Xbox is Waiting to Enter the VR Market Until There's More of an Audience - News
by William D'Angelo , posted on 04 July 2023 / 3,468 Views
The head of Xbox Game Studios Matt Booty was asked about the potential of Xbox entering the augmented reality and virtual reality markets in an interview with The Hollywood Reporter.
Booty said Xbox is waiting for the AR and VR markets to grow more before they were to enter either of them.
"I think for us, it’s just a bit of wait until there’s an audience there," said Booty. "We’re very fortunate that we have got these big IPs that have turned into ongoing franchises with big communities.
"We have 10 games that have achieved over 10 million players life-to-date, which is a pretty big accomplishment, but that’s the kind of scale that we need to see success for the game and it’s just, it’s not quite there yet with AR, VR."
Sony Interactive Entertainment President and CEO Jim Ryan last month revealed PlayStation VR2 in its first six weeks on the market has sold nearly 600,000 units. PlayStation VR2 is selling faster than the original PlayStation VR on PlayStation 4 by eight percent through six weeks.
A life-long and avid gamer, William D'Angelo was first introduced to VGChartz in 2007. After years of supporting the site, he was brought on in 2010 as a junior analyst, working his way up to lead analyst in 2012 and taking over the hardware estimates in 2017. He has expanded his involvement in the gaming community by producing content on his own YouTube channel and Twitch channel. You can contact the author on Twitter @TrunksWD.
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I think that's pretty obvious.
From a business perspective, I think it makes sense. Microsoft does have some AR/ VR tech that they've developed. But, right now, I don't think anybody is making money on AR/VR. They may as well let Meta, Sony, and whoever else expend the resources to develop that market, then they can just jump back into it when there's money to be made.
They'd be a little bit behind the curve at that point probably. But, I don't think that's a big obstacle for a company with pockets as deep as Microsoft.
Sometimes coming in late into something with a better product, doesn't work out too well for them. They tried coming in later with the superior Zune and it failed, tried coming in with a Windows phone and it failed, surface tablet, Groove Music, they had a fitbit type band that went nowhere, cortanan smart speaker failed. Hell coming in late to the video game scene, has been an uphill battle where they lost money for years on the original Xbox to try and make headway.
Yes, they've definitely had many products that didn't perform well. But, that's true of any big tech company. The reality is that the failure rate of new products is much higher when those products are pioneering a new market. I cannot think of a single company that has introduced more than a small handful of innovative new products that have all been successful.
The flip side of that, is that when you take all that risk to develop a new market, if you succeed, you may reap almost unimaginably huge rewards. So, MS may miss out on that, but they also don't risk a ton of money on something that may not ever become a profitable business.
Sony are well known for coming in late and seems to work out pretty well for them.
Poor MS with over trillion dollar can't risk some millions to foster a new market, but will be eager to put billions to buy others out.
They are actively investing in the cloud gaming market in a way no one else is and are being retroactively punished for it by the CMA and FTC.
Why would Microsoft or any tech company choose to invest in an emerging market if regulators are just going to restrict and punish them for it later
The FTC is on a missions from progressives senators/house members in the USA to go after the top 6 tech companies in the USA and challenge them at every step on new major purchases. This is a phase, that will go away if the FTC keeps losing.
Investment in cloud gaming is not done by just buying a big game publisher, who has zero stake in cloud gaming.
It is if you want to give Cloud vendors one of the biggest publishers out there an opportunity to expand their business with their games. One thing for sure, ABK without MS would probably never give their games to Cloud vendors without some huge and expensive license. Every Cloud vendor is pretty much wanting the CMA to go away. Give me 10 years of ABK and MS games and I will worry about what happens after that deal expire. Just like with COD, you basically make it expensive for MS to leave that market and revenue.
I'm sure most massive major companies would like competition authorities would go away, that way the biggest companies can become monopolies with nothing standing in their way.
It could go either way on the 10 year thing, MS could allow other cloud services to grow thanks to the deals (as long as they don't gobble up the revenue) and allow other services to increase play bases and therefore form other deals with other publishers, ready for the day when the 10 year deal ends and MS pulls all their games from those services. Or it could mean in an instant they all fail and the only place to get your favourite games is MS, go to MS or don't play. They own the games they dictate the price.
All I'm saying however is MS wouldn't have this issue if they just used that 70billion to make their own games, I know it's effort to create but it's worth it. ABK has no insentive to do the deals with other or even GP cloud services because they will make money anyway, MS is doing those deals because they have to appease authorities but they wouldn't need to if their growth was natural through game development.
The problem with your statement is that most of these companies that want the CMA to go away are very small. Do not forget that the BYOG Cloud market is very small and only one vendor is big which is Nvidia. The rest are trying to grow the market but in order for them to do that they must be able to host games on their service. None of the other Console OEM are putting any of their games on cloud vendor services, that include Nintendo and Sony. Only MS is putting not only ABK games but also all of their own games on Cloud vendor service.
Its hard to say that the CMA is helping this market when the only company putting games on these services are MS. Getting ABK games jump start all of these smaller Cloud vendors to have a better competitive product.
As for what happens after 10 years, well what happens before that time frame, really nothing. We do not see any effort from big publishers to put their games on Cloud services. We do not see any of the console vendors putting their games on cloud vendor services. For MS, GP is a download service not a cloud service. MS want their games on as many platforms as possible to strengthen GP. This is where the whole cloud thing really is weak. MS is not trying to host games on the cloud outside of allow people in GP to stream their games but that is more try before you download. GP and MS games success is to get them on every platform and get them selling.
As to your last statement, in business that means nothing. 70 billion dollars is just as much as an investment into the business then spending 70 billion dollars on building a bunch of unproven studios. The difference is risk. Risk is a huge issue for many corporations as the guarantee on that investment is much better with a proven strong buy with highly profitable IP instead of wasting years to build a studio, hope to get their games to market and those games become a success.
The 10 year deal from what was showed would retain all the revenue to MS, the cloud vendors would only have authorization "to stream the game". They would be MS customers not really competitors.
You know Don, for BYOG, the gamer has to first purchase the game. It could be any store but they need to purchase the game. Of course MS keeps all the revenue for the purchase of the game. If the game is purchased on Steam, Valve gets their 30% cut and MS gets the rest. The Cloud vendor has the license to stream that game for free without any money being exchanged to MS for the rights to do so.
Without a license to stream the game, the BYOG service would not be able to stream those games and thus is less of a chance someone would subscribe to the service if consumers cannot stream the games they purchase. I am not sure if people really is not understanding this business model.
Yes, the BYOG is not in direct competition with MS and I doubt they ever will be. Its another platform for MS to allow they games to be access which of course is exactly what they want.
Punishing? Neither CMA or FTC demands MS to stop investing in Cloud what they are preventing is MS buying a major company that could halt the progress of gaming in the cloud.
Going to have to explain the logic that the ABK acquisition would halt cloud gaming progression....
This only make sense if ABK without MS would actually invest in Cloud gaming which they have shone no interest in. Not only that but none of he big publishers have really shone any interest in putting their games on cloud platforms. If we go the console route, there is no indication that Sony nor Nintendo is looking to help expand the market as well as none of their games are going to those cloud vendors. Its not the question of what the CMA and FTC says, its whether their arguments on the subject is actually correct. So far, neither are looking that strong in the cases coming up.
You sound upset, why do you care? You wont be buying one, lets be honest here.
Upset? Nope. If MS had their VR on the market that would contribute to expand it and would bring more VR games or more console porting so it would be all positive.
They will only expand it on their own side which wont benefit you.
If they enter that market, you will complain about VR exclusives.
Only if instead of making their studios they decide to put 20B in buying devs that are already stablished.
What's buying studios got to do with this? You believe Sony and Xbox wont treat the VR market the same way they treat the console market?
They most likely would. Meaning Sony would partner with devs and increase their studios while Xbox would put a paycheck to enter the market late.
Tell me you arent bias without telling me you arent bias with that logic.
Xbox will partner up using the same methods Sony uses. Cash.
How do you believe that MS got to a trillion dollars. If you have noticed anything about trillion dollars corps, is that they leave all the risk to startups and come in when the growth potential is at its best. They do have some risky projects but the ones they are willing to put the big money into are the ones with a safer bet on return.
Microsoft needs to hire this guy so he can turn the company around
Microsoft did invest money in the PC VR/MR market, with limited success. At their apex they had about 7% marketshare for Microsoft Mixed Reality headsets (all of Microsoft's manufacturing partners added together) in the VR headset section of the Steam Hardware survey. There were two major players at the time, the HTC Vive and the Oculus Rift, that had almost all of the rest of the marketshare between the two of them.
Given that experience, I don't blame the Xbox division for being hesitant.
Yeah exactly. It's not a very big market and it would be a considerable expenditure of resources to create a VR or VR/AR headset, as well as set up the ability to make games for it.
Quite frankly, that stuff isn't going to be that popular until the technology advances to a point where VR headsets are more like large glasses, rather than large goggles. Plenty of years until such devices go fairly mainstream. As long as they get in the market before it actually hits mainstream, so they are develop the userbase before that event, they'll be fine.
A wise business move.
They said that X1 would have it. And now they want others to make the market relevant, them later if Sony or another company is a major player by the time they decide to join they will complain of how powerless and small MS is on that space and that they need to buy a lot of devs to be able to compete.
They are a buisness who invests into what they believe will make money, not the other way.
Its not like they are not already there. MS already have a VR and AR headset. So I am sure they understand the growth potential of both. As for using it for gaming, it really has not flesh out as much yet but I do agree the time is getting close where the tech gets to a point where its viable for the economy of scale MS is looking for.
It’s so weird reading multiple comments from people about how MS prefers to just wait and let the market mature before jumping in and “copying”. MS has already been in the VR/AR market, they already tried. The market just didn’t take off to something they thought was worth pursuing.
And let’s be honest, the amount of incredible VR content is still not very large and almost entirely multi platform. MS could come out with a headset tomorrow and be just fine.
I don't think that MS is really hardware focused ATM. It's clear that services is what they've been heavily investing their money in. Windows (as a service), Office 365, Azure, Game Pass, xCloud etc. If the new hardware can drive their services, then you will see new hardware from MS (or their partners). In case of the VR, there's most likely no added value there for MS ... yet. And BTW, they already have AR platform (HoloLens), if anyone forgot, so it's not like they would have to start from scratch.
Good, let others spend the millions to develop the tech.
I thought MS were very ahead when it came to AR stuff? It wasn't for me but the Minecraft Earth seemed like the first step into such a thing but Mojang no longer support it, I'm sure they had other examples. AR needs better way to utilise it, Apple's headeset might be the right way for that to exist. On VR, Facebook's ones are better overall for VR as it's more accessible. It seems and the longer MS wait the harder it will be to get make impact if the market leaders are that far ahead, especially when said market leaders are the other biggest companies in the world.
Microsoft always on the prowl to feed off the innovations of others!!!!
Smart move. Focus on your strenghts first. I enjoy VR, however let others drive the tech first than release a solid unit when its time.
It's the Xbox way, isn't it?
"We don't want to create something new. From scratch. We don't want to be innovative or drive the market, we want to wait until others have done all the work then come in and take a piece of the pie they baked, maybe even buy the pie off them if we're feelin' saucy."
I'll get downvoted to oblivion but you all know it's true.
Well in order to develop and drive a market, its high risk but also high price. Most big tech companies do not drive innovation, they just invest in it when its a viable market. Instead startups are the ones that flesh out an innovative product which is great because they can protect themselves with patents so they can grow as a company and expand before the big corps comes in with their trillion dollar market caps. Also a lot of big tech invest in smaller startups if the tech they are doing looks promising which is the same thing. The startup takes all the risk but gets all the glory.
Well at least one thing in your comment was factual, the part about you getting downvoted. Dumb comments do tend to get downvoted.
This is called "intellectual dishonesty", you fully know your statement is wrong or inaccurate yet tried to preemptively associate it as factual or the truth and downgrade any challenge to mere unpopularity. You've been doing that a lot in article comments.
It ain't working though as it simply does not live upon simple scrutiny and critical thinking. MS's R&D budget is now close to $25B annually. The last 15 years of R&D budget (~$200B) > all disclosed acquisitions amount in its entire history (less than $175B including ABK).
Xbox also innovates on a continual basis.
Let me get this straight; you purposely mis quote, make false statements about MS not innovating, which they have numerous times with Xbox, and then follow up with whining about being down voted for telling the truth lol. Every comment about MS is the same with you.
You may need to see a doctor about that Xbox hate boner of yours, it has definitely been longer than 4 hours.
Xbox has done plenty of innovative things for the gaming industry, from creating Gamepass (which Sony has now copied with their multi-tiered PS Plus system) to creating the achievements system (which has since been adopted by most major gaming platforms including Playstation and Steam).
Copying the business model of streaming services is not innovating, it's just another way to try and make all the money.
Was your first comment not spicy enough? Lol MS has really gotten people in their feels.
