WEBVTT 00:00:00.240 --> 00:00:08.960 Microsoft is in the news for hiking the price of Xbox Game Pass Ultimate again, 00:00:05.600 --> 00:00:12.080 and this time by 50%, leading to an 00:00:08.960 --> 00:00:14.240 historic surge of angry gamers smashing 00:00:12.080 --> 00:00:18.480 the unsubscribe button. And it has everyone from Microsoft's partners to 00:00:16.560 --> 00:00:24.560 the press to even individual gamers asking themselves, "What the hell is 00:00:21.520 --> 00:00:27.359 going on at Xbox?" I mean, one day 00:00:24.560 --> 00:00:32.320 Microsoft is celebrating, hey, Game Pass is totally making tons of money. Woo. 00:00:30.480 --> 00:00:36.880 And then the next day they're like, "Actually, we're going to need more 00:00:34.160 --> 00:00:41.760 money from you. Thanks." On one hand, they're promising new Xboxes are coming 00:00:39.520 --> 00:00:45.760 for really actually real this time. And then on the other hand, they're like, 00:00:43.360 --> 00:00:50.879 "Look at me. Your phone is the Xbox." Now, the same day that Phil Spencer sent 00:00:48.719 --> 00:00:56.000 out a memo that said, "Our game road map has never looked stronger," they 00:00:52.800 --> 00:00:58.399 notified Xbox employees of a 10% staff 00:00:56.000 --> 00:01:02.559 reduction across several studios alongside the cancellation of multiple 00:01:00.640 --> 00:01:07.040 games. Well, which is it, Microsoft? Snip snap. Snip snap. Snip snap. I mean, 00:01:05.119 --> 00:01:11.439 it shouldn't surprise us that much. If we go back to 2013, there was that time 00:01:09.119 --> 00:01:15.280 Microsoft forgot they were making a game console. 00:01:12.240 --> 00:01:17.520 >> Xbox go home. But more recently, these 00:01:15.280 --> 00:01:21.680 WTF moments seem to be happening more and more frequently to the point where 00:01:19.040 --> 00:01:27.360 it's raising the question, is Xbox even going to exist within another generation 00:01:24.320 --> 00:01:29.200 or two, which is a huge problem because 00:01:27.360 --> 00:01:34.640 even though I've never actually owned one personally, I 100% appreciate the 00:01:32.159 --> 00:01:39.520 value of having Xbox as a player in the space. There's so few console makers 00:01:37.040 --> 00:01:44.400 now, and seeing one of the major makers bow out now would be a big problem for 00:01:42.079 --> 00:01:48.720 competition. I have owned a lot of Xboxes and I'm also really terrified of 00:01:46.880 --> 00:01:53.040 a gaming future where Sony and Nintendo are going to have free reign to do 00:01:50.240 --> 00:01:59.200 whatever they like. Free reign, like do our Segways to our sponsors, Hadner. Get 00:01:56.960 --> 00:02:04.159 a powerful and scalable data storage solution that locks things down to GDRP 00:02:01.759 --> 00:02:10.319 and strict German privacy law standards with Headner. Click our link and use 00:02:06.079 --> 00:02:12.160 code LTT25 to get $20 off their S3 00:02:10.319 --> 00:02:17.120 compatible object storage solution today. It would be easy for us to kick 00:02:14.480 --> 00:02:21.280 this off with a crackdown on Xbox for all of its many problems these days, but 00:02:19.440 --> 00:02:26.080 let's give credit where it's due. 30 bucks a month multiplied by 12 is 00:02:24.640 --> 00:02:31.920 $360. >> Oh my god, we're so back. We're living 00:02:28.080 --> 00:02:35.200 in the 360 era again. Let's go. 00:02:31.920 --> 00:02:37.519 Okay, but for real, Xbox and PC Game 00:02:35.200 --> 00:02:40.879 Pass have been a great value for a lot of gamers. They've allowed people to try 00:02:39.519 --> 00:02:44.560 out experiences they might have otherwise overlooked, gotten eyes on 00:02:43.040 --> 00:02:50.000 games that might have struggled to find an audience, and according to some devs, 00:02:47.280 --> 00:02:53.760 even provided a stabilizing, de-risking presence for some smaller indie 00:02:51.680 --> 00:02:58.160 releases. It's been so good, in fact, that the service has, frankly, 00:02:55.360 --> 00:03:02.319 overshadowed their hardware for quite a while now, which is a shame because 00:03:00.319 --> 00:03:06.480 Xbox's hardware has also been traditionally pretty darn solid. We're 00:03:04.480 --> 00:03:10.640 PC people, which means we're often deriding consoles for their aging 00:03:08.319 --> 00:03:14.239 mid-tier hardware. But when you bear down on what you get for your dollar, 00:03:12.480 --> 00:03:18.959 it's kind of hard to argue with the original MSRPs of the series lineup. 00:03:17.040 --> 00:03:22.720 Just ignore the two price hikes just for a minute. We'll get to those later. 00:03:20.640 --> 00:03:27.280 Point is, for a long time, the combination of an Xbox Series S or even 00:03:25.120 --> 00:03:32.159 the X for that matter, plus Game Pass, was a pretty killer entry point into 00:03:29.280 --> 00:03:36.560 highfidelity gaming. And this next one definitely benefits us less. But you got 00:03:34.799 --> 00:03:40.480 to give credit, I guess, to Xbox's business side for successfully 00:03:38.640 --> 00:03:44.400 accumulating new studios and publishers like a gem-hungry Thanos. It has 00:03:42.799 --> 00:03:48.400 drastically increased their overall gaming revenue. And to Microsoft's 00:03:46.159 --> 00:03:52.640 credit, for better or for worse, they haven't greedily gatekept those 00:03:50.319 --> 00:03:57.519 franchise stones from the competition, which kind of plays into what looks to 00:03:54.400 --> 00:03:59.920 us like what might be a big switch away 00:03:57.519 --> 00:04:05.040 from hardware and toward providing services. Now, Xbox has stated many 00:04:02.720 --> 00:04:09.280 times that they do have more Xbox hardware on the way, but honestly, each 00:04:07.439 --> 00:04:13.120 press release feels less and less like an exciting promise and more and more 00:04:11.439 --> 00:04:17.359 like damage control over some bad headlines. Through both the naming of 00:04:15.280 --> 00:04:21.759 the current two-tier generation and the fact that seemingly everything with the 00:04:19.440 --> 00:04:26.720 screen could technically be an Xbox, Microsoft is telling us that a singular 00:04:23.919 --> 00:04:30.320 Xbox is not at the center of their game plan. And that means that resources 00:04:28.560 --> 00:04:36.080 which used to be spent on making the ultimate Xbox experience in one place 00:04:33.199 --> 00:04:40.720 like Engineering and Design Time are trickling out to make their streaming 00:04:37.840 --> 00:04:44.240 app pretty okay on your LG TV or your Samsung phone. You can kind of see this 00:04:42.720 --> 00:04:48.479 change with the first party Xbox handheld being canned in part due to 00:04:46.560 --> 00:04:53.040 Microsoft not being so confident they could sell 10 million of them, which to 00:04:50.960 --> 00:04:57.440 be fair, not even the Steam Deck has sold that many units. Instead, we're 00:04:55.040 --> 00:05:02.560 seeing Big Green offload their work and the risk to simply facilitate the 00:04:59.919 --> 00:05:06.479 release of an ASUS handheld with an Xbox button. And although this might seem 00:05:04.479 --> 00:05:10.960 just like a neat little side quest that should have little bearing on the future 00:05:07.919 --> 00:05:12.880 of Master Chief's chefs, it does raise 00:05:10.960 --> 00:05:17.680 major questions about a shift in paradigm at the old Redmond offices. 00:05:14.960 --> 00:05:21.680 Microsoft once fought hard to make their own hardware. Take the Surface for 00:05:19.360 --> 00:05:25.520 example, Microsoft's tablet and laptop lineup. They could have easily 00:05:23.199 --> 00:05:30.479 maintained the status quo just building their software as bestest as they can 00:05:28.080 --> 00:05:35.280 and letting the various OEMs build their systems around it. But instead, they 00:05:32.800 --> 00:05:40.160 invested many millions of dollars to design and build devices from the ground 00:05:37.759 --> 00:05:44.639 up with custom parts and this is important full control of the 00:05:42.080 --> 00:05:48.080 compromises that make a Surface a Surface. And that point is really 00:05:46.400 --> 00:05:52.800 important because pretty much every piece of consumer tech has some kind of 00:05:50.320 --> 00:05:57.039 compromise at its core. Now, usually these compromises are to keep the cost 00:05:54.560 --> 00:06:00.880 of manufacturing down so that the price doesn't go too high. Things like 00:05:58.560 --> 00:06:05.120 skipping out on an OLED screen or making the disc drive a separate thing. But 00:06:02.800 --> 00:06:09.120 sometimes these compromises could be to the margin of the manufacturer. Say for 00:06:07.199 --> 00:06:13.520 example, because they intend to make it back when they sell you software down 00:06:11.360 --> 00:06:20.000 the road. That's the big deal breaker with the new ASUS Xbox handhelds. 00:06:16.960 --> 00:06:22.800 Microsoft isn't subsidizing the cost. 00:06:20.000 --> 00:06:27.840 And ASUS has to make money on every unit sold because they don't get a 30% cut of 00:06:25.520 --> 00:06:34.240 whatever you buy in the Xbox store. So, the one you actually want is $1,000. 00:06:32.000 --> 00:06:39.919 I mean, that's not that unreasonable given the hardware that's in it and what 00:06:36.240 --> 00:06:42.880 the costs of it are, but I mean, that is 00:06:39.919 --> 00:06:47.039 galaxies away from mainstream pricing. And it's another signal on top of the 00:06:45.120 --> 00:06:51.759 increased cost of services and the increased cost of Microsoft's own 00:06:48.639 --> 00:06:53.840 hardware that Xbox just is not focused 00:06:51.759 --> 00:06:57.759 on bringing the best value in gaming, at least not the way they used to be. But 00:06:55.759 --> 00:07:04.319 then if Microsoft is just getting OEMs to make their hardware for them now, is 00:07:00.080 --> 00:07:06.639 Xbox just a logo and Windows? Hey, 00:07:04.319 --> 00:07:11.680 what's so bad about Windows being at the center of the future of Xbox? I mean, 00:07:09.120 --> 00:07:17.919 Windows has phenomenal cosmic compatibility and ity bitty little 00:07:14.479 --> 00:07:19.919 issues that uh really do add up. Windows 00:07:17.919 --> 00:07:26.000 has primarily been a mouse and keyboard product and using a joyad or touchcreen 00:07:22.960 --> 00:07:28.240 to navigate currently sucks. The years 00:07:26.000 --> 00:07:34.240 of patchwork development, multiple releases, and the need for their OS to 00:07:30.800 --> 00:07:36.560 do everything, not just games, means 00:07:34.240 --> 00:07:42.240 that there's a ton of inefficiencies and extra processes in the background versus 00:07:38.639 --> 00:07:43.680 something like Steam OS. Microsoft is 00:07:42.240 --> 00:07:47.599 working on these issues. Their new Windows handheld mode might actually 00:07:45.599 --> 00:07:52.160 release before this video does, but what they will never fix is a misgreant's 00:07:50.080 --> 00:07:57.280 ability to win every match in every lobby by nefarious means. You can't lock 00:07:55.039 --> 00:08:01.120 Windows down enough to prevent cheating. And they can't really prevent other 00:07:59.280 --> 00:08:06.000 storefronts from appearing on it, which from a gamer standpoint is pretty 00:08:03.280 --> 00:08:11.680 freaking great. We love competition, but from Microsoft's perspective, h this 00:08:08.960 --> 00:08:17.680 sucks. Unlike a lockdown console ecosystem, Xbox's services on Windows 00:08:14.639 --> 00:08:20.479 are just one of several options. They 00:08:17.680 --> 00:08:26.479 have to keep the value of PC Game Pass much more competitive than on Xbox. 00:08:23.120 --> 00:08:29.440 There is also an Xbox game storefront on 00:08:26.479 --> 00:08:34.080 PC, but do you know anyone who buys games from there? I don't think so. And 00:08:32.080 --> 00:08:39.919 while I've heard the fan theories that Xbox is desperate to get Game Pass on 00:08:36.880 --> 00:08:42.719 competing console platforms, I just 00:08:39.919 --> 00:08:48.000 don't see that happening. For one, their primary competitors are not interested 00:08:45.200 --> 00:08:55.120 in having Game Pass in their ecosystem. Nintendo, Sony, and Valve all make their 00:08:52.160 --> 00:09:00.399 money selling games, and having a competing service that does measurably 00:08:57.680 --> 00:09:06.240 reduce the amount of games sold is not good business. Two, even if they do let 00:09:03.920 --> 00:09:12.080 Microsoft weasel its way in, they are simply not going to do so without taking 00:09:08.959 --> 00:09:14.240 their cut, probably something like 30%. 00:09:12.080 --> 00:09:19.200 And at that point, I don't think Game Pass can take that big of a hit and 00:09:16.560 --> 00:09:22.480 remain profitable. And three, this might be the biggest one, Microsoft has 00:09:20.880 --> 00:09:28.480 signaled that having their biggest hitters as day one offerings on Game 00:09:25.040 --> 00:09:32.560 Pass loses them a lot of potential 00:09:28.480 --> 00:09:34.160 money, like the $300 million they left 00:09:32.560 --> 00:09:39.040 on the table with the latest Call of Duty. Right now, Microsoft gets to eat 00:09:36.880 --> 00:09:44.320 their cake with 37 million Game Pass subs and have it too by still selling 00:09:42.560 --> 00:09:49.040 millions of copies to PlayStation owners. Black Ops 6 was the highest 00:09:46.720 --> 00:09:52.959 grossing title in franchise history. And this isn't just a COD thing. Microsoft 00:09:51.519 --> 00:09:57.760 has been the top publisher on PlayStation for several months. And so 00:09:55.920 --> 00:10:01.600 even though it feels like Microsoft keeps shooting themselves in the foot at 00:09:59.440 --> 00:10:06.720 every possible occasion, and even though customers are seemingly turning on Xbox 00:10:04.080 --> 00:10:11.200 in every market, and even though their piece of the hardware pie keeps 00:10:08.720 --> 00:10:18.399 shrinking, their gaming division is making more revenue than ever in the 00:10:14.160 --> 00:10:20.480 history of all of Xbox. Just because I 00:10:18.399 --> 00:10:24.399 don't like what they're doing doesn't mean it isn't working for them. And 00:10:22.160 --> 00:10:29.120 while I really disagree with some of their moves, I think the discussion is 00:10:26.480 --> 00:10:34.240 less about Microsoft's failing strategy and more about them acknowledging the 00:10:31.519 --> 00:10:38.800 situation that games exclusivity driving console sales as a primary revenue 00:10:35.920 --> 00:10:42.880 stream is a thing of generations past, at least for them. But with that said, 00:10:40.720 --> 00:10:49.279 even Sony is smelling the roses these days. The PS5 has arguably Sony's 00:10:46.240 --> 00:10:51.120 weakest lineup ever of exclusives. And 00:10:49.279 --> 00:10:55.200 yet, it's their most profitable generation ever, which just goes to show 00:10:53.279 --> 00:11:00.480 people are still buying the consoles, even without the killer apps. But thanks 00:10:57.680 --> 00:11:04.880 to capitalism, no competition means that the monopoly charges whatever the heck 00:11:02.320 --> 00:11:09.200 they want. So, please Valve, please have the new Steam machines be good. Make 00:11:06.640 --> 00:11:17.760 them a real competitor for a 4K gaming system. Help me, Obie Gabe Canal. You're 00:11:12.640 --> 00:11:21.040 our only hope. Just like this segue is 00:11:17.760 --> 00:11:23.120 a new hope for our sponsor. Oh no, 00:11:21.040 --> 00:11:26.959 >> Vessie. We're partnering with Vessie to bring you an exclusive October giveaway 00:11:25.360 --> 00:11:31.600 extravaganza. Enter for a chance to win one of seven 00:11:29.279 --> 00:11:36.880 prize packs, each loaded with Vessie gear, LTT Store merch, and more. Up for 00:11:34.880 --> 00:11:42.399 grabs is footwear like their Stormburst hightops, our very own commuter 00:11:38.959 --> 00:11:45.839 backpack, Sony XM6 headphones, and some 00:11:42.399 --> 00:11:47.760 secret to beannounced prizes. It is 100% 00:11:45.839 --> 00:11:52.160 free to enter. 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