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.