battle.net. And Epic Game Store, where Ubisoft (or another big player I forget) was talking about abandoning their launcher for Epic which has a lower revenue cut like ~12%. So it seemed Valve made that change to shore up keeping the big industry players releasing on Steam.
Steam just sits back and takes money, for the most part. The hardware/software/advertising spend is probably a drop in the bucket compared to MS.
I think I understand why Microsoft costs are higher than others due to their a spending spree, so the break even is much higher.
You don't seem to understand the difference between the margins on a sale and the averaged margins once the studio development costs are included.
If the store takes 30% you are still left with 70% gross margins but if you have development costs, you maybe only have enough sales to break even or just barely be profitable. A 30% margin on the entire studio means the studio must produce guaranteed successes consistently.
It might also not be obvious but if Microsoft imposed 30% margins, those are a floor, whereas a fee reduces the ceiling. They are not the same even if we assume the target is met.
Game development costs - GTA for $2 Billion - sound like they might be a little bloated.
Only Xbox, the games console, is having a bad time, the publishing part is doing great with movie licenses, and all the studios that belong to Microsoft, regardless where they sell their games.
The next failure was Xbox Live. The video game market is a hit-based market with big tent-pole franchises doing large launches. For a modern example, look at the hype around GTA6. Launches sold games and exclusives sold consoles. Microsoft put huge game launches on Xbox Live for their relatively low monthly cost and lost millions on those launches.
They also bought a bunch of game studios which is a terrible strategy for a console maker. Meta made the same mistake with the Quest.
It's was never the lack of commitment to a strategy -- it was just having the wrong strategy to begin with.
In the XBox One gen they bet big on an ill-advised (but then-trendy) strategy to 'own the living room', devoting hardware CoGS to add TV / DVR features. It was a great strategy - for MSFT - but not so much for gamers. By 2018-19 it was clear they'd lost the hardware platform battle. The only bright spot was Game Pass which was working pretty well thanks to PC / XBox + web synergy. So, they went for a BIG strategic bet. An all-or-nothing, high-risk, high-reward gamble to move 'up the stack' from hardware by turning Game Pass into the "Netflix of Games". Forever being Pepsi to Sony's Coke wouldn't matter because content was where all the margin and sweet recurring revenue was anyway.
So MSFT spent over $100B acquiring game studios and... it didn't work. While it seemed like a reasonable bet in 2018-19, it's now clear no one can be the Netflix of games. The unit economics don't work because people watch a lot more new movies and shows in a year than they buy new games (the top ten console games capture over half the revenue). MSFT bet that a large number of gamers would keep paying >$20 - $30 / mo but after the COVID shutdowns ended, ASP growth stalled below $20 and the higher the ASP got, the more the churn went vertical. Oops!
Without that context, nothing makes much sense. But when you understand they're now dealing with the aftermath of that all-or-nothing gamble, it does. XBox isn't going away but MSFT is also done "investing big to win" in gaming. Now Sharma's job is to recoup as much of that $100B as possible by 1) Selling the shit out of all the evergreen hits they own like CoD, and 2) Milking their large library of non-hit titles to harvest as much revenue as she can while spending as little as possible.
The other subtext here is that if you manage to build a dominant multi-platform subscription business with a tens of millions of gamers paying $25-$30/mo and low churn. That's a high-margin business with flywheel effects that smell like Office365 and throw off enough cash to easily service that $100B in debt. But without that high, sticky ARR, gaming is a much lower margin business than any of MSFT's stable of winners like Azure. It's not that XBox is a bad business, it's that it's competing against much higher margin business units for each incremental dollar of investment.
My gut is that Blizzard chose right -- I feel like netflix is slop lately, producing one good show per year? Happy to hear other takes.
"[Netflix] recently made an offer to exclusively license Xbox titles from Microsoft for film and TV adaptations: $500 million for seven years."
Source: https://puck.news/newsletter_content/what-im-hearing-the-pet... (full text shows in reading mode)
Regardless, I think the cracks are showing in all entertainment industry. I don't understand why anyone has been buying an XBOX after the 360 given home computing accessibility only got better around the time that generation ended. The line between a console like an XBOX and PC was already extremely blurred back then, and it still doesn't make sense to me to buy a gaming device where your software is tied to a specific generation's hardware. I just wanted to say that since while I don't think this licensing would be a good deal for either party, I resent Microsoft's arrogance about how they think their place in this industry is permanent.
There are many valid reasons people still buy consoles. It's cheaper than a gaming PC, easier to use, has optimization for games, and consoles usually have many exclusives. I have both and I still prefer my PS5 over my PC.
For example, the deal Sony Pictures made which gave Netflix all global film and sequel rights to KPop Demon Hunters with zero back-end participation on the billions of dollars Netflix is now certain to earn from KPop is widely considered by experts the single worst streaming deal ever made. And that was just one unproven animated kids musical. XBox has proven mega-IP like Minecraft, Call of Duty, Warcraft, Halo, Diablo and Elder Scrolls as well as lots of unproven properties - any one of which might become the next KPop Demon Hunters.
Oh dear, someone forgot to read the article.
Well, lets take just one of those examples, Minecraft.
Cost apparently $150mil to make, and so far, has earned around $960mil. So if we use the usual doubling of the cost to get to the real cost with marketing and everything, it cost ~$300mil, so that is about $660mil profit.
Now of course that gets split, Xbox wouldn't get 100% of that, but still, even if it got 50%, thats still most of the way to the $500mil they turned down, on just ONE film, and only factoring in the theatrical release profit, not including any money it would have made on merch, or streaming, or anything else.
Good analysis but a 50/50 split after costs would be unusually high. That level of back-end usually requires investing significant capital in a film. It's a high-risk business like VC where most releases lose money which is (hopefully) offset by a few outsized hits.
The shape of a pure IP license deals is typically be more like ~10% share after costs. But that's generally for a property like Fallout with at least some known value. Beyond their hits, MSFT has a back catalog of game titles with unknown cross-media potential large enough to make the likelihood of a break out like KPop fairly high. I suspect the deal stalled at $500M offer / $800M ask over theatrical back-end with a minimum production guarantee.
But this isn't a normal IP license deal nor just a streaming rights or distribution deal, it's an exclusive IP library production deal which has different dynamics. MSFT spent over $100B acquiring game studios in an ill-advised strategy to turn Game Pass into the "Netflix of games". It's now clear no one can be the Netflix of games. The unit economics don't work because people watch a lot more movies and shows in a year than they buy games. To earn back $100B, MSFT bet a large number of gamers would pay >$20/mo but ASP growth stalled below $20 with too much churn.
Now Sharma's job is to recoup as much of that $100B as possible selling the shit out of all the ever-green hits they own like CoD and milking their massive library of IP non-hit titles for whatever it's worth. Netflix sees this and thinks "Why not toss in a low-ball offer with no back-end and no production guarantees to see how hungry they are for cash." If I'm Sharma, I've only got two really bankable assets, top title revenue and a back-catalog of IP with unknown value, essentially lotto tickets. Most will be losers and the tricky part is it costs money to audience test each IP and get an educated guess on if it has cross-media potential and then a lot more money to produce any that look good.
My guess is the deal fell apart over minimum production guarantees. Netflix says "We'll give you $500M and we'll cover all the downside costs but also own ALL the upside." Sharma says "So, you'd be tying up exclusive rights to all my IP and you can control your downside costs by simply not testing or producing any but the safest-bet IPs. Okay, but if any of those become the next KPop, I'd like a little back-end upside and I want some guarantee you're going test at least half the back catalog and actually produce a couple of the unknowns." Netflix does the math and says "You want us to guarantee spending ~$20M in development testing plus ~$100M in production on top of $500M for rights. Hmmm, what's the price to just invest as much or little as we want and still own all the upside?" MSFT comes back with "If promising to spend $620M feels 'too rich' then the buyout to tie up our library, develop all or none, and keep all the upside is $800M. Alternatively, let's talk about splitting the IP into the known and unknown with a different back-end and MPG for each pool, or maybe a sliding scale, like you pay no back-end on anything until after you've earned 3X its prod cost?" Netflix: "Yeah, nah. $500M, take it or leave it."
In reality, they were probably already deep in negotiating the pool splits, back-end rates and sliding MPG scales with Netflix hoping MSFT under pressure makes a Sony-sized IP mistake and MSFT trying not to become the industry's next cautionary tale. Even the infamous Sony/Netflix KPop deal was something like $125M to buy a 'first-look' right on just a sub-pool of unknown IPs in development with a buyout option on any that they liked for exclusive worldwide distribution (theatrical & streaming) with no back-end - and not just on the first release but all derivatives, forever. II...
My eyes are about to roll out of my head. Stale intellectual property can make unexpectedly good money for a little while, but this ain't exactly Mickey Mouse. Even Mickey Mouse is out of steam by now.
Hasn't Mickey Mouse been out of steam since the 50s? He is a normal guy and you need to base any short about someone else to make it interesting. Like the squirrels or Donald Duck...
This may yet come to pass.