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[SenjutsuSage]

With a pending $68.7 billion acquisition where Game Pass is of issue, this isn't the kind of news Microsoft will mind. Game Pass isn't so scary and dominant that it's just growing out of control and overwhelming the entire rest of the market.

And while I'm sure this will mean nothing to some, people shouldn't confuse very aggressive performance targets tied to exorbitant bonuses for top executives as a sign something isn't proving successful. Game Pass is almost certainly finding its mark, but these targets were set at a time when they were expecting a much different 2023 in terms of major first-party game launches.

 

[Zok310]

The delay of Starfield, recession/inflation concerns, and a slow year for AAA titles I'm sure all factor in.

2023 and beyond should see much, much larger growth though.

What recession?
The length we go to make excuses for xbox failing.

 

[MacReady13]

I just can't believe it. I can get all these awesome games for "free" yet not every single Xbox console owner has game pass? I wonder why? Can't be cause no one wants subscription services as no one like physical games anymore. Games are worth far too much (especially on PS5) so that can't be an excuse to NOT get a gaming sub. And they have approx 300 awesome games so lack of games is no excuse. What possible reason could it be that numbers aren't rising like they expected??? I mean yes, the mega mainstream Starfield isn't out yet so that might be a reason but surely not enough of a reason. We are in a recession and a cheap sub service that our saviour Phil didn't raise the price on is awesome value so why the lack of extra subscribers???

 

[Thirty7ven]

Doesn't more users means more money?

Subscribers paying standard price also raises revenue. The average price people were paying for Gamepass was 8$ according to Colin Moriarthy, I didn’t do the math myself.

 

[DeepEnigma]

With a pending $68.7 billion acquisition where Game Pass is of issue, this isn't the kind of news Microsoft will mind. Game Pass isn't so scary and dominant that it's just growing out of control and overwhelming the entire rest of the market.

Then there's this... which is mainly the CMA focus with cloud portion.

 

[DaGwaphics]

It’s still growing by 28% YoY, so stuck isn’t a word I’d use.

Important to note also, that while they might figure the bonus in the middle of the year like this, the public numbers they give are always following the holiday bump in January. They still have a couple important months to go.

But certainly more heavy hitters from first-party would help. They just aren't going to generate the buzz without those. 28% YoY is hardly bad though, not when you were as successful as they are already.

 

[SenjutsuSage]

If the subs aren’t increasing as expected thrn it means that not enough people think that the current offering offers enough value.

It has added 15 million in just the last two years. We have to also consider that there are still console shortages and their biggest releases are delayed. However high their targets might be, it's steadily growing nonetheless.

At the current subscriber counts, 28% growth would equate to 7 million more subscribers, which is exactly how much it grew since jan 2021 to jan 2022. Even taking the 18 million subscriber count at the start of 2021, 28% growth = 5 million subscribers.

So while they aren't hitting those super-aggressive targets, these aren't easily dismissed numbers. There is major growth in game pass.

 

[Thirty7ven]

I just can't believe it. I can get all these awesome games for "free" yet not every single Xbox console owner has game pass? I wonder why? Can't be cause no one wants subscription services as no one like physical games anymore. Games are worth far too much (especially on PS5) so that can't be an excuse to NOT get a gaming sub. And they have approx 300 awesome games so lack of games is no excuse. What possible reason could it be that numbers aren't rising like they expected??? I mean yes, the mega mainstream Starfield isn't out yet so that might be a reason but surely not enough of a reason. We are in a recession and a cheap sub service that our saviour Phil didn't raise the price on is awesome value so why the lack of extra subscribers???

MS has positioned Xbox as the value offer in the console market, which should attract value conscious costumers.

Xbox One didn’t have a particularly good attach ratio, and I expect a lot of Xbox customers to sub and unsub depending on the month.

 

[GHG]

As with all subscription services, content is king and quite frankly their output hasn't been good enough for a while now. If they wish to sell subscriptions and for people to stay subscribed it's imperative they have a steady flow of high quality games, something they've never managed from a 1st party point of view.

But overall I'm not surprised, everyone knows about this service now, there's only so much it can grow.

Called it that this would happen at the start of the year:

This is why I just laugh when people behave like these subscription services can grow quickly with huge YoY % increases forever. It's just not realistic. There will come a point when everyone knows about it and the people that want to subscribe will have already done so.

Price increases are up next, it's the natural evolution once growth slows for a sustained period of time.

 

[StealthGoblin]

That’s a wildly optimistic target but I’m sure delays factored into that. The comment about GamePass on PlayStation is hilarious - Microsoft would be frothing at the mouth for that.

Makes me wonder whether we’ll find out any breakdowns from SIE about extra and premium. Anecdotally every person I know IRL has extra and about 1/3 have premium. It would be interesting if they’ve already had a huge amount of members up their subs.

 

[feynoob]

Subscribers paying standard price also raises revenue. The average price people were paying for Gamepass was 8$ according to Colin Moriarthy, I didn’t do the math myself.

He was wrong, since he was counting the 1$ too.
1$+10$+15$/3=8.6

But since the 1$ is a promotional sub. It won't count toward the revenue (hope I am not wrong). This is just according to that Brazil document.
The current average should be (10$pc+10$base gamepass+15$ultimate)/3=11.6.

10$ is optimal equation for calculating the service. Even though, we are missing $1.6. It should give us an estimate guess for the userbase and revenue.

 

[feynoob]

I just can't believe it. I can get all these awesome games for "free" yet not every single Xbox console owner has game pass? I wonder why? Can't be cause no one wants subscription services as no one like physical games anymore. Games are worth far too much (especially on PS5) so that can't be an excuse to NOT get a gaming sub. And they have approx 300 awesome games so lack of games is no excuse. What possible reason could it be that numbers aren't rising like they expected??? I mean yes, the mega mainstream Starfield isn't out yet so that might be a reason but surely not enough of a reason. We are in a recession and a cheap sub service that our saviour Phil didn't raise the price on is awesome value so why the lack of extra subscribers???

That is how console userbase is.

PS is clear example of that. They have more than 100m userbase. Yet, only 47m have ps+. And what is worse is that, 3m of them had psnow.

Having alot of userbase doesn't mean they will sub to it. You need to provide content.

As with all subscription services, content is king and quite frankly their output hasn't been good enough for a while now. If they wish to sell subscriptions and for people to stay subscribed it's imperative they have a steady flow of high quality games, something they've never managed from a 1st party point of view.

 

[Lone Wolf]

Create a 'First party only' tier, and fully become third party and release all your games on PlayStation and Switch.

Everyone is allowed to dream, even you.

 

[FalsettoVibe]

MS has positioned Xbox as the value offer in the console market, which should attract value conscious costumers.

Xbox One didn’t have a particularly good attach ratio, and I expect a lot of Xbox customers to sub and unsub depending on the month.

My feelings exactly.

 

[GhostOfTsu]

Only 28% after adding many markets like Vietnam, Malaysia, Philippines and all the Cloud subscribers on mobile

They will learn the hard way like Stadia and Sony did. Those mobile cloud customers don't exist.

Damn...going from a 72% prediction to an actual 28% is...something for sure.

I honestly don't get how they expected it to grow so much? For sure at that point they knew their lineup right? Did they expect Starfield to really come out this year and do all the work?

Phil said to Satya they would reach billions of gamers on cloud. I'm sure the growth was supposed to come from there, regardless of Starfield and all that.

 

[Swift_Star]

Like I said: Phil is a chronic liar.

 

[GHG]

SenjutsuSage

Come on then, let's revisit shall we?

We shall revisit it before the end of the year most likely.

https://www.neogaf.com/threads/xbox-game-pass-subscriptions-miss-microsoft%E2%80%99s-target.1621499/

Microsoft in FY20 beat their Game Pass target by 14%. They achieved 85.75% growth with a target of 71% growth. For FY21 their target was 47.79% growth, they achieved 37.48% growth. So Game Pass was already running ahead of their projected targets as of 2020, which makes missing this year's target not quite as bad. These numbers, before titles like Forza Horizon 5, Halo Infinite and Starfield, are great.

It's in the numbers themselves.

Last year Microsoft projected 71% growth for Game Pass, but beat that with 85.75% growth. This fiscal year they had a target of 47.79% and achieved 37.48%. If you combine last fiscal year and this most recent one, Game Pass is clearly ahead of Microsoft's projected growth targets by 4.44%. And this is all before Microsoft's biggest game releases.

Yes, that's true, and taking FY2019 numbers into account, and after those figures were analyzed, Microsoft set a 71% growth target for Game Pass FY2020, which Game Pass beat 14%. So in the prior year, they overperformed their projection, and in this year they underperformed them. Taken together, this fiscal year and last, Game Pass is beating Microsoft internal projections for subscriber growth, all without Forza Horizon 5, Halo Infinite or Starfield.

If they achieved 85.75% growth in FY2020 then pretty much anything is possible. These Game Pass growth figures Microsoft just provided don't account for anything past June 30th, 2021. 3 whole months have passed since that time.

Next fiscal year 2022 will include not just Forza Horizon 5 and Halo Infinite's release, but likely Redfall's also. Game Pass is in a very strong position.

Going into next fiscal year, Microsoft has Halo Infinite, Forza Horizon 5, likely Redfall, as well as the fact that Cloud Gaming as part of Game Pass Ultimate just launched in Australia, Brazil, Japan and Mexico.

Xbox Cloud Gaming Launches in Australia, Brazil, Japan, and Mexico - Xbox Wire

At Xbox, our mission is simple: bring the joy and community of gaming to everyone on the planet. To achieve that, we aspire to empower everyone to play the games they want, with the people they want, anywhere they want. We are creating a future that combines the gaming heritage of Xbox and the...

news.xbox.com

Cloud Gaming has apparently been so popular in Brazil that server capacity has been an issue. So we shall see where things are at the next time Microsoft announces numbers, which Phil confirmed yesterday they will be doing, and also what growth looks like Fiscal Year 2022 ending June 30th.

 

[remember_spinal]

73% sounds like what's known as an 'aspirational' goal.
Something that everyone knows isn't going to be achieved but is parroted anyway to try to motivate the organization. My experience is that they often have the inverse affect though.

Idk about that considering their bonuses are tied to those projections.

 

[MacReady13]

What recession?
The length we go to make excuses for xbox failing.

Funny that recession would almost seem like the perfect time to get a cheap alternative to paying for full priced games...

 

[remember_spinal]

but we need to wait until titles like Starfield, which I think will have a similar reception to Elden Ring

Thats mighty optimistic of you

 

[Three]

I can think of several stuff.

2022 having a bad year for gaming's. Not enough AAA games for gamepass.
Next gen games means restricted user base.
Sony marketing, which blocks gamepass from getting certain games.

All these make it hard for the service to grow fast.

If cloud gaming was functional, then the growth would have been massive. Just controller and a sub.

There were plenty of games MS even had marketing rights to. I think what made them stop on those is that the ABK deal fell on their lap and they barely made additional ones even with the ones they had marketing rights to. Nothing to do with other deals by Sony. They would have known about those.

 

[jm89]

SenjutsuSage

Come on then, let's revisit shall we?

https://www.neogaf.com/threads/xbox-game-pass-subscriptions-miss-microsoft%E2%80%99s-target.1621499/

This dude senjutsu better be a ms shareholder, cause otherwise I am at a loss for words with what he is.

 

[SlimySnake]

The delay of Starfield, recession/inflation concerns, and a slow year for AAA titles I'm sure all factor in.

You forgot coronavirus and hurricane katrina.

 

[GHG]

This dude senjutsu better be a ms shareholder, cause otherwise I am at a loss for words with what he is.

Well we know he's balls deep in ATVI so I'll assume he also is in MSFT.

You forgot coronavirus and hurricane katrina.

It's funny to read back on last year's thread on this subject, all the same excuses popping up again.

 

[sendit]

This is a pro-consumer PR release. This means more 1 dollar subs.

 

[remember_spinal]

You forgot coronavirus and hurricane katrina.

And 9/11

 

[Kacho]

Things should improve when they get around to releasing games regularly.

I still firmly believe that the number of people interested in subscription services like this for gaming is tiny.

 

[SlimySnake]

Expected with no huge big hitters this year. Will be a concern if its still slow next year with starfield etc

If it was expected then the execs shouldve opened up their wallets and paid for the few big AAA games this year like Elden Rings, Dying Light 2, Callisto Protocol, Gotham Knights, Harry Potter which eventually ended up getting delayed.

I feel bad for anyone who paid the $180 fee up front after the shit year gamepass had all year.

 

[GHG]

If it was expected then the execs shouldve opened up their wallets and paid for the few big AAA games this year like Elden Rings, Dying Light 2, Callisto Protocol, Gotham Knights, Harry Potter which eventually ended up getting delayed.

I feel bad for anyone who paid the $180 fee up front after the shit year gamepass had all year.

Most people aren't paying full price, we know that much. It averages out at around ~$6 a month for the last quarters figures based on the data we have available.

 

[Bonfires Down]

Man cannot live by Cooking Sim alone. Indies are cool but day 1 AAA is what will drive subs.

 

[DeepEnigma]

If it was expected then the execs shouldve opened up their wallets and paid for the few big AAA games this year like Elden Rings, Dying Light 2, Callisto Protocol, Gotham Knights, Harry Potter which eventually ended up getting delayed.

I feel bad for anyone who paid the $180 fee up front after the shit year gamepass had all year.

No, because then it would not have been "profitable for them."

Gotham on the other hand, that stinker is definitely going to be on one of the two sub services.

 

[SlimySnake]

Most people aren't paying full price, we know that much. It averages out at around ~$6 a month for the last quarters figures based on the data we have available.

I thought it made $2.9 billion last year with 25 million subs. That comes out out to $116 per person. Or roughly $11 per month.

 

[DenchDeckard]

If it was expected then the execs shouldve opened up their wallets and paid for the few big AAA games this year like Elden Rings, Dying Light 2, Callisto Protocol, Gotham Knights, Harry Potter which eventually ended up getting delayed.

I feel bad for anyone who paid the $180 fee up front after the shit year gamepass had all year.

I completely agree that they should have opened the wallet to get some big games but for me I've been more than happy with continued play of forza horizon 5, tunic, tiny kin, Scorn, plagues tale, persona 5, deathloop and many more..

But I do completely agree, calisto protocol would have been huge if it doesn't have any Sony marketing. Dying light 2 etc.

 

[SenjutsuSage]

A reminder... 28% growth literally means north of 5-7 million new subscribers at current subscriber numbers.

 

[The Shepard]

And 9/11

And the Russian invasion of Ukraine

 

[DaGwaphics]

A reminder... 28% growth literally means north of 5-7 million new subscribers at current subscriber numbers.

ssh... The detractors have not realized that yet.

If they can string together 25%+ growth over the next few years they'd be at 50m subs. Not bad at all. With big releases they might do better still, but growing by nearly 30% per year is nothing to sneeze at.

 

[SlimySnake]

73% is an insane expectation when you aren’t putting out compelling content for a whole year. That’s on them and the management of their teams. 2023 should be better but what did you expect a full year of no first party games?

Pretty sure last year they said their expectation was 48% and they fell short because they only did 37%. So instead of managing their expectations, they raised it to 78%???

You gotta wonder just why these people who so much faith in Gamepass despite five years of missing expectations. Who is continuing to mislead these execs and sell them this gold mine that is clearly just a decent side hustle at best. Gamepass, like streaming services, are meant to complement the box office and the traditional sales of video games. They are not the main course. They are going out their gobbling up entire publishers over this service, and everyone of the execs seems to be fine with it. The moment acquiring Zenimax didnt move the needle, they shouldve taken a step back instead of going all in with another even bigger purchase.

It seems even the news of the CoD acquisition didnt help them. I know the deal is not done yet but technically it wont be on gamepass for another 3 years anyway so its likely they will keep seeing slow growth until CoD comes out in 2027. there is so much more you can do with that gamepass money right now when it matters most.

 

[GHG]

I thought it made $2.9 billion last year with 25 million subs. That comes out out to $116 per person. Or roughly $11 per month.

That's last years figures.

I'm going off Phil's statement yesterday stating it accounts for 10-15% of Xbox's revenue. Revenue for the last quarter was 3.61 billion.

We now know total subscriber numbers are ~25 million so calculations can be done on that. $6 a month is assuming 12.5% of total revenue for the quarter with 25 million subs.

 

[SlimySnake]

I completely agree that they should have opened the wallet to get some big games but for me I've been more than happy with continued play of forza horizon 5, tunic, tiny kin, Scorn, plagues tale, persona 5, deathloop and many more..

But I do completely agree, calisto protocol would have been huge if it doesn't have any Sony marketing. Dying light 2 etc.

i know i had my thread locked for bitching about hot wheels not being free but that turned out to be their one big release of the year. Shouldve made an exception for that DLC.

 

[anthony2690]

I can imagine with pretty much every upcoming first party game except pentiment & aoe2 definitive edition skipping xbox one doesn't help, same with delays to Starfield and Redfall.

Would probably explain the push for the pc player base too, as they can probably find it easier to expand the Xbox sub base when more people own the series consoles.

 

[Bojanglez]

I just can't believe it. I can get all these awesome games for "free" yet not every single Xbox console owner has game pass? I wonder why? Can't be cause no one wants subscription services as no one like physical games anymore. Games are worth far too much (especially on PS5) so that can't be an excuse to NOT get a gaming sub. And they have approx 300 awesome games so lack of games is no excuse. What possible reason could it be that numbers aren't rising like they expected??? I mean yes, the mega mainstream Starfield isn't out yet so that might be a reason but surely not enough of a reason. We are in a recession and a cheap sub service that our saviour Phil didn't raise the price on is awesome value so why the lack of extra subscribers???

A lot of people just buy consoles to play FIFA and Fortnite

 

[Warablo]

There is only so much growth

 

[SenkiDala]

The delay of Starfield, recession/inflation concerns, and a slow year for AAA titles I'm sure all factor in.

2023 and beyond should see much, much larger growth though.

Not against you, but I started laughing reading at your comment.

Since 2014 Spencer became the head of Xbox and since that year, EVERYYEAR, around January/March "this year is our BIGGEST YEAR EVER" and around October November "well NEXT YEAR will be our BIGGEST YEAR EVER, you will be blown away" and every year... Nothing happens.

And God, they're doing it again with the XGP, that's funny...

I own an Xbox SX (I owned every Xbox consoles on day one since the 1st one) I love Xbox, but man, Phil is great at giving a good image to the Xbox brand, but he's so bad at bringing awesome exclusives on it. the Xbox consoles, Sony is destroying them, every single year, since 2013, that's ridiculous.

Still tons of great games to play and Xbox but the situation is just funny.

 

[GHG]

A reminder... 28% growth literally means north of 5-7 million new subscribers at current subscriber numbers.

Can we have some of that napkin math from last year to explain how ahead/behind of their projections they are over the last 2 years?

 

[GhostOfTsu]

ssh... The detractors have not realized that yet.

If they can string together 25%+ growth over the next few years they'd be at 50m subs. Not bad at all. With big releases they might do better still, but growing by nearly 30% per year is nothing to sneeze at.

This is from july 2021 so it includes Psychonauts 2, Flight Sim, Horizon 5 and Halo + Cloud mobile. The 25 millions from January is also included in those growth numbers.

 

[DaGwaphics]

This is from july 2021 so it includes Psychonauts 2, Flight Sim, Horizon 5 and Halo + Cloud mobile. The 25 millions from January is also included in those growth numbers.

YoY, is YoY. If they can maintain this kind of growth for the next 3 or 4 years they are on easy street.

 

[Thirty7ven]

Every subscription platform that fails to meet targets this much over two years is met with with a critical eye over its future.

This is post Halo Infinite and Forza Horizon. This is post “we’re not in the Xbox business we’re in the gamepass business now”.

In a world where AB doesn’t go through, they are in trouble because you can’t go back on the strategy without killing the business entirely.

 

[DarkMage619]

Most of their big games were releasing after June 2022 before they were even delayed

The expectation was that there would be a some major AAA releases this year. That would be enough to forecast growth. None of those titles came out. The announcement of the delay for Starfield was before their June showcase. That absolutely would affect growth.

 

[remember_spinal]

Every subscription platform that fails to meet targets this much over two years is met with with a critical eye over its future.

This is post Halo Infinite and Forza Horizon. This is post “we’re not in the Xbox business we’re in the gamepass business now”.

In a world where AB doesn’t go through, they are in trouble because you can’t go back on the strategy without killing the business entirely.

I think AB going through would put even more pressure on them. I think thats why they aren’t in a rush to pull CoD off playstation and to add it to Switch.

They are using the playstation contract to justify why it won’t be on gamepass but im sure they’re probably happy they don’t have to do it right now.

 

[TaylorSwiftFan]

It has added 15 million in just the last two years. We have to also consider that there are still console shortages and their biggest releases are delayed. However high their targets might be, it's steadily growing nonetheless.

At the current subscriber counts, 28% growth would equate to 7 million more subscribers, which is exactly how much it grew since jan 2021 to jan 2022. Even taking the 18 million subscriber count at the start of 2021, 28% growth = 5 million subscribers.

So while they aren't hitting those super-aggressive targets, these aren't easily dismissed numbers. There is major growth in game pass.

It grew by 39% from Jan 2021 to Jan 2022 but only by 28% from Jun 2021 to Jun 2022. While on paper those 5M new subscribers look good, the rate of growth has decreased by quite a bit for a service that’s so new and that’s available on PC and Xbox. If anything that 73% growth number sounds low - execs probably lowballing it to get their bonus.