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this post was submitted on 24 Aug 2023
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Microsoft should really ask themselves why they couldn't have procured more components, despite being one of the most profitable companies on Earth.
I mean, unless their goal is to lose even more money on each console sold, I doubt they were interested in that. But that's not their goal. Their goal is to get people subscribed to Game Pass.
Yes, thank you!
Microsoft has historically never been profitably selling consoles, which is certainly part of their shift towards different business models, including Game Pass and a focus on more than just Xbox, but PC and Cloud as well. They don't really have much of a financial incentive to sell consoles for that sake alone, they have to get people to subscribe to Game Pass and/or buy games (possibly digitally whenever possible) and the Series S is their best console for that, as the consumer is very much locked in.
Game Pass includes PC gamers. It's probably not that profitable either.
Game Pass does include PC gamers, which is why they're probably more interested in opening up that service to more people with a cheap console SKU than to sell Xbox consoles, likely because outselling Sony by doing the same thing Sony is doing is a very steep hill to climb.
Then why even bother with a console? Just define the minimally specced PC box needed for Game Pass and call it a day.
One day they might. PC has taken a larger and larger market share as time has gone on. PCs became easier to game on, consoles became less streamlined, and perhaps even the closed-off nature of consoles compared to the open nature of PCs has played a role. But as of 2023, you're still not making a $300 PC that plays games as well as an S. While consoles have become less streamlined, they're still more streamlined than a PC.
We've already established that the $300 box is not viable for much longer. And since it sold around 1/3 the numbers of the PS5, it didn't even work as advertised.
Did we establish that? Most of the biggest games are not the hardest on system requirements. And while Microsoft would obviously prefer that they sold more Xboxes and reached more Game Pass subscribers (the 25M-30M is impressive regardless), I'd be surprised if they expected the majority of those to be Series S; but they probably did recognize that that customer base is still worth reaching. We're just not at a point in the history of consoles where they all have the same business model anymore, like they did 20 years ago.
They compromised their higher end system with their lower end system. It's time to admit they made a mistake here, and they are only now starting to fix it.
I've got a really hard time calling it a mistake when it's been more successful, but you do you.