“the Sega Model,” #MSFT #Xbox
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Date: October 7th, 2025 9:11 PM Author: SneakersSO
Internally, Microsoft has started referencing “the Sega Model,” which wasn’t meant as a joke. The 32X in particular gets cited in strategy docs as “a necessary transitional architecture for preserving IP value through hardware collapse.” Read that again. They know the hardware is over. The Xbox division is repositioning itself as a downstream content licensor; basically Sega 2001, but with cloud and Candy Crush.
There’s even a leaked brand segmentation study that’s downright cruel. It classifies the remaining Xbox audience as “Low-Born Enthusiasts” — their words, not mine — defined by low discretionary income, low upgrade intent, and high emotional investment. Marketing’s pivoting toward what they call “resilient prole loyalty.” I wish I were kidding.
At this point, it’s not “if” Xbox becomes a publisher — it’s “how ugly the transition looks.” Retailers are walking away, Phil’s a mascot with no control, and Game Pass is about to cost as much as a full streaming bundle.
The real kicker: Phil’s basically been cut out. I don’t mean he’s gone — he’s still technically Head of Gaming — but his entire org chart has been hollowed out. He doesn’t sign off on pricing, doesn’t set strategy, and apparently wasn’t even briefed before they greenlit the $30/month Game Pass tier adjustment slated for early 2026. One person I spoke to described it as “the first time Phil learned about his own platform’s pricing via a Teams slide.” They’ve started calling him Gen X Grandpa behind his back.
(http://www.autoadmit.com/thread.php?thread_id=5784163&forum_id=2],#49332981)
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