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Papo Sério - XBOX: De Nano a WoW os nros ainda não chegaram...mas a COO foi embora! #xbox #microsoft — Transcript

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0:01Gamescare, since 2016, taking great care
0:03of your video games.
0:06Links in the description.
0:08Games, controllers, keychains and many
0:11decorative items from the Geek gamer
0:12world can be found here at Pop Game Arts
0:15.
0:16Visit the website.
0:20Hi everyone. Welcome to another series
0:22of chats here on Mini. I'm Marcel and
0:24today I want to talk to you about Xbox.
0:28I want to talk to you about exclusives,
0:30I want to talk to you about numbers, I
0:32want to talk to you about quantum
0:33physics.
0:39Because only Heisenberg's uncertainty
0:40principle can explain certain things,
0:42because when you try to observe a
0:44particle, you alter its state.
0:50And when you try to observe Microsoft's
0:52quarterly report, you do the same thing
0:54.
0:56You look at a number, you think you
0:58understand it, and the next second, the
1:00hardware sector has shrunk by 14%.
1:06So let's have a chat about a mountain of
1:08things involving Xbox.
1:12Let's begin.
1:25Let's start by getting that eternal
1:26request of ours out of the way.
1:31Leave your like, leave your hype, it
1:32takes zero time from you and helps me
1:34grow and reach other people a lot.
1:39So please help us
1:42spread across YouTube.
1:45And all of this depends only on you.
1:47And of course, remembering everyone, the
1:49videos are released first for members.
1:52So if you want to watch a video as soon
1:54as it's released, just become a member.
1:57Members not only have early access to
1:59videos, but a series of other perks.
2:02Including the Calangos, who have a
2:04monthly meeting with me and Junião, two
2:06hours long, where you can do whatever
2:08you want with us,
2:12right? It's like those ads that say, you
2:14know those memes, they say: "If you had
2:1624 hours with me and I couldn't say no
2:18to what you would do, I would explain
2:20everything about Warhammer 40K to you,
2:22girl, right? And you wouldn't be able to
2:24say anything, you would have to listen
2:26to me talk about Warhammer 40K." Let's
2:28start by talking about the nano
2:29controller, right? Because the Xbox has
2:31an ergonomic problem.
2:34You've looked at the evolution of
2:36ergonomics on the Xbox since the fateful
2:38Duke, right?
2:40The original Xbox controller in 2001
2:43looked more like an Apollo 11 heat
2:45shield, didn't it?
2:47Xbox
2:51controllers, they've never been the
2:53average sample size for human hands.
2:57Just like the Nintendo 64 had
2:59controllers that were made for some kind
3:01of three-armed alien, the average Xbox
3:03controllers were made for basketball
3:05players, right? Obviously, the 360
3:07controller is a favorite of a lot of
3:09people. The One controller is a favorite
3:11of a lot of people.
3:12The Siri controller is the One
3:14controller again.
3:17Sorry, that was stronger than me, but
3:19it's true.
3:22So, the Xbox nano controller was
3:24released specifically for people who
3:26need an ultra-compact, affordable, and
3:28very lightweight alternative.
3:34So it's aimed at essentially two very
3:36clear audiences: people with small hands
3:38, including children, right?
3:42Gamers with motor needs, right?
3:46And
3:49people who don't feel confident with a
3:51heavier controller, and as a highly
3:53portable accessory for travelers.
4:00Unlike standard wireless controllers
4:02with their dual-A battery packs that
4:04weigh the equivalent of a small asteroid
4:06, the Nano boasts a lightweight,
4:08ergonomic design that reduces its weight
4:10and size by approximately 35%compared to
4:12a traditional official model.
4:19Furthermore, it has internal batteries
4:21that recharge via USB-C cable,
4:22eliminating the need for physical
4:24batteries and keeping costs down while
4:26maintaining a virtually negligible
4:28weight.
4:30But why did I mention it? First, because
4:32it's really cool. Second, because it
4:34perfectly connects to the second topic I
4:36want to discuss in this serious
4:37conversation, which is Microsoft's
4:39obsession with cloud gaming, right?
4:42And it's part of their cloud gaming
4:44strategy, because after all, you're not
4:46going to carry a 4kg console when you
4:48can carry a 150g controller and your
4:50phone.
4:52So, just two days ago, on November 5th,
4:54Microsoft officially announced two new
4:56ways to play via the cloud.
5:00The first strategy is expanding the
5:02ability to stream games you already own
5:03in your personal library.
5:06They call this feature "stream your own
5:08game," right?
5:11So you're leaving the Game Pass Ultimate
5:13catalog closed, and once you buy it—as
5:15they've already been advertising with
5:17GTA 6 in this situation—you'll be able
5:19to stream various games from your
5:21catalog.
5:23All the games in your catalog? No. Some
5:25companies still don't agree with that.
5:28They only gave permission for sale for
5:30you to use on your Xbox.
5:32So, not all games are included, but this
5:34will immensely increase the number of
5:36games available for you to play via
5:38streaming.
5:43The second way is the launch of
5:44ad-supported streaming modalities that
5:46are coming integrated directly into TV
5:48platforms like Samsung and web browsing
5:50, without the need for a premium
5:52subscription.
5:56In the long term, you buy by the hour,
5:58as we've been discussing, right?
6:01They already have a mass of Azure
6:03servers populated with custom Xbox
6:05Series X boards.
6:09So Microsoft wants to use this as a way
6:11to try to combat its dependence on
6:13subsidized and very, very expensive
6:15physical hardware in the middle of the
6:17Ramajedon.
6:21The cost to the consumer varies between
6:23a monthly subscription and the option of
6:25access by the minute.
6:29So, for Microsoft it's interesting
6:31because it takes advantage of its
6:33existing idle hardware and forces you to
6:36consume, trying to reach those 1 billion
6:39gamers who will never buy a black box
6:42with 500, 600, 700, 1000, or 1200 GB
6:44consoles.
6:47So it manages to reach that 1 million
6:49gamers who have cell phones, have TVs,
6:51but will never buy a video game console
6:53.
6:54Again, for me here, the idea is very
6:56beautiful, it's very cute, it's very
6:58cool, but it clashes with reality.
7:02There's a scholar named Everett Rogers.
7:07And Everett Rogers talks about the last
7:09mile barrier, in terms of infrastructure
7:11.
7:12He talks about it in various aspects,
7:14but it's the last mile barrier. What is
7:16that?
7:19I can solve the internet problem from
7:21the Azuri server to a large city.
7:31I can solve the problem of the big city
7:33down to your neighborhood, but I won't
7:35necessarily solve your neighborhood's
7:37problem by having fast Wi-Fi
7:38infrastructure or fast network
7:40infrastructure, whether it's copper,
7:41fiber, or whatever.
7:47So this problem is what we call the last
7:49mile barrier, right?
7:52Which is what we always discuss at least
7:53.
7:57Cloud Gaming. It's for a very specific
7:59user, a user who wants to play games,
8:04is potentially willing to pay monthly,
8:06buy minutes, buy games to play.
8:12They'll buy a controller or a TV that
8:14comes with a controller, they have
8:16high-quality internet, they live in a
8:17place where they have access to
8:19everything, but they refuse to buy a
8:21video game console.
8:28There isn't a huge number of people like
8:30that.
8:31It's an extremely limited audience.
8:35So it gets a little complicated to
8:37overcome the last mile, right?
8:42To reach 1 billion people who have cell
8:44phones, all the places in the world
8:46where this casual mass is located have
8:48to have dedicated servers, near-zero
8:50latency, perfect frame rates, and all of
8:52that requires an enormous number of
8:54servers and an enormous amount of
8:55internet.
9:00So it's really cool that Microsoft is
9:02moving in this direction, once again
9:04accelerating things in this direction,
9:05but it still needs to solve the problems
9:07to bring this into its customers 'homes
9:09.
9:12It's online, it's very cool, but it's
9:14still a little bit missing.
9:18Speaking of online, World of Warcraft
9:20got WoW Forever and the numbers for
9:22World of Warcraft remain solid with
9:24absolutely wonderful levels in terms of
9:26retention, especially when you consider
9:28that the game is 22 years old.
9:35Some of you watching this video weren't
9:37even born when World of Warcraft already
9:39existed and I was already playing, right
9:41?
9:42The recent expansions and the new line,
9:44right?
9:47Classic/Forever sustain tens of millions
9:49of daily active subscribers.
9:54OK?
9:56Tens of millions is absolutely fantastic
9:58.
10:01So, the big difference between WoW
10:03Forever, right, which draws heavily from
10:05WoW Classic, right, and modern WoW,
10:07which is WoW Retail, right?
10:10is game design.
10:13Retail prioritizes modern convenience
10:15systems. You can do a series of
10:17explorations on your own.
10:19The graphics are much more up-to-date.
10:21The endgame content is very dynamic,
10:23right?
10:25The Classic line, which Forever now
10:27draws heavily from, works a lot with the
10:30economy of nostalgia, in broad strokes,
10:32right?
10:33The pace is slow.
10:36There's a greater community dependence;
10:38you have new adventures, right?
10:40But yes, you'll have organic progression
10:42.
10:44The idea is to try to remind you of what
10:46World of Warcraft was like many years
10:47ago.
10:50And now Blizzard has rekindled the
10:51community's hopes, right? Because we
10:54were hearing that World of Warcraft
10:55Forever would make the leap to Xbox.
10:59And now we're seeing them rekindle the
11:01community's hopes again.
11:04The adaptation of the user interface and
11:06the preparation of the user experience
11:08for the use of Xbox controllers on PC
11:10has already been done.
11:15And some solutions are still being
11:16sought to reduce the need for skill
11:18shortcuts on the controller, because
11:20there are too many skills to put on a
11:21controller that only has 12 buttons.
11:26But now that Activision Blizzard is on
11:27board with Microsoft, right?
11:30The Xbox console release is no longer a
11:32question of whether it will happen, it's
11:34a question of when the interface
11:35architecture is ready, according to
11:37several leaks from Blizzard.
11:42We're excitedly waiting for that to
11:43happen, and then I have to get rid of my
11:45Xbox because otherwise, if I go back to
11:47playing World of Warcraft, I won't be
11:49able to have a serious conversation.
11:53I want to talk about exclusives, but to
11:55do that, I want to address two issues
11:57first.
11:59First, Gears of War.
12:01Excellent game, fantastic, incredible
12:03game, wonderful game, I recommend it to
12:05everyone. Fantastic. Wow!
12:09Wow, really very good.
12:15However, everyone is saying it cost an
12:17astronomical 500 million dollars.
12:22Microsoft, however, came forward, and
12:24through its executives and the people at
12:26the coalition, clarified that this
12:28number isn't quite accurate, is it?
12:34This figure represents the overall
12:36budget encompassing the costs of
12:38producing the game, ongoing investment
12:40in research and development, long-term
12:42licensing of tools, proprietary
12:44modifications to Unreal Engine 5, motion
12:46capture tool pipelines, studio
12:48infrastructure, asset purchases—ah, the
12:50purchase of graphic assets that will be
12:52reused and will serve as the backbone
12:54for future games and for expanding the
12:56franchise, for DLCs.
13:05So, it's not the isolated cost of
13:06producing the game, 500 million, but
13:08rather the total investment in
13:10infrastructure that allows the creation
13:12of this game and will reduce the cost of
13:14other triple-player games in the Gears
13:16of War franchise later on.
13:24Then we had the franchise relaunched,
13:26resumed as a restart of Xbox exclusives
13:28, right?
13:32So, we had some titles talking about 1
13:34million copies sold, others talking
13:36about 400,000 copies sold, others
13:38talking about 400,000 copies sold
13:40through paid subscriptions, others
13:41talking about 3,000 or 4 million users
13:44via Game Pass.
13:46We don't have that.
13:49What we have is, some suggest around
13:52400,000, 600,000, 1 million, I'll, let's
13:54guess as low as possible, 400,000 copies
13:57sold on paid platforms, counting Xbox
14:00and PC, but that data isn't from
14:02Microsoft.
14:05How many users played on Game Pass?
14:11Exact download numbers, exact paid
14:13subscription numbers, exact purchase
14:15numbers, number of simultaneous players
14:17.
14:20Microsoft doesn't release the raw data
14:22for individual titles.
14:28So this obviously puts pressure on the
14:30studies.
14:33Analysts are putting pressure on
14:35Microsoft, saying things like: "Wow, you
14:37took a blockbuster and
14:42limited it to Xbox and PC with a
14:44production cost of $ 500 million.
14:47Okay, $ 500 million isn't just the
14:49production cost, but that's how the
14:51market sees it.
14:52A $ 500 million production cost that
14:54will generate very, very little
14:56immediate revenue.
15:02So the pressure is mounting: this has to
15:04be a PS5, this has to be a PS5, this has
15:06to be a PS5, because the volume of Xbox
15:09hardware installed and its reach within
15:11the PC market won't grow at the same
15:13rate as its production cost.
15:20Then, in parallel, we had Elder Scrolls
15:226: Sentinel being shown for the first
15:24time.
15:27And
15:30then Bethesda, we had a new teaser, a
15:32second teaser.
15:34And then Bethesda came out publicly and
15:36said:' No, no, calm down, calm down,
15:38come back down to earth, stop floating,
15:41it's still going to take a considerable
15:43amount of time, there are still years
15:45until the studio is ready to show new
15:47things. '" Concrete or gameplay. "
15:56And then, obviously, comes the first
15:58wave of questions, right, which you can
16:00and uh, put all of them.
16:04So, why show a trailer or teaser so far
16:06in advance?
16:11In management, this is called
16:13expectation management, okay?
16:17But you can also fit it into talent
16:18retention.
16:19Why?
16:21Because such an early announcement
16:23serves three purposes.
16:25First, it reassures the shareholder.
16:28Look, the intellectual property exists,
16:30it's coming, it takes time, but it will
16:33arrive and it's fantastic.
16:37Look at the reaction the public is
16:39having, right?
16:42So you already see, you're seeing? Look
16:44at the reaction the public had to my
16:45teaser.
16:47You can continue investing here calmly,
16:48because Elder Scrolls is coming and it's
16:50going to be incredible.
16:53Then you have a second point, which is
16:55marking territory.
17:01You pee in the corners of the house, you
17:04have a little dog, you mark territory,
17:06you say:" Look, maybe you, such and such
17:08companies, are thinking about reviving
17:10some franchise to compete with my next
17:12Scrolls.
17:17"Remember, I'm Bethesda and my owner is
17:19Microsoft, a $ 3 trillion company.
17:22So
17:26no, don't do this to try to scare the
17:28public, to scare the developer.
17:31And a third point, you attract
17:33developers.
17:35You say," Look, I'm doing this, I need
17:38great talent, right?
17:42"And then many developers, junior and
17:44senior, who want to work on Elder
17:46Scrolls, who want to be part of the
17:47Central team, join you at this moment
17:49when you have a lot of time ahead of you
17:51.
17:55So we understand why they made this
17:57announcement. So
17:59the second question, however, is the
18:01exclusive opportunity,
18:06because everyone is waiting. And the
18:08current policy of Microsoft CTesda is
18:10case-by-case evaluation.
18:13But then, Elder Scrolls, the next Elder
18:15Scrolls, in what cases does it fit?
18:19Because it's a title with very high mass
18:22appeal, right?
18:23Very high.
18:26If you leave it out of PlayStation,
18:28you're giving up hundreds of millions of
18:29dollars in instant direct sales on day
18:31one.
18:34But maybe you'll push Xbox sales.
18:43So, right?
18:45Let's go, let's go.
18:47It's complicated. It's complicated.
18:50It's a choice that I wouldn't want to
18:52have to make, which brings us to our
18:53discussion about exclusivity.
18:56Here, right?
18:59We recently had an analysis by Mar
19:01Piscatela, from Circana, on exclusivity
19:03, and he was wonderful on several points
19:06he raised.
19:09But one of the points he raised, which
19:11was fantastic, is: just being exclusive
19:13doesn't guarantee excellence, sales
19:15results, and it doesn't guarantee
19:16financial health because it's a seesaw,
19:22okay?
19:23It's pure math, but think of it as a
19:25seesaw.
19:29For exclusives to be profitable, I need
19:31to have a lot of people on board my
19:33console who will buy the exclusive to
19:35absorb the cost and generate my profit.
19:41Or I have to have my game be so heavy,
19:48so incredibly powerful,
19:52right? It's so fantastic
19:56that it
20:00generates, right, a huge, fantastic
20:02console sales.
20:08And then you have a problem.
20:10When I limit exclusives, it's a
20:11trade-off.
20:14I'm trading sales elsewhere for its
20:15ability to force sales of my hardware.
20:19I'm trading.
20:22In Microsoft's case, it's a rather weak
20:24trade-off. Why? Because it also sells on
20:27PC.
20:29Because it also has an interest there.
20:30It has an interest in hindering Proton.
20:32It has an interest in preventing you
20:34from playing on Linux. It has an
20:35interest in people developing everything
20:37for Windows.
20:44So, releasing these games for Windows
20:46forces you to at least pirate a license
20:48, if not buy it, or buy a computer with
20:50a license already installed, right?
20:58There's no way around it. So, Microsoft
21:00doesn't want to take its games away.
21:03It doesn't want to limit its games only
21:05to Xbox and offend people on PC or
21:07diminish the value of Windows on PC.
21:11So, it has to keep the games coming out
21:13on Xbox and PC.
21:15But from the moment I don't limit it 100
21:17%to an Xbox, I'm already grabbing a
21:19piece of that potential buyer profile by
21:21telling them:" You don't need to buy an
21:24Xbox, you can buy on PC. "
21:30So, my game has to be so good that the
21:32consumer who owns a video game console
21:34and only plays on video game consoles
21:40chooses my console to play on.
21:45Until a few months ago, the only
21:46differentiating factor that Xbox had was
21:48the presence of Game Pass, with games
21:50available day one on it.
21:53Now you have day one games and you have
21:55exclusive games.
21:58But at this moment, from what everything
22:00indicates, what the math shows us, Gears
22:02alone
22:07wasn't able to move the needle enough.
22:10I'm not surprised by that.
22:12I'm not surprised by that. You need
22:14critical mass.
22:16A person doesn't buy,
22:18unless the person is Marcelo, they don't
22:21buy a video game console to play Zelda.
22:23They don't buy a video game console to
22:25play Mario, they buy it to play various
22:27things.
22:28Right? Karina sold the Nintendo Switch 2
22:31like crazy.
22:34Karina sold Nintendo Switch 2s by the
22:36meter, by the bucket.
22:39But why?
22:41Because it made people say," Wow, I need
22:43to have this video game.
22:46"Then they looked at the other things on
22:48board."
22:50Wow, there's already a console, there's
22:52already this, there's already that, "
22:53and then the guy buys it, then the girl
22:56buys it, right?
22:58So it's a huge point, yes, but for most
23:01people,
23:04one game isn't what's going to push you
23:06.
23:10So Microsoft will have to build the
23:11critical mass now, they'll have to build
23:13a game base where the only place where
23:15you'll have the ease of the console, the
23:17peace of mind of the console, the
23:19practicality of the console, while at
23:20the same time having those specific
23:22games, is on the Xbox board.
23:29Sensational. I'm right there with them.
23:33I really want to see what they're going
23:34to do now to get out of this mess and
23:36make it happen.
23:42That said,
23:46network theory also says that you choose
23:48a particular product based on where your
23:50friends and family are.
23:56This works for cell phones, this works
23:58for video games.
24:02A consumer enters the ecosystem because
24:04other friends and family are there.
24:10For them to choose to be in another
24:12catalog, it's only if they feel that the
24:14catalog is immensely superior, right?
24:20For them to abandon the ecosystem they
24:22were in and go to another, it's only if
24:23the catalog is immensely superior or if
24:25they feel attacked by that ecosystem in
24:27some way.
24:30Apple, for example, often loses
24:32customers because they feel attacked by
24:34a certain position of theirs, right?
24:37Oh, it happened to me, man.
24:39I used the 360, but much more than the
24:42PS3.
24:43But the PS4 came before the Xbox One. I
24:46never bought an Xbox One. I received an
24:48Xbox One as a gift.
24:50I never bought one.
24:52Why?
24:53Why did you have to receive an Xbox One
24:55as a gift, right?
24:57Why?
24:58Because when E3 2013
25:04came, I gave up. I said:" This company
25:07will not have my money.
25:09"Because I disagreed with several of
25:11their policies at that moment.
25:14I said:" I'm not going to give you my
25:16money. "So when I had to buy a video
25:18game console in 2014, which one did I
25:20buy?
25:21I bought the PlayStation 4.
25:26So
25:29, I abandoned it, my entire library was
25:32on the 360,
25:34right?
25:37Almost all of it, right?
25:41So, it's difficult to overcome that, the
25:43Network Effect is difficult to overcome
25:45, to make people abandon it.
25:48Game Pass makes it easier because people
25:50don't have to buy games, just subscribe
25:52to Game Pass?
25:54Even so, it's difficult because the
25:56other side has exclusives that
26:00are now exclusively tied to the
26:01PlayStation 5. They're not even coming
26:04to PC, like Wolverine, for example.
26:08So, is it worth it for Microsoft to keep
26:10exclusives?
26:13Yes, in the medium to long term it can
26:15foster an increase in Xbox sales,
26:20okay? But it's much more complicated for
26:23them than it is for Sony at the moment,
26:24where their single-player games only
26:26come out on the PlayStation 5, or than
26:28it always was for Nintendo, where
26:29everyone is already used to Mario only
26:31being legally released before someone
26:32comes along and says:" Oh, but I can
26:34emulate it? "I know, we know that.
26:37We, we made a video about it, right?
26:42You can only legally buy it on the
26:44Switch 2. So, Marcelo, you see that it's
26:46going to take a while for that to happen
26:48.
26:51It's going to take a while.
26:53They could reverse that position, yes.
26:57It wouldn't surprise me at all.
27:02If in 2 or 3 years they take control out
27:04of the company and create separate
27:06companies from Xbox Studios, close Xbox
27:08Studios, and turn them into the biggest
27:10publisher in the world, right?
27:14It wouldn't surprise me at all. He said
27:16:" Now we're going to release it to
27:17everyone, everything to everyone, right
27:19?
27:21We keep a product called Xbox, which you
27:23buy and is essentially a hybrid PC video
27:25game, but we release it to everyone.
27:30That's not what I think Charma will do
27:32at this moment, but it wouldn't surprise
27:34you or me.
27:36Proving that even when we try, we can't
27:38completely disconnect from politics in
27:40the video game universe, let's talk a
27:42little about boycotts in the Xbox system
27:44, shall we?
27:48Ah, I don't know who's been following,
27:50but certain independent developers with
27:53great prestige, like the guys who
27:54developed Celeste, and a few others,
27:56decided to remove their games, delist
27:58their games, take their games off the
28:00lists, as a way of joining the BDS
28:02campaign, which is Boycott Investment
28:04Sanctions, right?
28:08So, these studios are removing their
28:10games from Game Pass.
28:11If you bought these games, you still
28:13have access to them, but they are
28:15removing their games from Game Pass and
28:17removing their games from the
28:18possibility of new purchases within the
28:20Xbox infrastructure, simplifying a
28:22problem that is immense.
28:28The boycott starts... "The Israeli
28:29government has been using technology not
28:31only from Microsoft, but from various
28:33other technology partners, for actions
28:35that are considered internationally to
28:37be extremely unethical, aggressive, and
28:39that violate human rights at their core
28:41, constituting crimes against humanity.
28:50So, these companies are immediately
28:52removing their games, which is already
28:54affecting the availability and the
28:56portfolio, the catalog of games
28:58available on Xbox.
29:03In the long term, this could create an
29:06image problem for Xbox, right?
29:10While more brands are saying," Look, we
29:12won't stay here because you are an
29:14environment whose parent company
29:15cooperates with Israel and its actions
29:17with the Palestinians.
29:22"However, in the current situation, it's
29:24a case of" damned if you do, damned if
29:26you don't.
29:28"Why?
29:32Because Microsoft makes billions of
29:33dollars from its commercial partnerships
29:35with Israel.
29:38So, even if you find it charming, go up
29:40there and say:" Look, this is affecting
29:42people's perception of Xbox, this is
29:44affecting the number of games I can make
29:47available on Xbox.
29:51I need this to stop, we need to stop
29:53this partnership.
29:55"She'll hear a resounding, gigantic no,
29:58okay?
30:01Because there are political interests
30:02inside and outside of Xbox and Microsoft
30:04for this partnership to continue.
30:07And Microsoft makes enormous amounts of
30:09money, amounts of money that the Xbox
30:11department doesn't even dream of making
30:13, not even in its wildest dreams. So,
30:15there's no way. It's one of those
30:17situations where if you run, the beast
30:19catches you, if you stay, the beast eats
30:21you, right?
30:22Xbox can't give up those agreements.
30:26Microsoft can't give up those deals
30:28because it makes a lot of money and in
30:29turn Xbox doesn't make enough money for
30:31its voice to have any weight.
30:35We're only talking about the financial
30:36point here, we're not talking about the
30:38whole political point, right?
30:41So, indigenous developers may realize in
30:43the short, medium and long term that
30:45it's interesting.
30:49For their image to disappear, which
30:50would further complicate the situation
30:52of maintaining an attractive catalog for
30:54Game Pass, in addition to the
30:56reputational damage that parts of the
30:58internet will certainly generate for
30:59Xbox.
31:02There's a way, folks.
31:04Eh,
31:06there isn't.
31:08Everything is interconnected, right?
31:12We can try to escape, and you don't need
31:14to have politics within your game, but
31:16believe me, for your game to exist, to
31:18reach your hands, it's a network like a
31:20spider interconnected web of things.
31:23Leaving politics aside, let's talk a
31:25little about Arcane Leon, the creators
31:27of Dishonor and Deathloop, who are
31:29working on Blade, right?
31:32They were among the group of companies
31:34that Microsoft wanted to get rid of in
31:35that gigantic layoff, right?
31:39They wanted to disconnect.
31:46Microsoft then said that the first
31:47negotiations failed and that Arn would
31:49have until November to sell itself.
31:54And then, to everyone's surprise,
31:58who appeared interested in the purchase
32:00?
32:02The French giant Ubisoft, right?
32:05And then comes the 100 million euro
32:06question, right? How so? Does Ubisoft
32:09already have money for an offer like
32:10that if they're laying off people? The
32:11next day, an employee was closing the
32:13studio the next day, right? And that's
32:15one of those moments, the realism of
32:17accounting, right? Because
32:23you can, in business administration,
32:25have layoffs and operational
32:27restructurings that will free up
32:29immediate cash flow, improve your
32:30quarterly or semi-annual balance sheet,
32:32and allow for a strategic acquisition.
32:39In other words, yes, we could be seeing
32:41a Ubisoft that sold a mountain of things
32:44to earn
32:48money that it will use to invest, to
32:50freeze again, buying studios again,
32:52right?
32:57This could happen through its sales or
32:59it could happen because it has lines of
33:01credit coming in, as it has had constant
33:03investments from Tens, right, for years
33:05, or simply to buy using its shares.
33:09So yes, UB has the possibility of
33:11preparing for an acquisition of Arcane
33:14Leon.
33:18It will happen at the moment we are
33:20filming this, we don't know, there are
33:21three or four other companies butting
33:23heads there, but yes, it could happen.
33:28It could perfectly well cut operational
33:30personnel costs, raise funds in the
33:31financial market and acquire a valuable
33:33intellectual asset that it thinks it can
33:35.
33:37It fits better in her portfolio, since
33:39Arcan Leon is already a studio based in
33:41France, right?
33:44That fits with what she intends to do.
33:50Ubisoft might also just be taking a look
33:52, seeing what the price is, right, in
33:54Leon and adjusting, right, the costs in
33:56relation to what a company will be doing
33:58there.
34:02We know, according to Bloomberg, that at
34:04least two other companies, right,
34:06according to Jason Schreyer, are
34:08participating in this.
34:10We know that one of them is a European
34:12company, right?
34:15So, it could be Tencent, one of its
34:17European divisions, or probably Embracer
34:19, right?
34:21And we know that the other is an
34:22American group.
34:23When I say an American group, I always
34:26think of banks, investment funds, right
34:28?
34:29Some private equity group, because they
34:30must have seen the name Marvel's Blade.
34:33They say:" Wow, buy that, monetize the
34:36project, we'll have another Spider-Man
34:38on our hands.
34:40"There's also the
34:45possibility, right, of a management
34:47buyout, an MBO, right?
34:50What is this? A purchase by the studio's
34:52own leadership.
34:53The CEOs of Carin Leon get organized,
34:55right?
34:58Uh, and raise money in the market
34:59themselves, buy the company and make
35:01Carin Leon an independent studio.
35:04This possibility also exists.
35:07Under
35:11the French law that's managing the
35:13situation, Microsoft is obliged to seek
35:15alternative sales methods before closing
35:17a division of this scale.
35:19Microsoft originally said until November
35:21, but now it seems they have a new
35:23deadline for negotiations. We are
35:25waiting for confirmation from Bloomberg
35:27on this, but it seems the new deadline
35:29is December 13th, right?
35:33And so by December 13th we'll have to
35:35see if Microsoft injects itself as a
35:37co-investor in the company and keeps it
35:39open, right?
35:43Although independent of it, right?
35:45enters with a partner, or it sells
35:47itself, either to one of the interested
35:49parties, independently, to Ubisoft,
35:51right?
35:52Something has to happen, Carin Leon, by
35:55December 13th.
35:58We truly hope that whatever happens
36:03is good for...The company should be
36:05favorable to Arcane Leon, right, and to
36:08its employees.
36:09A second question, however, cannot leave
36:11our minds at this moment. What happens
36:14to Marvel's Blade, right?
36:17A game that was supposed to be the
36:18Spider-Man of the Xbox, right?
36:21What will happen to it?
36:25Ah, Arcane Leon now has a unique
36:27opportunity in its hands, which is to
36:29find a new corporate overlord, right, to
36:31pay for the game.
36:36Because in the case of a license with
36:38Blade, the license belongs to Marvel,
36:39right?
36:43The code, graphics engine, development
36:46work done so far belong to Microsoft/
36:48BetesDNA, right?
36:53If Arcane Leon is sold to Ubisoft or
36:55Tenscent or Embracer, right, the buyer
36:57assumes the development contract
37:05and either assumes the previous
37:06development conditions or reimburses the
37:08previous investment made by Microsoft,
37:10right?
37:14And this includes code, graphics code,
37:16work, development. Regarding licensing,
37:19there's no way around it.
37:22Whoever gets the problem pays Marvel,
37:24right?
37:26Because Marvel has a previous part, you
37:28pay to be able to Working with this.
37:31And it will have a portion based on
37:33sales returns.
37:35So, part upfront, part based on sales
37:37returns, there's no way around it.
37:40Whoever does the publishing pays Marvel
37:42.
37:45So, ah, if the sale doesn't go through
37:47and Microsoft decides to keep the team,
37:49right?
37:52Look, I'll come in as a partner, I'll
37:55keep you to finish the project,
37:56Microsoft assumes the costs, business
37:58continues as it was.
38:02Or if nobody manages to buy the company
38:04and the company is forced to close, okay
38:06?
38:09Microsoft will reabsorb whoever it can
38:11in terms of talent, and the development
38:12team will have to find another internal
38:14team if they decide to proceed with them
38:16.
38:19They constantly say they've decided to
38:21put them in, but it's very uncertain
38:23given their current conditions.
38:26I believe Marvel's Blade will still see
38:28the light of day,
38:31but
38:33I don't know under what conditions.
38:37No, it may be that we are heading
38:39towards a problem similar to what
38:40happened with Wolverine.
38:42One thing was expected, and the final
38:44game didn't meet what many people
38:46expected.
38:47(Giving a little clean to that taste
38:49buds, right?)
38:50We're talking so much about layoffs,
38:52corporate restructuring, and so on.
39:01We have a leak, right, from members of
39:03the data mining community, who noted
39:05some updates in Microsoft's network
39:07systems and the Xbox interface that
39:09suggest retroactive integration of Game
39:11Score and achievement systems for
39:12original Xbox titles that are coming to
39:15Xbox Game Pass and
39:24PC.
39:26We don't have a date for that yet.
39:28Microsoft hasn't officially announced
39:30the feature.
39:32They said that four games coming from
39:34the original Xbox to PC and Game Pass
39:38would have a version with achievements,
39:40right?
39:41But from what people have gathered,
39:43apparently many other games you're
39:44playing in backward compatibility will
39:46simply gain a series of achievements.
39:49So it's very interesting to see this.
39:53Uh, but
39:55people have unearthed that it's all
39:57already in the testing phase.
39:59It's a sensational strategy of theirs
40:01that costs very little and gives
40:03enormous value to the historical catalog
40:05because it forces, right, captures
40:07engagement, right? Because remember, we
40:09talk about this a lot in the mini-series
40:10, we're no longer in the era of selling
40:12, we're in the era of forcing you. It
40:14consumes time and more time, more time,
40:16more time, more time, time, time, time,
40:18stuck in your video game. Because if
40:20you've played, you've played Blade,
40:22Blade, wow, Blade's stuck in my head.
40:24You've played Black several times,
40:26you've played Jade Empire several times
40:28, you've played Cotor several times.
40:29You're not going to play it again;
40:31you've played it five, six times.
40:33But, if achievements that count towards
40:36your game score now appear, maybe I can
40:38convince you to engage in a game again
40:40for 15, 20 hours.
40:41You're not going to buy a new game if
40:43the game is on Game Pass. You're not
40:45going to buy a new game if you already
40:46have the game. You're not going to buy a
40:48new game, you already have it digitally
40:50or on disc in your access.
40:52But you're going to spend time on Xbox
40:54again.
40:56And if you spend time, I can find a
40:58corner to eventually sell you or other
41:00people advertising or a new game.
41:04Unfortunately, not everything is rosy.
41:07In fact, in this video almost nothing
41:10was rosy, right? But we've already
41:12started to have problems in the style of
41:13F Spencer in the new administration.
41:16It hasn't reached..." Given no time,
41:18right? We're already having problems
41:20with Stencer, especially now with Allen
41:22Shanga's departure.
41:24For those who haven't heard of Allen
41:26Shanga, she wasn't just any executive
41:28imported from some outsourcing
41:29consultancy somewhere.
41:33She was a veteran with over 15 years at
41:35Microsoft, whose professional
41:37breakthrough was leading Mojang Studios
41:39for years and transforming Minecraft
41:41into a money-making machine, the most
41:43profitable, stable, and transmedia
41:45property in the history of the Xbox
41:46division.
41:50When Microsoft created the unprecedented
41:53position of TIF Operating Officer for
41:55the Xbox
41:59division, Allen Shanga was the natural
42:01choice to be the efficiency engineer in
42:03a new era for Xbox.
42:08So you can imagine the shock when she
42:10left the position a mere 3 months after
42:12its creation.
42:16How can an executive of that caliber
42:18enter a newly created position and leave
42:20it in 90 days?
42:22The company's public relations machine
42:24goes on high alert and starts producing
42:26everything possible to have a nicer
42:28version of the facts.
42:31But apparently the official version and
42:33Allen Shanga's positioning... "Xang are
42:35banging, at least for now, right?
42:39According to The Verge, Vertical Slice
42:42News, IGN, and a mountain of other
42:44places, both Microsoft and Allen Cheng
42:46maintained that the departure did not
42:48stem from any misconduct, any ethical
42:50violation, or any change in internal
42:52policy.
42:54She emphasized several times, as anyone
42:56who wanted to hear her out, and also on
42:58her social media, that the transition
43:00was a personal decision, right?
43:03And that she felt her cycle of
43:04contributions to the organization had,
43:06in her words, reached its natural
43:08conclusion.
43:12However, when we confront this official
43:14version with the analysis of
43:15investigative journalists in the
43:17industry, when we look at Jason Shaer
43:19working, a much denser scenario emerges
43:21,
43:24right?
43:25A Daniel Arrado working.
43:28A much denser scenario emerges.
43:35The CEO position was created with the
43:37explicit mission of organizing the
43:38massive integration of Activision
43:40Blizzard King, a $ 70 million operation
43:42, a $ 70 million acquisition, and
43:44getting it up and running to achieve the
43:46profit margins and targets demanded by
43:48Microsoft's executive board.
43:53In the satellite-like form that is the
43:55group's CF.
44:00So, the likely cause of this departure
44:02is the beginning of friction
44:09between the Xbox department and
44:11Microsoft's self-management, in the same
44:13way that happened with Spencer and
44:15Sarabond.
44:18On one side, you have Xbox leadership
44:20trying to preserve development autonomy
44:22and trying to tell them that the only
44:24way to keep a video game alive in the
44:26market is a culture of long-term
44:27investment.
44:32And on the other, you have Microsoft's
44:34finance director again saying:" I need
44:36staff cuts, I need to eliminate
44:37redundancies, I need a rigid ceiling on
44:39research and involvement spending, I
44:41need to meet short-term operational
44:43targets, right?
44:47"And then you have Ellen Xang caught in
44:48the middle of this crossfire,
44:52right? And then she said:" I'm not going
44:54to stay in the middle of this crossfire
44:56. I'm not going to, because last time
44:58Phil Spencer was in the middle of this
45:00crossfire for years and had to leave.
45:02Sarabondo was in the middle of this
45:03crossfire for years and had to leave. So
45:06I'm not going to stay.
45:08Obviously, we have
45:11three serious immediate problems, right
45:14?
45:16When she leaves, first you lose, let's
45:18say, your technical compass,
45:26which was the person who was
45:27coordinating the direction of where
45:29you're going to take all these studios
45:30and how you're going to tie the
45:32structure of these studios together
45:33post-merger so that they operate with
45:35the minimum cost and maximum profit
45:36possible.
45:42Second, when you lose this spearhead,
45:44morale shatters.
45:48Morale shatters because Microsoft had
45:50been saying:' No, you have carte blanche
45:52, you have carte blanche, you can spend
45:54as much as you want, you can spend as
45:56much as you want, you can spend as much
45:58as you want, 'as Phil Spencer said years
46:00ago. "And suddenly, no, no, wait a
46:02minute, it's not like that anymore."
46:04And then the
46:08developers who have already lost 3200
46:11colleagues start saying, "Whoa, wait a
46:13minute."
46:17So Redmond, wow, our overlords, our
46:19burgomasters, our big bosses don't
46:21intend to keep the agreements.
46:26What was agreed upon won't be fulfilled
46:27.
46:28We'll be run over here in the name of
46:30short-term profit.
46:35And then this situation, and then you
46:37have even more talent who starts looking
46:39, let me fix my LinkedIn so I can get
46:41out of here.
46:45Add to that the instability for the
46:47shareholder, right, at the base, where
46:49the shareholder says, okay, they just
46:51created the position, the person just
46:53joined, the person stayed 90 days and
46:55the person left, right?
47:00It's already a video game brand that has
47:02made it clear throughout its history, in
47:04the last 10 years, that it is extremely
47:06unstable.
47:09And now you have another professional
47:10leaving.
47:12Whoa!
47:14Everyone starts saying, "Wait a minute,
47:16there may be, and probably is, something
47:18very wrong behind this."
47:22"So, Allen Shang's departure creates
47:24absolutely colossal problems for a
47:26division that's already struggling,
47:28right?
47:32When you look at the total revenue of
47:34the gaming division, the sector showed a
47:36slight decline, right, in the current
47:38quarter compared to the same period last
47:40year, 2%.
47:44But again, as I said at the beginning of
47:46the video, it's kind of a quantum thing
47:47, right? You blink and it's 14. Why?
47:50Because that 2%hides
47:56a plummeting sales of Series X and
47:58Series S. A 14%drop in the current
48:00quarter.
48:05And it's not an isolated drop, it's part
48:07of a downward trend that has been
48:09developing for at least four semesters.
48:15Semesters with drops of around 30%,
48:17right?
48:23And the department doesn't suffer total
48:25financial collapse because this decline
48:27is cushioned by the growth in revenue
48:29from content created by Microsoft,
48:30Activision, Bethesda, right?
48:35Blizzard, right?
48:37And by subscription services.
48:41So, subscription services, whether Game
48:43Pass or Cloud, the revenue from games
48:46created..." By Activision, Blizzard, and
48:48King, right?
48:51Bethesda, Microsoft Studios, provides
48:53support, they absorb it, okay?
48:58The software and services revenue saves
49:00the balance sheet from total disaster,
49:01but it's already become embarrassing.
49:05Physical unit sales are going downhill,
49:07right?
49:10And if you break that down
49:16, the organic contribution of the Xbox
49:18brand continues to shrink.
49:24What's bringing money into the Xbox
49:26department is software, right?
49:29It's the brand's legacy businesses, Game
49:31Pass, the studios that already existed,
49:33the games those studios made, and what
49:35came from the purchase of Activision
49:37Blizzard.
49:40It's not the hardware that's doing it.
49:45And at the same time that hardware sells
49:47less, its margin is being eroded by
49:49various costs, because it's becoming
49:51increasingly expensive to produce it.
49:59We're at a point in the life of the Xbox
50:01Series where it sells substantially less
50:03than the Xbox One sold at the same time
50:05.
50:11And that's complicated because the Xbox
50:13One didn't sell everything it should
50:15have sold,
50:18you know? If you Take a look at the
50:20company's financial report, you'll see
50:22there, quote: "Continuous investment in
50:24first-party content and cross-platform
50:26ecosystems has allowed us to offset
50:27adverse trends in the sale of physical
50:29devices." End quote.
50:31Look,
50:37if there wasn't a physical Xbox, if
50:39there was a video game console, the
50:41department's profit would be much higher
50:43, because you're having to compensate
50:44for rising costs and falling sales,
50:52right? So,
50:57you put 70 billion to buy AG, the
50:59company's board wants an immediate
51:01return.
51:04And, even with the massive layoffs of
51:062025 and 2026, mainly because it will
51:08happen, you still have to pay the
51:10salaries of those people you're laying
51:12off, there are severance payments, there
51:14are the rising video game production
51:16costs, you haven't delivered that profit
51:18leap that Redmond was expecting, right?
51:22So, everyone keeps looking and saying: "
51:25Wow, they laid off 3,200 people and
51:27still aren't doing well financially."
51:32While the top brass apparently expects
51:34much more from the Xbox department, A
51:36Charma's position was reassuring.
51:40Right?
51:41In the last, quote, in the last quarter
51:44, Xbox's results fell 2%when you compare
51:46year-over-year, right?
51:49Uh, but when you look at 2025 to 2024,
51:52we had lost 10%in that same period.
51:58And even with a 2%drop, our profit
52:00margin improved, right?
52:04That is, the space in dollars, if before
52:06they made, for example, 10 in profit,
52:08now they make like 20 for every dollar.
52:13Minecraft and World of Warcraft Forever
52:15broke records.
52:19Call of Duty and the new Call of Duty is
52:21the most acclaimed in a decade, and our
52:24presence on PC platforms grew by double
52:26digits, that is, 10%or more.
52:31Console sales continue to be constrained
52:33by the existence or non-existence of
52:35supply, where we have more demand than
52:37consoles available.
52:42We are working, right, on getting these
52:44consoles into the hands of players while
52:46expanding our used resale program.
52:51We are making progress with the Xbox
52:53department, but there is still much
52:55progress to be made.
52:57So, cool. No She buried her head in the
52:59sand, she didn't say, "No, nothing's
53:01happening."
53:02She said, "Okay, we understand the
53:04difficulties ahead, but
53:08it's a battle we'll continue fighting."
53:1110. That's what I expected from Xcharma
53:14.
53:14Does this mean her big reset didn't work
53:16, Marcelo?
53:20It doesn't mean she took over a brand in
53:22an extremely uncomfortable position and
53:24she's doing an excellent job of making
53:25that brand cool, visible, and satisfying
53:27to the fans of that brand again.
53:32She'll achieve that.
53:36Her COO's departure indicates that the
53:38frictions from Spencer's time haven't
53:40disappeared.
53:43It remains to be seen if
53:48her satanic charm will do the same thing
53:50he did with Spencer, at some point he'll
53:52get tired and say, "Get out, I'm going
53:54to put someone else in and manage it
53:56again, the way I want."
53:59Or if he'll respect the agreements made
54:01months ago when she joined.
54:04Unfortunately, only time will tell.
54:07But it's
54:09part of two paradoxes. The first of
54:12these paradoxes, this issue of a lack of
54:14consoles, but an abundance of consoles
54:16... "Shelf, right? Because I read that
54:19from her and I said,' Man, I'm going to
54:20do some research. 'And the funny thing
54:22is I didn't even need to because Mate
54:24Piscatela had already done that research
54:26nearby, saying,' Man, but there are
54:28video games, you go to Best Buy, you go
54:29to Target, you go to Amazon, right? Only
54:32the PlayStation 5 Pro is sold out.
54:34PlayStation 5 Slim is available, regular
54:36PlayStation 5 is available, Xbox Series
54:38X is available, Xbox Series S is even
54:40more available. Series X and Series S
54:42are having discounts right now.
54:44There are Black Friday promotions, there
54:46are November promotions, there are
54:48promotions, and so on.
54:52So you have bonuses with free games, you
54:54have seasonal price reductions, you'll
54:56have things that come with series and
54:58with a Game Pass subscription for a
55:00while.
55:03So there's the hardware.
55:08The problem when she puts it on us is
55:10that the production of new hardware
55:11becomes complicated because I have a
55:13certain sales volume."
55:18So, for example, I have, I don't know,
55:20100, I need, I have demand for 100 Xbox
55:23consoles worldwide, but I've run out of
55:25stock in a number of places around the
55:27world.
55:29Why?
55:30Because I've run out of stock in Brazil
55:32, I've run out of stock in various parts
55:34of Latin America, I've run out of stock
55:36in several places in East Asia,
55:41and the entire area around Saudi Arabia
55:43is out of stock.
55:45So I'm having demand for these consoles
55:46in various areas. These consoles are out
55:49of stock.
55:51My sales outlets, my points of sale, are
55:53out of stock.
55:55But producing video games now is very,
55:57very expensive.
56:00So my production capacity is extremely
56:02reduced.
56:03What do I need to do?
56:06Take the video games that are in places
56:08where I have more supply than demand and
56:10send them to places where I have demand
56:11, without making them so expensive that
56:13it's not profitable to sell them.
56:18So you're in a situation where you have
56:20excess inventory in some places, where
56:22demand is already controlled, and you
56:24have to move that inventory
56:27by putting it on sale.
56:30And you have several other places in the
56:32world where, although you have modest
56:33demand, you simply don't have inventory
56:35.
56:40And now you have a company that, like
56:42abandoning various areas of the planet
56:44to the elements, left them out in the
56:46cold, in the dark, and didn't properly
56:48supply hardware or software to those
56:50areas.
56:54The software exists digitally, but the
56:56disks, we basically didn't see them
56:58anymore in Brazil, and the hardware
57:00became extremely difficult to locate.
57:04Now you have demand rising, demand
57:06falling, and you don't have supply in
57:08those regions.
57:10How do you solve this problem? You're
57:12going to have to move your supply. How
57:14do you move the supply without
57:15increasing costs?
57:19You're going to have to acquire that
57:21supply at a very cheap price.
57:24So I believe that in the coming months
57:26we will see their plan to acquire
57:27hardware, Series S or Series X, in
57:29various parts of the world.
57:32Yes, and
57:36their refurbishment, right? They should
57:38partner with Apple and resell the used
57:40hardware.
57:41And we should start seeing this type of
57:43hardware arriving in Brazil as well.
57:48The Xbox department may, however, still
57:50be trying to cut a few more people, not
57:52with direct layoffs, but with a veiled
57:54attempt to induce voluntary resignations
57:56, called soft layout, right?
58:02Ah,
58:09when we think about human resources, the
58:12sudden increase in demands, whether due
58:14to goals, results, presence or return to
58:16in-person work, increased in-person work
58:18, often acts as a mechanism to reduce
58:20your workforce, okay?
58:29And since it's the person who resigns,
58:31it's not you firing them, it reduces
58:33costs, formal severance packages and
58:35compensation and things like that.
58:44And it tends not to affect you
58:45culturally, because the person left, the
58:47company didn't fire them, right?
58:54And Microsoft, actually, the Xbox
58:56department is demanding, they had
58:58demanded in the middle of the year a
59:00return to three days of work and now
59:02they are asking until February a return
59:04to four days a week in person, right, at
59:06Microsoft headquarters.
59:08This is for all employees, not just
59:10employees in the region, right, of
59:12headquarters.
59:17But it's also a way to give a helping
59:19hand to those who are on the fence
59:20thinking about whether to leave or not,
59:22right?
59:28Because if the person chooses, oh, I'm
59:29not going, I've already adjusted my
59:31whole life, I'm not going back, the
59:33person takes their things and leaves
59:35through the front door.
59:41Lastly, but least importantly, some time
59:43ago we made a video about how it would
59:45work, right, the risks, the problems and
59:47how it would work to remove Day One
59:49games from Xbox Game Pass and how you
59:51would remove them.
59:57It could generate a greater gain in
59:58sales, but it would generate a huge loss
1:00:00in the number of users and we hoped that
1:00:02this wouldn't happen, right?
1:00:07But we understood that if Microsoft
1:00:08wanted to get every possible penny out
1:00:10of the Xbox department, that was the
1:00:12direction they were going.
1:00:20So, we had an article in Fortune
1:00:22magazine, right, which has a payment
1:00:24barrier, a payall, so many of us didn't
1:00:26read it, but Fortune raises the point
1:00:28that, in conversations with people in
1:00:30contact with management, Microsoft is
1:00:32considering removing Day One games from
1:00:34Game Pass or, at least, modifying the
1:00:36way they are offered, right?
1:00:46And I really like the words "thinking,"
1:00:48"considering,""adjusting," because in
1:00:50the business world it means absolutely
1:00:52nothing.
1:00:58Nothing, because companies are thinking
1:01:00all the time, considering all the time.
1:01:03If you're a CF (Central Financial
1:01:05Manager), you're constantly looking at
1:01:07where you can reduce friction in your
1:01:09supply chain and cut prices, right?
1:01:11If you're the head of an engineering
1:01:13department, you're looking at where you
1:01:14can cut friction, where you can reduce
1:01:16time, where you can reduce costs, where
1:01:18you can reduce the need for people.
1:01:20So, all the time someone is bringing up
1:01:22an idea.
1:01:25Whether that idea becomes something in
1:01:27the end or not is another story, okay?
1:01:32Microsoft hasn't taken a position, right
1:01:34?
1:01:36And they don't even have to take a
1:01:37position in this situation, because they
1:01:39didn't start anything, right?
1:01:43When consulted by Fortune or Bloomberg,
1:01:45they say they are still evaluating
1:01:47solutions to bring the greatest possible
1:01:49value to subscribers.
1:01:52And that's the situation.
1:01:56According to the Fortune article, you
1:01:58have a few possible solutions to the
1:01:59situation.
1:02:03You could introduce delay windows,
1:02:05window wins, right, in Game Pass.
1:02:09So, the Ultimate Tier would still
1:02:11receive the games, but not on launch day
1:02:13.
1:02:18They would receive the games after a
1:02:20delay, a month, 3 months, 6 months, to
1:02:22give those who want to play on day one a
1:02:24chance, right?
1:02:29To buy.
1:02:31It seems like a good solution at first
1:02:33glance, but it's not.
1:02:35Why? We talked much more about this in
1:02:37the video there. So, if you want, just
1:02:39click here.
1:02:41But if you give a window for this, ah,
1:02:43many people will simply wait.
1:02:46There are other things to play, people
1:02:48will wait.
1:02:50Microsoft has been achieving much more
1:02:52interesting results by offering you
1:02:54something like this: it comes out on
1:02:56Game Pass on the 10th, but if you buy
1:02:58the special edition for R $ 150, you get
1:03:01access five days earlier, three days
1:03:03earlier.
1:03:07I know I've fallen for that trick more
1:03:08than once, so they've had excellent
1:03:10results with it.
1:03:12I don't think they're going to go to
1:03:14Windows, right?
1:03:16Another point raised is a possible
1:03:18restructuring of the subscription tiers
1:03:20, right?
1:03:23Separating a mode just for online games
1:03:26, a mode for the catalog with older
1:03:27games, a catalog with newer Windows
1:03:29games, and a catalog with day-one games
1:03:31.
1:03:35The service has already proven that it
1:03:37can't handle a price increase.
1:03:40It can't handle a price increase, right
1:03:42?
1:03:43When they basically doubled the price in
1:03:46Brazil, they jumped to essentially R $
1:03:48130, right?
1:03:50They lost many subscriptions. They lost
1:03:52many subscriptions in the United States
1:03:54when they increased the price by 50%.
1:03:57So the audience isn't there.
1:04:01The return that the user perceives for
1:04:02their payment doesn't adjust, right?
1:04:07And you're going to cause a lot of
1:04:08friction with your loyal customer, your
1:04:10loyal user.
1:04:12So, they've already demonstrated that
1:04:14when they cut the price back to previous
1:04:16levels, a huge portion of those people
1:04:18returned.
1:04:21So, I don't believe they're going to
1:04:23create a next tier and put the games
1:04:25inside that tier, right?
1:04:30And then, a third point that I think is
1:04:32even less likely to happen, right?
1:04:36Even less likely to happen is that
1:04:38they'll manage to launch the service on
1:04:40other platforms, according to Fortune,
1:04:41because it wouldn't make any sense.
1:04:45The other platforms would be feeding
1:04:47them with daily sales, right?
1:04:50I don't believe Microsoft is interested
1:04:52in launching Game Pass on PlayStation 5
1:04:54or Switch.
1:04:56They'll be interested in launching the
1:04:58games there and you paying 70, 60, 50 on
1:05:01launch day, bam, dry.
1:05:04And those who bought their hardware have
1:05:06the option of Game Pass, right?
1:05:11I don't believe we'll see that direction
1:05:13.
1:05:15Microsoft's multiplatform strategy is
1:05:17accelerating; I can see more and more
1:05:19games and more and more places, right?
1:05:25But trying to fit the service in...
1:05:26First of all, Sony will never accept a
1:05:28deal like that on their console.
1:05:32Nintendo neither, right?
1:05:35Because they want their 30%.
1:05:39And Microsoft, no, and if they manage to
1:05:42put the games on sale on those platforms
1:05:44, they earn much more selling the entire
1:05:46game, pay-to-play, than they would earn
1:05:48with the service itself, okay?
1:05:54And when Fortune did the article, it
1:05:56said that some of the changes would be
1:05:58implemented gradually until the end of
1:06:002026, with the rest by the end of the
1:06:02first quarter of 2027. So, folks, it's
1:06:04clickbait, it's the kind of thing where
1:06:07we heard this and we're doing something
1:06:09because scaremongering sells, right?
1:06:13Is there a position, is there a
1:06:15possibility that all this will happen?
1:06:18There is no possibility that eventually
1:06:20, if it doesn't pay off for Microsoft,
1:06:22Game Pass will either disappear or lose
1:06:24games anyway.
1:06:29This shouldn't happen now, no.
1:06:31This should happen in the coming months
1:06:33.
1:06:34Nothing indicates that,
1:06:37right?
1:06:39So we're back to that clickbait
1:06:41situation, that situation where
1:06:42journalism constantly has to make you
1:06:44feel like you're being attacked, that
1:06:46you're being assaulted, that you feel
1:06:47like you're being attacked because
1:06:49otherwise you don't engage,
1:06:54right? Otherwise you don't engage. Oh my
1:06:56God, I'm going to lose everything I have
1:06:58on Xbox, it's going to be horrible. How
1:07:00can Microsoft do that? Microsoft hasn't
1:07:02said anything.
1:07:03The information you received was based
1:07:05on whoever's armpit she talked to.
1:07:09So, at this moment nothing exists.
1:07:13It might exist in a month, it might.
1:07:16When it happens, we'll have a serious
1:07:18talk, we'll discuss it.
1:07:21Overall, Microsoft is, when it comes to
1:07:23Xbox, Microsoft is doing wonderfully,
1:07:25financially speaking, although it
1:07:27recently lost a fair amount of value in
1:07:30its stock, it's still doing wonderfully
1:07:32financially, right?
1:07:38The Xbox department is taking baby steps
1:07:40, improving.
1:07:45It's increasing margins, it hasn't yet
1:07:47managed to recover the hardware sales
1:07:49losses, it hasn't yet managed to anchor
1:07:51the situation.
1:07:54They'll probably try the strategy of
1:07:56launching Helix as soon as possible to
1:07:57see if they can gain a
1:08:01foothold, a jolt for the next generation
1:08:04.
1:08:06They're doing what they can.
1:08:11Maybe in the end, after years, it will
1:08:13prove that it wasn't enough and that the
1:08:15damage caused by Microsoft's previous
1:08:17decisions simply destroyed any
1:08:18possibility of recovery.
1:08:23But it's been very interesting to see
1:08:25them trying to fight.
1:08:27And I'll leave it at that, now that
1:08:29you're all up to date with Microsoft.
1:08:32Thank you so much for spending this time
1:08:34with us. We'll see you here at Min.
1:08:37Thanks, everyone.
1:08:39Ciao.

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