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FalsettoVibe
Member
Gotta sell more consoles to get more subscribers. At least until their cloud stuff kicks in.
adamsapple
Or is it just one of Phil's balls in my throat?
Went from sustainable to profitable in 1 year's time.
GG.
GG.
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SlimySnake
Flashless at the Golden Globes
And that right there explains the CoD acquisition and why they want gamepass on Playstation so bad. At some point you reach market saturation on one device and need to expand.
SF Kosmo
Al Jazeera Special Reporter
The cloud stuff could be pretty compelling if they supported it on smart tv platforms instead of just phones and web browsers.
Stuart360
Member
It didnt take a genius to know that. 2.9bil made last year with probably 500mil-1bil in game fees paid tops (after seeing 6mil for GOTG, 600k for Cooking sim, and the Epic leaks, i think thats a fair estimate, if not on the high side).
I doubt it costs more than 2bil a year to run Gamepass, server costs, etc.
I doubt it costs more than 2bil a year to run Gamepass, server costs, etc.
FalsettoVibe
Member
adamsapple
Or is it just one of Phil's balls in my throat?
Sub service has consistently been touted as the one thing off setting their gaming revenue for the last couple of quarters with its growth and increase.
They don't reveal GP numbers more than once a year but I won't be surprised if its between 32~35 million come next January.
It's funny. Because when Spencer said that main reasons for ActiBlizz acquisitions were Blizzard (for PC stuff) and King (for mobile), people laughed.
Same people also laughed when analysts said that biggest announcement from Xbox & Bethesda Showcase this year was partnership with Riot.
Now you clearly see why is Microsoft going this route.
Kokoloko85
Member
Showmethereceipts.gif
Hawking Radiation
Member
Well played Phil Spencer and Xbox division.
Wasn't a believer of GamePass until I tried it for a few months on my Series S. Completely changed the way I consume video game media. I'm now fully on board with any and all subscriptions services having subscribed to Ubisoft Connect, EA Play and Epic Games.
Lots of people eating crow now.
Wasn't a believer of GamePass until I tried it for a few months on my Series S. Completely changed the way I consume video game media. I'm now fully on board with any and all subscriptions services having subscribed to Ubisoft Connect, EA Play and Epic Games.
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StealthGoblin
Banned
I don’t doubt that it is, but when they start adding in AAA games that cost tens if hundreds of millions to produce, and eat into their retail/digital sales by giving them away for ‘free’ - that’s when it gets interesting. That is why Sony don’t want to do it.
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GHG
Member
This is the thing, they can't. They don't give breakdowns for this division.
SlimySnake
Flashless at the Golden Globes
They paid $5 million for Guardians of the Galaxy. Sony and MS both paid $3 million for that ark game. These games come very cheap.
I highly doubt the content costs are more than $1 billion a year. Probably $500 million max. Server costs are not in the billions. Couple of hundred million max including the cost of the console hardware sitting in server warehouses. AWS cloud service packages are very cheap.
SenjutsuSage
Banned
Like I knew it was. And when they sell more consoles and their bigger games release, they will see more growth on the console side.
Barely anyone is making AAA games that cost hundreds of millions of dollars to make. Perhaps the likes of Rockstar that tie down a significant number of expensive AAA devs for 8 years on a single title.
Aside that, they’ve long since been adding first party AAA games to the service.
SenjutsuSage
Banned
Microsoft has done this already with Gears 5, Gears 4, Halo Infinite, Forza Horizon 5. Game Pass brings in significantly more money each year than what it costs to produce even multiple big AAA games. And as Game Pass keeps growing, it becomes even easier to keep doing that.
Heisenberg007
Gold Journalism
But why are we only counting the cost of these third-party deals? A large portion of first-party game development costs should also be accounted in the "Gamepass costs" because those games are made available day one to GP subscribers, which affects lifetime game sales.
Same goes for server and xCloud hardware costs.
SlimySnake
Flashless at the Golden Globes
Thats a valid point.
trying to account for this shit is a pain and it gives companies huge leeway.
Does an xbox all access user revenue (including games sales/mtx) count towards GP? Yes/No?
Who knows? ultimately it dwindles down to the segments and whether thats making enough profits for MS
Beer Baelly
Al Pachinko, Konami President
Helghan
Member
Only 10-15% of those costs the probably...
Robb
Gold Member
Good for MS. Console growth being slow right now isn’t all that surprising. If most first party games hadn’t been delayed and Halo wasn’t such a train wreck I’m sure they’d have more stable growth on console.
Will be interesting to see how things go once their output (and hopefully quality) is more stable.
Will be interesting to see how things go once their output (and hopefully quality) is more stable.
SF Kosmo
Al Jazeera Special Reporter
I dunno, I've used it, it's not bad. I wouldn't take it over native gaming, but the pricing and value proposition is appealing enough and if it worked on my TV I am sure my wife would use it to play stuff in the living room.Until most have decent internet with low latency......
Stadia flopped because they wanted people to buy games with the same pricing model as native games, and that's just dumb. But Game Pass isn't like that.
ChorizoPicozo
Member
It is profitable but he believes is not going to grow significantly more?. Very interesting.
adamsapple
Or is it just one of Phil's balls in my throat?
All those games are also sold at retail. Putting 'a large portion of their development cost' on GP alone would be inaccurate.
That being said, even if you do that, it would still fit into the $3bn, if you take half of that $3bn for all first party development and use a very new AAA game like Guardians at $5m for a 1, 2 year deal to stay on the service.
ManaByte
Gold Member
I thought it took 5 billion a month for it to be viable though.
ProtoByte
Member
The argument has never been that Gamepass will never be profitable. It has been that in order to get it there, the types of games that Microsoft produces are not going to be the cutting edge kind that people wanted Microsoft to become competitive with, or at least purported to last gen. In fact, that their games would even devolve from what they were.
Perhaps Gamepass is "profitable for them" in a fiscal year where they've yet to release a first party game to put down on the balance sheets, and the only one that they will do is a combatless story game with Strega Nona picture book graphics and no voice acting from a "AAA" studio they bought over 3 years ago.
If it continues to be profitable in years where they actually do release games, I don't think people will be particularly happy or impressed by them. They certainly weren't by Halo Infinite.
In any case, if it's so profitable, one wonders why Spencer also said that they'll "have" to increase prices in the damn near same breath.
Perhaps Gamepass is "profitable for them" in a fiscal year where they've yet to release a first party game to put down on the balance sheets, and the only one that they will do is a combatless story game with Strega Nona picture book graphics and no voice acting from a "AAA" studio they bought over 3 years ago.
If it continues to be profitable in years where they actually do release games, I don't think people will be particularly happy or impressed by them. They certainly weren't by Halo Infinite.
In any case, if it's so profitable, one wonders why Spencer also said that they'll "have" to increase prices in the damn near same breath.
This is another thing; I think the announcement of that Keystone thing really goes back to their mythical "2 billion gamers" thing. But the thing about streaming is that it is genuinely a massive money sink. There's no fuzzy math or careful language to get around that. They will burn massive mounds of cash to get that working. Google did, and they've bailed out.
DeepEnigma
Gold Member
You know the real answer to this.
onnextflix5
Member
Only 10% revenue, when u have all ur games day one on it, sounds terrible, WTF
"We're seeing incredibly growth on PC... on console I've seen growth slow down, mainly because at some point you've reached everybody on console that wants to subscribe."
Where is the good news???
"We're seeing incredibly growth on PC... on console I've seen growth slow down, mainly because at some point you've reached everybody on console that wants to subscribe."
Where is the good news???
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SenjutsuSage
Banned
And for people that keep bringing up first-party game development, that's already factored into Game Pass profitability. Game development costs don't just happen the very moment the game is released and being played by all. Game development has been actively ongoing since 2017 when Game Pass launched. Game development was ongoing all of 2018, 2019, 2020, 2021, and of 2022. Game development costs don't just suddenly fall in their lap like, "Okay, since Starfield is releasing now, 100% of the development costs are ready to hit the books."
It doesn't work like that. 2021 has Starfield development costs and the development costs of all other Xbox first-party titles factored in. And all of 2022 so far includes Starfield's development costs. The price to build all first party games don't just suddenly start weighing them down the moment the game releases.
We already know that in calendar year 2021, Game Pass just on consoles had $2.9 billion in revenue. Safe to say no game is that expensive.
It doesn't work like that. 2021 has Starfield development costs and the development costs of all other Xbox first-party titles factored in. And all of 2022 so far includes Starfield's development costs. The price to build all first party games don't just suddenly start weighing them down the moment the game releases.
We already know that in calendar year 2021, Game Pass just on consoles had $2.9 billion in revenue. Safe to say no game is that expensive.
GHG
Member
And that they will need to raise prices.
Banjo64
cumsessed
FF:Enhanced_Reality
Member
Agreed. Sounds like investor talk to me.
adamsapple
Or is it just one of Phil's balls in my throat?
phil_t98
#SonyToo
Yeah the numbers will grow with it. Simple as that. It’s not like the number of subscribers stay fixed is it
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