Microsoft Set To Leave The Console Hardware Market, Says Analyst DFC

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For a while there, we were convinced that Microsoft were preparing to leave the console market, once they started with their push for Windows 10 gaming- and given that Microsoft announced at E3 that literally all of their first party games and Xbox exclusives will be coming to Windows 10 as well, you would imagine us to be of this opinion even more now than ever.

However, other things have happened that have made us surer than ever of Microsoft’s commitment to gaming- they have announced two new Xbox consoles in the pipeline, and they have greatly expanded their investment into first party developed and published games for the Xbox. If Microsoft are planning on dropping the Xbox, they sure aren’t acting like it right now.

However, it does not seem as though Analyst DFC is convinced regardless. In a recent note to investors, they listed what they feel are a series of problems with Microsoft’s Xbox strategy, all of which are indicative, in their opinion, of Microsoft eventually dropping the Xbox and moving out of the console hardware business entirely.


“The most immediate problem is Microsoft effectively killed the Xbox One Slim right out of the gate,” they said in an investor update. “If there were many Xbox 360, Wii U and even PlayStation 4 consumers interested in an Xbox One this holiday season they have now been told to wait until Scorpio arrives in 2017. Microsoft can only hope that the buzz around Project Scorpio goes away soon but with the cat out of the bag that is unlikely.

“There are all kinds of other problems with Microsoft’s mixed messaging. The pricing on the original Xbox One is great, and the Slim is wonderful, but all the important new games will be on PC, so why invest in a console? Just upgrade your PC. And if you do want a console why buy now when Scorpio will be here later. All of this is a net dampener on new hardware sales now and really opens the door wide open for Sony and even Nintendo for the NX.”


Their assessment gets even more scathing as they look at Scorpio more in depth, noting that there is a probability of Microsoft not even having an Xbox division by the time the promised Scorpio launch window approaches.

“The biggest issue is whether Microsoft will even have a game division by the time Project Scorpio launched,” they said. “It is no small irony that the E3 events went on at the EXACT same time as Microsoft CEO Satya Nadella was announcing the $26 billion acquisition of LinkedIn.

“The overall question now seems to be not if Microsoft will exit the game business, but when and how. Of course, that leads to many other questions such as how is exiting the game business handled? Is Xbox spun off? Does Microsoft find a buyer? Or does the company just shut Xbox down? DFC feels the latter option will most likely not occur but it is clear something must be done.

“Unfortunately the value of the Xbox brand is in serious flux with much of its advantage tied to the Microsoft Windows 10 operating system.”


We’ll know soon enough, I wager- but for now, I am more confident in the future of Xbox than I have been for a while now.

Posted:
Related Forum: Xbox Forum

Source: http://gamingbolt.com/microsoft-set-to-leave-the-console-hardware-market-says-analyst-dfc

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"Microsoft Set To Leave The Console Hardware Market, Says Analyst DFC" :: Login/Create an Account :: 45 comments

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IonXtremePosted:

Hey, DFC, how about actually learning that Microsoft would not leave the console market unless they believed there was a serious loss factor equated to being in the console market

OmittingCoderPosted:

MushroomElm "Microsoft just announced 2 new consoles. This article..Explains that they are now leaving the Hardware business." What? [That's what I get from the title.]

Microsoft is not stupid. The gaming platform for Consoles beats that of the PC by a massive percent.(1-2K (PEAKED)players on Blops 3, with 10's of thousands on any console at any given time. Microsoft is just EXPANDING, and there is nothing wrong with that. They made Windows 10 for this reason. To be able to bring players together, and I am in FULL support of it.It will break those walls of 'PC Master Race' and 'Console Peasant' War because no one can be better when they all play together > As it then comes down to skill and skill alone. Not hardware.

I'm confused on to how Microsoft isn't showing off their interest in releasing a new Xbox One when they just announced TWO new consoles? They might be a little 'hush hush' on Scorpio, and I think that's a good idea. Announce it, get hype, and make sure it's developed correctly before flashing it off completely. Not a tatic I would have used, but hey. It is what it is. I don't think Microsoft will be leaving the console behind. At least, not until their major gaming unit is moved over to PC. So, I give it a few more console generations, if not just two(which is a long time, seeing how long the 360 and ps3 lasted..)


You're comparing console games with PC games. Sure around 2k players peaked for Blops on console. Blops is one of the bigger games on console. Blops isn't even remotely popular on PC. CSGO (which is popular on PC) can peak well over 500k.
Edit: Blops 3 peaked at 12k on steam today.
PC game market is far bigger than console game market so saying it's bigger on console makes zero sense

GT-RPosted:

Daniel Surely this can't happen, Can it? The consoles are were their money is at.


No, they have always made the bulk of their revenue from software sales mainly to big companies. I'm pretty sure they don't make much at all from the gaming division after expenses.

RuiPosted:

i doubt this will happen, Microsoft announced Xbox One S for people who don't have a lot of money and to give them a choice between the Origin Xbox One & The One S. "Project Scorpio" is for the higher tear Gamers/Developers also for people who want more, obviously not everyone is going to be able to afford the "Scorpio" because it will be over $600 - £600

FamousPosted:

I don't see this happening at all.

DanielPosted:

Surely this can't happen, Can it? The consoles are were their money is at.

partyrockPosted:

MushroomElm "Microsoft just announced 2 new consoles. This article..Explains that they are now leaving the Hardware business." What? [That's what I get from the title.]

Microsoft is not stupid. The gaming platform for Consoles beats that of the PC by a massive percent.(1-2K (PEAKED)players on Blops 3, with 10's of thousands on any console at any given time. Microsoft is just EXPANDING, and there is nothing wrong with that. They made Windows 10 for this reason. To be able to bring players together, and I am in FULL support of it.It will break those walls of 'PC Master Race' and 'Console Peasant' War because no one can be better when they all play together > As it then comes down to skill and skill alone. Not hardware.

I'm confused on to how Microsoft isn't showing off their interest in releasing a new Xbox One when they just announced TWO new consoles? They might be a little 'hush hush' on Scorpio, and I think that's a good idea. Announce it, get hype, and make sure it's developed correctly before flashing it off completely. Not a tatic I would have used, but hey. It is what it is. I don't think Microsoft will be leaving the console behind. At least, not until their major gaming unit is moved over to PC. So, I give it a few more console generations, if not just two(which is a long time, seeing how long the 360 and ps3 lasted..)


The pc market is way massive than you think. Blops3 is just not a popular game for pc so look at counter strike, dota 2, League of legends and see how many people are playing those games. Steam also has over 90 million registered users way more than both the ps4 and xbox one. You say there are 10s of thousands of players on consoles are any given time but there are 10s of millions of players on pcs at any given time. Also if we are looking at other markets in the world, pc dominates in Asia and specifically china where there are more pc gamers there than the population of the US. Also about your other statement, with Microsoft announcing the scorpio right after the Xbox Slim consumers are confused as to why they should buy the slim this year when they could buy that more powerful console next year so the Slim seems like a waste of money.

VoroPosted:

No way this can happen, lmao. Xbox is one of their biggest money makers. They would not just leave Sony to take over lol

SupervisorPosted:

Not a chance. I just cannot see this happening whatsoever.

QTPosted:

Sega Really can't see Xbox simply leaving the market for Sony to dominate.


Same.. I really cant see them leaving.. they are going to make so much money off these new consoles..


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