Re:Epic Games is laying off 16% of its staff
by CamperBob2 on Thursday September 28, 2023 @07:15PM
(#37697213)
Well, they aren't going to in front of the FTC and make themselves look huge and successful and dominating, now, are they.
Phil's entire job is to communicate the idea that they have to acquire third-party studios to keep the business running at all. "If you don't let us buy Activision, then we'll just be forced to fold our tents, and then there will be even LESS competition. You don't want THAT, do you?"
When in reality, Microsoft's attitude toward the Xbox division has always been more like Citizen Kane. "Why, yes, we lost $100 million last year, and we're on track to lose $150 million this year. At this rate, if things don't improve, we might have to shut this place down in... let's see... 12,000 years."
PS5 has won the console war, Series X's hardware advantage has been subsumed by upscaling into a meaningless "runs 840p instead of 720p input res" thing that doesn't sell consoles and Sony has actually organically built studios that pump out exclusive content that does draw in customers. Microsoft has largely failed at building that, and instead tried to buy more studios to make their content exclusive (bethesda, tried to buy nintendo and activision, etc).
Microsoft has pretty explicitly pushed all their exclusives to PC as well, meaning Series S and the Gamepass are the only interesting thing they have going. And gamepass simply hasn't been doing the necessary numbers - there was a bump in 2020/2021 from COVID, when silicon shortages meant Series S was the cheapest route to a console, and gamepass gave you this ready library. But 2022 and 2023 have been the great Going-Outside and the numbers have gone down not up.
Another problem is that all those gamepass subscribers are using the "$1/mo for 5 years" crazy promo deals too. Which is another perfect example of crazy VC growth-hacking stuff that is being rightfully burned out.
the FTC leaks are absolutely devastating and reveal a company that is so on the ropes they're looking at closing the xbox division, or pivoting it to nettop style consoles and going after appletv and switch pro (docked) market, perhaps with an upscaling-based ARM console. They are drastically underperforming the scenario in which Phil Spencer said he'd pull the plug. But it sure as fuck isn't going to be running like it currently is, in another 5-10 years, unless they get a whole lot of market traction awfully fast.
I do think it's entirely possible that Starfield was their last shot - big flagship title from a big flagship studio, and if they didn't do the gamepass numbers (and they didn't) this is the final straw. MS has very explicitly avoided weighing in on a true next-gen console (a series s/x refresh is the only thing on the radar at the moment) and maybe they pivot or kill the division off.
https://www.youtube.com/watch?v=2tJBC9zXYQ8&t=2511s
https://www.youtube.com/watch?v=OUPxytMLWzI
But it's stunning to see this (ostensibly) gaming pillar/institution fall apart like this... apparently they were swimming naked too. But I guess that's not surprising, their only real traction was during the XB360/PS3 era and every single other time it's been a money pit they dump cash into in hopes of being profitable next generation... everyone kinda knew it intellectually but without the scales of losses being broken out separately, it's just an abstract point. Xbox is losing so much cash they will probably go under shortly.