00:01One billion people, an eighth of the world's population, that's how many people Xbox is aiming to quote unquote entertain
00:10every day under CEO Asha Sharma's reset.
00:14Yes, that number probably sounds preposterous to you. It certainly did for me when I first heard it. But instead
00:20of rolling my eyes at it, I wanted to at least try and contextualize it.
00:25I've crunched the numbers as best I can. And one billion doesn't just sound preposterous, it's nigh impossible. Let's break
00:33it all down.
00:38When Sharma's resetting Xbox letter dropped, much was made of that one billion number.
00:44Many were quick to interpret it to mean one billion daily players, which isn't what Sharma said.
00:50The exact wording that kicks off the letter's penultimate paragraph reads as follows, quote,
00:55I want Xbox to be one of the few companies that entertains more than a billion people each day, end
01:01quote.
01:02In order to reach a billion people daily, we're going to need to apply a generous definition to what entertaining
01:08someone means.
01:10I think the most liberal reading of the sentence that you could apply that allows it to become some form
01:16of trackable metric is to categorize entertainment as engagement.
01:21One billion people that in some form or another actively engage with some part of the Xbox brand on a
01:28daily basis.
01:29That can include everything from someone playing a first party Xbox game or playing a third party game on an
01:35Xbox console to watching a TV show based on the brand's IP or simply watching an ad on its social
01:41media channels.
01:42Are there even any brands that already achieved this?
01:45The two sectors where this is seemingly being accomplished are in food and tech.
01:49In the former, you have brands like Coca-Cola, Pepsi and Nestle that sell their myriad products to over a
01:56billion people every single day.
01:58Conglomerate Unilever, which owns food brands like Hellman's Mayonnaise and Ben & Jerry's Ice Cream, as well as wellness products
02:05such as Dove Soap and Vaseline, claims that 3.7 billion people use its products every day.
02:11In the latter category, where Xbox resides, you have Meta, which across Facebook, Instagram and WhatsApp drives the most daily
02:19engagement with more than 2 billion people per day, with some estimates at over 3 billion.
02:25Google, with Surge, its suite of productivity tools and YouTube, is looking at a similar amount of daily users.
02:31Apple and Samsung, thanks to their large stakes in the smartphone market, both cross the billion a day mark.
02:37And then, ironically, Xbox's own parent company, Microsoft, does the same due to the proliferation of Windows.
02:45Aside from the Meta Suite, there are two other social media platforms that have a billion daily users.
02:50The first is ByteDance's TikTok, and the second is WeChat, an incredibly popular messaging app in China, with small pockets
02:57of users in other parts of the world.
02:59WeChat is a product of Tencent, a company that is also the biggest video game vendor on the planet,
03:05thanks to its stakes in numerous game studios and publishers, such as Riot and Epic,
03:10as well as internal teams that make popular mobile titles like Call of Duty Mobile and Honor of Kings.
03:15It's important to note that the amount of daily active users Tencent gets from its games pales in comparison to
03:22the amount of people using WeChat every day.
03:24These companies give you an idea of the kind of scale we're talking about when we say a billion people
03:30daily.
03:31They're either online platforms that people can access for free,
03:35or products so pervasive in daily life that a large swath of the world's population can't really escape them.
03:41I think it's important to note that no brand that's primary focus is entertainment,
03:46such as Disney or Nintendo, is in this small group.
03:50So how does Xbox get into the club?
03:52Let's start with the games themselves.
03:54In Microsoft's 2025 annual report, which was published around a year prior to the time of recording,
04:00the company claimed to have quote-unquote 500 million monthly active users across platforms and devices when it came to
04:07gaming.
04:07Presumably this ranges from everyone that is booting up an Xbox,
04:11to playing a game via the cloud on their phone, to someone jumping into Call of Duty on their PlayStation.
04:16Considering that this is also talking about Microsoft as a whole,
04:20there's a chance that some of the people being counted aren't being entertained by Xbox.
04:26Is this including people that open up Minesweeper?
04:29Perhaps, but as I said at the top, we're going to need to be generous.
04:33So let's assume that all 500 million players can be considered Xbox players.
04:37Calculating daily active users based on monthly active users is actually quite tricky.
04:43Someone that boots up the game every day would be recorded as a daily active user, or DAU,
04:50around 30 times in a month, but is still only one monthly active user, or MAU.
04:56To figure out how many of those MAUs are DAUs, we need to know the stickiness of those games.
05:03Stickiness is a measurement in business of how successful any given product is at getting its users to repeatedly engage
05:09with it.
05:10A simple calculation for the stickiness of a game would be its daily active use account divided by its monthly
05:17active use account.
05:18For example, if a game had 10,000 DAUs and 100,000 MAUs, it would have a stickiness of 10%,
05:26meaning every month, around a tenth of players logged in every day.
05:30That means if we don't know the DAUs, but we know the MAUs, and we have an idea of how
05:35sticky these games are, we can calculate that missing statistic.
05:39Now, a game's stickiness is going to depend on the game itself.
05:42There are games at Microsoft, such as Activision Blizzard's World of Warcraft and King's Candy Crush Saga, that heavily incentivize
05:49players to return to them over and over again,
05:52and therefore likely have a relatively high stickiness, as opposed to something like Double Fine's Keeper, which is a game
05:58you can complete in a couple of hours.
06:00Since we're being generous, let's use a high stickiness of 20%.
06:05That would give Microsoft a daily active use account of 100 million gamers.
06:10Again, a game that can retain a stickiness of 20% every month is on the highest end of retention.
06:19So 100 million is a very liberal calculation, and still only a tenth of a billion.
06:26Xbox has grand ambitions to grow its daily active users, which in a prior letter to the company from Sharma,
06:32was cited as the brand's new North Star.
06:35It hopes to accomplish this, focusing predominantly on its most popular IP, publishing those titles faster, while turning its most
06:43prevalent games into bigger market competitors,
06:46with a report from Gamefile stating that Sharma is looking toward DAU juggernaut Roblox as a source of inspiration.
06:53In February of this year, Roblox published a report that cited the platform's daily active use account at 144 million.
07:02Microsoft has never confirmed Minecraft's daily use account, but third-party analytics have the game peaking at a little over
07:0960 million daily active users in 2025.
07:11If accurate, that would mean Minecraft would need to double its peak DAU count to be in the realm of
07:18where Roblox is operating.
07:20Therefore, in the spirit of generosity, let's say in the future, Microsoft is able to double how many players are
07:27engaging with its games on a daily basis across the board,
07:31and DAUs get to 200 million, again, using the very beneficent 20% stickiness statistic.
07:38But we're not just including everyone that's playing games, there are other ways Xbox can entertain someone.
07:45The Fallout TV show has been very successful for the brand, with distributor Amazon claiming that in the first 13
07:51weeks of release of its second season,
07:5383 million people tuned into the program.
07:56Let's say Xbox was able to have streaming successes like that all year round, with shows like the animated Gears
08:03of War in the works at Netflix.
08:05That would only add, on the most generous end, an average of around a million people a day.
08:11And that's only if there's a never-ending string of successful Xbox TV shows being released.
08:17Another successful project was the Minecraft movie, which raked in nearly a billion dollars at the global box office over
08:23the course of its theatrical release.
08:25If you divide the movie's box office by the average price of a ticket, we're looking at a rough estimate
08:31of 100 million people.
08:32If Xbox were to have a project like that come out every quarter, that would, on average, result in only
08:39around another million people every day.
08:42Let's look at engagement with Xbox online.
08:45Across all of the brand's social platforms, it's sitting at around 70 to 75 million followers currently.
08:51If everyone that followed Xbox across all its various online outlets engaged with something from the brand every day,
08:59whether it be a trailer, livestream, or meme post, that would give Xbox a boost for this stat that we're
09:05trying to build toward.
09:06But it's still ultimately a drop in the bucket.
09:10A big drop, but a drop nonetheless.
09:12And many of the people following Xbox on one platform also follow them on another.
09:18So the amount of daily active users you could count from this is actually much smaller than that 70 to
09:2475 million number.
09:26Plus, the parameters for entertaining someone are being stretched incredibly thin at this point.
09:32There are other points of engagement we could bring up.
09:35Skins in Fortnite and Rainbow Six Siege.
09:38Merchandise like hoodies and action figures.
09:40Third-party hardware sales from brands such as 8BitDo and Turtle Beach.
09:44And people buying the Minecraft movie digitally or on Blu-ray.
09:48But again, the quantities we're talking about needing to pump Xbox's numbers to that billion mark
09:54are in no way, shape or form, realistic.
09:58Like the companies that do cater to a billion people daily,
10:02Xbox's touchpoint for entertainment is going to be driven by its core business of games,
10:07which is a small slice of a larger market that is growing incrementally year over year.
10:14If Xbox is to entertain a billion people daily.
10:19We won't see that occur for a long, long time.
10:24And that's if the market doesn't suffer a major crash.
10:29If this video has felt absurd to you, that's because it is.
10:33I felt absurd writing it.
10:35An absurd video for an absolutely absurd statistic.
10:39But absurd has become the new normal for the gaming industry.
10:44With record layoffs and studio closures.
10:46Multi-million dollar live service projects that are shut down the blink of an eye.
10:51Surging component costs that are making it much harder for people to own hardware.
10:55And generative AI.
10:57The same tech that is driving said component costs being looked toward by many in the industry
11:02that control its purse strings as some kind of magic wand that is going to fix the woes of game
11:08development.
11:09Unfortunately, operating in the absurd has become an incredibly effective tool in modern times
11:16to drum up investment for a company.
11:19Particularly in the tech sector.
11:21The world's richest man, Elon Musk, has used it for all of his business ventures.
11:27His company SpaceX having recently gone public with the goal of putting thousands of people in a lunar colony
11:34and building data centers in space over the next 10 years.
11:37Despite the fact that he had previously claimed we'd already have people visiting Mars by now.
11:43Adam Neumann, the man behind WeWork, is famous for saying a lot of truly outrageous things.
11:49Including the fact that he wanted the business, WeWork, to be the new family of 150 million orphans around the
11:58world.
11:58Neumann's eccentricity was a lightning rod for investment into WeWork for many years.
12:04With the CEO of the company's primary investor, SoftBank, telling Neumann that he had been, quote,
12:10not crazy enough.
12:12That CEO, Masayoshi-san, is also the same person that recently said, quote,
12:17it's blasphemy against AI if you say it's a bubble.
12:21I'm not aware of the intricacies of the business reality that Xbox finds itself in.
12:26But it's hard to imagine Xbox needing to entertain a billion people every day for it to be a successful
12:33business.
12:34However, I do think those running it need to be realistic about its prospects.
12:39Unless the plan really is, as some outlets have reported, to spin it off.
12:44Or find some other corporation to take it off of Microsoft's hands.
12:48In which case that billion people entertained metric is not a sign of the brand's potential, but of its desperation.
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