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[DarkMage619]

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.

Sounds like a good reason for the ABK acquisition to go through. The argument was that MS had a monopoly on cloud streaming and game subscriptions. Looks like those things aren't as popular as once thought and now you are concerned for the future. Either Game pass and cloud streaming are failing or they are monopolistic. Can't have it both ways.

 

[Ass of Can Whooping]

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.

Starfield was releasing in November. It was never hitting their FY before the delay in the first place

 

[Banjo64]

SenjutsuSage

Come on then, let's revisit shall we?

http://[URL]https://www.neogaf.com/...ubscriptions-miss-microsoft’s-target.1621499/

[/URL]

If that guy had a third brain cell he’d be dangerous.

 

[GhostOfTsu]

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

Yes but you and Senjustsu were implying they got 5-7 millions since the 25 millions in January and it's not. Just wanted to clarify

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.

But Starfield was never supposed to come out in those target ending June 2022. They already knew it was for next fiscal year in November 2022.

 

[Thirty7ven]

Sounds like a good reason for the ABK acquisition to go through. The argument was that MS had a monopoly on cloud streaming and game subscriptions. Looks like those things aren't as popular as once thought and now you are concerned for the future. Either Game pass and cloud streaming are failing or they are monopolistic. Can't have it both ways.

Vertical monopolies, read up on it. And anti competitive measures with monopolistic tendencies are MS bread and butter. It’s absolutely an anti competitive move.

And I’ll tell you what, if COD stays multi platform Xbox fans will throw an epic tantrum, and if it doesn’t come to gamepass in the near future they will riot. “It’s really about mobile”.

 

[SenjutsuSage]

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.

Exactly! Efforts to downplay it simply cause they don't grow over 75%? The Pandemic year was a special case. It was only common sense that would cool off some. Microsoft has games on the way that will attract serious attention, and should be big for Game Pass growth.

 

[SlimySnake]

5% of Satya's bonus comes from hittng Gamepass subscriber numbers. I fucking knew it. There is no other reason why would they keep offering $1 subs for 3 months.

Shouldve been revenue. Cant believe MS board is so stupid they dont see how execs could manipulate those bonus incentives.

 

[Ezekiel_]

And 9/11

 

[Elios83]

Given the lack of the 30m subscribers announcement when they were at 25m at the beginning of the year it was clear that things weren't going super well, Spencer's comments on hitting a saturation point on consoles obviously was an other hint.
Things won't go well this holiday season with the total lack of first party releases.
We'll see what happens next year with bigger releases but also taking in consideration the possibility of price increases and more F2P games being released as hinted again by Spencer.

 

[FriulHado]

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

 

[Crayon]

Maybe the price is too high? Try $0.50?

 

[feynoob]

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.

You dont have to exclude Sony. Their marketing deal blocked certain games. That is a fact.

Whether Sony was right or not with that action doesn't matter.

Activision deal doesn't matter in this case. Gamepass games are negotiated in advance.

As for MS marketing deal. That is to the 2 companies. Not every company would agree to MS deal. Victoria is example of that.

 

[reksveks]

5% of Satya's bonus comes from hittng Gamepass subscriber numbers. I fucking knew it. There is no other reason why would they keep offering $1 subs for 3 months.

Shouldve been revenue. Cant believe MS board is so stupid they dont see how execs could manipulate those bonus incentives.

Hmm, how is this new news? This is the same metric as last year.

Maybe you just forgot.

 

[feynoob]

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 dont know what you are trying to say here.

Companies target most of the time is too much, especially when it ties to your bonus.

The service is critical success for them, as that is almost 15% of their gaming division. And that is with poor output.

The service is worth all the investment from MS. Even without Activision-Blizzard's. As long as they have alot of studio to feed the service, or alot of 3rd party deals like EA.

 

[SlimySnake]

Hmm, how is this new news? This is the same metric as last year.

Maybe you just forgot.

It was listed in the hoeg law video which covers Microsoft’s latest earnings and that’s where the incentives breakdowns were listed.

 

[ReBurn]

This is why Series S will be super cheap this holiday.

 

[gothmog]

I guess I understand now why the ATVI deal means so much to them. I imagine you're going to get some subs if you can tie COD to that.

 

[Jaybe]

Document

Some people seem to be saying these Game Pass targets were aspirational, something inflated as a stretch target for executives to hit and that they weren’t meant to actually hit them. Then I read your document (thanks for finding) and MS seems to beat or be close to achieving most of these.

 

[M1chl]

Call Bill Gates to do another pandemic

/s

 

[feynoob]

Some people seem to be saying these Game Pass targets were aspirational, something inflated as a stretch target for executives to hit and that they weren’t meant to actually hit them. Then I read your document (thanks for finding) and MS seems to beat or be close to achieving most of these.

Any company target, is done for bonuses. It's seen as a good performance.

 

[GhostOfTsu]

I guess I understand now why the ATVI deal means so much to them. I imagine you're going to get some subs if you can tie COD to that.

Bobby Kotick is making a new contract with Sony to make sure COD is blocked until 2025+

Good luck reaching those targets you speak of

 

[feynoob]

Bobby Kotick is making a new contract with Sony to make sure COD is blocked until 2025+

Good luck reaching those targets you speak of

 

[DaGwaphics]

Exactly! Efforts to downplay it simply cause they don't grow over 75%? The Pandemic year was a special case. It was only common sense that would cool off some. Microsoft has games on the way that will attract serious attention, and should be big for Game Pass growth.

I think some of it was a path of least resistance thing as well. You were always going to have the core group of the bigger spenders jump on it quickly once they first started pushing it. That will exhaust itself and then future growth could be a little slower in coming. Plus, the obvious situation where the higher the base number gets the harder it is to move by percentage.

If I only have 10 customers and I get 9 more I can scream to the rooftops about my 90% growth. A few years later I have 1,000 customers and gained 100 more, so, just 10% more. I think I'm really doing better with the 10%, aren't I LOL.

They will add a good amount of subscribers in November, December and the very beginning of January, probably their period of greatest gains every year as those Xmas Xbox systems start to come online.

 

[Kerotan]

Well they are competing against the Netflix of gaming so expected.

 

[lh032]

i wonder....if Microsoft released mega hit first party games, will it really help drive gamepass subscribers numbers by double? Seems way too optimistic for me.

And yea, Microsoft doesnt need Xbox console sales is pure BS though, i think they need it as much as Sony.

 

[DeaDPo0L84]

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.

Yea inflation is a killer, the usual $1 for 3 months went up to $1.50 and I was like "screw that noise".

 

[Mibu no ookami]

They have to assume that if growth slowed this year that it will continue to slow next year.

They also know that their costs are continuing to increase particularly with the purchase of Activision.

That's why they're already talking about increasing the price, because it is the easiest way to increase their margins and profitability with limited growth.

You have to ask yourself how many AAA games can Microsoft warrant placing day 1 on game pass.

Can they do 12 a year (i.e. 1 per month) PLUS all the other games that they put on the platform.

Not for 10 dollars a month, which is the equivalent of each subscriber buying 2 AAA games in a year (less than actually given the 70 dollar price tags).

Sony's games have missed the mark lately, probably due to limited hardware sales due to supply shortages but regardless they're not selling enough software.

But Sony will look at Spider-Man 2 and say for 70 doll hairs this game will sell 20 million units. We don't know what other big games they have lined up for 2023. But 1-3 big-time successes a year and they largely match the Game Pass revenue and certainly generate more profit, PLUS their subscription revenue without putting big games on PS+ day 1 AND their software royalties since all of these games aren't on PS+ day one. Basically, they get to have their cake and eat it too.

This is a desperate unsustainable model for Microsoft. Not only will they look to increase prices, but they'll look at lowering compensation for studios putting games on Game Pass, and slowly but surely the content will dry up in favor of Microsoft's internally developed games.

 

[DarkMage619]

Starfield was releasing in November. It was never hitting their FY before the delay in the first place

Then there is no way to spin this. Game pass clearly isn't the juggernaut some regulators think. Phil said growth was slowing and Game pass already has fewer subscribers than PS+. By just about every metric they are behind the market leader. There goes another reason to block the Activision acquisition based monopolistic subscription service reasons. Perhaps after adding the ABK games to game pass we'll see the growth MS was previously predicting.

 

[feynoob]

They have to assume that if growth slowed this year that it will continue to slow next year.

They also know that their costs are continuing to increase particularly with the purchase of Activision.

That's why they're already talking about increasing the price, because it is the easiest way to increase their margins and profitability with limited growth.

You have to ask yourself how many AAA games can Microsoft warrant placing day 1 on game pass.

Can they do 12 a year (i.e. 1 per month) PLUS all the other games that they put on the platform.

Not for 10 dollars a month, which is the equivalent of each subscriber buying 2 AAA games in a year (less than actually given the 70 dollar price tags).

Sony's games have missed the mark lately, probably due to limited hardware sales due to supply shortages but regardless they're not selling enough software.

But Sony will look at Spider-Man 2 and say for 70 doll hairs this game will sell 20 million units. We don't know what other big games they have lined up for 2023. But 1-3 big-time successes a year and they largely match the Game Pass revenue and certainly generate more profit, PLUS their subscription revenue without putting big games on PS+ day 1 AND their software royalties since all of these games aren't on PS+ day one. Basically, they get to have their cake and eat it too.

This is a desperate unsustainable model for Microsoft. Not only will they look to increase prices, but they'll look at lowering compensation for studios putting games on Game Pass, and slowly but surely the content will dry up in favor of Microsoft's internally developed games.

Spoken like a financial person .

The slow is the result of console constraints. Nothing more.

If more consoles in the market, it means growth for gamepass.

All they need to do is ramp up their console production.

This isn't a losing business as you claim to be. MS would have to make the platform very attractive in order to bring new customers and not lose their customers.

 

[adamsapple]

Spoken like a financial person .

The slow is the result of console constraints. Nothing more.

If more consoles in the market, it means growth for gamepass.

All they need to do is ramp up their console production.

This isn't a losing business as you claim to be. MS would have to make the platform very attractive in order to bring new customers and not lose their customers.

Indeed.

More AAA 1P content > more hardware sales > more people adapting to the service on both console and PC to get access to new content.

28% growth without a significant first party AAA game in the year is remarkable in itself.

 

[Mibu no ookami]

Spoken like a financial person .

The slow is the result of console constraints. Nothing more.

If more consoles in the market, it means growth for gamepass.

All they need to do is ramp up their console production.

This isn't a losing business as you claim to be. MS would have to make the platform very attractive in order to bring new customers and not lose their customers.

That can be calculated pretty well. I.e. for every X number of Consoles we produce we get Y number of subscribers. You have to remember many of these users especially on XSX are existing Xbox One users who already have game pass and aren't new subscribers.

They sold more consoles in 2022 than they did in 2021 and 2021 was more consoles than they sold in 2020, yet subscribership is DOWN...

The gamers most interested in Game Pass would be the early adopters to XSX/S not the more casual gamers who wait to get the console years down the line. This is the big difference between Sony and Microsoft, where Sony can sustain subscribership based on a larger userbase needing to pay to play online.

 

[GhostOfTsu]

28% growth without a significant first party AAA game in the year is remarkable in itself.

Psychonauts 2, Flight Sim, Age of Empires 4, Halo Infinite and Forza Horizon 5 is not remarkable?

Remember this is between July 1st 2021 to June 30 2022.

They also launched Cloud Gaming in Brazil, Australia and Asia in that same period. The 28% is all that included.

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

Xbox Game Pass Finally Coming to Indonesia, Malaysia, Philippines, Thailand and Vietnam

Sign up today!

www.google.com

 

[feynoob]

That can be calculated pretty well. I.e. for every X number of Consoles we produce we get Y number of subscribers. You have to remember many of these users especially on XSX are existing Xbox One users who already have game pass and aren't new subscribers.

The math is total existing xbox one userbase purchasing the xsx/sconsole-(not subscribed users+subscribed users)=new subscribed userbase. The remaining ones would be customers to the ecosystem. So any bought new console would be either subscribed, not subscribed, or new customers who are subscribing to the service.

It's why increased xbox production allows more userbase, until the console reaches a ceiling, like Ps+ on PS. At that point, there would be no more growth, until xbox does 100+m consoles. It's only option would be cloud gaming or PC gamepass.

They sold more consoles in 2022 than they did in 2021 and 2021 was more consoles than they sold in 2020, yet subscribership is DOWN...

The subscriber's aren't down. What it's down is the new expected users. Because the new console is being purchased by people who are on gamepass and people who aren't on gamepass. This leaves less room for new users, who wants to be part of gamepass.

The gamers most interested in Game Pass would be the early adopters to XSX/S not the more casual gamers who wait to get the console years down the line. This is the big difference between Sony and Microsoft, where Sony can sustain subscribership based on a larger userbase needing to pay to play online.

It's why diversity is important. Xbox needs to focus on more different games, in order to attract those users. Limiting games would hinder that process.

GHG stated, Content is King. Without enough content, you wont attract new users, or even make existing xbox users join the service.

 

[GHG]

Psychonauts 2, Flight Sim, Age of Empires 4, Halo Infinite and Forza Horizon 5 is not remarkable?

Remember this is between July 1st 2021 to June 30 2022.

They also launched Cloud Gaming in Brazil, Australia and Asia in that same period. The 28% is all that included.

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

Xbox Game Pass Finally Coming to Indonesia, Malaysia, Philippines, Thailand and Vietnam

Sign up today!

www.google.com

It goes from "publisher of the year" and "neogaf game of the year" to "not remarkable" on a whim.

I can't keep up anymore.

 

[feynoob]

It goes from "publisher of the year" and "neogaf game of the year" to "not remarkable" on a whim.

I can't keep up anymore.

Anyone that uses these term needs to ashamed of themselves.
A title means nothing, without a result.
Real world cares about a result. Not a title.

 

[GHG]

Anyone that uses these term needs to ashamed of themselves.
A title means nothing, without a result.
Real world cares about a result. Not a title.

Don't worry, attempted to explain how meaningless those "titles" are ad infinitum, especially when those things included consideration for Halo Infinite at the time.

People don't care about hollow PR/marketing victories, last year was weak overall and you're only as good as your next game.

 

[tusharngf]

games drought continues from 2010... They never had consistent AAA releases in any of these last years.

 

[sainraja]

Their prices might also go up next year based on this article:
https://www.pcmag.com/news/xbox-consoles-game-pass-games-may-rise-in-price-after-the-holidays

Excerpt:

During a chat at the Wall Street Journal Tech Live conference this week, Xbox boss Phil Spencer hinted that price rises are coming. As The Verge's Tom Warren tweeted(Opens in a new window), Spencer said, "I do think at some point we'll have to raise the prices on certain things, but going into this holiday we thought it was important to maintain the prices."

In fact, the price rises for Xbox may end up being more wide ranging than just the cost of the hardware. Spencer went on to say(Opens in a new window), "We've held price on our console, we've held price on games... and our subscription. I don't think we'll be able to do that forever. I do think at some point we'll have to raise some prices on certain things..."

 

[Three]

You dont have to exclude Sony. Their marketing deal blocked certain games. That is a fact.

Whether Sony was right or not with that action doesn't matter.

Activision deal doesn't matter in this case. Gamepass games are negotiated in advance.

As for MS marketing deal. That is to the 2 companies. Not every company would agree to MS deal. Victoria is example of that.

There were plenty of other games other than the ones sony had marketing deals with. Even games from previous years. MS would have been aware of those marketing deals in advance too. MS didn’t have many big games on gamepass this year because it didn’t spend on them.

 

[feynoob]

There were plenty of other games other than the ones sony had marketing deals with. Even games from previous years. MS would have been aware of those marketing deals in advance too. MS didn’t have many big games on gamepass this year because it didn’t spend on them.

Yes there are other games. But the problem is knowing, which game is blocked, and which game isnt.

We saw the first 3-4 month of this year with big games. Then it went quite.

MS is willing to spend the money, especially with how they snatched Guardian of galaxy, and those day1 games.

 

[wolffy71]

https://www.axios.com/2022/10/27/microsoft-xbox-game-pass-miss

This is information based on a new financial filing from Microsoft. Yesterday, at the WSJ conference, Phil Spencer had stated that Game pass was profitable, but that growth was slowing on console.

• Game Pass achieved 28% growth for the fiscal year ending June 30, 2022, but the target was 73% growth rate. This fell short of a target tied to the pay of CEO Satya Nadella and other top executives. This is the second year in a row Game Pass has missed the growth target, having exceeded the target in 2020.
• Microsoft wasn't specific about subscriber target counts, but claimed delivery of "over 25 million Game Pass subscriptions."
• The success of Game Pass is pertinent to the Activision deal, as the UK's Competition & Markets Authority has suggested that if Microsoft puts Call of Duty on Game Pass, there could be "substantial lessening of competition" in "multi-game subscription services." Microsoft denies that putting Call of Duty on Game Pass would require blocking the deal, arguing that PlayStation could put better exclusives on its own subscription service or even offer Game Pass on PlayStation.

There you go, no reason for anyone to act like the Activision acquisition will do any harm to Sony. It's just a service, not even hitting growth protections

 

[MScarpa]

And 9/11

I hope this isn't September 11th, 2001. A lot of people lost loved ones. Not funny.

 

[remember_spinal]

I hope this isn't September 11th, 2001. A lot of people lost loved ones. Not funny.

No september 11th, 2013

 

[Three]

Yes there are other games. But the problem is knowing, which game is blocked, and which game isnt.

Why would that be a problem? If MS is interested in a game they approach a dev and ask for a gamepass release and they either reject them because they don't want to or because there is a marketing contract.

We saw the first 3-4 month of this year with big games. Then it went quite.

MS is willing to spend the money, especially with how they snatched Guardian of galaxy, and those day1 games.

Games that MS had a marketing deal with would be a good start of knowning which ones. Battlefield 2042 and Cyberpunk had MS marketing deals. Lego Skywalker had no Sony marketing dea, Elden Ring had no marketing deal, Sonic Frontiers release has no marketing deal. There are more games without a Sony marketing deal than there are with. The reason it went quiet after the first 3 months of this year has nothing to do with Sony and everything to do with MS not spending anymore after the Activision deal.

it would have applied for games in 2021 too in that case yet MS did fine. Why did it start this year only? Sony were doing marketing deals prior to 2022. The Cod one is from 2015, REVIII 2020. it isn't some new thing.

 

[bender]

 

[ChorizoPicozo]

Haven't keep it up with the thread. ...How are the defense/offense force doing?

 

[feynoob]

Why would that be a problem? If MS is interested in a game they approach a dev and ask for a gamepass release and they either reject them because they don't want to or because there is a marketing contract.

Didnt you read Sony marketing clause? They have the first right for subscription service.

Also, devs not agreeing with MS is very normal. Victoria 3 is good example of that.

Both of these are factors. You cant exclude one, while calling the other.

Games that MS had a marketing deal with would be a good start of knowning which ones. Battlefield 2042 and Cyberpunk had MS marketing deals. Lego Skywalker had no Sony marketing dea, Elden Ring had no marketing deal, Sonic Frontiers release has no marketing deal. There are more games without a Sony marketing deal than there are with. The reason it went quiet after the first 3 months of this year has nothing to do with Sony and everything to do with MS not spending anymore after the Activision deal.

it would have applied for games in 2021 too in that case yet MS did fine. Why did it start this year only? Sony were doing marketing deals prior to 2022. The Cod one is from 2015, REVIII 2020. it isn't some new thing.

And those games are put in negotiation table. They discuss about it. If both party agree to it, they would make the deal.

As for battlefield, doesnt EA has a contract with MS? Their woud comes come to EA play, which gamepass has.

Activision deal has no impact about these negotiation. you stretching this too far.

 

[feynoob]

Haven't keep it up with the thread. ...How are the defense/offense force doing?

Just typical normal stuff.
This time, people are not reading very well, and talking about stuff they dont understand.

Other than that, its very tame here. Cant say the same about the price thread. That thing is bloodbath.

 

[Thirty7ven]

It goes from "publisher of the year" and "neogaf game of the year" to "not remarkable" on a whim.

I can't keep up anymore.

Halo and Forza literally Xbox’s biggest exclusives too, it’s mind blowing.

 

[teraflops]

The PC side will eventually hit a peak too. Most PC gamers will stick with Steam.

Yup acquiring Steam would probably be the only way to take their marketshare. Epic has literally been giving AAA games away for years now (plus locking up popular exclusives) and probably hasn't even put a dent in Steam's sales.