First Ring Daily 1928: A Hilux of Helix

This is our second attempt because I had a phone call that happened right in the middle

and I have tried to make a joke about a Toyota Hilux because Xbox to announce you're

talking about it.

I was like, we should revisit that humor.

It was really good.

It was a really well thought out joke of, well, so anyways, they announced the Helix stuff

yesterday.

Well, I think the biggest takeaway, and I think you agree with this, is that the next

generation Xbox is absolutely not coming until probably fall of 2027 because they said

they won't have alpha units until I think it's going to be 2028.

I think.

Well, why wouldn't you have said early 2027, I mean, yeah, they've been burned by that

by a lot.

I mean, oh, I will give you credit.

That might be a very, you know, they said 2027 and I was thinking GDC 2027 and like games

come out 2028 or 20 late to hear the comments.

I think it'd be right.

You could be right.

That seems you, I don't know, you have alpha hardware and March and you're going to ship

the thing in October, I don't know, maybe, maybe, yeah, but there should be telling these

people right now is just make it on a PC.

You'll be fine with that.

I feel like that's kind of like what they said because there was not during Jason's, I

don't think it was during Jason's session.

Like later in the day, they were talking about, hey, if you use our new GDK, which they

give you some now like baseline play fab or whatever, there was a slide or an image

somewhere that says within 30 minutes or whatever, you can be up and running and set up.

So I think, I think you might be right is they're messaging, honestly, might just be go

build a PC game, get it, go build your PC game.

And then what you're going to do is you'll come on over to us and say, hey, we want to work

on the console.

We'll give you this thing.

Yeah.

Right.

We're going to get X frames for second on whatever device, you know, if you're making

games on PC, you're already supporting this infinite number of configurations, right?

The issue here is going to be optimizing for the particular capabilities of whatever this

thing is.

And I don't, I don't know, this is the dark side of what I do sort of see as the primary

benefit of what they're doing right now, meaning obviously you're opening up this thing

to all PC games, brings more games right to the console.

But when you buy a game on steam or Epic or whatever, it's not really optimized for this

thing.

Now, if it's powerful enough, it doesn't really matter.

But you know, if you're going to sell hardware, everyone talks about exclusives, but really

the more important thing to me is just that you have the most games and they look the best

as possible on that system, right?

So right now, when you see anyone wants to show off a game that they made, they pretty

much always show the PS5 version.

And getting these companies to optimize for whatever this thing is, I don't, it's going

to be, it's going to be difficult.

Yeah.

I mean, we know why they show the PS5 version because if somebody, if you're a PS gamer

and you see something on an Xbox, inherently, even if not true, you just kind of assume

it's like, that's probably not on PlayStation.

Yeah.

It's an old way of thinking, especially with an Xbox, but yeah, it doesn't matter if it's

old.

I mean, you know, that's what people do.

I, that seems correct to me.

What do you think the possibility is that this thing is going to be modular?

I don't.

Meaning you will be able to upgrade the components, including the graphics.

I don't know.

I know.

But I don't see, honestly, I don't see the value.

Well, well, do you see the value of Microsoft doesn't care about selling hardware?

I mean, because here's, here's why here's why I don't think it is.

First off, they announced that they're working with AMD.

They have this high performance system on a chip, blah, blah, blah, we hear that every

time.

But they're also using some AMD FSR platinum or whatever they called it.

And so to me, that would, that would mean that it has to use an AMD GPU, probably.

So you just wiped out all of Nvidia.

And then, oh, no, it's absolutely going to be an AMD.

Everything.

Yeah, of course.

Yeah.

Like, I don't, I mean, let me, let's rephrase that slightly differently.

You can already upgrade your storage today on the Xbox.

Yeah, storage, but, you know, imagine if you could have started with an Xbox Series S because

that was less expensive.

Sure.

And then at some point, there was a $200, I guess it's like, in this case, because it's

all integrated.

It's like an SOC module or something.

And it upgrades you to all of the, whatever the advantages are of the X, you know, like,

maybe I guess you don't have to imagine this.

This is, it's obvious why someone might want this, but the quite, I think the question

you're really asking is why would Microsoft do this?

Right.

Here's the other question.

Here's the other side of us.

With doing that, make building the next generation console cheaper, because here's what

they would do.

Here is exactly the math that Microsoft would do.

So I'm not saying they wouldn't, but let's say they sell a baseline, whatever Xbox next

gen for, just say 500 bucks for easy money.

I think this thing doesn't cost a thousand bucks, they're going to be shocked, but go

on.

We'll just say 500 bucks for now.

For the baseline system, it's equivalent to the Series S blah, blah, blah, it doesn't

matter, but it has a modular GPU that modular GPU costs an extra $10 per machine to make

it in that form functionality, just doing that, just making that up.

What they will then do is determine how much it would cost to build the upgraded module,

what their margin would be on that, and what's the likelihood that somebody would go buy

it.

Yeah.

Like what percentage of them?

Yeah.

What is their cell through rate of that particular attachment, and they would probably

look at the storage first and be like, mm, not a lot of people buy storage.

So I think the thing with the graphics, too, is that it would have to be, I, it would

be, you're onto something.

I mean, I, if you look at the history of video game consoles, there have been a, these

add-on modules that you could buy, right?

There was a thing you could plug into an Intellivision to, in a clickovision to play Atari

games.

There were like CD add-ons when that was a thing, right?

Like the Mega Drive and whatever on, whatever Sega system I was, but these have never

sold well.

But the, the, the thing that kind of tilts this a little bit is, this is a PC.

This is like an Xbox for PC gamers.

It's going to play PC games.

It's going to support other PC stores.

That might make, that makes sense, right?

Because this thing could grow with you, as games improve over time, you know, games always

look best in the PC, really, because you can go, you can scale infinitely, you know?

If you're going to really embrace the PC, which I think is the strength Microsoft has as

a gaming platform maker, however you want to say it, some kind of upgradability might

actually make sense.

You know, no one's going to come up and be like, this is the last Xbox we're ever going

to make, because this thing is infinitely upgradable, that doesn't make any sense, but, yeah.

But look, I, the thing that's weird to me here is, I'm going to get these dates a little

bit wrong.

Maybe you know better than I, maybe we have a better memory, but you go from the Xbox

360, which came out in late 2005 to the Xbox one.

What year was, was that 2011 or 2013?

Oh gosh.

Right.

That's a great question.

I don't remember.

But if it's 2013, you can look, if you feel free, I mean, if you want to look it up,

go over it, but that's eight years, right?

And then the timeframe from 2011, 2013 to 2020, when they released the X series,

X and S, is, you know, depending on which number we just picked this somewhere between

seven and nine years, right?

So it's kind of, you know, around that timeframe.

If this thing lands in late 2027 at the earliest, which I'm a little nervous about, that's

another seven, maybe eight years, if we go into 2008, you know, and the thing is, the

Xbox 360 and the Xbox one, whatever the timeframes really are, both were improved at a hardware

level in that space of time.

The Xbox series, X and S have sat still.

There's been no technical enhancement to these things.

They release whatever do baloney models that have different little sparkly colors or

something or more stories, but they never upgraded the actual processing or whatever you

want to say to graphics, whatever.

And I feel like they can't do that again, you know, like that has failed.

Has it though?

Well, I was going to say, okay, that failed.

I mean, I guess somehow this console Gen failed to some degree and they just never saw

the sales that maybe would justify the interim models, I don't know.

But letting a thing sit there in simmer, untouched for several years is not, it's not been

great for the.

It depends what they want to do, honestly, because if they want to be selling hardware,

then I agree with you.

Like, if their goal is to sell hardware on a very regimented basis, that is one thing.

But I do, I do hard and fundamentally believe that they will just keep selling the same

hardware to the same customers and potentially not new customers, right?

Like if they came out, let's just say they came out with Xbox series XV2 today and it

is guaranteed 4K frames per second HDR dashboard and everything else, 60 frames per second,

absolute minimum, 240, whatever your spec list is, I'd probably go buy it.

But for Microsoft, that does nothing other than if they lost money on the hardware, they're

actually in the whole.

If things had gone differently, I see it's hard to know what was the cause and what was

the effect and vice versa.

That makes sense.

And it's the star that there hasn't been any kind of midstream improvement in this stuff,

whatever.

It's just, it really boggles the mind.

If you're not going to, I don't know why anyone would take this new thing seriously

given what they did with the hardware last time.

Like what has changed, you know, like why would we believe you now, you know?

Yeah.

The fact that this is already generating so much interest, I think suggests that, I mean,

look, this is, we went through the red ring of death, you know, we can weather problems,

you know, I don't know, I don't know, I just, this is, this is an unknown, they may be

going into this thinking, okay, this is going to be the start of a new thing where we're

going to actually more aggressively read things, whatever, but then it will sell not well

and we're back to where we started, I don't know.

It's a pretty question, Chairman.

There's a lot of, that's what I don't like the time frames are bad too, because even

if this thing does thermoship in late 2027, that's like a year and a half from now.

It's a lot, this is a long time, but we're not, I just, it's, you know, we're

whatever we have five, six years now, six years, I guess, almost six years into this

thing.

Nothing has changed.

Except they just don't, they seem to sell less than less than less.

Every quarter, somehow magically, I don't know, I don't know how to say that.

Well, they're not trying, they're not, they're not, they're not trying to sell hardware

right now.

Yep.

They're not trying.

They're actively, they're actively trying to not sell hardware is how I would say it.

I mean, you know, holiday season last year, two things happened, one, there were no

sales on Xbox hardware at all, but for the first time in history, I'm not sure about

that.

I don't know, but it feels like it.

But that business lost money in a holiday season, a holiday quarter.

That's got to be a first.

I, again, I'd have to go back and look, but it did, it did poorer, financially, that

quarter than it did the year ago quarter.

What?

I mean, what?

Yeah.

I don't know.

Oh, holiday season, man.

Anyway, people weren't buying for their kids in Xbox.