Tricky Bits with Rob and PJ
XBox Predictions and Announcements
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Rumblings of a major XBox announcement in a post Activision/Blizzard acquisition world slated for mid-Feb 2024 started a number of rumors around what might happen...would all XBox games go cross platform? What would this mean for the XBox hardware?!?
Then on Feb 15th....Phil Spencer, Sarah Bond, and Matt Booty fulfilled the special announcement...with a whopping 4 games (all unnamed) slated to go cross platform...followed by a lot of corp speak. And, ahead of that, there was an internal meeting where they seemed to be doubling down on the XBox hardware.
So it seemed like the wild speculations...were untrue....or were they?
In this episode, Rob and PJ pick apart the XBox strategy...analyze what is there and speculate what is still yet to come...
Enjoying the show? Hating the show? Want to let us know either way? Text us!
Rumblings of a major XBox announcement in a post Activision/Blizzard acquisition world slated for mid-Feb 2024 started a number of rumors around what might happen...would all XBox games go cross platform? What would this mean for the XBox hardware?!?
Then on Feb 15th....Phil Spencer, Sarah Bond, and Matt Booty fulfilled the special announcement...with a whopping 4 games (all unnamed) slated to go cross platform...followed by a lot of corp speak. And, ahead of that, there was an internal meeting where they seemed to be doubling down on the XBox hardware.
So it seemed like the wild speculations...were untrue....or were they?
In this episode, Rob and PJ pick apart the XBox strategy...analyze what is there and speculate what is still yet to come...
Alright, everyone, welcome back to Tricky Bits with Rob and PJ. So earlier this week we actually recorded some predictions about the Xbox announcement that was going to come out. Let's just do a quick recap of what those predictions are going to be. This was planning on making its games completely cross-platform. Gamers were outraged on this, rob, you had a particular prediction that the games becoming cross-platform for Xbox, or moving Xbox exclusives, was a fairly genius move. You want to dive into that a little bit?
Speaker 2:I still think it's a genius move. I think the outrage that the hardcore gamers are expressing right now will blow over. From a business point of view, it is a genius move because it gets eyes on content. They have good content, they're just not the market leader. So by simply making your games cross-platform which this obviously all fits into the Activision acquisition making your games cross-platform immediately makes you a much bigger player in the market. Microsoft is kind of now the biggest publisher on PlayStation, which is kind of a crazy world. But again, it's from a getting eyes on content point of view, it is a genius move.
Speaker 2:I said that they want eyes on content. Phil said he wants Xbox on every screen and the only way to do that is to not be only on your own platform. You can get Xbox to be synonymous with, say, netflix, where every smart device that exists as a Netflix portal. If you can do that for Xbox and get Xbox games and PC games streaming to all of those screens, regardless of who owns the platform, then you've won. You've got eyes on content, and that is literally what gaming is about it's eyes on content. If you take away the super hardcore people.
Speaker 1:So just to pick on two points, one from a business standpoint. I believe you said that PlayStation outsells Xbox two to one.
Speaker 2:Right now I think it is, and it has been that on pretty much every generation. The 360, playstation 3 war was kind of close for a while, but I think ultimately, especially worldwide, playstation 3 still outsold it by a long way. The last two consoles have been cut and dry. Playstation one, if you factor in PlayStation five, now has I don't really know the numbers, I have to look them up, but I'm guessing it's 50, 60 million. Xbox has half of that. Add them together and make your games cross platform. You now have 75, 80 million devices which you can sell, which, if you're all about selling content, that's a hell of a big market compared to what you originally had, and all you've got to do is swallow your pride of being a platform owner. You can be a platform owner and a cross platform publisher. There's no rules that say you can't do that.
Speaker 1:Correct. And just to make a fine point on the prediction we originally had. I believe it was all Xbox clues would go to PS5 and maybe even the PS4.
Speaker 2:I think over time that will happen. This is just the tip of the iceberg. They're just going to do a few tests of waters, that sort of thing. They could also go back on what they said they. I think the PS4 thing, if it happened today, may be viable for some of the games they have. It's absolutely humongous market If they're going to gradually do this. The PS4 gets more and more irrelevant as we go forwards. So maybe not.
Speaker 1:All right. So these are our predictions, but actually I'm going to make my wild prediction, which I know a lot of people actually were chomping at the bid on this one after we said it was that Xbox has a piece of hardware will get discontinued because it was third place in the market. And then hardware is a hard business to be in. The margins are low as we chatted about it. To recap from last time the margins and many times are losses Like these are loss leaders for folks to make it up for the games and the licensing, but software is a great business to be in software and services. So this was my wild dark horse prediction of what was going to happen. We'll grade that one in a second Spoiler alert Widely off base so far.
Speaker 2:Let's grade that one right now. I don't think you're wildly off base. I think it's off base for now, and the reason I say that is because the time frames related to game consoles are so long. So Phil Spencer said they're not planning on stopping making hardware for now, and all they have to do is make one more Xbox, which is probably already being designed to come out in three years of time, four years time, something like that, and that gives them a 10 year window of telling the truth. Effectively, they've got the remaining half of this generation. If they make one more Xbox, they have a whole generation.
Speaker 1:Five to seven years, basically right Of that generation for that generation plus the three that's left on this generation.
Speaker 2:That gives them a 10 year window. So if they say today they're not planning on stopping making hardware even if long term it's maybe a good idea, they're still correct. They're not lying for the next 10 years and then 10 years, who knows what the market is going to look like? If you go back 10 years, it looks pretty much like it looks today. Mobile today is a much, much bigger player. We have mobile devices like the Switch and obviously all the iOS, android devices.
Speaker 2:The consoles are still doing the same old thing they always did. They've been doing it for 20 odd years with the two competing back and forth. It's not much different to what consoles will icon. The Sega Nintendo days Yep, it's big platform was so if you factor in, they said they're not going to stop making hardware. All that really says is they are going to make another Xbox. Who knows what? They're going to make another one after that? Should they? I don't know.
Speaker 2:I think for eyeballs on content you can go OK, don't make a hardware, we'll just publish on PlayStation because they're bigger than us, but that's right now. If they did that, it would fundamentally change PlayStation 2. They wouldn't be that competitive pressure, they wouldn't be potential need to rush out another console. So I think if you took a snapshot right now and say all games are PlayStation 5 cross platform, it makes a lot of sense for them to discontinue Xbox Ultimately, especially for the next generation.
Speaker 2:I think, while it makes sense for an eyeballs on content point of view, it would fundamentally change the market, remove the competitive pressure. Playstation would probably become crap and then this room for someone else to come along to make a better platform, potentially another Xbox. So I think the market needs that competition. There's no one left, I mean unless Apple TV steps up and starts to become a serious game player to make it. So there is competitive pressure. I think having the Xbox is, from a hardware point of view, a thing that we need, even if it's a loss leader, even if it's second or third in the market. I think just having it and having the two big guys fight head to head is needed for the market.
Speaker 1:You bring up a really interesting point, which is that it's needed for the marketplace, and it's fascinating because is it the most optimal decision for Microsoft? And I think you have to. If you say it is the most optimal decision for Microsoft, what you're saying is that they're doing an investment in this. Then pushing PlayStation is better for improving the marketplace, which expands it, which then again goes back to the bottom lines for Microsoft. That is actually better for them by keeping that pressure up.
Speaker 2:I think so. I think that is true. I mean, if they lose a billion dollars on the hardware due to loss leader financials and they make it back through again, eyeballs on content licensing beyond every screen, stream games, play games if the hardware can support it, etc. Etc. I think it's just almost marked at that point. It's just brand recognition. I think you have to. I think you already said this. If you split the Xbox as a platform versus the Xbox as hardware, you can see how it all would play out. But I think they do need the Xbox hardware, at least for this foreseeable future. And again in 10 years, at the end of the next Xbox, who knows what the world or the market looks like.
Speaker 1:I'll add one more curveball in here, because we talked about it earlier in the week, which was my comical irony was that the antitrust case that was brought against Microsoft's acquisition of Activision Blizzard was due to fears of Microsoft basically cutting off PlayStation and removing competition. Part of the theory around all the games becoming cross-platform, discontinuing Xbox as a piece of hardware, was that the Activision deal in this case would have removed competition in hardware if Microsoft got out of the hardware game. Now, as you point out, they're not just yet, but there's a question for the long term.
Speaker 2:Yeah, like I said, I think somebody has to be that competitive pressure on Sony, otherwise why would they make a new PlayStation? Just keep selling the current one by now. They're making money on it, they've cost-reduced it and done all that it's like without that we're going to release a new one. So you have to. Without that pressure they wouldn't do it and so we need to. I mean, we have two phone operating systems. We have there was beat-a-max of VHS, there's Xbox PlayStation, there was Sega Nintendo. There's always been the pair and without them can go on to dominate but it doesn't improve. So it really makes a point Like VHS. Yeah, it won in the end but it was crap and never really got any better.
Speaker 2:It would be a shame for consoles to start having a 10-year life or 15-year life just because there's nobody to replace it. That's kind of where the original 2600 was. It's kind of why we've got so many awful games and so much just blandness. It was finally, market pressures. External market pressures, like the whole video game crash of the 80s, is what finished that off. But they had no real plans of replacing it to the cash cow, and I guess we know Belly now with 30, 40 years ahead of that and we know that burning people having a cash cow isn't necessarily the way to keep customers long-term. Some of these games that have so expensive and have so many sequels that long-term planning is far more important than short-term benefits.
Speaker 1:It's an excellent point, and it's fascinating to try to compare some of these things, like the 2600, as you point out, was the only thing in town at the time. There was a few other sort of also rands at the same time, but it really was the thing that had dominated, at least in the US, obviously with VHS, betamax. Betamax was always the better technology, and yet it lost out due to sort of market pressures to VHS, and I think the stagnancy that you point out, or at least the potential stagnancy you point out, if there was no Xbox hardware would effectively just make PlayStation the hardware du jour. Now, the counterpoint, though, is that it is like we had actually discussed the idea that if there was only the PlayStation line, it would become that common set of hardware that people could write games to, and you wouldn't have to be worrying about retargeting. Ps5, the PS5 Pro, the Xbox S, the Xbox X, like these would collapse effectively into a single, more stable platform.
Speaker 2:So there's two pressures there, right, I think there's the ideal development world, which is exactly that. There's one platform and it's well supported and the vendors update that platform as needed. And then there's the real world, where financials and bin counters come into effect and you don't necessarily get that ideal development environment because they'll look at that as the fact that they're making games. Now, why make it better? We're making a lot of money, we're doing this right, we're doing that right. It's like developers can suck it up. Would it be better? I think it'd get better games. I think you'd have a big, open pool of ideas. It wouldn't be so secretive because you wouldn't be caring about your competition, learning about what the hardware could do. It would as an ideal development environment. It'd be nice but realistically not going to happen. But I do think that we're on the right path of splitting the Xbox hardware, which we've talked about a lot, from the Xbox platform. Look at what Microsoft can do to the table. They have some great games. I'd love to see Gears of War on my PlayStation and lots of PlayStation gamers will too. That is where they're going to win big time with their exclusive content being on the PlayStation. They have a lot of mic. They have more mic now. They all, like I said, the biggest developer on PlayStation at this point. They can do things like make Xbox Live and PlayStation talk to each other. It can be done now, but it's still a pain in the ass. To normalize things like that Would be really good for all developers, not just the two platform holders Xbox Live and the Game Pass, and all of that that they do is significantly better than PSN.
Speaker 2:So, with all of the antitrust actions that are going on right now regarding Apple and Android gaming in particular because Epic's involved in a lot of those and the EU rules about app stores it's not hard to see a world where, potentially, you could have Xbox Live on PlayStation. It's just no different to a Netflix app. You run the Xbox app and you get streamed games. You get whatever you're paying for and there's all the different subscription levels. It's literally no different to paying Netflix. Sony have nothing to do with it, they just put the app on their platform.
Speaker 2:If Sony can overcome the hump of allowing Xbox Live on PlayStation, you know damn well it would be there in a heartbeat because it makes absolute perfect business sense and, like Phil says, they want Xbox every screen. They don't care about who owns that screen or what runs that screen. If they can overcome some of these issues and lockdown app stores might become a thing of the past. With all of the legal action that's going on all over the world, that's the case, then why can't you have multiple stores? Why can't you have an Xbox store on the PlayStation where you can buy games? It's just a different store.
Speaker 2:So having a different app store on iOS or a different app store on a PC, it's just a vendor. It opens up competition back to how it was in the brick and mortar days, I think. Overall, I think that's a big win and I think it would take someone the size of Microsoft to pressure Sony into doing it. I mean, if me and you decided to make a store and put it on PlayStation, it'd be like, yeah, get out of here and that's the end of the story. But Microsoft, I'm going to take that as an answer. If Microsoft goal is to get Xbox on every TV, then they have the resources to do it and you probably don't want to stand in the way.
Speaker 1:That, I think, captures the set of predictions we had at the start of the week, because we knew there was a big mid-February meeting going to happen, announcements from Phil Spencer and company on some of the future of Xbox. So we said we think all the games are going to be going across platform. We had the probable long-term goal of getting rid of Xbox's hardware. So the meeting happened yesterday, which was February 15th. In the interim, phil did have an internal meeting stating there were no plans to stop making hardware. So Xbox as a piece of hardware, like you said, is still going to continue.
Speaker 1:Now we get into the actual interview that happened yesterday, on February 15th, which had Phil Spencer, sarah Bond and Matt Booty. We had talked about the sort of mass diaspora of things going across platform. Right now we know that four games out of the exclusives are going across platform which are as yet unnamed. There's some people who suspect Starfield may be one of them. What was said in the meeting was that Indiana Jones is not going to be there and that Activision Games are going to Xbox Live, rob, for what you watched of it. Any particular takes on the information so far, which again covers kind of a small aspect of the predictions that we had.
Speaker 2:I think the games they announced weren't the obvious ones, but I also think they had to announce something. There were so many rumors flying around and people speculating, themselves included, that they had to say something. So I think the games they announced are the ones that they could legally clear. You've been involved in games. You know how much legal back-end stuff this takes or what platform can this thing be on. The licensing is very specific, so some of these games maybe will show up later as they figure it out. New games will probably show up on both platforms.
Speaker 2:And the idea of games going to Xbox Live I kind of liked the idea. Now that Xbox Live is allowed on iOS. It wasn't for a long time. Every game had to be individually. Even if it was streamed, every game had to be individually improved as itself. Now they can have Xbox Live, so that's step one into getting Xbox on to every display. Now we have a billion iPhones out there that can stream games. I think it makes a lot of sense the more content they can push into Xbox Live, especially like it says. Now they're off the Xbox hardware onto all the hardware. They are literally a content provider. The eyes on content is the winner for them. I think that's the biggest win for the software platform of Xbox is there is many people to play that content anywhere they want to play it. If it makes sense, why should we say no?
Speaker 1:And this goes right back to what we discussed earlier, which is that, classically, when we said the word Xbox, it meant a piece of hardware. It meant you know the device you made 20-something years ago. It was a physical item. Now, and you stated this earlier in the conversation, xbox is starting to transmute itself as a brand identity, which isn't just necessarily the hardware platform, but it's the back-end services, it's the content, it's the whole unified experience that starts to Service, basically, multiple service.
Speaker 2:I mean you take all of it in Microsoft's very good at the back end stuff, like says they way better at the streaming side than Sony is. Just make sense to make it a Content platform more than a hardware platform, and I think that's where they go in and I think that's what they alluded to in the Announcement, but without saying anything specific. And they have to be very careful. Of course, it's like announcing a new console will kill sales of an old console because just people who are gonna buy one now I'll just wait a year and bring the the brand new one, and With backwards compatibility being a big thing now it's probably the best move to make. As soon as they announce anything hardware related, it decimates the sales of the current hardware. So they have to protect the current market too. They've got a lot invested in it. I do think, speaking of investment value, the amount they paid for Activision is so high that they have to have bigger plans over then keep releasing games for Xbox absolutely.
Speaker 2:By taking Activision and making it a exclusive platform, you're decimating Activision's value, which is usually 60 or billion, for it's now only worth half of that because it's only gonna sell half the games, and that's a simplistic way of looking at it. It's probably much worse than that in reality. So why would they spend 60 or billion and then half the value that they paid for it? I thought it was obvious from day one that something like this was gonna happen. Why Activision? Why would they buy a game that's Got massive titles that are cross-platform? You, they knew from day one it was gonna cause a huge stink. They knew it wasn't gonna go past all the various regulators around the world and they, I think they knew this was what they were always gonna do. They were never gonna make Call of Duty exclusive, because why?
Speaker 1:correct. I'll tell you my take on the Announcement yesterday. I think you're right, they had to announce something. I also believe that, like you talked about, I think these four games that are going cross-platform are in some sense like almost like a scouting party. It's going out to kind of test the waters and there was an amazing amount of corporate speak throughout the majority of that discussion. But the majority of that announcement really was a lot of Try to talk around Xbox as a central platform. They definitely were doubling down on the hardware, especially like hey, the best Xbox experience is going to be on the Xbox. But I also believe that they're doing this as smoke screen For what is the long-term play.
Speaker 1:I think our predictions are right. In the long term, I think they do end up leaning into the services. I think they do end up Looking at getting rid of the hardware side of things, like we talked about at the beginning. But I think they are not ready to do that. I think you already answered the reason why, which is that you don't want to decimate hardware sales right now. They've put a lot of money into it. If there was too much thought that everything is going across platform, who would buy an Xbox at this point in time.
Speaker 2:Exactly and, like I said, it's it's such long time frames that they have the next one in the works. That gives them ten years. Think about it halfway through the next generation, and it's it just delays it. It's, I think it's inevitably will happen. It could happen to PlayStation 2. Maybe by that point, in ten years, internet so good that everything can be streamed and you don't need hardware at all, which I Don't know. That's probably a ridiculous prediction, but I said it was ridiculous ten years ago when People were trying to oh, toy originally tried it. There's a whole bunch of people who were doing it back then and the only one who really survived of all them was Nvidia and Microsoft started doing it with the Xbox, and it's not a bad experience. In ten more years, who knows where things will be?
Speaker 1:We probably could have dialed back the clock 20 years or even 15, and Stated hey, you're not gonna be buying most of your physical Media for watching movies. Most of your movies are gonna be coming via streaming or your television shows. All of these things Because people I think 15, 20 years ago would have thought the bandwidth requirements were gonna be too much and again we're talking long, long terms here.
Speaker 2:It's yeah, it. I don't think hardware is gonna change for the next generation. They're gonna both be optimized for shitty PCs that decent when they first come out, but then you have to really optimize for them to keep up with the PC, which is exactly what happened the last two generations. I can see them being the same hardware base again, just because he gives them that easy backwards compatibility. So maybe we're on that path where new consoles anyone can make one, it's just. It's just a AMD APU with some optimized features and custom software.
Speaker 1:And basically all you need is an inner internet connection again.
Speaker 2:Maybe that's the counter argument to myself at that point, that maybe so many don't need competitive pressure because that's all the next PlayStation could be.
Speaker 1:it could be basically like a Effectively an upscaled Apple TV at that point in time, Yep and that's an unknown too, of like.
Speaker 2:Could Apple step in and do something here? Have make a more competitive pressure elsewhere? I don't know. Games tend to be crap on Apple devices and Apple's not really known to support game developers in the way they need supporting. They're not just apps where you just click on a button and you get a piece of information shim to you, which is tend to be like all the frameworks that Apple produced, tend to be in that mindset. All the big games they announce that their announcements are what? Visually? Ones that they've paid for, because no other giant games typically come out for iOS and the Apple platforms as a whole. So we'll see.
Speaker 2:I think there's some things Apple could do.
Speaker 2:Whether they want to or will do, I have no idea and, like I've said many times in this one, so far these time frames are so long.
Speaker 2:They said they're not stopping making hardware and then they're technically not lying. They're not, won't be lying until the next generation and by that point everything will be different, different people winning the show, yeah, different market forces and everything. So Nothing's gonna change, I don't think, on the hardware for another generation, but the software dynamics are, like Phil said, of Xbox on every screen is definitely gonna be a big mover and that being such a big platform will change the industry and will change the direction ultimately of the in of the industry. I think people like to look if, if you did this right now, it would be like this, but you can't do it. Yeah, these things gonna take years to play out and by which point they're gonna have their finger in the pie. All the people are gonna show up and have their fingers in the pie and it's gonna be what it is in ten years time, but I can see Xbox becoming a software content platform.
Speaker 1:It, with an accompanying set of back-end services, effectively to support the games.
Speaker 2:Yeah, and it's not an unheard of thing. If you look back at all the other different hardware platforms and games, they're all now software platforms. Yeah, has games on Nintendo. Atari is still making the same games it made for years and they'd literally just software platforms. Sega and Atari tend to be like living in the past. With there, we'll just keep re licensing and rebranding and redoing everything with the content and the IPs that we have. Obviously that's just going stagnant, it's. I don't ever see Xbox doing that.
Speaker 1:They have especially now, after the acquisition, I mean they have every incentive to continue to push their first parties and push the Activision Blizzard folks to keep making the next Diablo, the next Warcraft, the next Starcraft, you know, etc, etc, etc.
Speaker 2:Yeah, the interesting, though, that if they do this, it'll be because they want to do it and not because they were forced to do it. Like a Tori leave in the hardware market and Sega leave in the hardware market was ultimately because they couldn't compete on the hardware side and Didn't have the mindset of developers at the time They'd move to all the interest in platforms. Interesting that in this case it would be Microsoft doing it to themselves. It's right now.
Speaker 2:It's a bit of pilter swallow, but over the next 10 years, while Xbox hardware will still exist, it'll become much more of An easy pill to swallow and they won't be as much backlash from the hardcore fanboys, because taking the baby steps like says that the waters. Some things will work, some things don't work, but in the end everyone will see that it makes sense. And when Joe blocks can go to his friends house and play his Xbox live game on his friends PlayStation and it starts to be a convenient thing for the end user, that's how you win the hearts and minds of People. It's all about 100% this of the experience. If you can, if you can apple, if I, the Xbox experience.
Speaker 2:Yes people will just like. I'll take this minor inconvenience over here for this awesomely smooth experience over over here and Again. Eyeballs on content is what wins and that's how you get eyeballs on content and I've never really understood even myself. I've made a whole bunch of these hot, these platforms on both sides. I have no affliction for any platforms like whatever, I'll play it. If I need to play the next books, I'll play the next box. I'd rather not have to switch inputs and do all that and go buy another console and I'd rather just turn my PlayStation and play it there. But it is what it is. If I want a mobile platform, I'm not gonna bitch that my PlayStation is not mobile. I'm just gonna go buy a switch and Do it like that. So again, I've worked on this book, I've worked on the PlayStation. I have no love for any of the hardware. It's all out of date at some point and the next one will be better the hardware bit here Reminds me of a story from 15 years ago at Dreamworks.
Speaker 1:Now this is taking place at the Really the tail end of the last big media matchup for physical devices, which was, in my mind, blu-ray versus HD DVD, and you had, effectively, people who went on to either side of the fence Dreamworks animation, it was actually on the HD DVD side Until, obviously, the consortium effectively just turned that down.
Speaker 1:Well, there was a bit of a hubbub that was happening at the time. A lot of people were asking like, hey, why isn't Steve Jobs putting a Blu-ray player writer inside of the new, you know, apple machines? And Jeffrey Katzenberg's response was because it doesn't matter. This physical media thing is not going to matter at all because everything's going to be streaming and, yeah, obviously Blu-ray one in in the sense that it is the the highest end physical media that you can get today. But I think the point that Jeffrey Katzenberg was making, which is like hey, it became an irrelevant question because everything became a streaming service for video. And To your point earlier, I think that might be where we're heading again, where the hardware questions effectively Become mood, because we're no longer talking about necessarily Having a bespoke physical device, but it's really more about this content that exists someplace that we're able to get in an ad hoc basis.
Speaker 2:Yeah, having two minds about streaming games, you've got to fix a lot of problems. Stadia had a lot of these problems. They didn't fix it. They should have done. I think Microsoft understand games enough that they are.
Speaker 1:I agree, I agree.
Speaker 2:Make active progress in things like modifying hardware and operating systems so you can get fast latency over the network. But you think on a triple-A 60Hz PlayStation game 60Hz, 16ms of frame the latency is that it isn't. It's nowhere near that. The latency for a PlayStation 5 game, if you factor in, like TV input latency could be 100ms from pushing a button to see in the result. And if you restructure that pipeline if we're comfortable with 60Hz frame rate being 100ms latent, if we refactor that pipeline, that model, you can easily transmit button presses over a network processor and send them back to Spader Results. Some of that latency goes away when you do that, Some of it doesn't, but it is a viable model.
Speaker 2:The years ago people were saying it's not even a viable, Can't do it, blah, blah, blah. And when it's shown that it actually is possible, if you tweak a few things, then you get all the game streaming services and they're not going to get worse, they're only going to get better. With better networks and more technology, more thought put into how you manipulate these game pipelines, Then I think it becomes viable. But it's not really. It's not the best experience today.
Speaker 2:And again, you've got to factor in today, You've got to factor in five years and 10 years. So in 10 years, who knows? But today the best experience is still in hardware 100% agree.
Speaker 2:Yep, you get nice visuals for stream stuff. I mean, it's just as nice looking and potentially nicer looking, and the limiting factor is the back end is an Xbox or the back end is a PlayStation. If you take that away and make it the back end of PC. Now there's no limit on the hardware, you don't need to buy the 4090s, blah, blah, blah. But this is getting into like really great territory because this is literally stadia and that didn't work. But it probably didn't work for Google reasons, more than it was.
Speaker 2:Yes, I think so I know you did, you did. I'll just give you a opportunity to bash off. Well listen.
Speaker 1:I'm actually going to weirdly compliment Google in one way, but it's going to be still a bit of a bash, would Google? Google looked at stadia, in my opinion, as kind of a fun technical problem, that's it. And I have chatted with folks who've been in the game industry from a production side from the producers and what have you and they were like Google wasn't listening to them and putting in the appropriate tooling and things that you need to actually like make games for real there. And when they first came out with it and I think many people and I was at Google at the time really thought Google is not going to have the stamina to do this and they kept stadia around for three years and then shut it down. So we were right that it didn't have the stamina to actually go through with it, because it took, I believe, microsoft seven years before Xbox was a profitable engagement.
Speaker 1:The thing that I will compliment Google on in this one case is that they had the guts to shut down a product area. They said, hey, we're not going to do this. They didn't. I mean, yes, they did it in two phases where they cut off their intern, like their first party support, and then they cut off the third party support later on, but they actually had the guts to go ahead and say we're shutting this down as opposed to, you know, paper cutting these different product areas. So the only thing that I will say as a compliment was like yes, google made a hard choice there. Ish, hardish, yeah, whatever.
Speaker 2:It's, I think, google or the big guys like that. Amazon's will always be a real.
Speaker 1:I don't think they are invested in it.
Speaker 2:And I think that's Apple's problem too. But I think this whole discussion of can you stream games is something that I agree, come in a war and more even for the consoles. And it also fits into the, like you said, of 20 years ago people were buying DVDs. The idea of not owning content, yep, was foreign back then. You'd now today. You don't really own CDs, I guess vinyls and exception for digital media. You don't really own anything.
Speaker 2:You stream it when you want it and you in return everything you demand anytime you want it, and I think vinyls, vinyl, just they were not going to consider that at. Consider that at all. Games are the exception. Today you still buy physical games. Some consoles you can buy without discs, so you can't physically buy the disc, but you still buy it and it's on your machine. Even if you download it from Sony, you still have it. There's lots of great questions there of like what if they? Well, that's all of this up like. Is there any benefit?
Speaker 2:in having a physical copy. If the game checks in straight away, then probably not. And then Ubisoft came out a few weeks ago and said people have to get used to not owning the games. So is games the next media that's going to go down this you don't own it path, it's just. Even if you do own it, it's just a license to play it. You don't actually own it. They take away any time, just like it is if you buy. Well, let's just use my own example. Let's just. If you buy Top Gear on Amazon and you buy season one and then Amazon decides you can't have season one anymore, they just take it away, even though you paid for it. Because I didn't ever own it. I owned the license under the terms which I bought it under and they changed those terms. And whether they should or shouldn't is an argument we can have and I'm sure it's ultimately going to play out in the courts. But it's going to take a lot of people to be annoyed before it gets that far. But games are the next frontier in this. You don't own it.
Speaker 2:Platform mindset Again, 10 years is a long time in technologies. I think Microsoft is already thinking out there and they're already preparing for a world where this would make sense and hardware isn't. You don't want to be the one with the pants down when you realize hardware is irrelevant. Yes, everything they've done makes a lot of sense from a business point of view. It doesn't estimate sales today. It keeps the hardware around. It gives them the opportunity to stream and not own content in the future, I think, across the board. It's a great genius move you did. I said at the very start of this podcast, it gets eyeballs on content, however it takes.
Speaker 1:Yes, it's a classic content play. I've got content. I want as many people to see it and engage with it and pay for it as possible, no matter what underlying hardware is there. I want to read this one quote which is a fraction of the internal memo that came out yesterday. It got leaked to the verge and I believe it's from Phil Spencer, and this bit of it is. We have a different vision for the future of gaming. A future where players have a unified experience across devices. A future where players can easily discover a vast array of games with a diverse spectrum of business models. A vision where more creators are empowered to realize their creative vision, reach a global audience, unite their communities and succeed commercially. A future where every screen is an Xbox. I think this goes right to what you're saying, Rob, of what does it mean to be an Xbox if you're not a piece of hardware?
Speaker 2:Yep, I guess we have to wait 10 years to find out.
Speaker 1:I think We'll find some answers out ahead of time, I think you'll get the answers I get.
Speaker 2:It's a slippery slope, it's going to be a long spiral, but you'll see answers over time. But I think 10 years from now will look very different than 10 years ago, which looks kind of similar.
Speaker 1:We can probably make some predictions of some of the markers we believe are along the way. I think you stated it earlier when Xbox Live goes to PlayStation, that's a massive one that says hey, the sea change has happened, and now you can get access on PlayStation to whatever you want.
Speaker 2:Yeah, and I think Sony have got their play too in all of this. So we'll have to see, on that side there are a lot more tight-lipped than Xboxes.
Speaker 1:What do you think their play is going to be?
Speaker 2:I don't know. I have to think about from their point of view. They are the market leader, they have the hardware, they have the sales, they have the developers, they have the great exclusive games. Yes, so I think for now they don't have to do much, but they also have to not get caught with the pants down if things change real quick.
Speaker 1:Yeah.
Speaker 2:I think the story will start to unfold dramatically at the next console launches. Okay, so three years, the state is set for this platform. Things are just going to continue as they are. No one's going to stop buying Xboxes. No one's going to stop buying PlayStations. It's the content's going to change around. Maybe moving around, maybe show up on a switch every now and then the next generation of consoles. As to what the two big guys do, sony and Microsoft, will start to dictate the future and, like I said, that puts us 10 years out, to the end of that life, and so I don't think nothing's going to change for now. We're just going to start to see some Microsoft games on Sony, but once we get to the next generation, that's going to set the path in stone more than anything they can do today.
Speaker 1:So here's a curveball. Curveball, if Xbox Live creates, obviously it's on Xbox, it creates a toehold on PlayStation and it's available on PCs. Do you think that the games that they start developing, which can have more of a focus on the higher end PCs, is that enough of a pressure to put on PlayStation and Sony to upgrade what they're doing so that the gamers basically aren't going to go out and buy PCs? They still want to buy PlayStation, but Sony needs to be providing even higher end PlayStation because of the pressure that's come from PCs as opposed to Xbox.
Speaker 2:That's kind of where the pressure comes from. Anyway, it's kind of a convoluted path. But you think that Microsoft does DirectX 12, which puts so. They work with Nvidia and AMD yes, mostly Intel too to make the next generation of DirectX and expose all the features that the hardware can do, add APIs for things like ray tracing when it first appeared, blah, blah, blah. So on one hand Microsoft pushing the content and the developer experience with DirectX as hard as they can they slow down a bit in the last few years. We're hitting a bit of a plateau.
Speaker 2:There'll be more steps in the future, more than just generational performance steps. There'll be new things like ray tracing and various other shader stages, which makes sense. Or maybe it all just goes to computers and it's all software. Who knows where it goes. But there will be bigger changes coming in the graphics pipe in the PC world in the future. Directx 12 isn't the end of the line, so Microsoft's already involved there. So they're helping PC developers to do this.
Speaker 2:But then Sony of the last two generations have kind of just been using PC hardware. So all Sony then do is look at the PC, amd in particular. They look at their current and future products APUs, potentially GPUs too, knowing that they have to do a two chip solution at that point Harder. Cost reduce may never cost reduce. So looking at APUs to start with makes a lot of sense from a cost reduction and initial cost point of view. So they kind of look okay, well, this APU in two years time is going to have all of these new GPU features and that becomes the new PlayStation. And it just happens to be that Xbox and Sony both kind of picked the same APU because it's the one that obviously made the most sense at the time and they picked it two years early. They're not going to pick it today because it's going to take them years to get the hardware out. So they are looking at what's going to be in the market in a couple of years time.
Speaker 2:So in some ways the PC does drive the consoles and it drives them from a developer side too, because developers expect certain features. Like I can't do my cool game on the PlayStation because it doesn't have hardware feature X For PlayStation 4, that would have been ray tracing. The new consoles have ray tracing. Although it's not used that much, it can be used. Developers get some expectations from the PC world and that's not only the hardware. It's a level of performance. It's a level of quality in the tools and the debuggers that they use and then ultimately that all feeds back into the consoles. Years ago Sony didn't use Visual Studio for development. Now it's all Visual Studio. So I do think the PC feeds the consoles and has them for at least the last two generations.
Speaker 1:So I'm going to ask a question this is for the audience's sake, which I know is my prickish question I ask all the time on this one Do you think, Rob, that another marker could be that, as an optional API, DirectX would ever make its way over to the PlayStation, or do you think that one of Sony's hallmarks really is that low-level graphics access that you don't want to have anything on top of? Don't and can't? Two different things.
Speaker 2:Sony have always given us these crazy low-level graphics APIs and I was involved in a few of those. Like GCM on the PS3 was super low-level, at least after We'd Finish with it it was and basically it's user mode application-level command buffer generation, like command buffers on the PC, are not first-class citizens. You can't do what you like with them and probably never will be. But many other reasons are not worth getting into today. But on a fixed piece of hardware it's like let's do what we want to do and Sony go okay, and all the exclusive games the really good PlayStation 5 exclusive games all take advantage of that. They're all very good graphics engineers. They have very nice architectures. None of them are saying well, let's just write a high-level API and put it on top of this low-level API, just so it's easier. Yep, none of the first-party teams are doing that. But no one says you can't do that. Sony have made half-assed efforts implementing OpenGL and Vulkan and things like that, and it always gets to the point where like to be standardized enough that it's familiar. You've got to write a bunch of extensions to deal with how you work on these platforms and the memory models and things like that, and ultimately it's not worth it, just do it with the other API. But again, no one said you can't do it. If somebody wants to add, I'm sure somebody has Some point written DirectX 11 or 12, not officially, but just took the API and be like, well, this is what it does, I'll just rewrite it. And they've done it enough to get their DirectX 11, 12 code to work on a PlayStation and I know for a fact it was done on the older PlayStation.
Speaker 2:But an official implementation would be super useful. I mean you wouldn't get the AAA-quality, exclusive PS5-quality games, but you would get easy development. So no, you wouldn't get the same quality. So no one says Microsoft can't release it. You can't make it official. People make third-party middleware all the time for these consoles. Why can't Microsoft just go? There's DirectX 12 for PS5. And we implemented it ourselves. If you want to use it, it's there. If you don't use Sony's API, no one says you can't do that. I could do it today and release it as a valuable library for the PlayStation DirectX 12, it works perfectly and if Microsoft did it it would be better than me doing it. It's totally allowed by the rules today. Sony wouldn't take the game off the store just because you use the library Microsoft provided, which happened to be DirectX 12.
Speaker 1:So I wonder if, as part of this, every screen is an Xbox strategy, if we would see basically some sort of DirectX for PlayStation, simply to make development easier, even if it's only for Activision, blizzard and maybe for anyone else For anyone else.
Speaker 2:I mean if the longest Microsoft give it make it available. I mean that's just part of it, of the ease of development. Xbox has always been traditionally easier to develop for not necessarily the best performance, because these APIs do get in the way. Even though 12 is significantly better than DirectX 11, as part of the API overhead CPU side, the developers will pick the battles. It's like some developers don't care. Directx 12 is perfectly acceptable. All the developers want to be at the metal with the mindset of if I don't optimize this, my competitor will, and then they'll be better than me. It depends who you are.
Speaker 2:I think if you're an exclusive PS5 first party, absolutely Sony developer, then everyone expects that your next game will be significantly better than your previous game. They expect no games will just be good all the time and you've got on the PC. That same mindset comes from. Well, in six months hard, it'll be faster and there's a lot of developers out there that are just well, this works good enough. I'm not pushing the envelope in this area, so I don't need the best of the best.
Speaker 2:It's like not all games are all about pushing the graphics. Some are very simple and push another side of the spectrum. Audio, for example, like guitar hero games and all of those games fairly basic graphics had a different criteria they had to meet to make sure those graphics lined up with audio etc. But it was an audio game. You don't have to push the graphics to make a good game. There's plenty of other areas that people can push and we see it all the time with especially mobile games where there's a lot more tinkering. I think it would be fine. I don't think anyone would have any complaint if DirectX was available on all platforms. Make an iOS version, a Linux version of what you asked for.
Speaker 1:That would be fun. I think it would be a really interesting move on Microsoft to actually do that as a fulfillment to getting every screen to be an Xbox.
Speaker 2:Yeah, I mean they could always make just their own libraries, like all iGames will work on all these platforms, because we just make libraries that will make it look like Win32. You could definitely do that. I mean, it's no different to what Proton or what things like that do.
Speaker 1:Wine or a game engine.
Speaker 2:It's. Yeah, a game engine is the same thing, but just higher level. Yes, I think it's totally acceptable that they do that and they might, they might not, but it's. I don't think it'll be much of a marker because it's possible today and I'm sure it exists in some form somewhere.
Speaker 1:So to recap our predictions from here going forward, obviously four games are going cross platform. I think it's probably pretty easy to say we think that more will go cross platform and that one of the big markers will be Xbox Live getting onto PlayStation sometime in the next few years.
Speaker 2:That'll be a big step and like that's, that's so any relinquishing the reins on their platform too. So that's that's a two-sided big step. It's. It's not as simple as Microsoft just making an app that happens to be Xbox Live, because Sony might have something to say about that.
Speaker 1:Yes, that's true.
Speaker 2:But that may be how it starts. They all will just do it, put it out there and then we'll see in court when you see we can't do it. And you've got to bear in mind it's like Sony is a big company but Microsoft massive. Right now it's the most valuable company in the world. It like surpassed Apple the other week.
Speaker 1:They keep going back and forth. It's hard to keep track.
Speaker 2:Yeah, right now it's Microsoft's number one. So if Microsoft do something like that and it's like they're tempting you to sew, basically Okay, we'll do this, and then if you don't like it, you could sue us. But don't forget where it was. It's like come at me, bro, and there's all these other app store lawsuits going on which Microsoft's, funny enough, not involved in. It would be a big step for Sony, but I think it's an inevitable step.
Speaker 1:And I think it's a mutually beneficial one.
Speaker 2:Because you own it, becoming kind of a no-no. And what was the numbers? Like the EU say, if you've got more than 45 million monthly users, then you're a required platform type thing. They have more than that. So Sony effectively could be in violation of that law if they try to enforce something against Microsoft wanting Xbox Live on PlayStation and it'd be nice, it'd be nice to have the Xbox Live app. I think it's. I think, take it all the way. I have competing stores. I'd love to see competing stores on various platforms, ios included in this whole thing. It's like if you get to pick your poison of like this store has adult rated games, you don't, that's fine, you don't have to. I know if I want adult games, I go here.
Speaker 1:Yes, it's the content moderation question I want gambling games, I can go here.
Speaker 2:That's fine. No one's saying you have to do it. It's open up the competition. Let everybody decide who does what, and these stores will naturally pop up to serve various markets. Maybe you have a game that's just retro game, an engine, a store that's just retro games. Maybe you have a store that's just Xbox games. Why is that not a thing today? It seems to be like these app stores are removing our choice because you only get to choose what they approved and it's like I don't necessarily agree with your approval and I'll go to a different store. Maybe you sideload games like Android style. You lose all security. You do it yourself. If you get a virus, you did it to yourself. I think all of these things are going to be addressed in the future on a lot of platforms, not just the game consoles. Obviously, android, ios is where this battle is going to be fought.
Speaker 1:Again, it feels like technology keeps going in circles in many ways, but if we keep taking so much of this stuff to the limit where we stream movies, maybe in the future we're streaming games. So much of where we seem like we're going is these centralized servers, these things in the cloud, versus the importance of having something locally on your device, whether it's a console or whether it's a DVD player or whether it's your phone, where now, hey, all of this stuff takes place someplace else. You get to put whatever you want, or you get to access whatever you want from whatever device you have and not have, effectively, the tyranny of one app store or another telling you what you can or can't do with it.
Speaker 2:Yeah, and then everyone thinks like these devices will be like this will be Xbox device. Who cares what the device is? I bought this device for a multitude of other reasons. Correct, it happens to have an Xbox front and I like that. I think the idea of a hardware for one purpose is gradually becoming a thing of the past. I think Sony is missing the ball here to some extent because they don't have much presence on other platforms and maybe that will change. I mean, they do have, like, these various PlayStation properties in the iOS store and that's about it. There's no PlayStation. There is a PlayStation live app for iOS, but it's more account side stuff. I think it will kick them into doing something similar.
Speaker 1:Well, let's roll back the clock 35 years. At this point in time, I think it would have been anathema to Sega to have its IP on Nintendo, and obviously today that's basically where you can get it. I've played Sonic, the old Sonic, on my Apple TV.
Speaker 2:Yep, it's on Apple TV. There's lots of iOS Sonic games yeah. And 35 years ago, like in the Well, even go, go back to 1990. Yeah, that is 35 years ago. God, I'm old.
Speaker 1:We're all old.
Speaker 2:It's a Go back to 1990, before the PlayStation, when it was purely Sega Nintendo.
Speaker 1:Yeah.
Speaker 2:Then, yeah, the idea of a Sega Sonic game on a Nintendo platform was completely like ridiculous. You suggest it. You'd be like what the hell are you talking about? It will never happen.
Speaker 1:Right.
Speaker 2:And look at everything that's changed from then of like platforms becoming relevant, new parties showing up, Sony showed up, Microsoft showed up. Neither of the two big platforms today, even Apple, in these mobile space. None of them existed in the gaming space in 1990. 100%, In fact. From 1990 to 2000 is the decade that we keep talking about in this podcast. From 1990 to 2000,. Everything changed.
Speaker 1:Yes.
Speaker 2:It went from 2D to 3D, it went from Sega Nintendo to Sony, microsoft, and Nintendo is still in there and still are.
Speaker 1:Yeah.
Speaker 2:But the head-to-head competition was Okay. That was a decade of change in games and it went from offline playing to online playing, it went from standard-deaf to HD, it went from cartridges to discs Literally everything in that decade changed. So there's no reason that decade can't happen again. So it's all about knowing the market of where it's going and where you think it's going. If you're a big player, then you probably have a better handle on it than any of us do. But the idea of it's going to be the same over and over and over again is ridiculous and I think that's kind of Sony's downfall is they just do the same thing again, and PS4 is no different to PS5, which is really no different to PS3. It's the same old saying with better tech, better games, better content. But I think Phil, when he said they have a different vision, I think that's literally true.
Speaker 1:He's looking ahead. He talks about it in terms of the business models. He talks about it in terms of every screen is an Xbox. But to everything we're saying, what does an Xbox make If not? Hey, it's really just accounts for the content. Nothing else really matters at this point in time.
Speaker 2:I'm not so never mad. It's always been content. It's always Eyeballs on. Content is what wins it, whether that means making hardware and getting your exclusives on it, or whether it means putting your exclusives on some of the platform. It's like they have the content, they have the IP, they have the developers. Put the games where people are.
Speaker 1:There's a quote from the movie Star Trek 6 that I've always liked. It's towards the end of it where Kirk says some people think we're at the end of history. Well, I think there's a little more history left, so it's exactly right.
Speaker 2:To your point.
Speaker 1:I think we've got a lot more change that's actually ahead of us and that the stability we've seen over the last 20 years really 25 years with Sony and Microsoft I think that is actually going to be seen as this, maybe even a stagnant island for a little while in the game space.
Speaker 2:I think again nothing's going to change in the future. In 10 years, I think the game space will look very different to what it was today.