Microsoft’s new weapon in the game console war: “Game Netflix”

According to reports, last week, Microsoft and Sony launched a new round of game console wars, the new game consoles launched may become one of the most sought-after gifts this holiday season. This round of competition is particularly important for Microsoft, and it needs to do better than the previous round of game business.

According to the results of the game revenue analysis of the two companies over the past five years, it is fair to say that Sony left the industry’s main competitor Microsoft far behind in the last cycle. However, Microsoft will still have its own advantages in the gaming industry in the next few years.

The company’s game subscription service Xbox Game Pass has achieved strong growth, which will help expand the number of players for console games over time. The purpose of this service is to allow people to play games like Netflix without paying $60, and let them play games through the cloud on devices other than Xbox .

Microsoft also used its cash reserves to acquire game manufacturers in order to expand the scope of the service. The $7.5 billion acquisition of ZeniMax Media, a company that is the parent company of the licensing of the games “Doom” and “Fallout”, is pending. It is understood that Microsoft’s plans said the company might be game developers more large-scale acquisitions.

▲Nintendo’s total revenue, part of revenue from Microsoft and Sony’s games

As shown in the figure above, although Microsoft’s game sales revenue rose from 9.12 billion U.S. dollars for the fiscal year ended June 30, 2015 to 11.58 billion U.S. dollars, Microsoft’s ranking among the top three game makers has changed in the past five years. Decline.

In the most recent fiscal year, Sony and Nintendo’s gaming revenues were US$18.98 billion and US$12.56 billion, respectively.

In November 2013, Microsoft launched the Xbox One on the hardware of the previous generation of game consoles. The start was not smooth. Since then, Microsoft’s position among game console manufacturers has declined. Microsoft’s biggest failure was the bundling of game consoles with the motion-sensing device Kinect, which made Xbox One more than $100 more expensive than Sony’s PlayStation 4, which was released almost at the same time.

Within a few months, Microsoft removed Kinect from Xbox One and lowered the price of game consoles. However, the deal is done. Consumers still believe that Sony’s game selection for PlayStation 4 is better than Microsoft’s game selection for Xbox One.

For Microsoft, which has been in the game console business for 20 years, it is very difficult to reverse this situation. Over the years, Microsoft has been challenging the dominance of Sony PlayStation. For a while, Microsoft has been waiting for it. Microsoft’s second attempt on the console was Xbox360, which sold almost the same as Sony’s PlayStation 3.

These data examine the total game revenue of the three companies in the past five fiscal years, including game console hardware sales, online game services and small transaction fees, and the sales of games produced by the host companies themselves. The so-called “first party “Games” (first-party titles), and the royalties they collect from independent third-party games sold on their platforms.

Sony and Microsoft are generally regarded as direct competitors in this industry because they produce the most powerful game consoles that can realize the most graphical games.

Microsoft’s Xbox business chief financial officer Tim Stuart (Tim Stuart) said in a statement that the company’s two new game consoles, the Xbox Series X and the lower-priced Xbox Series S, have sold out globally. This is the company’s history. The most successful game console ever first launched on.

He said: “Gamers are at the center of the ecosystem that we have invested in over the years. We believe this strategy is the main contributor to Microsoft’s annual gaming revenue-in the past two years, Microsoft’s annual gaming revenue has exceeded $11 billion.”

Stewart described Game Pass as the “cornerstone” of Microsoft’s gaming strategy, which “lays the path for growth outside the console market.”

New competition

Microsoft has placed a big bet on the Game Pass service, betting that it will help sales of the latest generation of hardware. The company launched this service in 2017, but it has only recently begun to launch new products including Electronic Arts games to enhance its competitiveness.

The cheapest version is $10 a month and players can play more than 100 console games, while the $15-a-month version includes PC and console games, as well as Microsoft’s Xbox Live Gold multiplayer game service.

More expensive services also include cloud gaming, which allows people to play high-end console games on mobile phones and tablets. Cloud games currently only run on Android phones, but Microsoft said it will eventually run on iOS devices.

The biggest test Microsoft currently faces is to see how many people are willing to pay to play a variety of games every month instead of buying them separately. So far, the numbers are encouraging. Microsoft announced in September that Game Pass has 15 million subscribers, up from 10 million in April.

However, Michael Pachter, an analyst at Wedbush Securities, expressed doubts about the service’s prospects for significantly expanding the gaming market. He said that this service costs US$120 to US$180 per year, which is too expensive. He also pointed out that large game publishers such as Take Two Interactive Software and Activision Blizzard have been reluctant to include their games in similar services such as Game Pass. According to people in the gaming industry, Google’s cloud gaming service Stadia has not gained much appeal.

“Like Hulu TV, Microsoft will understand that the cost of these transactions is high, and like Hulu TV, if Microsoft tries to add content, its Game Pass price will rise,” Pachter said. “Then I I didn’t watch it.”

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