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Game Pass is not profitable yet - Tom Warren
- Thread starter Rolla
- Start date
Heisenberg007
Gold Journalism
Spotify making a £20 million net quarterly loss despite having 165 million paid subscribers and 365 monthly active users puts the entire thing in perspective.
Schmick
Member
how so?
(from the article)
"Overall, the company made a net loss of €20 million, compared to a net loss of €356 million it made in the same quarter the previous year. Executives have said that the company’s focus is on growth rather than turning a profit on a quarterly basis, the Wall Street Journal notes, while the previous loss was mainly due to taxes the company had to pay related to its Swedish workforce."
Seems to me that Spotify is doing really well. They are deciding to continue to invest in the service.
IDKFA
I am Become Bilbo Baggins
This all day.
People are forgetting how deep of pockets that Microsoft have.
Soon, we'll see Microsoft purchase another huge publisher, which will mean more GP games. After this, it's pretty obvious that they'll be throwing billions at the remaining publishers for all their games to hit GP on day one.
Then the killing blow
After this, Microsoft could make every one of their games GP exclusive, so they're only playable with a GP subscription. They can then throw more billions at publishers so their games never leave the service.
Do this, and they'll match or even exceed Spotify and Netflix numbers with absolute ease.
Trust the process. Believe in Microsoft and Saint Phil!
JerryinSoCal
Member
So you are saying MS will buy the industry and try to shape it to suit them vs actually competing and having success by offering more people what they want than the competition? lol. I know your post was just a joke but sadly people really seem to want this to happen for some reason, they are crazy.
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Mr.ODST
Member
But your not allowed to have fun ... your NOT ALLOWED TO LIKE XBOX.
MrFunSocks
Banned
This is no different to cd sales either though. Only the huge bands make money on cd sales, the rest make it from touring and selling merchandise at shows.
Why do I get the suspicion that even if MS released 99 MC score games exclusively 5 times a year people on here would still be concerned about if Game Pass is profitable or not? Legitimately no one on this board should give a shit about how much money game pass makes or loses.
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Banjo64
cumsessed
My fun-o-meter directly correlates with the amount of profit the Xbox decision makes
Kokoloko85
Member
Because if the industry falls under that model ( because they are forced to compete with ms and stay relevant ) and then 5-10 years time realized its not working out, the developers and publishers will have to make huge changes and probably suffer huge loses in doing so.
MS is doing it as a trojan course because they can afford the loss for now. But when the investors are tired of the loses, they will have to say well we can only pay the developers xxx amount and they can only make this type of game beause they are the ones that are giving returns.
Its not about MS or Playstation doing it, its about is it sustainable in the long wrong? And will if effect the games developers want to make.
Its like saying the goverment is gonna pay everyone £3000 a month, who cares if there paying all that money, we’re all having fun.
And then after 5 years, the government cant do it anymore, is in dept and then changes will have to be made which probably weren’t worth it.
If Cinema collapsed tomorrow the budget for blockbuster movies would be determined on what Netflix says etc
Papacheeks
Banned
If the sales of said software through exposure of gamepass were doing big numbers we would have heard about from Microsoft. The only thing we have to go on is indie developers saying their games has seen better sales because of exposure on gamepass. NPD and digital sales that are now included are showing Microsoft aint selling shit because of gamepass. ANd thats why also Exclusives are still a big thing for Sony, and many developers who make those deals. If they were to do some kind of deal with Microsoft Gamepass is what they are making a deal on.
For smaller studios gamepass works out great for them, for larger studios with big AAA games, it doesn't to have it exclusive most of the time without having it on other platforms.
Bernd Lauert
Banned
Not to disturb the concern trolling, but Spotify spends 52% of the money they make on royalties. This means even if they had a billion subscribers, more than half of that money would be instantly gone no matter what. There's also no way for Spotify to make additional money, you pay the sub and that's it. It's simply not comparable to Gamepass.
Kokoloko85
Member
The sale numbers don’t show Xbox users purchasing alot more games than Playstation and Nintendo users…..
Alot of Xbox users have turned to, “Ill wait till its on gamepass.” And the charts show Xbox users buy less than Playstation and Nintendo users by a landslide.
Obvioulsy the game selling department on xbox is selling and making great profit like always, but that doesnt mean gamepass is doing that. The commercial public doesnt know about gamepass for them to go out and buy an xbox because of that, thats why the sales of the console are pretty similar to last gen so far.
Papacheeks
Banned
But video streaming services is very comparable specifically movies. If Disney thought Disney+ was the future for all Marvel releases, we would not be seeing theatrical releases at all. But Shang-Chi, and the total youtube views of marvel's recent trailers for Eternals/ No way home say other wise.
Box office is like the physical/day one release of a game. You make your money upfront for first couple months, then the game goes to a streaming service like gamepass or PS now or whatever. Disney has tried the day to date model like gamepass and it went nowhere real fast. People would rather pay money to sit in seats. Like big AAA games people would rather spend money on the game.
I mean sure if you gave a AAA game for free similar to if Disney put out Black widow for free on launch on Disney+ with no PREMIER ACCESS fee people would flock to watch it. But they would be losing out on so much money. MS cares right now about growth. But at some point your going to hit a wall, and if your software isn't the cat's ass, you will be playing this game of cat and mouse to keep people subbed. Which means spending even more money to entice people to stay.
Which is whats happening in the streaming service sector right now. It's why all analysts call it a growth sector and not a money making one.
Hendrick's
If only my penis was as big as my GamerScore!
This guy has a huge boner for Game Pass. Guess he has nothing else better to do right now.
Kev Kev
Member
So…… Gamepass = The gaming apocalypse?
My dude, you are being the Karen of video games right now. None of that is going to happen. Just relax and enjoy some games.
And even if your right (you’re not), then might as well enjoy It while it lasts, no? Because it’s obviously not going to stop, so ride this bitch into the ground with the rest of us and just enjoy yourself.
Mr.ODST
Member
Trying hard to get his old job back
Frankly I don't care if gamepass is making a profit or not as a customer. I'm not a shareholder so why would I care? What gets on my nerves though are the fanboys who try to pretend that it is this massive success that other actual successful platform holders need to answer to. It simply isn't. It's a plan B.
IDKFA
I am Become Bilbo Baggins
Nope. Not joking
I understand that the cost of GP would need to increase for every AAA game from every publisher to be on GP from day one.
However, myself and many others would be happy to pay at least £70 per month for that service.
Would be even better for Microsoft if they locked everyone's games to Gamepass, so everyone would be forced to sign up to play the games they've already purchased, plus in order to play all future titles. Could you imagine if they did that, plus had exclusive bangers like ESVI? Those subscription numbers would sky rocket.
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M1chl
Currently Gif and Meme Champion
I wonder.... You guys don't like Spotify and would rather buy fully licenced MP3 one by one, for like 10 bucks a pop?
Also the situation why Spotify bleeds so much money also stems from how fucking insane are those record label companies.
Try to stream game vs try to stream licenced audio. Let's be assured, that, this is the biggest problem for Spotify.
Also the situation why Spotify bleeds so much money also stems from how fucking insane are those record label companies.
Try to stream game vs try to stream licenced audio. Let's be assured, that, this is the biggest problem for Spotify.
Bernd Lauert
Banned
I'd argue that Marvel movies are comparable to Call of Duty, Fifa and so on. You'll always have a handful of games (and movies) every year which have enough pull that they can sell well no matter what, so they don't need to be on a subscription service. Every other game (or movie) is fair game though.
Ironically, the last two Marvel movies didn't do that well at the box office. Could be covid related though.
at the moment is very clear that they don't care not mind...if it make money or not here seem someone wanna explain to one of the most richest company in the world how to make money...just ridiculous.
The task of gamepass at the moment is to gain market before the inevitable future of -streaming only- arrives and everyone will be competitors
The task of gamepass at the moment is to gain market before the inevitable future of -streaming only- arrives and everyone will be competitors
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PropellerEar
Member
You have a huge boner for Shawn.
Can't blame you, Shawn is much cooler dude compared to say Phil Sphincter.
eyesabitdull
Banned
Came here to say this.
Microsoft isn't surviving off games or game pass alone, they made billions before ever touching the game industry.
They could give two shits about losses if the product is moving and the word is spreading that GP is not that bad of a deal.
The game industry is not their bread and butter.
They're just in too deep to quit and/or admit defeat.
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Heisenberg007
Gold Journalism
They are losing more than they are making -- not necessarily investing back in the service. That'd have been at the break-even point.
Doing "really well" would have been increasing operating expenditures QoQ and YoY while still increasing net income QoQ and YoY.
Thirty7ven
Banned
That’s like saying games should be like TV and be free with ad breaks. Or maybe it should be like theater and you pay to play once, and you gotta pay to play again.
And if we are in the business of comparing, then gamepass is really bad value compared to iTunes because I get access to basically every song I can think of, while gamepass has a tiny library in comparison.
Maybe the prospect of paying for a curated list of titles only makes sense if the games releasing are the ones you would be buying at launch. Then the value is there sure.
But what happens when the subscription is at 20$, 240$ a year, and it doesn’t include most of the biggest games coming that year or the games you’re more interested in? At the end of a gen you’ll have spent over 1.5k on what is essentially a rental service with limited choice. Let’s not forget it was easy for Gamepass to look amazing at the of last gen because they were able to add so many games, but suddenly it’s not looking so aggressive is it? It’s a different ballpark when you have to add games to the service from a generation that started not even 12 months ago.
It’s a great option for people who worry more about dollar value than game value.
Maybe for some companies the games they make have enough value to first launch as a standard release and later hop on a subscription service to add value to said service.
Movie publishers are going back to launching their big movies in theaters before putting them on streaming, I wonder why.
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yazenov
Member
Glad people are exposing the money sink that is Gamepass.
If not for the parent company's "infinite war chest", the Xbox division would have gone bankrupt long time ago. Its lucky to have rich parents.
Sony and Nintendo are the ones who don't have a safety net, therefore, they keep on releasing innovative and quality software.
If not for the parent company's "infinite war chest", the Xbox division would have gone bankrupt long time ago. Its lucky to have rich parents.
Sony and Nintendo are the ones who don't have a safety net, therefore, they keep on releasing innovative and quality software.
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Mr.ODST
Member
Gaming in their foot into the metaverse and creator economy I think so that's the key reason that they ain't going to drop it.
samoilaaa
Member
can you give some examples of some innovative and quality software made by sony ?
M1chl
Currently Gif and Meme Champion
It was less about GamePass and more about "lol@Spotify loosing money" and that it somewhat it's the bad news for GamePass. The level of reach of GP and Spotify is nowhere near close. And I agree, basically the scope of GamePass is nowhere near Spotify's reach. Because the % share of the whole industry is for GamePass in <1% of Gaming Catalog as a whole and with Spotify, it's like in, how much 20-30% of all record available everywhere? Maybe I am overshooting, but damn, there is some literal garage to be find in there.
So I agree, in this case the comparison of money which had to be put to services does not make sense to compare.
deriks
4-Time GIF/Meme God
I don't believe that GamePass will be the only place to Microsoft games. Minecraft is a hit mostly because it runs on everything, so kids play it everywhere. Other stuff from Microsoft too, so it's ok to have some stuff on more than Xbox if is well selected
don't worry i understand your worry but trust me if Sony did survived at PS3 loss era....everyone in the gaming industry is safe
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skit_data
Member
They came from two very succesful generations before and it was very close to making them leave console business though
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Neofire
Member
Sony has a brand recognition only second to Nintendo, so why wouldn't have they survived?
Especially after the success the Beaststation 2 had.in fact they did survived ...losing 10 billions not doing a dime for all the PS3 gen.Sony has a brand recognition only second to Nintendo, so why wouldn't have they survived?
all this being an extremely poorer company than ms. So let's relax for Ms everything will be fine))
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SaucyJack
Member
One could have a really interesting conversation about the economics of game streaming services. Unfortunately such conversations get bogged down all to easily here.
I'm sceptical of the model, but that doesn’t stop me subbing to PS Now for £30 per year and dipping in and out of Gamepass when it suits me. Both services are great value for the consumer right now.
All I’ll say is enjoy it while you can, I suspect that the next year or two will be the best value it ever is, longer term I think you’ll see prices creep up and compromises made on content - which is basically what’s happened on Netflix - or you’ll see lots of content with additional fees - like Prime.
I'm sceptical of the model, but that doesn’t stop me subbing to PS Now for £30 per year and dipping in and out of Gamepass when it suits me. Both services are great value for the consumer right now.
All I’ll say is enjoy it while you can, I suspect that the next year or two will be the best value it ever is, longer term I think you’ll see prices creep up and compromises made on content - which is basically what’s happened on Netflix - or you’ll see lots of content with additional fees - like Prime.
yazenov
Member
Are you living under a rock? Sony constantly sweeps GOTY awards for a reason. No need to make a list.
samoilaaa
Member
just because a game is GOTY doesnt make it the best game of the year for everyone and innovative , for example alot of people didnt like the last of us part 2 and sekiro , GOTY 2020 and 2019 , goty means nothing to the gaming community
just curious what made the last of us part 2 so innovative compared to the first one ?
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Leyasu
Banned
What are Spotify paying the publishers/groups? Does Spotify have a publishing arm? Do they have any big bands making music for them?
Why do people think that Microsoft has invested massively in studios and I.P? They don’t want to pay 3rd parties top dollar for their content. They want to have their own studios making the bulk of the content.
Jemm
Member
The good thing is that nobody is forced to subscribe and subscription can be cancelled if it ever stops being valuable enough (price rises too much or offering gets worse).
Then you just change back to buying all the games you want.
SaucyJack
Member
exactly
Heisenberg007
Gold Journalism
For every person who didn't like TLOU 2, 10x more people loved it. Forget the "Media Outlets" awards (that's from editors and critics). It won the highest number of Readers' choice awards.
Those awards come from fan votes -- by gamers like you and me who go on these websites and vote for their favorite games. TLOU won 108 such awards, while the next best was Ghost of Tsushima with only 11 awards.
Burythelight
Member
Most of the community has shit tasties.
ms it is dozens of times richer than all sony and is not suffering in any of its most main markets ..unlike Sony which saw the TV and audio sector suffer substantially during the PS3 period.....with all that ... Sony is still here, stronger than before. As I said already those who continue to be concerned about the fate of the Xbox in relation to gamepass at this point are just carrying out an agenda.
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Clear
CliffyB's Cock Holster
There are good reasons to be at least questioning of the long-term impact of these sorts of offerings. Its a known, undisputed fact that the rise of music streaming has made it harder for new artists to break through. Because without gigging constantly to loyal audiences there's no way to make enough money to support doing it as a full-time occupation.
Apply that to games, which have much longer gestation periods and its putting a lot of pressure on smaller devs. Yeah sure they can take a one-time buyout deal, but that's basically break-even money. And you can't build/expand from break-even and if you go back for a second, similar deal you're likely to get a worse offer if your initial offering didn't catch fire.
The core issue is that it gives corporate gate-keepers excessive power and makes the market more challenging for anyone trying to establish themselves outside of it.
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eyesabitdull
Banned
Oh for sure.
If anything, they're smart for not quitting. Gaming is bigger than ever, and as we can from a couple of attempts from now established corporation, getting into the big boy gaming club is harder than it looks.
Despite what anyone says, Microsoft is now an established - and welcomed - partner in the sphere of the gaming industry (despite their mishaps).
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