But do they need to? Do netflix have their own cloud infrastructure?
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Phil Spencer: Amazon and Google are ‘the main competitors going forward’ in relation to Sony and Nintendo’s ability to create a cloud infrastructure
- Thread starter Fiery Phoenix
- Start date
will be really interesting to see all 3 mega corporations (Google, MS and Amazon) battle it out. I wonder what happens if they all decide to go all out.. I still think Tencent and Apple should be in there too.
well... this true.
I don't think this matters at all for gaming. Most large tech companies now use a combination of their own infrastructure plus all three major public cloud providers (AWS, Azure and GCP). iCloud is a great example of this.
The cloud is just a backend, and the important services (load balancing, storage, compute) are pretty much interchangeable.
The successes of PUBG and Fortnite, both of which relied on public cloud to scale up, show that developing good games is the real challenge. Gaming is still a hit driven business and MS, Google and Amazon haven't matched Sony or Nintendo in that regard.
The cloud is just a backend, and the important services (load balancing, storage, compute) are pretty much interchangeable.
The successes of PUBG and Fortnite, both of which relied on public cloud to scale up, show that developing good games is the real challenge. Gaming is still a hit driven business and MS, Google and Amazon haven't matched Sony or Nintendo in that regard.
Microsoft has evolved their controller more than Sony has.
What do you call the elite?
When you strike gold with the feel and thumb stick placement there is not much more you could do outside of customization and that's what the elite controller is all about.
Microsoft is making a eco system not just a new console so the fact that you can use a Xbox one controller work on all playable Microsoft gaming devices is a good thing.
I don't really get it. I mean he's clearly talking about the cloud hosting business, so, sure, for the Microsoft Corp. that's true. But the gaming division that Spencer is heading is also in the business of developing and selling games. They just bought a shit ton of studios, so of course they are still in competition with Sony and Nintendo for years to come. It's two completely different businesses he's talking about.
Exactly this. It doesn't make sense in the context of the conversation. Yes I understand they cannot compete in infrastructure but that doesn't mean the cannot compete in cloud gaming as a service in conjunction with a partner.
Google Stadia is just the latest in these painful lessons and Nvidia Geforce Now has had a great reception. This should be a lesson for large corps and smells like power of the cloud 2.0 hubris all over again.
In terms of pipes and infrastructures, sure, they're competing with Amazon and Google but in terms of content they're still competing with Nintendo and Sony, and they will compete with the other big two when they'll decide to pump out exclusive games.
He's conveniently omitting the content part out of the equation. People get the games they want to play where they are, being on a streaming service a console a PC or whatever.
He's conveniently omitting the content part out of the equation. People get the games they want to play where they are, being on a streaming service a console a PC or whatever.
I can understand some of the confusion and controversy behind this article end Phil's response, since on the one hand the implication is he's talking about long term cloud infrastructure ramifications, but on the other hand he name drops Nintendo and Sony, and is the head of Xbox and VP of Microsoft's gaming division, not cloud division, hence two entirely different business segments.
Ultimately, I think it's just a bit of PR by Phil not only to distance Xbox from the traditional console race and sales/revenue comparisons (which Microsoft is handily losing), but to also make it seem as though Sony/Nintendo will not be able to compete in the future digital gaming arms race in the same way, because they don't have the cloud infrastructure Microsoft, Google or Amazon has.
In reality, they don't actually need that extent of infrastructure, they can just invest in using existing infrastructure the way Netflix, Disney and Sony all presently do, and scale it to the necessary demand.
Hell, the infrastructure issue isn't really a concern at present given how little market penetration cloud gaming presently has, or is likely to have at any point in the near future. This is going to be a slow burn, and there will always be existing infrastructure that platform holders can invest in to stay on top of user demand and content.
The irony of all this is that Sony arguably still has the most popular cloud gaming service presently available and using their own PS3 based infrastructure at that, which interestingly is offering fairly comparable latency performance to xCloud (which isn't even officially out yet).
Ultimately, rather than infrastructure being the key deciding factor in the cloud game streaming race and each platforms future reach or success, I think in the end it'll boil down to the games and pricing that most appeal to consumers, not too dissimilar to the console race at present. In other words, content, not infrastructure, will still be king.
Ultimately, I think it's just a bit of PR by Phil not only to distance Xbox from the traditional console race and sales/revenue comparisons (which Microsoft is handily losing), but to also make it seem as though Sony/Nintendo will not be able to compete in the future digital gaming arms race in the same way, because they don't have the cloud infrastructure Microsoft, Google or Amazon has.
In reality, they don't actually need that extent of infrastructure, they can just invest in using existing infrastructure the way Netflix, Disney and Sony all presently do, and scale it to the necessary demand.
Hell, the infrastructure issue isn't really a concern at present given how little market penetration cloud gaming presently has, or is likely to have at any point in the near future. This is going to be a slow burn, and there will always be existing infrastructure that platform holders can invest in to stay on top of user demand and content.
The irony of all this is that Sony arguably still has the most popular cloud gaming service presently available and using their own PS3 based infrastructure at that, which interestingly is offering fairly comparable latency performance to xCloud (which isn't even officially out yet).
Ultimately, rather than infrastructure being the key deciding factor in the cloud game streaming race and each platforms future reach or success, I think in the end it'll boil down to the games and pricing that most appeal to consumers, not too dissimilar to the console race at present. In other words, content, not infrastructure, will still be king.
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I'm not sure they're competing in content anymore in order to 'beat' Sony or Nintendo - I'm not sure that competition is as much of a concern for them now as it was when Xbox first entered the market. I think they're continuing to operate as a B2C player in the games business only in order to influence/coax the industry in directions that will pay off for MS as a infrastructural player down the line. That's why Amazon and Google are cited as the competition, and not Sony and Nintendo. MS wants to coax the industry onto cloud infrastructure so that they can make money servicing the industry at that level, regardless of whether Sony or MS or Nintendo is the successful or dominant B2C player, or whether indeed it's a fractured landscape of third party services.
Xbox couldn't credibly go to the board/shareholders for a fourth round and push the narrative of 'winning' in the B2C space. That was the original plan when MS entered games, but it just doesn't hold water anymore. I think they know it's just not going to happen, especially after 2013 - or, at least, it can no longer be the goal Xbox hinges its existence on. If Xbox couldn't find a support role as a driver for the cloud business it probably would not exist anymore.
So that's where it is now. IMO Xbox's entire modus operandi for the last 2+ years has been about pushing the type of changes that will hasten the kind of changes among all the B2C brands that will suit MS as a infrastructure provider company down the road.
I think you are and a few others are just getting defensive about it all because you still root for the standard console strategy (and fixate on hard numbers) whereas Microsoft is obviously looking beyond that and well into the future. Some of you even go as far as suggesting Microsoft is only doing this because they are losing the console race.
It's not about defensiveness or rooting for a standard console strategy, it's simply the factual reality of the present situation, eg that Microsoft is undeniably losing the traditional console race. Whether they're more heavily investing in or prioritising broader alternatives partly as a result of that, we can't know for sure, but it certainly wouldn't be ridiculous to assume as much.
Further to that, we don't actually know how they or anyone else will fare in future with these newer endeavours or as these new adoption avenues (cloud gaming) gain in prominence, and my post was to highlight how even in cloud gaming, it's not necessarily extent of infrastructure that will determine who wins that race or is most successful, but traditional consumer draws like content/games, price, performance and accessibility.
Nobody is going to choose xCloud over PS Now, Stadia or GeForce Now because of the backend infrastructure (at present they all perform roughly the same in terms of latency anyway). Instead it'll be because of other factors and distinctions like the actual content or games, pricing or value proposition, performance or graphics and so on.
But perhaps as gofreak states, Microsoft might not even care if they lose the cloud gaming race too, so long as they hasten the entire industries move towards it, thus stand to gain more from the leasing of cloud services and infrastructure instead (eg further Azure growth, revenue and profitability).
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It's crazy folk are acting like Microsoft are making moves because of Sony and Nintendo.
When in reality... Xbox is changing because of Microsoft as a whole.
Seems like people can't handle Microsoft being big enough to do their own thing regardless of how Xbox fairs against Sony and Nintendo as divisions.
I mean...they introduced the xbox one on a completely different plan than Sony without knowing how sales would be today.
When in reality... Xbox is changing because of Microsoft as a whole.
Seems like people can't handle Microsoft being big enough to do their own thing regardless of how Xbox fairs against Sony and Nintendo as divisions.
I mean...they introduced the xbox one on a completely different plan than Sony without knowing how sales would be today.
Part of the conflict (with topics like these) is most who come here are console gamers who enjoy past practices of comparing hard numbers and want everything to be pretty much the same moving forward. Resistant to streaming, resistant to subscription models, while focusing mainly on exclusive titles and wanting them to remain exclusive. They only really see losers and winners in the overall console race.
Well they are competing with all of the various ecosystems. But yeah in 10 years time, I'd say the big tech companies with cloud infrastructure are the ones that Microsoft will be competing with in gaming. Microsoft usually takes the long term approach with their products so it makes sense that Phil would think that way today.
Obviously it's only part of the picture, but of course it would be a success for Microsoft if they'd sold more Xbox One consoles than Sony sold PS4 consoles.
If console sales had zero significance for Microsoft, why would they even be making a new console?
There is more truth than that which is contained in Microsoft's marketing statements.
DING DING DING
Microsoft's main focus for the past several years has been to push Azure.
It's really not a bad thing to not prefer Microsoft's direction and instead favor Sony or Nintendo. Nothing at all.
The biggest problem i see is the people who champion other strategies is that they improperly represent why changes are happening even though the evidence is right there.
To insinuate PlayStation and Nintendo have enough sway to make Microsoft as a whole pivot just because they sale more consoles than Xbox is fanboy reasoning to the max.
50 million (that's what some analyst predict) is still significant. It's not 110 million like the PS4 but it's also not 15 million like the WiiU failure. I still think some of getting awfully defensive because Phil said there are bigger fish to fry than remaining in a lanscape that really hasn't grown all too much since the PS2 era.
Of course. They are not going to spend tens of billions of dollars in cloud infrastructure just because they couldn't sell as much as Sony. There is a lot more going on than console sales.
There is nothing wrong with that, which is why Microsoft continues to create new Xbox systems and have spent a lot recently acquuiring new studios while still investing in existing studios moving forward. Sony has also been moving in this direction as well with PS Now.
As for the bolded part of your statement when you look it it from a distance it really does sound that way. Microsoft is the most valuable company in the world and has more cash reserves than anyone. Yet they are making these moves because they got outsold by Playstation?
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I think they're playing a bigger game than Sony right now. Yeah they are losing the console race, but even Sony is renting servers off Microsoft. So even if Xbox is less popular, the PlayStation branding getting bigger means more people streaming through PlayStation services meaning Microsoft rents more servers to Sony.
I don't think Microsoft even cares anymore if Xbox is a lesser brand than PlayStation because they now have a revenue stream tied to how popular PlayStation is.
I don't think Microsoft even cares anymore if Xbox is a lesser brand than PlayStation because they now have a revenue stream tied to how popular PlayStation is.
Bingo. To wit, gaming in the AAA sense is an order of magnitude more expensive to produce and host than streaming video, which is what every hungry executive wants to compare it to. And Netflix etc is NOT a massively profitable endeavor in practical terms, it's kept alive by constant growth and overheating the stock value. Can it hit critical mass and become fundamentally profitable? It depends who you are. One big market crash and you will see a cloud Apocalypse. And we're probably overdue for an economic catastrophe at this point. This will of course harm traditional gaming as well, but at least traditional gaming markets are fundamentally profitable.
Playstation went to MS due to a dispute between Sony and Amazon, not because they needed MS. It benefits everyone.
Nintendo could potentially increase their already existing long time partnership with Nvidia and extend it to cloud gaming, Nvidia has one on the best already existing and proven solutions.
Anyway, content is still going to be the main deciding factor over technical superiority and Nintendo IP's are second to none on that regard.
Anyway, content is still going to be the main deciding factor over technical superiority and Nintendo IP's are second to none on that regard.
Exactly. Remember, Microsoft's aim was to sell 1 billion Xbox Ones, presumably in the hopes its home entertainment aspects would appeal to a much wider audience.
Then later there was talk here and elsewhere about how broadening to the PC market and the install base it carries with it (considerably bigger than all the console install bases combined) would greatly expand Xbox's success and sales, but in reality, how much has it really improved things for Xbox? Certainly not anywhere close to the added install base reach.
And that's what I think will be a similar case going forward with cloud gaming, where the adoption rate will likely be slow and steady, and not reaching anything even remotely close to the potential install base, let alone the reach or popularity of even traditional local hardware based gaming at present, at least not in the next 5-7 years anyway. Long term, I guess we'll have to wait and see.
I didn't say Sony needed Microsoft. I acknowledge their deal and said that the more popular PlayStation becomes and the more people use their streaming service, the more servers MS rents to Sony. MS doesn't care if PS5 wins against XSX because they're making out either way.
It makes perfect sense in the context of the conversation Spencer was having. It's people in this thread who are taking his comments out of context and assuming he's saying Sony and Nintendo are not his competition when it comes to delivering games to the end user.
The interview he gave was literally about how big tech is finally investing big in the in the gaming industry, and much of that investment occurring via offering backend products and services via their cloud infrastructure.
Him saying that the future of MS' gaming competition is going primarily to be other cloud vendors isnt the same is saying that Sony and Nintendo cant offer competitive services via the cloud. What he's saying is that he's competing with Google and AWS for Nintendo's, and other content maker's business is going to be the bigger fight for MS going forward.
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He thinks there is more money in cloud gaming in the future than in regular console gaming.
Meaning, even if a Sony or Nintendo would get into it, they'd be paying a partner a whole lot of money to run their cloud gaming service, cutting into their profit margins. Those partners would be likely the likes of MS/Amazon/Google... so even if Sony and Nintendo end up with huge cloud gaming services, the underlying cloud infrastructure companies would hugely benefit while also having their own services.
Beyond that the costs are so enormous for what the point of cloud gaming is, to reach the entire world..you can't compare it to something like Netflix that is basically just pushing cachable video data around. Those costs seemed huge 10 years ago but the cost of moving data around is miniscule compared to the cost of running GPU based compute all over the world. A typical web based service can have servers in a few locations in the world, and then edge nodes that cache the data that come out of those services, whereas a cloud gaming based service needs to have the actual GPU compute very widely distributed.. tons and tons of actual DCs with expensive GPU compute.
A fairly cheap web server can run on the same CPU as a game streaming server and host requests for thousands of users.. a game streaming server eats up that entire CPU for 1 user + an even more expensive/hot/etc. GPU.... and a web server can be thousands of miles from you and still give you a decent web or even streaming video experience.. a gaming server can't.
And of course there's the fact that if all you are is a game streaming company, all that architecture has to be paid for by game streaming.. whereas tons of shared architecture (networking, idle CPUs, idle GPUs, the actual buildings, employees paid to manage the buildings, the cooling,etc.) can be shared with the other Azure/AWS/GCP services the big three sell.
I think those are the factors going into this comment...
However it all depends on the idea that consumers will actually demand such a service.. that it will be worth filling the world with DCs full of gaming class GPUs in the first place.. because if all they do is convert the existing couple hundred million "high end gamers" to game streaming I think that is a huge loss for the business compared to the current model.
I personally think it's highly possible 10 or 20 years from now we'll all be making fun of these pie in the sky predictions for cloud gaming. Moving into a more and more "wireless world" our network "health" isn't actually getting better.. wireless tech is finicky, suffers from greater packet loss, etc.. and game streaming needs a constant PERFECT connection to not drive you nuts. It can't be cached.. packets CANT be lost, etc. without causing hiccups. Whereas streaming video can actually work fine even if loads of packets are lost or latency spikes occur because of data caching.
We'll see.
Meaning, even if a Sony or Nintendo would get into it, they'd be paying a partner a whole lot of money to run their cloud gaming service, cutting into their profit margins. Those partners would be likely the likes of MS/Amazon/Google... so even if Sony and Nintendo end up with huge cloud gaming services, the underlying cloud infrastructure companies would hugely benefit while also having their own services.
Beyond that the costs are so enormous for what the point of cloud gaming is, to reach the entire world..you can't compare it to something like Netflix that is basically just pushing cachable video data around. Those costs seemed huge 10 years ago but the cost of moving data around is miniscule compared to the cost of running GPU based compute all over the world. A typical web based service can have servers in a few locations in the world, and then edge nodes that cache the data that come out of those services, whereas a cloud gaming based service needs to have the actual GPU compute very widely distributed.. tons and tons of actual DCs with expensive GPU compute.
A fairly cheap web server can run on the same CPU as a game streaming server and host requests for thousands of users.. a game streaming server eats up that entire CPU for 1 user + an even more expensive/hot/etc. GPU.... and a web server can be thousands of miles from you and still give you a decent web or even streaming video experience.. a gaming server can't.
And of course there's the fact that if all you are is a game streaming company, all that architecture has to be paid for by game streaming.. whereas tons of shared architecture (networking, idle CPUs, idle GPUs, the actual buildings, employees paid to manage the buildings, the cooling,etc.) can be shared with the other Azure/AWS/GCP services the big three sell.
I think those are the factors going into this comment...
However it all depends on the idea that consumers will actually demand such a service.. that it will be worth filling the world with DCs full of gaming class GPUs in the first place.. because if all they do is convert the existing couple hundred million "high end gamers" to game streaming I think that is a huge loss for the business compared to the current model.
I personally think it's highly possible 10 or 20 years from now we'll all be making fun of these pie in the sky predictions for cloud gaming. Moving into a more and more "wireless world" our network "health" isn't actually getting better.. wireless tech is finicky, suffers from greater packet loss, etc.. and game streaming needs a constant PERFECT connection to not drive you nuts. It can't be cached.. packets CANT be lost, etc. without causing hiccups. Whereas streaming video can actually work fine even if loads of packets are lost or latency spikes occur because of data caching.
We'll see.
Yup. I am willing to guess the existence of Stadia and Amazon's gaming plans helped Phil gain some funding. It's really a win/win for how they have strategized this. Become a big player in the provider of gaming subscription/cloud gaming services directly, or become a big player in hosting gaming subscription/cloud gaming for others even if your direct to consumer plans don't result in being the top dog in the space.
I have to agree with that. Microsoft has been making money for years in the cloud business,it's one of the biggest transitions in computing at least in this decade. And it has happened almost silently, for Microsoft Azure (which xcloud is a part of), there are only two bigger players and they are Amazon's AWS and Google Cloud Services (which yes includes Stadia)...
If you honestly think that the competitor for the gaming cloud is Sony then you have not been watching the space, Google's already made its big play they got to make that work (which they might), and it's only a matter of time before Amazon get involved... Sony can't compete with these big dogs and Nintendo simply not going to try which has been working for the company with issues out of their expertise.
Unless you're talking about data center hardware, I don't see how you could think this the case.
They didn't buy up a bunch of first party studios, and R&D a next-gen device because they don't want to compete on hardware.
They see that there's a massive opportunity in providing cloud based products to devs, publishers, and consumers and this market here will outgrow the traditional console maker market.
As a recent Playstation Now subscriber, and a Game Pass user since day one, I will agree that Now has a lot of work to do in order to compete.
That said, I don't think it's a good idea to shrug them off like MS is doing.
That said, I don't think it's a good idea to shrug them off like MS is doing.
Sony bought Gaikai to compete with Microsoft in cloud infrastructure.
Sony has now changed course and decided to partner with Microsoft in utilizing Azure for cloud infrastructure.
Microsoft has not shrugged off Sony's competition, they have partnered.
Right, but what exactly do you think they're doing with their cloud infrastructure?
Serving their own B2C game business and quite possibly/probably serving Sony's also. And maybe others also in the future. Sony and Nintendo do compete with MS in the B2C space but neither are competing with MS on infrastructure, which is the lens that makes sense of Spencer's comment. His wasn't a comment on the ability of Sony or Nintendo to compete B2C with gamepass or cloud gaming services, or if it was, it doesn't make so much sense.
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I don't think you understand. Microsoft has their own infrastructure, Sony has to rent. It's pretty clear who is more prepared for this
Microsoft's net income is about 5x larger than Sony's, and Azure (the service this thread regards) is their most significant revenue driver. I think you should probably look at their financial statements before making outrageous claims.
If money is the only thing that determine who have a say in the market, then why Nintendo is still a console maker to this day and age and why is Google Stadia failing so hard?
Did anyone say that Microsoft invested in Azure because of Playstation? of course no but the direction of the gaming section, Xbox, of course was affected by lower than expected sales for Xbox One which is a result from fierce competition, and that led them to change Xbox head/management and go back to planning. traditional gaming business is not a small one, those companies are making billions and billions of dollars every year. Microsoft wanted to stay in the gaming business, but they decided to change their direction because they didn't sell too well, they are thinking how to reach new consumers and there is nothing wrong with that, but don't act like they were not affected by what happened this gen. I said before if Microsoft was the one to sell 100m+ console, maybe many of those steps wouldn't had accelerated this way.
And it is beneficial for Microsoft if they did sell more consoles next gen even still, they will reach more core players that are known for high spending. less systems = less potential subscribers and less revenue. Xbox as a hardware is still important for Microsoft, and action speaks louder than words I guess.
Leveraging it to different companies and themselves for games and whatever else another company may need it for. Something Sony and Nintendo cannot do because it isn't their business.
Is he though? I've seen so many negative memes on social media recently.
He's not a PR guy. He's a senior executive of one of the biggest companies on Earth. Literally reports to the CEO.