Ben Gilbert: belief

Transcript context

…Right, but Microsoft figured this out 20 years ago. This was the whole point of the Xbox and why they were willing to lose $5 billion up front on it, because they knew that if they can get those Xbox Live subscribers (and now the Game Pass subscribers), that's a really, really, really good business model. Nintendo has only just figured it out. It's so funny. Yeah. They basically make $10 billion a year selling physical things on a non-recurring basis. They make $3 billion a year selling digital things that have super high margin revenue, and a billion of that is recurring. I think that's the framing that you have to go into when you think about what their next move should be. Now, they're Nintendo, so they're going to do whatever they want it to be. But if it's what should it be, the answer is, figure out how to launch a next generation piece of hardware that makes people upgrade, very similar to the way that people do with their iPhones that has backward compatibility to every other thing that they've purchased in your ecosystem before. Preserve and make it so that you're growing your monthly active customer base. If they're thinking like this, we might see them do the thing that Apple shifted to, which is, instead of reporting total devices sold, reporting their monthly active participants in their ecosystem, and make it so that the Switch 2 has all these cool capabilities that make people want to upgrade, but the same great games work everywhere. This is the forward compatibility piece that Microsoft, Sony, and Apple too have figured out of like, make sure the software, for a certain period of time, keeps working with the old Switch consoles.…

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