Microsoft CEO Reassures Investors That Xbox Is Focused On Console, PC And Mobile

How can investors believe that the consoles are being focused on when they aren't even advertising them to increase sales? That to me would sound like you have decided to give up for yet another generation and start again on the next one which seems like how they regularly do things.

Actions speak louder than words, no matter what they officially say.

But investors aren't necessarily gamers, so they might not be able to tell the difference.

As long as a few of us continue to prefer consoles to play, they will continue to make them.

But I think that console users are not going to grow much more, and in fact I suppose they will decrease over the years, perhaps in 10 or 15 years having a device next to the TV to play video games will be a thing from the past.

I don't believe him

It would be stupid to drop consoles. There is absolutely zero reason to do so and they won't do it. Console sales are decreasing, both Xbox and PS, but the console market, while limited, is very profitable, even more for Microsoft that doesn't target it exclusively, but as one branch of their gigantic gaming business.

Satya's discovered sockets. This is promising.

Normally a CEO saying something is still a priority is reassuring, but in the case of Nadella, it's more like Lucy telling Charlie Brown she really won't pull the football away this time, honest.

It's kind of like that time he told important people there won't be any price increases due to Call of Duty right before they raised prices and said it's because Call of Duty.

Nothing this man says is worth the bandwidth used to repeat it. He makes up whatever sounds good at the moment regardless of if it's true. He's playing investors, of course, too. Though he didn't say much of value here, with vagaries about covering all platforms starting with console, but somehow also thinks they had console covered just fine before ABK. Corporate not understanding their market position may be a huge part of their problem.

Also, where is Phil? Should not head of Xbox/Microsoft Gaming be the one talking about the future of the product? Why is the corporate CEO the only source of this information? I'm starting to picture Phil in a closet, bound, with duct tape over his mouth.

@Zenszulu That's exactly it. Whenever the sales are low, they give up, regroup, let it fizzle, and plan to reboot next launch to fix it.

Yes yes and private equity.

Pity those consoles are ps5 and switch …

Sorry couldn’t resist

I don’t trust them, actions speak louder than words and they have done absolutely nothing to gain console space proactively.

I think they have a situation, where they know over 50% of GP subs are on Xbox consoles.
And I think they want to drop consoles but if they do that’s more than 50% of GP subs gone, so they are stuck in what to do.

Nadella is terrible for Microsoft. Really wish he would just leave. He only cares about cloud and forcing subscriptions on to consumers.

@NEStalgia Nadella is terrible. He needs to go before he finishes destroying Microsoft. The guy is too narrow minded and has zero foresight.

I think you have a very distorted vision. Nadella has saved Microsoft, which after the Windows Phone era was in a very complicated situation, and he has turned it into the most valuable company in the world (well, now second after Nvidia).

Xbox probably wouldn't exist today if Nadella hadn't agreed with Phil Spencer to invest in the gaming division after Xbox One.

And we may dislike the recent decisions more or less, but Xbox is a monster that generates enormous profits, Sony or Nintendo have much worse results, it may be that in 10 or 20 years Playstation will not exist, no matter how much it sells hardware, as a business is much weaker.

As players there may be many decisions that we don't like (I'm the first), but really as a business Xbox couldn't be in better hands, in 20 years it will still be there, I don't know if as a cloud game or where we will play then, but it will still be there, thanks to all these decisions.

I cant believe anything this guy says. Seriously, would you buy a used car from him? Thought not.

Phil is so backseat these days, but much as I didnt subscribe to the 'cult of Phil' at least I often believed what he was saying. What has happened to him?

If i was an investor i will laugh on this cra* but as a gamer....i dont really care anymore

@GuyinPA75 In his own words from various interviews he's always afraid of "missing the next big thing" and therefore chases after it to try to get ahead of it. A wholly reactionary way of trying to be a visionary. And also he's still having Gates whisper in his ear what to do...... not exactly a proven strategy.

But he's bolstered by investors that love love love the money he's pulling in, from their perspective he's better than great, and it's of no conern to them that he's selling their long term stability to grab investment windfalls today. Investors never care about tomorrow, they only care about today.

If Microsoft were truly focused and committed to selling Xbox consoles all there games would be exclusively on Xbox only and not on PlayStation 5 or Nintendo Switch.

Investors, they are focused on PC and Mobile lol.

@Pabpictu That's certainly an opinion....

Below are the top 10 companies by gaming revenue in H1 2023:

Tencent — $15.4 billion (-3.6% year-over-year);
Sony — $8 billion (+8.7% year-over-year);
Apple — $6.9 billion (+3.2% year-over-year);
Microsoft — $6 billion (+3.5% year-over-year);
NetEase — $5 billion (-3.8% year-over-year);
Google — $5 billion (+2% year-over-year);
Activision Blizzard — $4.4 billion (+35.5% year-over-year);
Electronic Arts — $3.8 billion (+5.5% year-over-year);
Nintendo — $3.1 billion (+3.3% year-over-year);
Take-Two — $2.4 billion (+26% year-over-year).

@CallMeDuraSouka
So basically Microsoft are now second with about 10 billion as they have Activision now.
If the numbers are similar for 2024.

@themightyant
That’s low we make about 30% profit 🤫

@OldGamer999 Yeah, the single digit margins coming out is when Jim "retired", Totoki apologized to investors, they shut down studios, killed the GaaS games, and doubled down on console+PC lol. Things aren't rosy at PS. But in their case they have solid revenue, their biggest problem is that Jim was spending all their revenue like a drunk sailor in a house of pleasure.

See he says "content for console" but then goes on to say "expanding it to everywhere people play games"

That at best sounds like Xbox is being treated as "early access" with exclusives coming to PS/Nin later and at worse using just releasing games directly onto PS/Nin.

The more I read the more I get a feeling Xbox is shifting towards next gen, and maybe next gen will be the last gen.

Activision and Xbox are now the same, I guess we can say they have "bought" their position there, but right now Xbox (or Microsoft Gaming if you prefer) as a business is much bigger and more lucrative than Nintendo or Sony.

In fact, Sony specifically is at a dangerous point, they have a significant amount of income, but not profits.

I imagine that Microsoft's plan will be to surpass Tencent and have the largest video game business in the world, but of course, they cannot do that only with the "small" game console business, they have to expand.

@abe_hikura You're reading too much into it - it's empty corporate rhetoric to touch on the keywords investors are looking to hear.

"What we love and always loved about gaming which is Xbox" (Which conveniently ignores Microsofts entire gaming presence and history prior to Xbox, and just gives a cursory nod to "we've been doing gaming stuff for a while" in simple digestible words investors can connect in their heads) - it's just pretend acknowledgement of recent history to get to the main talking point which is PC and mobile.

Given that PC was their FIRST gaming stronghold before sabotaging that to go Xbox before sabotaging that to go cloud before sabotaging that to go SwitchStation, his statement actually reveals a total disconnect from and unfamiliarity with Microsoft's entire history in the gaming market. Just empty rhetoric to glue together paragraphs to get to what investors want to hear.

Although if really parsing words we get to: "now we have both the content and the ability to access all the traditional high-scale platforms "

ABILITY TO ACCESS all the traditional high scale platforms. Not control over. Not compete as. Not lead in. No, the ability to ACCESS those platforms including console. He did not say who's platform. But, I think that would, again, be reading too much into his words because they're ultimately meant to be empty filler words to get to the meat of "expanding mobile and PC gaming presence." The rest is just decoration on that sentence.

Plus the talk of "sockets" which has got to be the weirdest use of corporate metaphor speak I've ever heard.

@BIG3 Yeah, I think it's premature to say if next gen will be last gen or not, it probably depends a lot on how well it sales, how they manage to blunder it or not, where cloud tech and even just mobile hardware, or even just laptops go over the next decade, and where subscriptions end up going in terms of growth outside the console and paid online, so it's as much 50/50 to them as it is to us at this point. But I've thought it's been pretty clearly telegraphed and not even hidden since January that Series XS is a dead parrot and they're in "transition" to next gen the same way Awkward Reggie and Bobby Kotick were playing with Skylanders action figures during the WiiU's last E3. As a Series X and PSVR2 owner, I feel like this entire generation has been one giant transition from X1PS4 to XYPS6. The PS5/XSX started winding down for next gen January 2021.

@NEStalgia
I thought Nintendos share in billions would have been bigger.
What is Nintendos percentage profit?

@GuyinPA75 I've been saying this since he gutted Windows Phone when they were working on their foothold and showing steady, albeit slow, growth. Nadella simply hates hardware.

@InterceptorAlpha Hardware has upfront costs, R&D, supply chain, things that eat at the opex. Software is just profits minus the umbrella operating budget. He doesn't hate hardware as much as he's just a finance guy and just hates any line that inclines at more than a 30 degree angle.

@OldGamer999 Nintendo's not actually a particularly large company, they just act like one because they're a monopoly in their own market and have cash reserves that are the envy of any company that's not one of the silicone valley big 10. IDK what their profit percentage looks like, but it's very likely to be extremely large. Their low operating expenses are laughable, their staff size is minimal (everything they do is outsourced), and they were managing to pull a slight profit when WiiU was catastrophically burning. There's a trick MS and Sony couldn't even dream of. PS5 "historic success" margin isn't much better than Nintendo's WiiU era margin. And they did it without fortnite money back then.

Wow, a lot of armchair CEO's in this thread. I invite all of you to take over Nadella's job and right the ship. I am sure you can do it.

Xbox will always be the brand but it's effectively Microsoft Gaming in everything but name. Microsoft is a software company and dedicated hardware has never been their sole focus.

@NEStalgia
Imagine how well Nintendo are doing then during this Switch era.

I think they will do at least one more generation of Xbox hardware, but beyond that it's unclear. If their marketing (what little they do) continues to revolve around "No Console Required", pretty soon the mass public (not just the hardcore gamers) will say "Yeah you know you're right, why do I even need to buy an Xbox?"...

@NEStalgia It's finally catching up with him way he always puts all his eggs in one basket. Stock took hit beginning of the week due to low Azure usage. Serves him right. He constantly thinks, cloud, cloud, cloud, cloud, but if no one is buying, it will sink them. Believe they lost some government contracts as well.

Turning out way always thought about him. He's terrible. Giving up on Windows Phone the single worst decision he's ever made. Will haunt him tremendously as time goes on.

@InterceptorAlpha Agree 110%. Nokia 950 to this day is still absolute best phone I EVER had. Being able pull microSD card out from Windows Phone and plug into my Surface to move whatever I wanted then plug back in phone. Best user experience, ever. No converting files, jumping through hoops. Nope. None of that. Simple. Easy. Convenient.

He does hate hardware. It will get worse now that Panay is not there. Honestly think nadella pushed him out, so he went to Amazon. Now I'd bet watch Amazon turn out amazing hardware while nadella still has his head in the clouds. Guy is terrible. Can not say that enough.

I honestly don't know why they bother talking. Xbox fans will be happy if they put a turd on a stick and call it an xbox while PS fans will hate xbox even when they have the most powerful console. Seems to make no difference what they say or do. Just make some damn games that play well on a turd on a stick and I'll be happy. not booted up my series s for about 6 months now and thats got nothing to do with how focused you say you are!

@GuyinPA75 Cloud cloud cloud was almost fine. The problem is his single track mind switched to AI AI AI, and then it became "local AI, local AI, local AI." The tech doesn't even have a known demand or use case yet, just theoretical "if IA becomes local corporations that don't allow cloud AI due to confidentiality issues will use AI."

In his single focus on AI/local AI and hoping it's ahead of the curve, he forgot about everything else including cloud, on top of it, which is why Azure is shrinking despite being the actual backbone of OpenAI!

@Pabpictu This statement is so true, and some people don't understand business 101. Microsoft is a business and in business you have a job, which is to make money, ans to do so you often have to think outside the box. Microsoft is doing as such and within a couple of years or so will be the largest gaming company in the world. Just because you don't sell as many plastic boxes doesn't mean you aren't winning the war.

I'm stopping reading comments on this site, it's just so negative and depressing. 40 odd game backlog / library to focus on so I just don't have time or energy for endless doomsaying.

I'm really unsure of their marketing strategies. I'm definitely not representative of every gamer demographic but after my initial outlay for the Series X, I've predominantly bought third party titles for PS5 and eventually when I could afford to build one recently, PC. I had Gamepass for two years as part of the Series X payment plan through which I enjoyed an incredible number of games from catching up on the Xbox One exclusives to indie gems. Since that elapsed I've subscribed only for a month or two at a time and crammed in some backlog and new titles. Microsoft aren't doing too well out of me these days and I can't help feeling this is similar for a lot of folks. Who are they trying to capture now Sony and Nintendo are so dominant and decent gaming PCs are more affordable than ever?

The next Xbox console cycle is certainly going to be the most interesting yet.

Edit: 'dominant in the console space', I understand Microsoft gaming is a behemoth.

Yeah yeah! There are times where I think “what would Balmer had done about xbox”

Such reassurance from the guy that killed Windows Phone…

This should surprise no one who isn't trying to fanboy. Too many people are stuck on the idea that console sales dictates the winner. Consoles, and exclusives tied to hardware, are quickly becoming irrelevant.

MS clearly recognizes they lost the "console war" after the disastrous XOne release and is focusing on the next step. Just because MS is shifting it's focus to software over hardware doesn't men's they've abandoned consoles (yet).

@IOI I owned a Lumia 900, loved it to death. But even then I knew that Windows Phones wouldn’t be successful by any means. Their ecosystem was too walled for devs to care, even after their native code kernel change.

"console" is a general term. They can support "console" with their portfolio by publishing on Nintendo and Sony...

@IOI and Hololens, and Windows Mixed Reality...

Don't worry it'll be fine with all the BILLIONS Microsoft is inventing in AI tech soon they'll be able to release the greatest games of all time every day of the week with the push of a button, and thus be able to print infinite money and grow forever. All they need to do is invest just a couple billion dollars more, and THEN it'll finally work properly and make money.

Maybe I’ll wait 5 years into the cycle when the games arrive.

What does it mean that Microsoft is too unwilling to sell the Xbox Series X|S?
Not only is it not advertised, it is almost always out of stock in our area.
Yes, in a region like Japan, where Xbox don't sell well, they are always out of stock.