Xbox is at the start of a new era, one where the credit card has been put away and hard decisions are being made - diving into the details of why Xbox is making these decisions and if they even make sense.
Chapters:
Background: 00:00-5:09
Xbox Phase 2: 5:09-13:26
The Big Problem: 13:26-17:37
What About This: 17:37-20:16
More Cuts: 20:16-22:22
The BIG Question: 22:22-23:17
Larian is not a small studio. They also sold the game in early access for 3 years, which allowed them to generate income and gather community feedback. It isn’t the same problem.
That and their partially owned by Tencent, who they regularly go to for more money and investment.
People ignore all of that.
@@jessep5280Tencent is a blessing for the gaming industry. They give you money and all they ask in return is a cut of the profits.
Irregardless, EVERY OTHER STUDIO with major publisher-backing them has this in many orders of magnitude GREATER than Larian did and yet they managed to put out last year’s GOTY. Am I saying they were completely unassisted? No, but hypothetically, everything they were able to accomplish as an INDEPENDENT studio should be JUST AS, IF NOT MORE FEASIBLE to pull off from studios under the umbrella of multi-billion-dollar publishers.
Crazy that people are okay with paid demos.
People are having real thoughts about cancelling their Game pass subs or moving to another platform like PlayStation, due to decisions like this that, rightly or not, undermine trust and confidence in the brand. When most of the game "sales" aren't really sales but are less tangible in the form of Game pass subscriptions, how do you fairly quantify what is making $$$ and what isn't? What does success look like? What constitutes a successful game? The answers aren't so straightforward when Game pass is your business model. I'm not even saying GamePass is a bad move, I think they are struggling to figure out how/what success looks like.
On PlayStation you at least know that $150/year allows you to play the most recent COD online (game & PS+), but on Xbox this is apparently currently up for a debate, despite them having explicitly stated that ALL 1st party games would be available Day-1 on Game Pass!!!
Don't even know if Xbox knows what a good game is anymore. Look at the quality of their games you can see they're not spending enough on the budgets. Avowed gameplay killed my hype for it.
@@MrJayslayerjay well apparently they KNOW they don't want any Japanese devs content on Game Pass 😂 Telling a giant chunk of gaming community just go to Nintendo and PlayStation, don't bother here 😆 They have to do making these decisions without ANY consideration from PR/Marketing
until they go back paying $70 and realise Gamepass was better.
Sony is way worse when it comes to "sales" and the games they offer monthly. The game pass absolutely destroys the playstation and I say that as a playstation user. Switching now would be insanity.
First level headed and objective analysis I've listened too in the last few days.
Yes, it’s a wasteland out there. It’s a relief to hear nonemotional journalism
I agree. There has been a lot of analysis based on emotion and not financial objectives. Nobody is asking the question if these studios had anything in the pipeline that was going to move the needle in any meaningful way.
It’s become easy engagement farming to punch down on Xbox at every mistake. Been this way for at least 3 years, but they are primarily responsible for handing these idiots ammo to continue doing it. lol even as a spectator I’ve seen social media make up confusion on Xbox messaging on several occasions. For example: they’ve stated 100 times that gamepass will have all of their first party games day and date. This particular topic was recycled by the media a few times with the narrative that Xbox marketing is confusing?? Then you have the 1000 fanboys specifically loving this and adding to the confusion, it’s been tiresome trying to flush out logical conversations in gaming and other media because drama is what brings in views.
Remember xbox has created a backward/forward compatibility team and also a team to help other studios learn unreal engine 5. These teams cost money yet won't be specificly making games/profit. These teams cost money and are to make other games and nxt gen better so to pay for these they can't keep spending money on studios wages that will not produce a profit
Unless they start to crank out backward compatible games that team isn’t worth sacrificing potential future IPs/the brands ability to put out a variety of games which is the issue they’ve had for years. Helping teams learn Unreal Engine is a good benefit but something I feel simply asking for Epics help could be more beneficial as they’re the designers/creators of it. Those two examples you gave are the perfect reason as to why Xbox has had such a lack of focus and not been a strong brand for years. Worried about quite frankly irrelevant things that others could probably do better or things that just aren’t needed vs things that need their attention like idk MORE GAMES and a large VARIETY of games. Less games isn’t what Xbox needs right now.
Sony has had the team red for decades now who handle engine related stuff
Sony has a similar team, but, it is made up of devs from Naughty Dog and Guerrilla as well as Mark Cerny and his people. That is the difference. They are from studios that are producing great games. They work on tools dev, engine, optimization, research, etc. Microsoft really truly has a leadership issue.
@EliteBlackSash xbox is from coalition so and they're the best with unreal engine 5 they helped do the matrix demo
@@leeg21ukNothing backs that up.
Management is the problem and that dates back to the tail end of the Xbox 360, Xbox under Peter Moore in half the time with 1/20th the budget was multiple more times successful then what Xbox is under Phil Spencer.
Peter Moore was there at the start of the issues Xbox is now having. Peter made the decision to go for the big blockbuster games and drop the IP that weren't huge sellers, games like MechAssault, Crimson Skies, Perfect Dark, Kameo, and MS chased that mindset ever since. Don Mattrick then finished the job, and Phil picked up the crumbling ruins, but still ignored it's old IP that made it great. Instead chasing acquisitions of big IP.
Great job in putting together this video. I think this is the only video out here that has done a great job in articulating nuances a company has to go through to take some tough decisions.
Tough decisions they didn't have to make.. trying to compete with Sony has killed them.
Xbox has sucked so hard for 10 years bro
My goodness, when will the excuses stop ?
@@trex7115never because Phil is the savior and can talk from both sides of his mouth because Xbox fans defend him nonstop. Just read some of the comments on his social media accounts
Has sucked for 10 years....what a load of crap -- been 10 years of solid cost effective entertainment in my book "When will the excuses stop" - again what a load of naive crap.....this isn't about the fans....this is business.....this is the way projects are managed. As someone who has been involved in project management for 30 years, I HAVE SEEN IT time and time again in the corporate world. Brad was dead on accurate when he referred to the employees as assets...Microsoft is no different than any other large company in that regard. Grow up and get used to it being the way things are done. Do they need to try and keep an eye on the PR meter a little more? Probably so but at the end of the day to Microsoft executives, the Xbox community is a large group of consumers....the xbox group within Microsoft may have a slightly different viewpoint.....but the Microsoft executives do NOT. And it's the same for Sony and Nintendo executives....get over yourself if you think we are anything more than that to them
This is exactly why I've always scoffed at people who pipe on about how Microsoft is the richest company in the world, acting as if the XBOX brand is safest of all the console makers, because they are the richest. I've always had the exact opposite opinion. Nintendo is a gaming company, period. Their entire business is gaming. Sony's core business is PlayStation, but they also make substantial money from the sale of insurance, as well as from the sale of software services. related to the PSN. On the other hand, Microsoft's diverse company portfolio is precisely why their position as a console hardware manufacturer is always in question. Gaming is not its core business, it's simply a relatively small part of a much larger corporate organism, which is why they're able to make these harsh cuts, without blinking an eye or losing much sleep.
The reality is they didn't need every single studio under Bethesda and Activision. It's obvious that companies like Embracer Group and Microsoft have too many studios. All Microsoft needed was King maybe things like COD and Blizzard were also needed to help boost Xbox. But they never needed 25+ studios under one organisation.
Nothing is wrong with having successful studios, but Redfall? Sadly heads had to roll because of that and the sad part it’s not the managers who pay the price. The reality is Bethesda was badly run, very clear with their recent games. They couldn’t deliver Starfield even with a 1 year delay cuz it’s clear now they are still finishing the game! Same with 343! PS has their shit together but even they’re cutting grass off their top studios, but I am still shocked since I thought MS would be a bit patient with their newly bought studios
No one liked it when EA was doing it.. spoiling franchises like BioWare... But he doesn't seem to have seen and learned
@@MrCarpediem6EA actually is becoming a redeeming company again .
@@sumomaster5585frankly all the closures from Zenimax but tango game works made a lot of since. Everything they shutdown was basically a support studio. Austin was mostly a support studio and their only two games themselves IIRC were Prey 2017 (great) and Redfall (really not great... so not great that the staff WANTED Xbox to reboot it's development or cancel the project). Then one was a mobile studio. Xbox doesn't need an Arkane Austin and Lyon and only one of those have a good track record. They want to get into Mobile but I think most of those efforts are going to King now. Tango is the only loss. And I can understand shutting it down due to poor sales, but the success of their games and franchises with communities was majorly ignored. Not to mention the importance of having a first party Japanese studio when that's a major market Xbox wants to get into.
Suuure, lets shut down the studio who made the only good xbox game this generation (hifi rush), what a good idea
I don’t think people realize that the activation deal, literally doubled the size of the Xbox business. of course there’s gonna be massive reorganization of the business. That happens every time there’s small acquisitions, now imagine doubling the size of your company. It will continue happening.
I think where the Fed up comes from is that like he had to buy a fan favorite companies that may be delivering small indie games that people enjoy.. just to see them shut down or drastically changed
Huh ? Why would you double the size of your company that you paid for by the way and proceed to downsize it ? Doubling in what sense ? Value, headcount, resources(including IPs and technologies). Is like paying for a whole cake and throw away 2/10 of it into the bin ?
@@trex7115no I think what he is saying is anytime there is an acquisition there are people who are let go. For example they need activision accounting when they have that already with MS and Xbox, same goes for HR and other teams
@@trex7115 headcount
@@trex7115 all companies ever after an acquisition will synergize. All of them. Every single one of them.
Why tango gameworks tho. I want an evil within 3
They could make evil within 3, but just under Bethesda instead
who even knows if that was ever going to happen. It's been years since the last one, and Shinji and a lot of his core team left
If they get some other part of bethesda to do evil within 3 I don't think it would be as good as the ones tango made.
@@lootrat8821 evil within is lowkey one of the best games period. Its up there with the resident evil series’ best games.
because everyone left and it was a empty studio
Brad - you just made a case why Microsoft should not buy studios and why the public should not celebrate them doing so. We no longer will receive celebrated successful games like Hi-Fi Rush, which for a small company living off of small venture capital money, would be successful and warrant a sequel because Microsoft wants every single game to make $200M+. It’s unsustainable. Furthermore, it’s infuriating that Microsoft would acquire studios with MANY SMALL teams that ship smaller titles just to turn around and kill then all so that we can get nothing but Elder Scrolls, Call of Duty and Starfield. Makes no sense. Why not just pay for platform exclusivity instead of buying the studio and killing the talent? Awful management.
What is amazing to me is how much context and background information this video doesn’t have. Redfall was a product of Bethesda pre-acquisition when they were trying to force their single player studio to make a live service game. They wanted to be acquired, and fallout 76 is an example of this too. The layoffs that happened at the beginning of the year were planned by activation blizzard, but postponed so that Microsoft would have to do the dirty work. That was not part of Microsoft’s strategy either. The news is that the 4 studios were not closed because of Redfall failure or hifi rushes lack of success, but potential pitches these studios wanted to make for upcoming games (and resources for them). This video presents these things as a coherent narrative with a plan that was in place, yet it is clear that what Phil Spencer said and did in the past, and with hi fi rush, was the actual plan. Now, it appears that a profit and growth obsessed board and ceo, having seen activation-blizzards strategy, has taken control. This is not Phil Spencer’s vision of Xbox.
Good comment and topic classification. Thanks a lot Brad! Greetings from Germany
as another commenter has mentioned it is refreshing to see some coverage on this that does not solely consist of: reading aloud other online articles (especially Jason Schreier my god) on the subject then adding insightful commentary such as: "This is unbelievable" "What were they thinking??" etc. etc. Well done BS
Time to put on your cape and defend Xbox!
Just like you and Sony.
I’m with Xbox
Did you not watch the video at all, lol. He clearly has many problems with xbox, you would know that if you watched the video instead of pandering to the dumb "my plastic box is better" idea.
We are unfortunately seeing the slow demise of xbox. 😢 360 were the golden days and I miss them.
I still can't believe how Microsoft passed on Genshin Impact and, as a consequence, missed out on Honkai Star Rail and eventually missed out on Zenless Zone Zero as well. To be honest, the developers behind the game are privately owned, and they self-publish all their games in all regions. I'd hate for them to be bought up by companies like Microsoft and eventually get shuttered.
Yeah? And stay tuned for a totally cheerful happy Friday upload tommorow, where it will be the usual D riding of MS lol
I feel like the give it back stage did not take into account how long it takes to get these games out and Microsoft expected huge ROI within a very short amount of time.
very level headed take and well presented, thanks Brad
This gives me a little hope. I’m a console gamer. I don’t do this because I think it’s the ultimate form of gaming but because it’s what I can afford right now. I can’t just squeeze over thousands of dollars for a gaming pc. I hope they can turn this around and make console gaming viable again.
Well put.
What people forget is during Xbox360 they were only focusing on "on-line"...while PS3 was still focusing on AAA single player to keep fans happy. By the end of the generation PS3 developed a HUGE MOMENTUM shift to carry them into PS4.
This sums up the issue better than most. I'm not worried. Things will be different over the next year or two and on out from there but it may end up being a very good thing. Just keep making the games and I'll keep playing them where ever I can.
I believe Gamepass is sustainable but IMHO it needs changes since more and more titles are coming onto it. Maybe a price increase. Maybe only putting day 1 on the Premium tier while standard tier gets it later. Also, great breakdown in this vid, Brad.
I'd rather a 6 month delay for first party titles on Gamepass than a price increase. I mostly wait for games to be patched anyway (like Forza & Starfield are in way better shape now than on release day).
@23:07 mark, Correct!
It's not rocket sience. there are currently more people raging about these studio's closure than ever bought their games.
Whether the model is sustainable depends on gamers. Xbox is not selling consoles and not selling subscriptions. There’s a lot of people to shed crocodile tears on studios getting closed but what is supposed to pay the people at those studios if you don’t subscribe to game pass or buy an Xbox? This trend will continue until the console sales or the number of subs picks up, it’s as simple as that. If you love Tango, Ninja Theory and Double Fine, go get a series S. it’s 200 bucks. Or get a GP sub. You can also hypocritically demonise Phil Spencer online when they do the only thing they can financially do but it doesn’t affect his life.
Ah ok. If Tangos brass left and took talent then shutting them down makes a lot of sense. I was angry as hell when i heard the news.
The studio's management left last year (I think) and set up a new studio last month ( called Kamuy). Considering how loyal Japanese can be, its possible that a lot of people left... So shutting down the studio makes a lot of sense even though it kinda hurts too lol.
He was still at the studio at the time of the announcement. He is indeed leaving to pursue his ambitions because under Zenimax/Bethesda/Microsoft he was nothing more than a file and report employee. He's only felt like a real boss of his own studio for 6 months so it was such a waste of his talent. A man with a large resume creating awesome IPs such as Resident Evil to be reduced to a mere number. However he isn't uncaring, he doesn't want to just leave the studio that he found and nurtured for years. Some employees might follow him but he knew that, he designed Hi-Fi Rush to be a learning process as well. Teaching his young developers to be independent.
Think about WHY he felt the need to leave.
@@elhazthorn918 that's just the way Japanese devs are.
My biggest concern with the current situation is that there are two visions inside Xbox right now, that collude each other. On one hand, they invest heavily to increase their internal studios to offer more value to the GP model. On the other, right now they need those investments according to their metrics. I do not expect they would require that someone like Obsidian sells the same as Bethesda, but it is still to be known what it means 'small' size from their words. This is not only an issue with the profitability of these studios, but also a mismanagement issue. Which is clear to me with the current situation is that these small studios will face sooner or later this new management scrutiny, and maybe, they will run out of the business. Even more when these new studios need to be 'solvent'.
Imagine is Sony had closed Naughty Dog, Santa Monica, Sucker Punch, etc. barely 3 years after acquiring them because they didn't release a megahit in time. We would never had played any of the great games those studios have produced over decades.
It's like if Nintendo just sold off HAL, instead of building them into something great and reaping the rewards. Anyways, this analysis is a shallow little trickle. Microsoft forced a talented developer out of their comfort zone, and firing them all for the failure of Redfall? That's an idiot tantrum, not a sign the adults are in control.
Being an Xbox fan is disappointing as hell, I remember from 2007 to 2014 how good Xbox was going , was all about the fun! Then an literal avalanche of investors flooded Microsoft and everything became "how can we make more money out of it" and everything went to shit!
Most xbox fans are fine, it is the internet that is saying xbox is down. Nothing has changed in my gaming future. I have had to stop watching most of my favorite podcaster because they think the sky is falling. I have found I have more time to play games.
I think the financial calculation has changed because of these AAA failures. Suddenly the risk assessment has less certain return on investment and it seems to have caused a very big course correction. [edit] Which was pretty much what Brad said when I got further in the video.
You can't spend this much money on acquisitions and not have to trim the fat otherwise you continue to lose money in wages alone. The number one expense in any business is wages so unfortunately those are the first to be cut. I think Game Pass is sustainable, but not within Xbox itself, because only about half of its base is interested. They have to get the content coming regularly and hope the PC/Mobile side pick up the slack in a big way. If that doesn't happen then I suspect either Game Pass will die or they'll resort to putting more games on PlayStation and Nintendo sooner to help make up the revenue.
Microsoft gaming is up over 49%. It's likely these studio closures were already in the works under Zenimax this is why many devs are being allocated elsewhere within Bethesda
This is why so many people were against the acquisitions. When a few companies own a lot of studios you are in fact shrinking the gaming industry.
@@DioBrando-qr6ye The "shrinking" was going to happen regardless.
Exactly, business sense 101
Microsoft is learning and making moves and looking 3-4 steps ahead. Folks they are a trillion $ industry for a reason
They need to hurry and put all abk games into gamepass to see what kind of bump it gives it.
Microsoft has the sales data and I expect they didn't just throw darts at a board. But still I think they've missed the mark with closures like Tango. There is real benefit to keeping favor with the community and being where they need to grow. They keep saying they want to grow in the east and especially Japan. An in-house first party Japanese studio would have been so important to achieve that. If it were a shell then it should have been catered to and helped to grow after the former head's departure. Yeah it may have brought in losses, but it could have provided real benefit that led to growth and profits in other areas.
I think Game Pass needs to be tweaked, or you raise prices yet again. You say it works for movies and TV shows but even then we see that it really doesn't. Netflix and co keep raising prices and now we have ads in there. The other smaller players are merging into one bundle to try and stay up. As good as the day 1 game pass model is for us gamers, I think they'll have too drop it. Sad to say, but I still see value in game pass just from the scope of the library it has even without day 1 releases anymore. You can still do day 1 drops if you want, but probably not everything. If they don't add new COD to game pass day 1, then expect it to go away for many games over time. New games will go day 1 to game pass probably like movies that go to streaming, 45-60 days later.
Yea but how much more can you charge while producing the level of games you’ve been releasing? I’m an Xbox fan, also an accountant so I understand they’ll have to consolidate things more because they’ve created 100B in expenses buying studios and even more because they’re all spending more money to produce games that are mostly breaking even. You have to consistently produce high quality games every month in order to justify another price increase. Call of duty or not it’s not worth an increase in itself. They don’t live by their own model of worlds most powerful console, unpolished and unfinished game releases are a regular thing for Xbox. A price increase is likely needed but has to be justified with the games.
It's not the pricing it's the marketing. Game Pass won't take off until the game industry stops being niche. It works for movies, TV, and music because those are all massive markets with billions of users around the world. For gaming this is only a thing on the mobile side. In reality console and PC gaming has just kinda failed (like not really failed but the growth hasn't achieved what it's needed to for the ballooning costs). The iPhone has the Minority share of smartphones globally (only about 20% compared to android) and still a new iPhone (like the 15) sells 200 million ish in one year. The current best selling console (Nintendo switch) is near the end of its lifespan and hasn't even broke 150 million sales. That's really bad. Sony should be thankful the rest of the industry doesn't believe in generations like they do because then they'd only be serving about 60 to 70 million users on PS5. Xbox has always been the smallest and they're lucky enough to still see some growth because of this but that growth is really minimal and only because they've done a lot to keep One users in the loop. PC gaming isn't much better. It's a little smaller than all three consoles users combined and that could have changed but the people with a gaming laptop that can actually run and buy AAA games is still sub 500 million. It's why they've been so desperate to grow to the cloud and mobile. That's AAA console gaming's last real chance. And I blame a lot of this on consoles. Sony, Nintendo, Xbox, Atari, and Sega insisted on a fragmented mess of a market. They weaponized their users against each other and pushed for exclusivity deals on a hardware level. Now the ones left standing have to deal with the consequences and their taking the whole industry down with them. It's not just xbox. Sony gaming revenue overall fell about 30% in their earnings call. Growth is stagnating. People aren't buying new consoles and most are spending time in games available everywhere for free with live service. Meanwhile dev costs have gotten insane.
All these subscribtions services are only attractive in the initial growth phase, where the investor basically pays the user to use the service so it can grow and scale. Once this phase is over and the harvest phase starts this when all the annoyances come in: huge price increases, ads, less content and quality... It is always the same with every service.
@@vullord666 Game pass wont ever work, and its nothing caused by marketing. You cannot fiscally charge a flat rate and fund the development of good games. Why would I pay $150 a year to play a game I can buy for $60 then play til I am bored ?
What I see here is something like Toys for Bob where they leave Microsoft, but still have some ties with them.
Highly likely this is the case. I feel like it will be the same with Tango's leader's next studio (I think its called Kamuy).
@zerohbeat that would be a great welcome if this happened, and also, stop the "Xbox is falling to pieces" lot. We'll see what happens.
That was a divestiture, not a flat out closure though. TfB still exists, Tango has been knifed and now lies dead in a gutter.
@@zybch I think they would have done the same with Tango if it was feasible. But even if you allow a studio to become independent, there still needs to be someone to take the lead and someone that pays the bills. I think in the case of Tango there was no one to do that, so closure was the only option.
Tango was closed.
Xbox is just dead to me now... I've always been a fan of the brand, but this? Feels like this literally is the beginning of the end. There is nothing to look forward to at Xbox, because it's only gonna get worse from now on.
lol what?
Yeah Microsoft will shut them down
I don't think Game Pass subs is the main success metric for Xbox anymore for some time now. The main metric is MAU (Monthly Active Users) , and these can be generated by Game Pass subs but also by other means. Instead of just Game Pass the strategy is likely to be multiple pillars to drive growth: 1. Game Pass 2. Multiplattform expansion (with and w/o Game Pass) 3. Growth in Service Games 4. Growth in strong IPs (like Fallout) across multiple entertainment formats...
They need to speed up putting abk games into gamepass to see what kind of bump it gives it. Maybe they'll announce some june 9th.
Game pass should be more like what PSN is now like... Have major releases still be bought... And in a year bring it to game pass... But at least that a new release get its initial bump
The fact that they make a pressure washer game, or prison architect …… maybe they should start making decent games again? Not our fault they are intellectually barren.
@@Defundthesoy i thought square enix made the power wash game. And prison architect is from paradox.
Why is MAU a metric of success? You're not getting money from those people, unless your strategy is to sell ad spaces in games or in the Xbox menus.
Unfortunate reality is that HiFi Rush and Ghostwire Tokyo were commercial flops by every metric. Supposedly the gave Arkane was given 1 year to fix Redfall post launch and they couldn't get anything out the door except he 60fps patch, so they were canned too. Its also very likely that MS's purchase of Zenimax was more about the big IP and big studios and not these smaller that they just cancelled, so they're trimming the fat.
the crazy thing is xbox higher up on twitter said hifi rush didn’t the exact opposite
@@taeallred after 2-3 months on the market I'm sure it was doing better than they were expecting a game with zero marketing to do, but looking at every chart its engagement flatlined after that. I'm sure that bombing on the PS5 was the last straw. 1.7m unit sales and 3m total lifetime players for a game that took 5 years to make isn't going to keep a studio open. Then you had Ghostwire that didn't seem to do well commercially and definitely didn't do well critically.
HiFi rush was a flop? How? Over 3 million people have played that game. Where are you getting this information from? 😂😂😂😂 all of Microsoft executives proclaimed the game as being one of their biggest successes in years and said they would reinvest in the studio. So were they lying? And how do you prove that?
A flop? If that’s the case that is purely the fault of Microsoft by sticking it on Game Pass only.
in the era of game pass, everything is necessarily going to be a commercial flop
Xbox has fucked up over and over again, with the odd big pro move like back compat.
Xbox needs better PR. All they had to do is say these studios would be consolidated into xbox games studios or bethesda teams to work on niche exclusives. Their plan is to keep a steady stream of smaller games with ABK and Game Pass paying the bills.
But that would be lying if they don't actually do that.
This.
@@ohmnesia Not really. PR is also about good communication. That's something they lack badly.
@@ohmnesia Like saying they need smaller GP suitable games, then garotting Tango...
@@zybch Yeah... That was beyond any logic.
I think GamePass is indeed a stable and viable option. It’s my favorite part about Xbox, Having a library full of games ready to download is amazing.
I wonder what would have happened if Gamepass had released titles that were exclusive to the service? Similar to Netflix which has content that can only be consumed through their subscription.
When he says smaller, I’m guessing he means reduced scope. That is no different than what Shawn Layden has been saying for years. In fact a lot of publishers are saying the same thing.
Awesome explain
Best video I've seen yet explaining everything
I sold my Xbox and used the cash to buy a nice video card. I’m sort of tired of paying for ultimate with so many bad games.
So first problem with this at least for Tango: We just saw FF7 Rebirth BOMB. That's the safest game ever for that market, which Xbox wants to do better in and bolster their portfolio. Tango yes successfully did the smaller game but for one it wasn't cheap/efficient. Two, a lot of the talent left including the studio founder. Three, if you're going to make a JRPG with them, you would need to ramp up and spend more. Given the climate in Japan? That's too risky to be spending Zenimax's resources on when hey, this Fallout TV show did really well, could be ramping up there. That's all it was. Matt's assessment is right but Tango and the market there, wouldn't have been a wise bet right now. Instead, hopefully they can retain what they can and move them to another studio short term. Remember we're also in Global Recession. Absolutely is a time to tighten the belt a bit until people have money. It'll let them be flexible to try and grow and risk later. Finally, the industry needs Game Pass because without it? Things would be bombing left and right. Nobody wants to pay $70. The Free to Play games that make up the blackhole title are really hurting traditional business. If there was no Game Pass, I'd honestly just stick to playing Hoyoverse titles and massively tightening my own belt. Game Pass being there, in addition to doing Steam like sales and incentives, allows me to invest on my terms.
Ff7 rebirth bombed 😂😂😂😂😂 on what planet.. you are absolutely deluded ,Xbox tried to compete with Sony and it killed them 😂😂😂
How many people worked on HiFi Rush, and how much of that team was let go? How much of Arkane Austin's team was actually left?
Alex has two great ideas in his latest video.
Really interesting analysis of the situation Brad, and puts things into perspective.
I think Gamepass needs some sweeping changes to be sustainable. They should rotate games in and out of game pass from studios they own because I don't think they're making enough sales if all the games are free all the time. All MS studio games should be available multiplatform so they can make more sales that way as well.
Matt Booty needs to go. He proved he can't manage a group of studios. Phil Spencer needs to go, as he can't seem to notice Matt Booty mistakes and reposition him or fire him, instead he promoted Matt. And at the highest level, Microsoft should keep nadella off of gaming division. Nadella proved time and time again he hates consumer-oriented Microsoft Products. He destroyed Windows Phone and will destroy Xbox if he continues to have influence over the gaming division.
Maybe you should submit your resume. You seem to know exactly how to run a $25b/year division. You're expertise is wasted posting on KZhead.
@@jubei20111 I am not an expert, but I'm pretty sure Matt Booty saying 'Xbox needs to do small games that bring prestige and awards to the division 1 day after closing down Hi-Fi Rush makers Tango make it looks like he doesn't know what's he doing.
@@eduscxbox Since when is a game small when it took 100 people 5 years to make it? Doing the math that game cost anywhere between $50M-75m to make. Thats roughly the same size as Ratchet & Clank: RA.
@@jubei20111 Since Phil Spencer said himself so. A month ago when they were being interviewed about the 3rd party rumours and said that they will take these smaller games to other platforms.
@@jubei20111 Game was small. John Johanas prototyped it on his own and a small team worked on it. At the end of the project, after ghostwire be released ghost team helped. It wasn't 100 devs since the beginning, only a small part. Also, all hurdles Tango had developing Hi-Fi Rush were solved by the team, that means a sequel would have the foundation ready and they would build upon it, making the game even smaller. Just look at the picture, they already have 3d models, shaders, animations, rhythm system, combat system, everything that make the game works is done, so they would not spend money on those things anymore. A well-scoped sequel would cost less than the first game.
I think your spot on
Even if a project is small, if it has a projected +NPV, then it makes sense to pursue. Microsoft has signaled their interest in smaller titles, so I don't think that they're overlooking small opportunities. They just for whatever reason didn't think Tango's next project would have a +NPV. Why? I don't know. One would think that Tango's increasingly positive reputation would've resulted in growing sales for the next title. But I guess that Microsoft didn't see it that way.
They could make modern retro style games like gex or racthet and clank, small games and fun. I liked playing the remastered spyro and ty the tasmanian tiger on switch. Bringing back the premium package for the game and cool stuff. You could remaster mosters inc from psone and ps2 and id buy it. I thought switch was remastering gex and i never saw it. Switch remastering zelda was pretty good. Making games so big fills up storage space way too quickly and for series x games, you cant play from an external hardive. The expansion drive isnt that much, about 2 T, and that would fill up with a handful of massive series x games. Fun small games with cool upgrades, good stories. Am i missing anything or is it just me?
The sun didn't explode this week either. That's good, right?
There's always Next week for that happen.
This is a very level headed video, and exactly what I needed. There’s so many bad faith arguments going around, especially from a certain group. This is maybe the best video you have made. Hi-Fi Rush did take 5 years to make, so per definition not a smaller game. Game Pass is absolutely sustainable.
No is not. Lmao
@@JunlugoPR Dude, the earnings numbers state clearly that GP is "sustainable and profitable" (MS's words).
@@zybchhow so? Just yesterday they said that they are rethinking the overall Gamepass strategy… probably not including CoD in the service and raising the prices of it…does that sound “ sustainable and profitable” ? Numbers are stuck.
@@zybch if GP was sustainable, we wouldn't be in this situation
I've seen people say that Hi Fi Rush was considered at least a mid size game because it took about the same time to make as other AAA games. When they say small size they probably mean like 2 to 3 years. It is a huge shame, though. HiFi Rush was one of my favorite games that I have ever played.
Axing Tango after Hi Fi Rush was criminal.
Gamepass can only be sustained if the games created speak to a mass audience. They must also come out in quick succession to retain users. I would sub to the service for a month play the new game and bounce once I'm done. They are going to be force to either release more games regularly or the games being made will be bloated to tide users over to another billing period. And they must find ways to get users to pay more money through DLC. This can work for Cod with its multiplayer but singleplayer games and modes will suffer more.
Finally, a mature approach to this. The countless idiots preaching 'Xbox is dead' is more damaging to the brand, it was only a month or so ago 'Xbox is leaving the console market' there's a serious problem with many channels simply lacking the intellect to understand business.
Appreciate the detailed analysis Brad. Honestly confirms what I’ve believed from the start, Microsoft doesn’t seem to understand how to make big titles. Halo isn’t the only one that suffered from big budget sub-contractor bs either, Forza Motorsport tanked too and the game is still terrible as of right now. No passion or vision whatsoever in that game, hate to say this but that would never happen with Sony. Talk about a good way to ruin a reputation, it’s why I went ahead and bought a PS5
You are seriously putting this on the talent and not the people who manage all that talent? Which is Bond, SPENCER, BOOTY. If there are this many issues with studios as have been reported then their internal culture in how they operate does not work so there for trying to be consistent is close to impossible outside of self running entities like COD/ABK. All internal MS studios and Bethesda need guidance for the ship to work correctly. Which means intervening when things are not working, and doing it early enough before a game is announced.
If they want to sell more gamepass, they need to become a monopoly, thus maybe they should have bought Sony (lol). Unlike movies which can be consumed in 2 hours, games take longer to complete. Most people don't have the time to play multiple games to make gamepass worth it. Give up on gamepass and just sell quality games.
What happen to Bethesda Asia K.K.? Tango was a department of K.K.
K.K slider / totakeke
I think they need to still focus on sales of games and stop putting them day one on game pass. Let them sell for a while then drop them on. Even if it’s a few months later or something. I bought a lot of the games available in series x because you could only buy them they didn’t have them available on gamepass at all. Now there is so many new games on there what’s the point in buying them.
Frankly, this all comes down to poor management. For example, when Nintendo released the Wii U, few could argue that it was a massive misstep for the company. With lifetime sales of the console at 14 million, how did Nintendo respond? Simply put, they supported it with great first party output for a little over four years. But more importantly, executive leadership took voluntary, massive pay cuts, in order to save developers jobs. Nintendo is worth 8 billion dollars. Microsoft is worth 3 trillion dollars. There is no justification for these cuts, especially for a company the size and scope of Microsoft.
Eurogamers article on why xbox still exist is spot on. This last paragraph by Chris Tapsell really stood out for me and tells me why Xbox will never succeed and will always be mediocre in my opinion. The philosophy of a great video game platform holder is that it makes money in order to make more consoles and more games. The philosophy of Microsoft - and by dint of that, Xbox - is evidently that it only makes consoles and games in order to make money. Like so many businesses owned by gigantic, publicly-traded mega-companies, Xbox is now stuck in a cycle of thinking back-to-front. It, and I suspect much of the video game world, no longer knows why it exists.
hope this means more Fallout 🙏🏻
At the end of the day, Microsoft & Sony are 2 giant digital stores that are competing. The total revenue is huge and most of it is from totally the safe, risk free 30% on 3rd party games, DLC and micro transactions. Sony makes a relatively small profit on Spiderman as development costs are large and licensing marvel characters is expensive and they spend an absolute fortune on marketing. The whole point of spiderman is to get millions of gamers into the playstation ecosystem/store which works really well. Xbox has a low console market share as it has the lowest number and quality of exclusives. You only buy any type of media player if there is great media on it. You join a streaming service for that one show you can;'t get anywhere else. A console is no different. Microsoft expected massive growth by making every screen an xbox but this "extra reach" is not getting people into their store and spending money. The "extra reach" is not working. Selling gamepass at a great price has attracted a lot of players but that price focused market is kind of maxed out now. If you are selling media products and services then you need good exclusive content & closing Tango, your only japanese studio is the opposite of what you want. Your whole discussion is based on xbox being a game publisher that needs to make a good percentage profit on each game. But xbox get most of it's profits by being a store. So profits is driven by having custmers in your store. I quit gamepass when there was no exclusives and I joined again when Starfield was released. It's all about the exclusive content.
I was more shocked with Tango
Have been with Microsoft Xbox and Xbox Live since day one on all fronts... In my home 1 Xbox, 4 Xbox 360's, 2 Xbox Ones, 1 Xbox One X, 4 Series S, 1 Series X... between them all safely 750 physical games minimum, who knows maybe 200 to 300 paid digital games along with the games that have come from Live and now Ultimate.... Honestly... I've gotten over them "almost rounding the corner." I now pay for a couple of monthly subs for ultimate because of the family and the fact we have 4 digital only consoles. At some point I'm probably going to back down to 1 sub and drop everything else as MS just really disappoints me. Not mad at all, just tired of waiting for the "we have arrived" moment for far too long. I'll still collect Switch games as long as they put them out physical, and play my retro consoles.
Finally, someone who understand what's going on. XBox is now what a +100B sub-company? When you have parents like MSFT, no matter the business you gotta deliver. They have deep pocket, still at the end of the day, if you don't make money, you're useless that's all. I see people are surprised or they're blaming XBox to put their games on PS or Nintendo, they just understand nothing. I'm a gamer, I'm not a platform addict, I don't care if I play on PC, or XBox, or a 3DS and I don't what, as long as I can play the games I want to play at the best price, it's fine for me. Cause I'm gamer, not a cult member. Just look at what happen with Helldivers 2 with Sony, do you think it's normal? One reason I won't play at Stell Blade or even interested on the game, and god knows, I believe it's a damn good game. Buying a PS5 just to play at some games? No thanks, if you're a gamer, you don't care about the platforms, you just care about the games and the price. The problem with platform cultist is they have no clue of how a business is managed, and the pressure these managers have. When you manage Billions, it's a totally different game.
Redfall, the live service cut scene sim
We just watched the perfect Microsoft corporate narrative. We are consumers, not corporate executives. Next, try the consumer perspective. Most importantly, we talk about humans who lost their job. Stop the damage control.
Suck at your job lose your job truth is who cares they need you o now find better forms of employment
Consumers aren’t the ones writing checks for these small studios who aren’t making a return for the company that writes them. Consumers opinions don’t matter because if MS doesn’t make money, they don’t make more games. The best thing for consumers is to leave the decision making for people smarter than the consumer.
@Annyong31 so why haven't Todd Howard and Emil Pagliarulo been fired out of the Yamato 18.1" A turret yet? Even Stevie Wonder can see that Fallout 76 and Starfield are very much NOT quality games - the fact that Phil Spencer, Matt Booty, and the Microsoft board hasn't launched Bethesda's leadership into outer space rather proves that Xbox and Microsoft know far less than we the public do.
People lose their jobs all of the time. Where’s your humanity for the billions of people that lost jobs this past decade? The problem with gamers and fans is yall can’t think outside of your narrow bias. This is happening across the entire planet. Companies are tightening their belts everywhere because they over hired these past 5-10 years and now, with economic headwinds, have to find ways to control their spend and drive profits. That’s business. People who do good jobs tend to keep them. Those who do bad or mediocre jobs inevitably lose them.
Game Pass was supposed to take care of all of the low budget titles that wasn't going to make a whole bunch of money but because it's for Game Pass it would be fine
Game pass is good for Microsoft, but a curse to the game industry, because the expectations for a game is too high, which causes crunch. Developer are not given the time to build a game from a passion. The reason Halo was great wasn't because of how block buster it was or how much money they have, it was the process of making a game that not just consumers would enjoy but also a blast for the bungie developers like Martin. Minecraft was successful not because or money, but because of fans and notch taking the feedback and improving upon it, to make sure people could have the best gaming sandbox.
Phil said that the Activision buyout wasn't xboxs main strategy. Phil said this. It was used for a propellent for the brand and to help get there foot in mobile gaming. Nobody is saying this. NOBODY
I’ve spent the past couple days catching up on reactions to this story, and this video resembles an oasis within a vast desert of vapid, surface-level coverage. I actually find the degree of group-think displayed by the Commentariat viscerally disturbing. It’s a common phenomena exacerbated by social media across the board, but this shit is next level.
You can’t believe a word out of these companies Brad.
Its crazy that Xbox was able to succeed and reach the heights that it did (360 Era) at one point with far less support from Microsoft. Now they have all the support in the world from Microsoft and its been a disaster.
There's a big comet heading towards Elder Scrolls Online. By the 9.
Shutting down tango is incredibly dumb because they've said it's a success.Other Xbox Studios are going to think we aren't safe even if we do succeed.Short term thinking from cold corporate & incredibly stupid.Devs will be cautious joining Xbox because of this.
I feel you said it really well and i said they were gonna need to get their return on investment and it probably was gonna lead to a ton of firing but everybody shooed me and said this is good for the industry and its healthy. spoiler its not. They were really over zealous and spent around 85 billion dollars on aquisitions. the only reason you do that is you business is failing and you need something to save it or you see buying something as a worthwhile investment like how sony bought insomniac. if something like starfield from bethesda cant move the needle then i dont think there is much they can do. I feel xbox to survive is going to go multiplatform while still producing consoles because for them that is what is going to make back their investment because that is all they care about
The question should be can the current number of Gamepass subscribers sustain the huge number of studios under Microsoft? Can the store sustain Xbox if gamers are trained to buy less games. Gamepass was never the Netflix of gaming, it has far more in common with Movie pass. A subscription based model for moviegoers for a flat monthly fee. Had instant success. Burned millions of dollars. Went bankrupt a year later.
So many things wrong with this video: 1. Redfall only continued development because Microsoft insisted on it. The devs themselves wanted to cancel it. Also Arkane was about to send out an update for the game and were planning on honoring the year one pass before MS closed the studio. It's not Arkane Austin's fault, it's MS' fault for Redfall. I suggest you read more on Redfall's development. 2. There's absolutely no evidence that Shinji took some devs from Tango. Absolutely no source for this. MS shut them down cause their next project was Hi fi Rush 2 and it was years away. Plus it didnt make that much money for MS.
I don’t know why Microsoft can’t just come out and say exactly what they are going to do, this way anyone who is on board with Microsoft’s vision for Xbox can remain where they are and who knows they may even get more people interested in Xbox if they just came out with the truth Instead of constant mixed messages.
Honestly, Game Pass Is Not Sustainable Because the Revenue Is Not Enough to Cover the Cost of All the Games Releasing On Game Pass!!!! What I think should have happened with the Game Pass Subscription Model is you Pay for a Monthly Subscription Fee and lets say you play a particular game UP TO 50% of the Game and then once you reach 50% of playing a particular game THEN YOU WOULD HAVE TO DECIDE IF YOU ACTUALLY WANT TO BUY THE GAME OUTRIGHT TO FINISH 100% OF THE GAME OR NOT BUY THE GAME ONCE COMPLETING 50% OF THE GAME AND JUST NOT FINISHING OF COMPLETING THE GAME!!!!! BUT BASICALLY THE SUBSCRIPTION FEE LETS YOU PLAY A PARTICULAR GAME UP TO 50% OF THE PARTICULAR GAME!!!! This Idea of paying a subscription fee to play 100% of a particular game is BAD FOR BUSINESS!!!!!
The conclusion is - modern AAA game development as it stands isn't compatible with what modern capitalism demands at higher scales. The risks for any AAA game doesnt pay off enough frequently enough. The only thing that solves this is reducing the risk- advancements in game dev have been pretty static for the last 15-20 years. The advent of the big game engines wasn't the savior people thought it was. And it's meant costs go up, not down. The only thing that realistically 'fixes' this to make AAA dev make sense in the future is tech advancements that let people make games faster, cheaper. Maybe AI, or other advancements will let studios put out what the public wants in 'AAA' but in fractions of the time, thereby making the costs much less. Esp with the current economic env, if something doesn't change I see Xbox being forced to spin off as just the thing that exists to sell CoD, Fallout, maybe Halo and Gears, and maybe Flight sim. And it will have to be private, because otherwise Wall St would short a independent xbox into oblivion. (And not that Oblivion).
Microsoft is sacrificing their long-term financial goals by focusing on short-term gains that they're killing off their only chance at ever making a massive impact in the consumer space.
Got a lot of balls to say tango isnt what it used to be when arkane austin lost 70% of staff, director of prey included prior to the announcement of RF
HiFi Rush doesn't move the needle for Xbox. They need games that cost 100M+ to make, not 7M. Otherwise they're in the same business as Devolver Digital. These are high rollers dawg.
Gamers aren’t going to like this video, but you’re 100% right. MS isn’t cutting successful studios. They’ve got too much overhead and these studios aren’t performing. Ninja Theory is next.
Remember when Platinum Games wanted to be purchased by Xbox for the easy dollars? I'm sure they are glad that didn't happen.
Everyone is looking at this only through the lens of console gaming.. the other shoe that has yet to drop is mobile gaming. Once they get that spun up there's a giant chunk of that $140b mobile gaming market that they're gonna want to capture. They said it a million times the purchase wasn't just about COD.. were they lying or is mobile the ultimate goal? the way things are trending with cloud based and things like that seems to speak the truth to that. It's been 7 months since closing and all they've done is housekeeping wrt abk games.. they need to get those spun up into GP asap
ohh my goodness if people haven't figured it out by now THEY ARE A COMPANY !!! THEY DON'T CARE HOW YOU FEEL !!!! yes it sucks that they shut down these studios BUT they will do whatever it means necessary to make money ...this is the hard reality of the business world
I think all that transparency Phil told us about, needs to actually happen.