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[MrFunSocks]

Don't think you are paranoid. I am on the following bandwagon.



I do wonder if some people fundamentally think that gamepass has to be profitable as its own revenue stream to be sustainable.

This is what I've been saying since it first came out.

Game Pass itself will likely never be profitable and likely is never expected to be - but that doesn't mean that it loses money for MS though. Let's take someone that subscribes to game pass and then spends hundreds of dollars on microtransactions in the games on game pass as an example - that revenue doesn't go to game pass. Game Pass' only revenue is subscriptions, but MS make money from game pass in lots of other ways.

Amazon Prime likely isn't "profitable". I get free shipping on 20+ things a month for like AUD$4 a month, plus I can also watch all the shows and movies on Prime streaming. Where Amazon make money from Prime, however, is that you then buy more things on amazon because you get free shipping, and guess what? Amazon makes money on everything you buy on Amazon. So again - Prime itself would be "running at a loss" but brings in more profit than those losses to other parts of the balance sheets.

 

[thicc_girls_are_teh_best]

Until gaming is all digital, comparing it to netflix now is useless.

amazon Prime movie is best example. You can buy the movies, and watch it using sub.

I mean TBF, almost every movie/show you can watch on Netflix (that isn't an original) you can watch elsewhere, be it another streaming service, or on TV (live or on-demand). Not to mention a lot of those you can still purchase physically via Blu-Ray or even DVD as well, new at that.

So in terms of media consumption options GamePass isn't theoretically that much different than current Netflix, or if you want Amazon Prime movie. The only difference is the percentage of the respective audiences who have largely shifted to digital delivery as their preference. It's higher with home film/tv shows than games, that's true. But digital is already taking majority in gaming.

It's probably a better question to ask how many of those digital customers are consuming digital content via subscription, because with film/tv the vast majority of those are provided through a subscription, not VOD-style rentals or services (though on Amazon they are, which I guess helps support your point in making a GP comparison to that over Netflix). I should probably try finding some Amazon Prime Video subscription numbers.

EDIT: So I did that and they're currently at 60 million (2021), or 56 million (2020). Prime Video had $9.91 billion in revenue in 2020, that's an average of $176.96 per subscriber. Amazon Prime had 200 million subscribers in 2020 and generated $25.21 billion in revenue. So Prime video generated a 1:2.54 revenue ratio on a 1:3.57 subscriber base ratio compared to Amazon Prime itself.

It's usually accepted the XBO platforms sold a bit north of 50 million combined last gen, and most Xbox Series estimates put those at a bit north of 8 million LTD so far. So, combined let's say they're around 63 million units between the two. If you take GP's last public number (18 million) and multiply it by 3.57, you get 64.27 million. That's about in line with XBO + Series (speculated) unit install base currently. If Xbox division had a fiscal year revenue of $15.5 billion, divide that by 2.54 and you get $6.1 billion in revenue from GamePass.

But that isn't a number which adds up to known quantities ATM because it'd require an average of $28 per GP subscriber per month (which isn't realistically likely), OR require a lot more than 18 million active subscribers paying an average closer to the higher GPU plan (also not likely considering Axios reported MS missing growth targets; even if you take the 37% and multiply that by 18 million (24.66 million subscribers), assume ALL of those are paying for GPU and doing so the full year, you still come up almost $2 billion short of the $6.1 billion figure). It'd also suggest an abnormally high share for GamePass into Xbox division's total annual revenue (which could only potentially be true if you buy the narrative that 3P games "simply don't sell" on Xbox platforms because you have to make up the missing numbers through GP revenue instead).

So ironically using Amazon Prime as a reference actually acts as a better (in terms of finances) figure of reference than the Netflix one. But like it's been said a lot of times already, it's just me trying to use some hard data as scenario references for GamePass, I'm not trying to claim any of this as literal proof of GamePass's internal revenues. But since they are numbers for somewhat similar items (content subscription services), it's at least worth it to see what equivalent numbers would be if scaled for GamePass and in some cases (like I just did above) actually reject the viability given other things we actually do officially know.

Come on thicc_girls_are_teh_best , be honest. The Jim Lyin post are real. And I'm one of those people criticizing him from time to time, because he does PR speak more and worse than Phil Spencer. It kinda sounds like you're saying PR a main part of the customer facing part of their job....

And maybe I read their quarterly report wrong then about the Xbox profit part.

PR may factor into it partially but I'm just saying for a long while that's all people were attributing to Phil Spencer: a mouthpiece, hype man, all-bark-no-bite. Which was wrong to do for how long people were doing it. The Jim Ryan stuff is more recent and even I think some of the vitriol against them is out-of-pocket.

But if it's a competition between Jim and Phil in who's in 1st place being viewed as nothing but a PR talking piece, Phil still holds that title by a mile for a lot of people. My thing is that neither of them should have to burden that type of title in the first place, but even if you aren't necessarily trying to insinuate one or the other is those things, if you frame talking about them using terms like "painting a narrative" or buzzwords like "PR", then you're incidentally contributing to that atmosphere.

No, I'm implying its record revenue growth is mostly due to them acquiring Bethesda, because their revenues were added to the Xbox division's revenues.
Zenimax's revenue up to the sale was around $440M per year, so ~$110M per quarter.


I think there might be some misconception between revenue and operating profit here.

There's no misconception on my end; Zenimax's revenue figure is still only a small fraction of what the Xbox division was generating per year pre-acquisition. Take away $440 million from $15.5 billion and you still have $15.1 billion which is not bad at all for a brand that was struggling with console units last generation. It is what it is.

Nope. Haven't missed anything. We are, in this thread, talking about Xbox and Gamepass so i'm not talking PC. And yes, I do think eventually Microsoft will lock their games behind gamepass. That is a future I don't want.

What specifically has Microsoft done in the past year or two that suggests they could consider removing the option of physical and digital sales for their games and putting sole access to them behind GamePass? If there's anything you can reference in particular I'd like to see it, I'm genuinely curious.

This is what I've been saying since it first came out.

Game Pass itself will likely never be profitable and likely is never expected to be - but that doesn't mean that it loses money for MS though. Let's take someone that subscribes to game pass and then spends hundreds of dollars on microtransactions in the games on game pass as an example - that revenue doesn't go to game pass. Game Pass' only revenue is subscriptions, but MS make money from game pass in lots of other ways.

Not only that but since GamePass falls under the Xbox division then ultimately it's a question of if the Xbox division is generating the revenue it needs to generate. Of course they likely (internally) look at GamePass' revenue on its own and its operational costs to see how that weighs out, see how much it's adding to Xbox's revenue totals compared to the costs for operation, content securement etc. and making decisions from there.

If at some point the revenue it alone generates isn't worth the costs for the aforementioned things, then they'll retool it or gut it. But right now they are nowhere near a point of needing to make that decision and I think that's some thing certain folks (not you; other people) need to understand a bit better.

Amazon Prime likely isn't "profitable". I get free shipping on 20+ things a month for like AUD$4 a month, plus I can also watch all the shows and movies on Prime streaming. Where Amazon make money from Prime, however, is that you then buy more things on amazon because you get free shipping, and guess what? Amazon makes money on everything you buy on Amazon. So again - Prime itself would be "running at a loss" but brings in more profit than those losses to other parts of the balance sheets.

Amazon's model has operated on debt IIRC, but one thing that benefits them when it comes to delivery service is that they have near-full vertical integration. They own the warehouses for item packaging, labeling, package testing etc. They have their own drivers for making package deliveries, probably own their own freighting stations as well. The only thing they don't own or produce themselves are most of the actual items sold to the customers.

Still though, that's a lot in terms of advantages that helps with reducing what losses they incur for doing business.

 

[Basil King]

11 pages of drama when the man himself doesn't seem too concerned about it. I think that's what we have to look at and keep into perspective. As gamers we shouldn't really care if it's profitable or not as it's saving me thousands of dollars over the last two years.

 

[kingfey]

I mean TBF, almost every movie/show you can watch on Netflix (that isn't an original) you can watch elsewhere, be it another streaming service, or on TV (live or on-demand). Not to mention a lot of those you can still purchase physically via Blu-Ray or even DVD as well, new at that.

So in terms of media consumption options GamePass isn't theoretically that much different than current Netflix, or if you want Amazon Prime movie. The only difference is the percentage of the respective audiences who have largely shifted to digital delivery as their preference. It's higher with home film/tv shows than games, that's true. But digital is already taking majority in gaming.

It's probably a better question to ask how many of those digital customers are consuming digital content via subscription, because with film/tv the vast majority of those are provided through a subscription, not VOD-style rentals or services (though on Amazon they are, which I guess helps support your point in making a GP comparison to that over Netflix). I should probably try finding some Amazon Prime Video subscription numbers.

EDIT: So I did that and they're currently at 60 million (2021), or 56 million (2020). Prime Video had $9.91 billion in revenue in 2020, that's an average of $176.96 per subscriber. Amazon Prime had 200 million subscribers in 2020 and generated $25.21 billion in revenue. So Prime video generated a 1:2.54 revenue ratio on a 1:3.57 subscriber base ratio compared to Amazon Prime itself.

It's usually accepted the XBO platforms sold a bit north of 50 million combined last gen, and most Xbox Series estimates put those at a bit north of 8 million LTD so far. So, combined let's say they're around 63 million units between the two. If you take GP's last public number (18 million) and multiply it by 3.57, you get 64.27 million. That's about in line with XBO + Series (speculated) unit install base currently. If Xbox division had a fiscal year revenue of $15.5 billion, divide that by 2.54 and you get $6.1 billion in revenue from GamePass.

But that isn't a number which adds up to known quantities ATM because it'd require an average of $28 per GP subscriber per month (which isn't realistically likely), OR require a lot more than 18 million active subscribers paying an average closer to the higher GPU plan (also not likely considering Axios reported MS missing growth targets; even if you take the 37% and multiply that by 18 million (24.66 million subscribers), assume ALL of those are paying for GPU and doing so the full year, you still come up almost $2 billion short of the $6.1 billion figure). It'd also suggest an abnormally high share for GamePass into Xbox division's total annual revenue (which could only potentially be true if you buy the narrative that 3P games "simply don't sell" on Xbox platforms because you have to make up the missing numbers through GP revenue instead).

So ironically using Amazon Prime as a reference actually acts as a better (in terms of finances) figure of reference than the Netflix one. But like it's been said a lot of times already, it's just me trying to use some hard data as scenario references for GamePass, I'm not trying to claim any of this as literal proof of GamePass's internal revenues. But since they are numbers for somewhat similar items (content subscription services), it's at least worth it to see what equivalent numbers would be if scaled for GamePass and in some cases (like I just did above) actually reject the viability given other things we actually do officially know.



PR may factor into it partially but I'm just saying for a long while that's all people were attributing to Phil Spencer: a mouthpiece, hype man, all-bark-no-bite. Which was wrong to do for how long people were doing it. The Jim Ryan stuff is more recent and even I think some of the vitriol against them is out-of-pocket.

But if it's a competition between Jim and Phil in who's in 1st place being viewed as nothing but a PR talking piece, Phil still holds that title by a mile for a lot of people. My thing is that neither of them should have to burden that type of title in the first place, but even if you aren't necessarily trying to insinuate one or the other is those things, if you frame talking about them using terms like "painting a narrative" or buzzwords like "PR", then you're incidentally contributing to that atmosphere.



There's no misconception on my end; Zenimax's revenue figure is still only a small fraction of what the Xbox division was generating per year pre-acquisition. Take away $440 million from $15.5 billion and you still have $15.1 billion which is not bad at all for a brand that was struggling with console units last generation. It is what it is.



What specifically has Microsoft done in the past year or two that suggests they could consider removing the option of physical and digital sales for their games and putting sole access to them behind GamePass? If there's anything you can reference in particular I'd like to see it, I'm genuinely curious.



Not only that but since GamePass falls under the Xbox division then ultimately it's a question of if the Xbox division is generating the revenue it needs to generate. Of course they likely (internally) look at GamePass' revenue on its own and its operational costs to see how that weighs out, see how much it's adding to Xbox's revenue totals compared to the costs for operation, content securement etc. and making decisions from there.

If at some point the revenue it alone generates isn't worth the costs for the aforementioned things, then they'll retool it or gut it. But right now they are nowhere near a point of needing to make that decision and I think that's some thing certain folks (not you; other people) need to understand a bit better.



Amazon's model has operated on debt IIRC, but one thing that benefits them when it comes to delivery service is that they have near-full vertical integration. They own the warehouses for item packaging, labeling, package testing etc. They have their own drivers for making package deliveries, probably own their own freighting stations as well. The only thing they don't own or produce themselves are most of the actual items sold to the customers.

Still though, that's a lot in terms of advantages that helps with reducing what losses they incur for doing business.

Gamepass revenue goes back to the system.

For the math, it would be 8$ average. 1+10+15=26/3=8.6.

If we use 8$*18m. That would be 144m. That 18m was January. At most, gamepass is now 23m. 8*23m= 184m.

That money would go to gamepass budget games, for the next 6 month. Remaining covers other Xbox expenses.

Now do you think, that is gamepass money? Not really. Dlc, mtx, and sales also go to gamepass revenue. This is one reason why gamepass can't be measured. Mtx would be higher in months, where there is new MP games. Right now, there is halo MP, which gamepass player play (its free), and Forza 5. Any pack, battle pass or dlc they buy, will go to gamepass revenue.

For the prime movies comparison. Both have extra revenue, outside of subs. Gamepass has dlc, mtx, and full games, which all are 30% cut for MS. For prime, Amazon gets a cut from movie sales, and movie rent. Both of these revenue go with sub revenue. Its why sub count is worthless. And revenue is unreliable for these 2 service.

 

[GhostOfTsu]

I am seeing a lot of what I consider to be pretty disturbing posts trying to shut down this discussion. As if discussing the sustainability of Gamepass or VR or Onlive or F2P games is somehow tabboo and immediately warrants bans for console warring.

I call it disturbing because I saw the same thing over at era where it started off small with bans for topics that triggered fanboys, but then immediately turned into ANY and ALL criticism of Sony, Microsoft and Nintendo. It became an unbearable place where you had to look over your shoulders because you knew guys like Mr Fun Socks would lament that mods haven't banned anyone in this thread for discussing the literal topic of this thread. Absolute nonsense.

Thank you! It really needs to be said. I notice Stuart and crew going around in threads hoping people get banned. I know they were very successful the last few weeks but now it's reaching toxic level.

I have to say that even with the new console war rules on here (which have been great so far), its a shame to see so much salt and warring go unpunished in numerous Xbox related threads lately.
Mods please dont let the forum slip back to shit. Use Xbox threads for culling lol, nothing will be missed.

 

[FritzJ92]

Until MS shows signs of shutting Gamepass or worry about the financials I see no reason to personally worry about it. It’s a great service that has allowed me to play many games at an affordable price.
I hope they grow to where they are happy and sustained so I can keep using the service. I’d even entertain a $20 a month plan with Ubisoft+ (whatever it’s called).
On the money side “very very sustainable” means that’s they are within their expected losses

 

[John Wick]

Are you listening to what you are saying?

Is paying 180$ upfront equal to paying 1$? What kind stupid logic is this?

Also how is xbox live is 22.99 euro?

Here is cd key Xbox live

12 Month Xbox Live Gold Membership - (EU & UK)

Buy 12 Month Xbox Live Gold Membership - (EU & UK) ✔️ CD Key ✔️ Instant download ✔️ Fantastic price ✔️ Membership ✔️

www.cdkeys.com

Sorry Mr Expert all things Xbox/MS.
Let's do it your stupid way
12 months gamepass £120
12 months gamepass ultimate £180
12 months Xbox live gold £38
+£1 gamepass 12months
See the difference?
If your smart and use offers which most people do then you can pick up 12m Xbox Gold for as little as £29.99 and stack it.
If your an expert like yourself you can buy 12m Xbox Live Gold for £22.99 and stack it.
I'll let you work it out where from?

 

[reksveks]

Nope. Haven't missed anything. We are, in this thread, talking about Xbox and Gamepass so i'm not talking PC. And yes, I do think eventually Microsoft will lock their games behind gamepass. That is a future I don't want.

So you are talking about games preservation on xbox specifically. I don't think gamepass is the issue but the fact that you need to connect to the Internet to set up your console. I don't think gamepass is a factor.

I personally think if you are worried about game preservation in general, the fact that xbox game studio and other 3rd parties devs are supporting pc is a massive pro.

On xbox locking games behind gamepass, it's a possible future but not one that I see happening and not going alot of evidence of it being a possible outcome yet. If it does, I will complain along side you.

 

[Robb]

Well, it’s obviously not the money-sinkhole some people seem to believe it is at least. Otherwise they wouldn’t have kept it going for 5 years.

 

[FF:Enhanced_Reality]

I get the feeling you think you made a point here. You didn't. Anyway. Halo time!

Enjoy your service man. At least until the price gets hiked up or its... Not sustainable anymore.

 

[veterangamerUK]

Sustainable, not profitable

Why the fuck does that matter to you? Are you a shareholder?

 

[BattleScar]

I would like to thank gaffers for their business analyst. Some great insight to kids, who have no clue about how big business operates.

Carry on with your bulshit words. Meanwhile I will enjoy with real world, where growth and sustainability means something, instead of useless numbers.

You're breaking the heart of every financial accountant in the world...

 

[Gameplaylover]

Well, it’s obviously not the money-sinkhole some people want it to be.

Fixed this for you.

 

[JackMcGunns]

If it was profitable he would have used the word profitable.
Sustainable simply means the losses aren`t high enough to bring the whole division into trouble. It can just sit there, grow and lure people into the ecosystem to make more profit in the long run.

He didn’t just say sustainable, he said very, Very sustainable as it stands and it continues to grow, which is very, very good so early in the game as it’s expected for any subscription service to take a LOSS at the beginning, but if at this point it’s already sustainable, imagine what happens as it grows in subscribers.

Sustainable is the only word I care about as a gamer, just keep those games coming. I’ve never stopped half way of binge watching a series on Netflix just to wonder if they made a profit or not, I’m happy to get my money’s worth and with GamePass even more so.

 

[Hydroxy]

I don't care if gamepass is sustainable or not, as long as I am getting the opportunity to play games legally for cheap, am happy. I don't think anyone else should care either. I recently got 8 months of gamepass for $7 and as long as I keep getting such deals am gonna keep subbed. I actually find the normal price of $15 a month too expensive so I will never sub at normal prices.

 

[Clear]

This is what I've been saying since it first came out.

Game Pass itself will likely never be profitable and likely is never expected to be - but that doesn't mean that it loses money for MS though. Let's take someone that subscribes to game pass and then spends hundreds of dollars on microtransactions in the games on game pass as an example - that revenue doesn't go to game pass. Game Pass' only revenue is subscriptions, but MS make money from game pass in lots of other ways.

Amazon Prime likely isn't "profitable". I get free shipping on 20+ things a month for like AUD$4 a month, plus I can also watch all the shows and movies on Prime streaming. Where Amazon make money from Prime, however, is that you then buy more things on amazon because you get free shipping, and guess what? Amazon makes money on everything you buy on Amazon. So again - Prime itself would be "running at a loss" but brings in more profit than those losses to other parts of the balance sheets.

That doesn't add up because the core Xbox offering as a console platform isn't close to the size and ubiquity of Amazon's retail business. And Its just an alternative monetization system for the same product/services after all.

And being an alternative, that makes it somewhat of a replacement for that core business.

 

[Bernd Lauert]

He didn’t just say sustainable, he said very, Very sustainable as it stands and it continues to grow, which is very, very good so early in the game as it’s expected for any subscription service to take a LOSS at the beginning, but if at this point it’s already sustainable, imagine what happens as it grows in subscribers.

Sustainable is the only word I care about as a gamer, just keep those games coming. I’ve never stopped half way of binge watching a series on Netflix just to wonder if they made a profit or not, I’m happy to get my money’s worth and with GamePass even more so.

Yep. He made sure to explicitly point out that it is already "very, very sustainable". Which means Gamepass is today operating without a loss. Another narrative dies.

 

[kingfey]

You're breaking the heart of every financial accountant in the world...

Accountants are higher than CEO in my case.

These guys will catch your arse, if you steal 0.1$ from the company. You dont mess with them.

 

[Banjo64]

Sorry Mr Expert all things Xbox/MS.
Let's do it your stupid way
12 months gamepass £120
12 months gamepass ultimate £180
12 months Xbox live gold £38
+£1 gamepass 12months
See the difference?
If your smart and use offers which most people do then you can pick up 12m Xbox Gold for as little as £29.99 and stack it.
If your an expert like yourself you can buy 12m Xbox Live Gold for £22.99 and stack it.
I'll let you work it out where from?

That goes to show how out of touch you are with the average consumer. Yes people on GAF, ResetERA and Hotukdeals are stacking Gold however 3 of the kids in my wider family have a Series console and their parents are all paying the monthly rate. All of my eldest kids mates have Game Pass too and you think a bunch of teenagers (or their working parents) are stacking Gold?

 

[Papacheeks]

Yep. He made sure to explicitly point out that it is already "very, very sustainable". Which means Gamepass is today operating without a loss. Another narrative dies.

That is not how many interpreted it. Sustainable could mean in how they subsidize gamepass because of Azure. Sustainable to me means enough traffic, enough subs currently with cloud users and azure server investment to keep it going. Netflix, and the likes dont make profit because of all the content they spend money on to stay competitive.

Unless they show us a break down of what they mean by Sustainable it's PR at this point. Sustainable is different than shouting from the rooftops on how profitable you are.

 

[Bernd Lauert]

That is not how many interpreted it. Sustainable could mean in how they subsidize gamepass because of Azure. Sustainable to me means enough traffic, enough subs currently with cloud users and azure server investment to keep it going. Netflix, and the likes dont make profit because of all the content they spend money on to stay competitive.

Unless they show us a break down of what they mean by Sustainable it's PR at this point. Sustainable is different than shouting from the rooftops on how profitable you are.

Yes, people who don't like Gamepass as a concept will interpret it as negatively as possible. Doesn't mean that the interpretation makes any sense, though.

 

[Belthazar]

Put the full info in a quarterly report then!

The first post nailed it. They always were very quick to post very detailed info on the Xbox profitability when it was a success, but stopped doing it when it wasn't anymore. Them still not giving detailed information speaks volumes, way more than a PR statement.

 

[Bernd Lauert]

The first post nailed it. They always were very quick to post very detailed info on the Xbox profitability when it was a success, but stopped doing it when it wasn't anymore. Them still not giving detailed information speaks volumes, way more than a PR statement.

They also don't give profitability information on Azure, Office and Windows. Does that speak volumes too?

 

[Papacheeks]

They also don't give profitability information on Azure, Office and Windows. Does that speak volumes too?

Yes it means because of Gamepass's connection to Azure server expansion they and dont show numbers for Azure which I believe is also used for Exchange aka office 365, in a way makes it so they can obscure their information in how the actual division itself is going specifically gamepass. They dont show how much it costs in operating because of the azure connection, they dont show how much they spend on game deals for exclusives like MLB, outriders, B4B, EA PLAY ect.

To me thats shady. It makes you look better than you are compared to Sony/Nintendo which at least give you somewhat of a break down on what its costs for operating specifically the gaming division. It's more clear in terms of what they spend on game development/servers for said games/PSN. You at least can see what they make via PSN game sales, retail, and deduce how they are doing compared to what they spent on the division for the most part.
Xbox because of all the intersecting with other technologies that have other uses, it obscures things a bit. On top of not showing metrics of who is actually paying for gamepass at full price, or just show how much is generated from Gamepass in $ then show what it costs specifically for straight operating costs?

But they dont. SO all we have to go on is "he it's very sustainable" and people like you eat it up and swallow".
The entire point of sales threads is to see how the divisions are doing, how investments in those segments are doing.

Microsoft is the only one because of their intersecting of things like Azure and what not that is not as cut and dry.
At least for Nintendo and SOny we get equations like" Revenue generated by Software(retail and digital)+Peripherals - operating income/costs= net profit.

Pretty simple, and on top they usually give us R&D breakdown as well. Like if they used camera sensors for lets say new VR that will be in there and shown. Or if they now are breaking even on hardware costs there's usually a notation somewhere.

 

[Bernd Lauert]

Yes it means because of Gamepass's connection to Azure server expansion they and dont show numbers for Azure which I believe is also used for Exchange aka office 365, in a way makes it so they can obscure their information in how the actual division itself is going specifically gamepass.

Wait, so you think they don't show profitability in any of their company wide sub-divisions just because they want to hide Gamepass numbers?

 

[reksveks]

That doesn't add up because the core Xbox offering as a console platform isn't close to the size and ubiquity of Amazon's retail business. And Its just an alternative monetization system for the same product/services after all.

I don't know what the profit margin amazon has on its average unit sold but I suspect that digital sales would have a higher margin therefore it doesn't necessarily need to get to the size or ubiquity of amazon prime imo.

they dont show how much they spend on game deals for exclusives like MLB, outriders, B4B, EA PLAY ect.

No-one shares this info, right?

On top of not showing metrics of who is actually paying for gamepass at full price, or just show how much is generated from Gamepass in $ then show what it costs specifically for straight operating costs?

Not sure, Sony gives away for similar metrics for ps plus or ps now, they just give the top line numbers (users and Total network revenue) and then you can then try and figure out what ps plus is doing in terms of ARPU. It's still hard cause it includes other revenue streams than just ps plus.

 

[Sanepar]

This is what I've been saying since it first came out.

Game Pass itself will likely never be profitable and likely is never expected to be - but that doesn't mean that it loses money for MS though. Let's take someone that subscribes to game pass and then spends hundreds of dollars on microtransactions in the games on game pass as an example - that revenue doesn't go to game pass. Game Pass' only revenue is subscriptions, but MS make money from game pass in lots of other ways.

Amazon Prime likely isn't "profitable". I get free shipping on 20+ things a month for like AUD$4 a month, plus I can also watch all the shows and movies on Prime streaming. Where Amazon make money from Prime, however, is that you then buy more things on amazon because you get free shipping, and guess what? Amazon makes money on everything you buy on Amazon. So again - Prime itself would be "running at a loss" but brings in more profit than those losses to other parts of the balance sheets.

That's why Sony and Nintendo should never follow this model. These companies need to be profitable, Xbox doesn't, they have MS.

 

[FF:Enhanced_Reality]

Why the fuck does that matter to you? Are you a shareholder?

Oh man. I hurt your feelings?

 

[Kssio_Aug]

Enjoy your service man. At least until the price gets hiked up or its... Not sustainable anymore.

Imagine being triggered to the point of desiring a price hike for a service you supposedly don't care about. It's seems you're a very happy consumer, whatever gaming platform you chose with a blood pact.

 

[Clear]

I don't know what the profit margin amazon has on its average unit sold but I suspect that digital sales would have a higher margin therefore it doesn't necessarily need to get to the size or ubiquity of amazon prime imo.

All I mean is people pay for Prime for the delivery option, which in turn feeds Amazon's entire physical retail operation. Prime movies are just an added benefit for most people. GamePass is much more integral than that. Especially as it offers the entire first-party software line-up, a thing that you'd expect to be a huge profit driver for the console ecosystem.

What makes GamePass so interesting to talk about is it audacity. And in that regard Prime movies isn't nearly such a bold business strategy.

 

[Papacheeks]

I don't know what the profit margin amazon has on its average unit sold but I suspect that digital sales would have a higher margin therefore it doesn't necessarily need to get to the size or ubiquity of amazon prime imo.



No-one shares this info, right?


Not sure, Sony gives away for similar metrics for ps plus or ps now, they just give the top line numbers (users and Total network revenue) and then you can then try and figure out what ps plus is doing in terms of ARPU. It's still hard cause it includes other revenue streams than just ps plus.

But its easier to deduct is my point. You at least can get by them showing straight revenue numbers and then subtracting operating income/costs from it to give you at least what they made for the quarter/year. my point is because of other technology's Microsoft has intersecting with Gamepass like Azure, and that XBox live is now roped into Gamepass its harder to get actual sales numbers.

And because of intersecting things like Azure for their gaming side it's harder to deduce what the straight gaming section is generating and what it actually costs to run because azure shows growth. Which is subsidized because of the other markets within the company.

When they say azure grew this much% because of gamepass subs and cloud streaming, how do you deduct actually how well gamepass or the division itself gaming is doing?

All we want is them to show here's how much to operate aka azure servers + game development costs+ game exclusive costs - revenue made = net profit.

You at least can in a rough way get something from Sony and NIntendo when you do a little math because at least you get from their Fiscal reports operating income/operating costs which include things like ramped up R&D or it's annotated saying the extra costs were because of ramp up for console launch. You get retail/digital sales numbers, you get revenue generated by PS+/PSN. You at least have something you can see and then deduct what it costs for the most part to operate.

Which will give you an idea of profit, which in then give you a better idea of how they are doing. If Microsoft gave anything close to that we could at least see compared to years without gamepass.

 

[reksveks]

GamePass is much more integral than that. Especially as it offers the entire first-party software line-up, a thing that you'd expect to be a huge profit driver for the console ecosystem.

I am not sure that's the case. 60% of Sony's software revenue is dlc/mtx and first party full game sales (units) is between 10% and 20% of all game sales.

The real profit is in mtx/DLC and third party sales.

 

[Papacheeks]

I am not sure that's the case. 60% of Sony's software revenue is dlc/mtx and first party full game sales (units) is between 10% and 20% of all game sales.

The real profit is in mtx/DLC and third party sales.

But look at the break down? They literally are giving you numbers for everything. You can do some math and see how they are doing. You get what is generated by segment, physical, digital, add on content, network services I assume is PS+/PSNOW. Pretty easy breakdown of all revenue streams within Game division?

Try that with Xbox.

 

[FF:Enhanced_Reality]

Imagine being triggered to the point of desiring a price hike for a service you supposedly don't care about. It's seems you're a very happy consumer, whatever gaming platform you chose with a blood pact.

Did nobody look at the financial info from the Apple and Epic court case? The reason that it's so sustainable is because it's a 2 trillion dollar company that can afford a loss. It cannot continue to survive the way it is, games that have cost hundreds of millions to develop come to the service for free on day one? It's a way of buying love from consumers and the reason that it's "very sustainable" right now is because Microsoft will accept the loss because they're happy with the growth in XBOX. What happens when they fail to meet expectations several times? XBOX doesn't make money for Microsoft. To make it profitable it would need to be about £30 a month. Which is almost like a small phone contract. So either enjoy it while it lasts or wait for the price to go up because I promise you. It will. Look at how long TES and Starfield have been in development for. The hundreds of millions poured into them. And they've reduced their market from Sony and Nintendo platforms where most people will download and play them cheap through GamePass. Like I say. Enjoy it while it lasts. The day Microsoft decide they aren't happy losing money anymore the shit will hit the fan.

The Netflix of gaming concept doesn't quite work the same way. It isn't an apples to apples comparison between games and movies/TV.

 

[reksveks]

But its easier to deduct is my point. You at least can get by them showing straight revenue numbers and then subtracting operating income/costs from it to give you at least what they made for the quarter/year. my point is because of other technology's Microsoft has intersecting with Gamepass like Azure, and that XBox live is now roped into Gamepass its harder to get actual sales numbers.

Definitely agree that it's more easily to figure stuff out on the Sony side but the point was that some of the asks from users here is stuff that you still can't get anywhere (barring a legal court case between two third parties )

 

[Papacheeks]

Definitely agree that it's more easily to figure stuff out on the Sony side but the point was that some of the asks from users here is stuff that you still can't get anywhere (barring a legal court case between two third parties )

I just wish Xbox was a little more honest. Feel like when there's articles like these the question gets asked and then regular PR speak is what we get. Just release the numbers on xbox? I think of they did their stock would dip when compared to other company fiscal statements.

I think thats why, as showing growth keeps stock high, if they showed how little they actually made it would go against growth segments and stock would more than likely dip.

 

[MonarchJT]

Oh man. I hurt your feelings?

Did nobody look at the financial info from the Apple and Epic court case? The reason that it's so sustainable is because it's a 2 trillion dollar company that can afford a loss. It cannot continue to survive the way it is, games that have cost hundreds of millions to develop come to the service for free on day one? It's a way of buying love from consumers and the reason that it's "very sustainable" right now is because Microsoft will accept the loss because they're happy with the growth in XBOX. What happens when they fail to meet expectations several times? XBOX doesn't make money for Microsoft. To make it profitable it would need to be about £30 a month. Which is almost like a small phone contract. So either enjoy it while it lasts or wait for the price to go up because I promise you. It will. Look at how long TES and Starfield have been in development for. The hundreds of millions poured into them. And they've reduced their market from Sony and Nintendo platforms where most people will download and play them cheap through GamePass. Like I say. Enjoy it while it lasts. The day Microsoft decide they aren't happy losing money anymore the shit will hit the fan.

The Netflix of gaming concept doesn't quite work the same way. It isn't an apples to apples comparison between games and movies/TV.

your post show complete ignorance in everything that is business and gaming industry not worth to reply...but i would just let you know that

 

[reksveks]

I think of they did their stock would dip when compared to other company fiscal statements.

It's 8% of their business, think there is more important stuff that would move the needle honestly.

 

[MrFunSocks]

That's why Sony and Nintendo should never follow this model. These companies need to be profitable, Xbox doesn't, they have MS.

Not at all what I said. What I said is that the profit earned by people that game pass brings in outweighs any costs of game pass, so there’s no actual loss.

 

[JackMcGunns]

I just wish Xbox was a little more honest. Feel like when there's articles like these the question gets asked and then regular PR speak is what we get. Just release the numbers on xbox? I think of they did their stock would dip when compared to other company fiscal statements.

I think thats why, as showing growth keeps stock high, if they showed how little they actually made it would go against growth segments and stock would more than likely dip.

I just wish You were a little more honest. Feel like when posts like yours come into question regarding agenda, we just get pivot and deflections. Tell us with honesty what your agenda is about?

"We need to reveal how MS is doing bad, bad GamePass, bad bad boogie man bad!, must fail! Sony good, Sony friend!"

 

[DaGwaphics]

Until MS shows signs of shutting Gamepass or worry about the financials I see no reason to personally worry about it. It’s a great service that has allowed me to play many games at an affordable price.
I hope they grow to where they are happy and sustained so I can keep using the service. I’d even entertain a $20 a month plan with Ubisoft+ (whatever it’s called).
On the money side “very very sustainable” means that’s they are within their expected losses

Agreed 1000%. Most of the fear mongering that occurs regarding GP seems to center on the inevitability of the service going to shit over time in one way or another. But isn't that always a possibility with everything?

It's a $15/mo sub with no commitments. Not exactly like we agreed to give up a kidney if we ever cancel. I'm loving it for what it is, and if they ever screw it up completely, then I'll stop subscribing. It would be sad, but not the end of the world.

I wonder if they ever will add like a premium tier or further differentiate GPU from GP on Xbox. Integrating Ubi would be sweet, even if it was just like the EA play integration where older games came over some time after release. Could certainly be worth a small price increase.

 

[Papacheeks]

I just wish You were a little more honest. Feel like when posts like yours come into question regarding agenda, we just get pivot and deflections. Tell us with honesty what your agenda is about?

I have said my peace on gamepass, I have also said how good of a value it is. I believe it can live beside physical/digtial as a option for consuming game content. I don't believe that its the future of where games are heading, and I think there's a apparent issue going all in on said service to being your main staple in how you operate a division. Especially when you put the cart before the horse. Xbox needs to get back to the brand being synonymous with quality produced titles.
In the past couple years they have shown how shit they are in managing teams and studios. Jaffe and others can attest to this. Them buying a bunch of studios and a publisher in theory gives them the foundation for putting out games at a high clip that internally they will own aka disney plus which owns all of its content. Instead of relying on third party deals as much to have larger growth months with big titles. Instead of leaning on red dead 2 or MLB, b4b, they can lean on forza, halo.

Which I think this month and next couple will show some huge growth. My issue is when looking at the landscape of consolidation thats happening with studios, large and small. It's easier to spin or make a studio into a factory or support studio when things dont show good metrics for specific titles in terms of growth/engagement.
Right now you are seeing it within Blizzard/Activision, minus the scandal thats going on Vicarious Visions and Toys4Bob are super talented studios who made in the past year or so great million dollar selling titles. Now VV is working on Diablo, and call of duty.

Same with toys4bob.
That fear is what I worry about, on top of a focus on quality. A lot of the talking on gamepass is i'll try this out its on gamepass. LIke with battletoads, crackdown 3, bleeding edge, and a bunch of other somewhat medicore to middling games that go to the service that are developed under Microsoft.
My issue is not with the value Gamepass offers, its that at somepoint as time goes on and more metrics are used in how they track engagment/usage of said titles. And that can lead to different things.
Similarly Netflix has a lot of shows that don't get renewed, or any interest in producing again. And based on viewership numbers, and how many people watched the series and how many binged it. Those give information on how well something was received.
All this adds to me Microsoft Throwing money at xbox division but is doing so only for the sole purpose of Gamepass growth. Not as in we want to make XBox a brand thats more WW recognizable with branded games. I think thats a lot of peoples issues, as putting everything in your division behind a service instead of the brand, and shifting from wanting people to buy and Xbox for the same reason people by a switch.

People buy Nintendo to play NIntendo games, that they cant get anywhere else. And NINTENDO has earned that trust in the quality of their games over many generations and systems. The same can not be said about XBox.
Like now every AA-AAA game that comes out of xbox needs to be a big hit with gamepass. Do you think Microsoft will give a giant budget to a studio for a sequel to a game if they took 4-5 years to make the first and metric wise on gamepass only a fraction of the subscribers played it or at least completed it?
This is why to me at least same with Nintendo's service its good to know and have these break downs. Nintendo needs to do better, and looking at their attach rate I think they know they need to, and looking at the feedback they know they need to improve.

 

[John Wick]

That goes to show how out of touch you are with the average consumer. Yes people on GAF, ResetERA and Hotukdeals are stacking Gold however 3 of the kids in my wider family have a Series console and their parents are all paying the monthly rate. All of my eldest kids mates have Game Pass too and you think a bunch of teenagers (or their working parents) are stacking Gold?

You'll find years ago that only tech savvy paople got these type of deals. But now with social media far more people are getting them. There are guides literally showing noobs how to do these transactions. So no I'm not out of touch with the average consumer. So until MS show the receipts or have enough confidence to show them it's all pure speculation.

 

[Lognor]

You'll find years ago that only tech savvy paople got these type of deals. But now with social media far more people are getting them. There are guides literally showing noobs how to do these transactions. So no I'm not out of touch with the average consumer. So until MS show the receipts or have enough confidence to show them it's all pure speculation.

I"ll agree more people would take advantage of this type of offer now for the very reasons you mentioned but it's still a small percentage of the overall userbase. Even when I stacked with the EA Access trick I hedged and only did a year because I was not 100% sure it would work. And there are ways to get it cheaper via VPN, but again some people are just not going to be comfortable with these methods and they're going to pay full price. That is the majority. Or even those that got the deal once it expires they'll continue on at full price. People aren't always looking for a deal. I used to call Comcast or Spectrum or whoever my cable provider was every time my promotional rate expired in order to get put on a new promotion. I don't do that anymore. It's not worth the hassle. Most people don't do that. Same thing applies to Game Pass. Most people aren't going to do the hassle of that.

 

[mckmas8808]

I"ll agree more people would take advantage of this type of offer now for the very reasons you mentioned but it's still a small percentage of the overall userbase. Even when I stacked with the EA Access trick I hedged and only did a year because I was not 100% sure it would work. And there are ways to get it cheaper via VPN, but again some people are just not going to be comfortable with these methods and they're going to pay full price. That is the majority. Or even those that got the deal once it expires they'll continue on at full price. People aren't always looking for a deal. I used to call Comcast or Spectrum or whoever my cable provider was every time my promotional rate expired in order to get put on a new promotion. I don't do that anymore. It's not worth the hassle. Most people don't do that. Same thing applies to Game Pass. Most people aren't going to do the hassle of that.

Honestly we just really don't know how many people have Gamepass via "deals" and how many are paying the full $10 or $15 a month. Not until MS tell us in a quarterly report.

 

[Lognor]

Honestly we just really don't know how many people have Gamepass via "deals" and how many are paying the full $10 or $15 a month. Not until MS tell us in a quarterly report.

Right. But why assume a large percentage are in on these deals? Not you specifically, but a lot of Game Pass detractors assume that. And it's a very silly assumption. If you look at any type of subscription service most people are not doing these deals. Or at least not long term. My cable bill was one example. Another would be Netflix. There are occasionally deals for Netflix, but people aren't waiting for such a deal and then loading up their subscription. Most people are not paying that close of attention to it. When I look at my credit card bills I don't even register those nominal amounts I'm paying for subscriptions (Game Pass, Netflix, Spotify, etc.). They are just automatically paid. And I think Game Pass defaults to auto renew which since that is the default you can assume most are not changing that. And thus once those who have a deal has their subscription expire all of a sudden they're paying $15/month.

 

[ManaByte]

Jaffe highlighted this thread on his steam today.

 

[Kagey K]

Jaffe highlighted this thread on his steam today.

Did he say anything worthwhile regarding it?

 

[ManaByte]

Did he say anything worthwhile regarding it?

Oh yea. He pointed out a couple of posts on the first page and basically said that Spencer would know the numbers and asked what it would take for people to believe him, a trip up to Washington to dig through MS's books?

 

[Azurro]

I didn't want to discuss this topic since it seems any worthwhile criticism of Xbox is getting banned nowadays, but...

Yep. He made sure to explicitly point out that it is already "very, very sustainable". Which means Gamepass is today operating without a loss. Another narrative dies.

That's not how it works. You don't get to say "it's doing great! Really great! It's so, so great, you wouldn't believe it, I was talking to Aaron and he was telling me how the numbers are so, so great, it's fantastic, t's the best anything has ever been.". They are discussing sustainability, great. You then need to sustain that with numbers, but MS would rather obfuscate them to hide the parts of their business that aren't doing that great or are not hitting internal revenue/profit targets.

To me sustainable would be a business that brings in profit or on the way to, growing every year. Do increased MTX from the games they give away plus the relatively paltry monthly sum compensate for the enormous amount of capital they have to put to fund first party games, plus existing deals, plus future deals, plus lost third party sales (due to expectations to be on GamePass), plus taxes, plus infrastructure costs? How does this compare with the traditional model?

Those are the details people need to believe Phil, who from an objective pov, is basically a used car salesman who will say anything to sell Xboxes.

Oh yea. He pointed out a couple of posts on the first page and basically said that Spencer would know the numbers and asked what it would take for people to believe him, a trip up to Washington to dig through MS's books?

That's dumb reasoning by Jaffe. Basically he's asking people to stop using their brains, it's normal to not believe the business model works when the numbers don't support it so far.