I’m not really sure how the C-suite is escaping blame here.
But Phil was the one who dug two incompatible holes and kept digging hoping they’d meet in the middle with buried treasure.
Xbox exec: Deletes AI from games.
Color me surprised.
Anyone who's been paying attention to Halo for the past 15 years knew there was bad management the entire time. (Halo used to be the game that everyone wanted to have and to be; now it's an also-ran due to self-sabotage.) The first step is admitting you have a problem, so good job there, keep following through.
Giving a player a reward for putting in effort is one of the fundamental principles of game design. If you remove all the rewards, what incentive do they have to play?
Their response to player backlash which was essentially “deny, defer, gaslight and ignore” killed the online community for it within a couple of months, and I think they dropped what little content support it had within two years as well, after initially marketing it as a long-term “live service game”.
Blatant incompetence, how Microsoft ever let itself get in this state I’ll never understand.
Also I can’t even remember the campaign story. Was there an angel or something? It was a cliffhanger about some new enemy, as if they’ll ever make another game?
I just remembered the monstrosity that is the Halo TV series as well now, ah god… it’s been a rough decade.
She has done everything but focus on delivering games (product).
Right now, the 5 and 10 year US treasury rates are 4.2% and 4.47%. The 30 year is 4.99%.
A business with a return on invested capital less than that is in fact operating at a loss. Unless there is reason to believe the situation will change in the near-to-mid future, such a business would literally be better off liquidating everything and just investing in treasuries.
You would need access to internal data to figure out their ROIC, but a 3% margin is not promising.
A high revenue but low margin business is a lost opportunity to invest that same revenue in a different area with better margins.
The time value of money suggests money invested today is more powerful than money returned tomorrow, even if you magically get the highest possible rate of return.
The opportunity costs say that if you jump ship on an entire industry don't expect to have the same revenue next year.
I love this weird short term thinking with long term mistakes that treasury bonds are the right benchmark for something like Microsoft's margins and net revenue. It's really fun to watch all the armchair capitalists come out to play that seem to follow quarterly reports like hawks but seem to act like they never took an actual economics course.
If one bank pays 4.25% on your savings and the other pays 3.25%, which one are you going to chose to put your money in all else being equal? Why is the 3.25% one not a good choice despite you still making money?
People inherently understand business, they use the same principles in their daily life, but they just get confused on making the connections.
But you are talking the "consumer perspective". Right now the median interest on consumer savings accounts is less than 1%. [1] Someone getting 3.25% from their bank isn't "struggling" compared to their luckier neighbor that found a 4.25%. They are probably closer to the top 10% or top 1% and have a larger savings deposit and/or high credit/sustainably low debt. Most Americans can just envy that, not qualify for it.
There are opportunity costs in moving your money from a stable bank that you have an existing relationship and shopping it around to get that perfect 4.25% highest margin that you can find. Transfers are usually free for consumers, but a bank may give you a lower APR on your credit cards and a cheaper checking account if you keep your accounts all in the same place with that bank. Trying to move all of that at once for a similar deal at the 4.25% bank can risk hard credit checks and account closure notices that consequently drop your credit rating, including possibly enough to make the bank at 4.25% question your stability and change their mind on the deal.
I think consumers actually today have a better idea of the risks of these kinds of "small improvement" things than large companies. Wall Street is a much worse "Credit Rating Bureau" than the three (truly terrible) consumer Bureaus. Businesses have grown so large they no longer understand Opportunity Cost at any real level. If you shut down the things that bring in $5 billion revenue, you no longer have $5 billion revenue, you have a gamble that some other industry can ramp up to that quickly. $5 billion has never been "quick money". (Inflation would have to get a whole lot worse for that to happen and that point the company has too many other problems.)
[1] https://wallethub.com/edu/savings-account-statistics/143529
Microsoft's ownership wants to put their money into the 4.25% bank, not the 3.25% one. Don't lose your mind overthinking it.
Sure,
Using Phil as a scapegoat and Sharma as the savior is disingenuous.. and is honestly pretty consistent with how i view Microslop: opportunists, tasteless, and visionless executives, shareholders and fanboys
The fall of Xbox started before the launch of thier current gen:
- HW: they announced 2 SKUs, with polar opposite performance profiles
- SW: their system sellers got delayed to couple years
The reset needs to happen at the highest executive order, not at the lowest, workers implement whatever project was greenlit
People chose PS5/Switch over Xbox (it now sells 3x less than Switch 1, wich is a previous gen console), people see through the lies of the media
You said it yourself, Xbox was being outsold 3:1 by PS5 which is still shocking numbers given the investment, and the fact that PS5 was having trouble selling units at the same rate as they’d been selling PS4s.
Humans often think in terms of deontological ethics. Corporations operate in terms of consequentialist ethics, and the only consequence that matters is that the numbers go up.
> Blame: assign responsibility for a fault or wrong.
b) She's been in the role for 4ish months, not years.
Occam's razor: Spencer and Bond jumped off a sinking ship, Asha wasn't doing enough in AI. Push her to be the fall gal for the sinking ship and put in whoever will milk AI more in her place. Win-win. Asha will be gone in a few years with her job done and a cushy parachute, and Xbox will be a shadow of its former self. But that's not a failure; that's the goal.
But even then you wouldn’t be able to deny that Xbox was floundering under Phil.
And for all of this you’d still be left with conjecture?