Hello, and welcome to Protocol Entertainment, Your guide to the business of the gaming and media industries. This Friday, we’re checking out Microsoft’s very good week in Xbox News and what it says about its long-standing console rivalry, plus what to read, watch, and play with this weekend.
Xbox’s Steady Return
It’s been a good week for Xbox. On Monday, research firm The NPD Group announced that Microsoft’s console posted its best March sales figures in 11 years. Then, during Microsoft’s earnings announcement on Tuesday, the company said Xbox “parted” against PlayStation for two consecutive quarters.
So what’s going on here, especially in terms of the seemingly never-ending PS5 crunch? Well, it’s a story about a chip shortage as well as Microsoft’s multiyear strategy to better compete with Sony by using the appeal of its Game Pass subscriptions and affordable Xbox Series S.
The new Xbox consoles are doing a lot better. Microsoft hasn’t released solid console sales figures yet, and it hasn’t since it fell far behind Sony in 2013 shortly after the Xbox One’s launch. But the company is slowly starting to release more data and talk more openly about it. Its console hardware business has changed.
- According to Microsoft gaming chief Phil Spencer, we know that the Xbox Series S and Series X consoles are selling out faster than any previous generation Xbox.
- Some Estimate Microsoft’s sales figure ranges between 10 million and 12 million units, compared to Sony’s recent 17 million-unit milestone in February.
- Microsoft saw Xbox hardware revenue rise 14% this past quarter compared to a year ago, and overall gaming revenue jumped 6% to $3.74 billion.
Microsoft has come up with a unique formula. While sales of Xbox devices follow at roughly the same pace as the Xbox One’s launch a decade ago, Microsoft today is less reliant on it than it was at a time when it had a larger console-only customer base.
- More important for Microsoft is increasing Xbox Game Pass, which has seen a 45% increase in subscriber count over the past 12 months.
- Because of Microsoft’s commitment to cross-save and cross-buy, players can move their libraries from Xbox to PC and even mobile devices with cloud gaming. Microsoft doesn’t need to outsell PlayStation if it can begin to unlock new audiences on mobile devices and attract players with its cross-platform and quality-of-life features.
- “While console users represent the core of Microsoft’s service, for example, its future growth will depend on converting non-console users through its streaming functionality,” said Ampere Analysis researcher Piers Harding-Rolls. A recent report on gaming reads.
Sony’s supply constraints have given Microsoft an advantage. We can’t say for sure why Sony is having a hard time supplying PS5 consoles, but we do know that demand is far greater for the PS5, while also Microsoft’s cheaper Series S throughout the past year. It has been very easy to find and in 2022. Series X shortages are no longer as severe as they were.
- Anecdotally, I’ve heard from several readers that they’ve chosen to buy a new Xbox because of the general fatigue of buying the PS5, the more readily available Series S, and the allure of Game Pass.
- Having two options at meaningfully different price points could help split demand for Xbox devices, while the PS5’s two options are either a base model without Blu-ray drives or a little one that accepts discs. There are expensive versions. Meanwhile, Sony lowered its PS5 sales projections for fiscal 2022 and said it would continue to make PS4s through the end of the year.
- Because Xbox devices are easier to find, street prices for scaled units have dropped dramatically, while post-PS5 prices have remained nearly double the MSRP.
- Long it will continue, Microsoft may be able to clinch market share against PlayStation, which still captures nearly half of all console consumer spending, with more than 112 million PS4 units sold.
The console market is more dynamic than it has been in years. Nintendo continues to have strong sales, six years into the Switch’s life cycle, and regularly sells more units than the competition. Meanwhile, Sony is still capturing the PS4’s massive installed base and most popular free-to-play console games, like Fortnite and Call of Duty: Warzone, spending most of the time being played on PlayStation.
But the Xbox has a unique advantage thanks to its investment in subscription and cloud gaming and Microsoft’s more device-agnostic approach to distribution. It’s also been able to keep up with the demand for Xbox, while Sony continues to falter.
While you can easily find the PS5 on store shelves at Best Buy or Walmart, Microsoft may have the official rights to Activision Blizzard’s formidable software library, making the deal sweeter for Game Pass customers and Xbox and Xbox One. Closing the once seemingly insurmountable gap between Play Station.
Nick State
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TGIF: How to spend your weekend
“Undo” – Amazon Prime Video. The first thing you’ll notice when you see “undo” is the rotoscope animation. This is the same technique used for Richard Linklater’s “A Scanner Darkly” and it basically means that the filmmakers captured the actual footage and then used that as the source of their animations. In “Undo”, it helps to tell the story of a girl torn between two worlds: the here and now and the world in her head, in which her long-dead father convinces her that time travel is real. It is captivating, to the extent that the viewer no longer knows what is real and what may actually be the product of mental illness. Season One was a masterpiece, and I can’t wait to watch Season Two, which premieres today on Amazon Prime.
“Arex” – Netflix. If you’re looking for some more kid-friendly alternate realities, don’t miss “Arex,” a charming if slightly scary short film on Netflix that puts a new twist on an old question: What if fairy tales were real. Was? “Arex” was produced as part of Netflix’s Emerging Filmmakers Initiative and was created by Chicago up-and-coming visual artist Hebrew Brantley.
Spilling Silicon Valley secrets, one tweet at a time – MIT Technology Review, If you’ve ever read a story about Twitter working on a secret plan, or Instagram getting ready to test a new feature, chances are those scoops were unearthed by notorious reverse engineer Jane Manchun Wong. Was. Based in Hong Kong, Wong has become renowned for her ability to find clues on what some of the world’s biggest companies are going to do next. This profile tells us what tickles her and reveals that the CTO of Facebook is among her fans.
Crispy Street – iOS and Android. Aren’t you curious what Netflix’s foray into gaming is all about? Here is your chance to find out and have some fun while at it. Krispy Street is a Netflix-exclusive mobile puzzle game based on the Krispy web comic. It’s like “Where’s Waldo?” Except that you’re tasked with finding flower people like Murakami and big cute monsters with emotions. It’s fun, cute and surprisingly hard! The game is available to Netflix subscribers through Google and Apple’s app stores.
Janko Roetgers
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Thoughts, questions, suggestions? Send them to [email protected] Enjoy your day, see you next Tuesday.
