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[akimbo009]

If a service is profitable that is generally an indicator that the service is a success. It's not the only indicator, and sometimes something can sell well but still be considered a failure. It would be helpful for you to understand that I have only been referring to Game Pass in this discussion, not Xbox or Microsoft as a whole. It is possible for Xbox/Microsoft to profit while Game Pass is simultaneously losing money. And again, I'm not saying that's what is happening. I am only saying that since we don't know whether or not Game Pass is profitable it is still a possibility that it is not.



My thoughts on this are irrelevant.



No further clarification was needed in my post. You skimmed my response and then responded sarcastically. I'm not going to apologize for your inability to comprehend the words that I typed. That's on you.



I said I feel the same way about PlayStation Plus' subscription service as I do with Game Pass' subscription service. If you see that as selective criticism then you have serious issues.



None of this had anything to do with my response to you. Also, can you please explain the conclusions that I am drawing? And can you explain my narrative? The only narrative that I know that I made is that we don't know for certain if Game Pass is profitable or not because the only reported figures are revenue, and revenue isn't the same as profit. That's the ONLY stance I have taken in this thread, and that isn't a statement that is up for debate. It's fact.

They are spending $70B on it and making $2.9B on it.. it'll be a one time cost and write off to MS, but it's clearly not in the black and won't be. They are building the business through investment still - so it profit doesn't factor into their decision since they aren't seeking it (nor is it necessary to claim success).

 

[IFireflyl]

They are spending $70B on it and making $2.9B on it.. it'll be a one time cost and write off to MS, but it's clearly not in the black and won't be. They are building the business through investment still - so it profit doesn't factor into their decision since they aren't seeking it (nor is it necessary to claim success).

If you think you're arguing against me, think again. I'm not disagreeing with you. Again, my only purpose in joining in the conversation initially was to correct someone who stated that Game Pass is turning a profit. My correction only went so far as to tell them that we don't know for certain that that is correct. I stated that it is possible that Game Pass is turning a profit, and that it is equally possible that it is not turning a profit. Since we don't have access to their outgoing expenses we can't know for certain.

And to be clear, I'm not even saying that we need to know if they're profitable. My whole point was that we don't know for certain if they are or not (which, again, isn't a debatable claim because it's fact). Then people started asking why we care about profit, and I gave my personal reasoning for caring about profit. Then you tried to argue with me and I'm honestly not sure why.

So let me turn the tables and use your own tactics against you: why does it matter if I care if Game Pass is profitable? What does it hurt you for me to be curious as to whether Game Pass is profitable?

 

[akimbo009]

If you think you're arguing against me, think again. I'm not disagreeing with you. Again, my only purpose in joining in the conversation initially was to correct someone who stated that Game Pass is turning a profit. My correction only went so far as to tell them that we don't know for certain that that is correct. I stated that it is possible that Game Pass is turning a profit, and that it is equally possible that it is not turning a profit. Since we don't have access to their outgoing expenses we can't know for certain.

And to be clear, I'm not even saying that we need to know if they're profitable. My whole point was that we don't know for certain if they are or not (which, again, isn't a debatable claim because it's fact). Then people started asking why we care about profit, and I gave my personal reasoning for caring about profit. Then you tried to argue with me and I'm honestly not sure why.

So let me turn the tables and use your own tactics against you: why does it matter if I care if Game Pass is profitable? What does it hurt you for me to be curious as to whether Game Pass is profitable?

It doesn't - but you won't get an answer here cause no knows it - but we have reasonable understanding that it's not and likely will not for quite sometime because it doesn't matter in context of growing the business. It's the wrong question to ask...

For example, looking at the recent Ark funding, a little question can be are they spending enough money to capture the right content - are they seen as an enticing approach for 3rd parities to continue to get into these contracts - is it profitable enough for them (3rd parties) if it creates a modal experience for customers? I'm curious if some developers will decide if it's the wrong model for them leaving GPs pipeline dry.

That's way more interesting than the obvious answer or lack of importance whether a trillion dollar business is profitable on a $2.9B line of business.

 

[IFireflyl]

It doesn't - but you won't get an answer here cause no knows it - but we have reasonable understanding that it's not and likely will not for quite sometime because it doesn't matter in context of growing the business. It's the wrong question to ask...

For example, looking at the recent Ark funding, a little question can be are they spending enough money to capture the right content - are they seen as an enticing approach for 3rd parities to continue to get into these contracts - is it profitable enough for them (3rd parties) if it creates a modal experience for customers? I'm curious if some developers will decide if it's the wrong model for them leaving GPs pipeline dry.

That's way more interesting than the obvious answer or lack of importance whether a trillion dollar business is profitable on a $2.9B line of business.

I'm not looking for answers on here regarding whether or not Game Pass is profitable. I just don't want people shutting down the other side of a conversation simply because they have a different opinion. If someone thinks Game Pass is profitable that's great. If someone else thinks that it isn't profitable that's great too. As long as neither party is pretending that it's fact one way or another, or being belligerent, or console warring, then it doesn't matter that there is a difference in opinion.

You can say it's the wrong question to ask, but what you mean is that it's not the question you would ask. That doesn't give you the right to shut someone else down who does want to ask about profitability. Too many people in this thread are taking other people's thoughts and opinions far too personally. Let people have their own opinions, and let them talk about what they want to talk about (on topic of course). If someone gets out of line then report them and let the moderators do their thing. But don't try to stifle conversation because you think it's pointless.

As an aside, I agree with your last two paragraphs. That is a more interesting question than whether or not Game Pass is profitable.

 

[thicc_girls_are_teh_best]

In considering that the $2.9 billion/year was not only just in reference to revenue, but also includes XBL Gold figures in it, and considering that profit margins for the subscription services might be somewhat higher than than the normal revenue/profit margins of console divisions in and of themselves...

If the average ARPU for PS+ in 2021 was ~ $52/year, and assuming XBL Gold had half the subs of PS+ (24 million vs 48 million), XBL Gold would account for $1.248 billion of that $2.9 billion revenue. Factor out the licensing costs for 3P content in XBL Gold and that probably drops down by $20 million - $30 million (considering XBL Gold has had a mostly subpar selection of games for a while now). GamePass would've accounted for the remaining $1.652 billion...in revenue.

The actual profits they're getting for GamePass is probably notably lower. Actual hosting costs on the server side are likely pretty cheap for MS, since they own the servers and all the applications for Azure. However, the licensing costs for the various games they include Day 1, the costs for continued inclusion of various games in the service etc., probably eats a decent bit into that $1.625 billion. Now, Sony have to pay a lot of the same costs for 3P licensed content in PS+ (that's a reason why so many games left PS+ once the revamp happened), but they probably pay a lot less for equivalent games due to the advantage of their install base size and the fact 3P games tend to sell notably better on PS vs Xbox. Plus, Sony aren't paying for nearly as many Day 1 3P games (especially AAA ones) into PS+, so they don't have to deal with those costs.

I'd assume that if total PS division profit is 14.286% of total division revenue (going by the previous fiscal year where they had $24 billion in revenue and $3.4 billion in division profit), let's say that Xbox's ratio of profit relative revenue is similar or even slightly higher, let's say max 20%. At 14%, $16 billion in division revenue for FY 2021 would've gotten them $2.28576 billion profit for the Xbox division on a low end, $3.2 billion profit at the high end (but I don't think this is very realistic, so we'll mostly disregard it). Those percentages towards GP & XBL Gold 2021 revenue would give you $414.294 million in profit (14.286%) to $580 million (20%). Specifically to GamePass, profits would've been $236 million (14.286%) to $330.4 million (20%).

However, let's assume that the percentage of profit relative revenue for the sub services is as high as 50%; that'd give GamePass a profit of $826 million, and I think that's the absolute highest amount of profit it could have brought in. So we have a low end of $414.294 million GamePass profit for 2021, to a high end of $826 million for 2021, which is slightly higher than the ~ $750 million Heisenberg007 and I arrived at months ago doing some numbers off the Axios reports and cobbling from several other sources (though in my case, I didn't delineate between revenue and profit at that time when I should've).

That's effectively an APPU (Average Profit Per User) of $33.04/year, or $2.75/month at best for GamePass. And that's about the best we can arrive at, because Microsoft don't report their actual profit margins for the Xbox division, let alone specific parts of the division like gaming services, peripherals, consoles, software sales etc. The lack of transparency is maddening at times when you think about it, because it prevents us from having wholistic discussions on topics like this which, for an enthusiast forum, just plain sucks. And I'm sure the shareholders would like those profit margins and breakdowns (or at least revenue breakdowns) to division segments as well.

 

[DarkMage619]

If a service is profitable that is generally an indicator that the service is a success. It's not the only indicator, and sometimes something can sell well but still be considered a failure. It would be helpful for you to understand that I have only been referring to Game Pass in this discussion, not Xbox or Microsoft as a whole. It is possible for Xbox/Microsoft to profit while Game Pass is simultaneously losing money. And again, I'm not saying that's what is happening. I am only saying that since we don't know whether or not Game Pass is profitable it is still a possibility that it is not.

The profitability of Game pass is largely irrelevant if the rest of the gaming division is making money. In addition Phil Spencer has said on many occasions that the service is very very sustainable. If the service makes enough money to keep itself running making a profit it in itself doesn't really matter. This is especially true if Xbox get revenue from other areas of the business. If you noticed Game pass isn't the only part of the business generating money.

My thoughts on this are irrelevant.

If you are hung up on whether or not Game pass is profitable I'd imagine you'd apply that logic elsewhere with other subscription services. I was looking to see how consistent your reasoning is. Your refusal to answer speaks volumes.

No further clarification was needed in my post. You skimmed my response and then responded sarcastically. I'm not going to apologize for your inability to comprehend the words that I typed. That's on you.

There wasn't much comment to skim. You picked one arbitrary metric and held it up as something to base Game pass success on. You didn't base it on the number of subscriptions or customer satisfaction, things actually related to gamers but profits something average gamers should not really care about if they are using the service. My comments about MS's profitability as a whole are just as valid as yours. Your inability to support your argument is your fault. Your decision to get emotional and make personal attacks also speaks volumes about the sincerity of your entire argument.

If you don't like subscription services and don't use Game pass how much does it making a profit or not actually affect you?

 

[LordBlodgett]

There must be more than meets the eye on this one.

If you look at the subscriber counts for 2021 - which will include PC players - and divide the revenue up, which it is claimed is only console, it puts the number at a number that's basically the retail cost of GPU, let alone solo GP.

This doesn't many sense when, whilst people like to joke about the $1 deal, there will be a lot of people taking advantage of that. There will also be many people using trials, the promotional memberships I keep seeing bundled with retail purchases even things like internet services etc.

For me this only works if they're booking the full retail value for all of the above as 'revenue' and then applying the discount as a cost on the balance sheet.

Where did you get that the amount is equal to full price GPU every month? Let's do some basic math:
Revenue: 2.9 Billion
Users (as of January): 25 million
2,900,000,000/25,000,000=116
So revenue per user is $116 annually, or $9.66 on a monthly basis.

That seems totally doable, doesn't it? I mean console or PC Gamepass are $10 a month their own, and GPU is $15. I really don't know how you got to am average cost that is equal to GPU. Might want to check your math

 

[StreetsofBeige]

The profitability of Game pass is largely irrelevant if the rest of the gaming division is making money. In addition Phil Spencer has said on many occasions that the service is very very sustainable. If the service makes enough money to keep itself running making a profit it in itself doesn't really matter. This is especially true if Xbox get revenue from other areas of the business. If you noticed Game pass isn't the only part of the business generating money.

If you are hung up on whether or not Game pass is profitable I'd imagine you'd apply that logic elsewhere with other subscription services. I was looking to see how consistent your reasoning is. Your refusal to answer is speaks volumes.

There wasn't much to you comment to skim. You picked one arbitrary metric and held it up as something to base Game pass success on. You didn't base it on the number of subscriptions or customer satisfaction, things actually related to gamers but profits something average gamers should not really care about if they are using the service. My comments about MS's profitability as a whole are just as valid as yours. Your inability to support your argument is your fault. Your decision to get emotional and make personal attacks also speaks volumes about the sincerity of your entire argument.

If you don't like subscription services and don't use Game pass how much does it making a profit or not actually affect you?

So true.

Just about every big company in the world with tons of product lines wont have every one being big and profitable. There's been product lines at my company selling for 20 years that barely make money. Some years it's a loss. But for sake of overarching deals and getting people into the brand's base products to buy other stuff, that's the hook.

It goes to show how much people know about business. Similar to the handful of people who think when someone buys an asset with some inherent/carry over value they think it immediately goes to $0. That's how you can tell who rents a home and who owns a home. Because no homeowner thinks (or market adjusts) the value of the home to be $0 the next day.

Guess what? Suppliers and stores make basically zero profit on selling the low end basic milk and cheese. They do that to draw in foot traffic so they buy the other products that make money. The same even goes for B2B. Kraft would make zero money selling shitty cheese slices to fast food joints for their equally shitty burgers. But they make it back from them on other premium dairy products as a package deal.

Why do so many game makers release F2P games? It took years and millions of dollars to make it. And every download is zero sales. On paper that should be the dumbest business model ever. The more free copies unleashed to gamers the better. But they make it back with mtx and DLC.

Sony had that bad period where their TV and A/V division were losing $1 billion per year. And that went on for years even when Sony's overall financials were on shaky ground. That was somewhere around 2010 I think (give or take a year). Guess what? Despite 10x worse finances than MS who makes billions to cover, Sony kept it going. Well look at that. Sony TVs still being sold.

 

[akimbo009]

In considering that the $2.9 billion/year was not only just in reference to revenue, but also includes XBL Gold figures in it, and considering that profit margins for the subscription services might be somewhat higher than than the normal revenue/profit margins of console divisions in and of themselves...

If the average ARPU for PS+ in 2021 was ~ $52/year, and assuming XBL Gold had half the subs of PS+ (24 million vs 48 million), XBL Gold would account for $1.248 billion of that $2.9 billion revenue. Factor out the licensing costs for 3P content in XBL Gold and that probably drops down by $20 million - $30 million (considering XBL Gold has had a mostly subpar selection of games for a while now). GamePass would've accounted for the remaining $1.652 billion...in revenue.

The actual profits they're getting for GamePass is probably notably lower. Actual hosting costs on the server side are likely pretty cheap for MS, since they own the servers and all the applications for Azure. However, the licensing costs for the various games they include Day 1, the costs for continued inclusion of various games in the service etc., probably eats a decent bit into that $1.625 billion. Now, Sony have to pay a lot of the same costs for 3P licensed content in PS+ (that's a reason why so many games left PS+ once the revamp happened), but they probably pay a lot less for equivalent games due to the advantage of their install base size and the fact 3P games tend to sell notably better on PS vs Xbox. Plus, Sony aren't paying for nearly as many Day 1 3P games (especially AAA ones) into PS+, so they don't have to deal with those costs.

I'd assume that if total PS division profit is 14.286% of total division revenue (going by the previous fiscal year where they had $24 billion in revenue and $3.4 billion in division profit), let's say that Xbox's ratio of profit relative revenue is similar or even slightly higher, let's say max 20%. At 14%, $16 billion in division revenue for FY 2021 would've gotten them $2.28576 billion profit for the Xbox division on a low end, $3.2 billion profit at the high end (but I don't think this is very realistic, so we'll mostly disregard it). Those percentages towards GP & XBL Gold 2021 revenue would give you $414.294 million in profit (14.286%) to $580 million (20%). Specifically to GamePass, profits would've been $236 million (14.286%) to $330.4 million (20%).

However, let's assume that the percentage of profit relative revenue for the sub services is as high as 50%; that'd give GamePass a profit of $826 million, and I think that's the absolute highest amount of profit it could have brought in. So we have a low end of $414.294 million GamePass profit for 2021, to a high end of $826 million for 2021, which is slightly higher than the ~ $750 million Heisenberg007 and I arrived at months ago doing some numbers off the Axios reports and cobbling from several other sources (though in my case, I didn't delineate between revenue and profit at that time when I should've).

That's effectively an APPU (Average Profit Per User) of $33.04/year, or $2.75/month at best for GamePass. And that's about the best we can arrive at, because Microsoft don't report their actual profit margins for the Xbox division, let alone specific parts of the division like gaming services, peripherals, consoles, software sales etc. The lack of transparency is maddening at times when you think about it, because it prevents us from having wholistic discussions on topics like this which, for an enthusiast forum, just plain sucks. And I'm sure the shareholders would like those profit margins and breakdowns (or at least revenue breakdowns) to division segments as well.

Nope. They wouldn't. They care about revenue growth - but their financials are public record. The again, you don't invest in MS for Gamepass.

Though I'm impressed at your super random guessing here. That's a lot of work.

 

[pasterpl]

In considering that the $2.9 billion/year was not only just in reference to revenue, but also includes XBL Gold figures in it, and considering that profit margins for the subscription services might be somewhat higher than than the normal revenue/profit margins of console divisions in and of themselves...

If the average ARPU for PS+ in 2021 was ~ $52/year, and assuming XBL Gold had half the subs of PS+ (24 million vs 48 million), XBL Gold would account for $1.248 billion of that $2.9 billion revenue. Factor out the licensing costs for 3P content in XBL Gold and that probably drops down by $20 million - $30 million (considering XBL Gold has had a mostly subpar selection of games for a while now). GamePass would've accounted for the remaining $1.652 billion...in revenue.

The actual profits they're getting for GamePass is probably notably lower. Actual hosting costs on the server side are likely pretty cheap for MS, since they own the servers and all the applications for Azure. However, the licensing costs for the various games they include Day 1, the costs for continued inclusion of various games in the service etc., probably eats a decent bit into that $1.625 billion. Now, Sony have to pay a lot of the same costs for 3P licensed content in PS+ (that's a reason why so many games left PS+ once the revamp happened), but they probably pay a lot less for equivalent games due to the advantage of their install base size and the fact 3P games tend to sell notably better on PS vs Xbox. Plus, Sony aren't paying for nearly as many Day 1 3P games (especially AAA ones) into PS+, so they don't have to deal with those costs.

I'd assume that if total PS division profit is 14.286% of total division revenue (going by the previous fiscal year where they had $24 billion in revenue and $3.4 billion in division profit), let's say that Xbox's ratio of profit relative revenue is similar or even slightly higher, let's say max 20%. At 14%, $16 billion in division revenue for FY 2021 would've gotten them $2.28576 billion profit for the Xbox division on a low end, $3.2 billion profit at the high end (but I don't think this is very realistic, so we'll mostly disregard it). Those percentages towards GP & XBL Gold 2021 revenue would give you $414.294 million in profit (14.286%) to $580 million (20%). Specifically to GamePass, profits would've been $236 million (14.286%) to $330.4 million (20%).

However, let's assume that the percentage of profit relative revenue for the sub services is as high as 50%; that'd give GamePass a profit of $826 million, and I think that's the absolute highest amount of profit it could have brought in. So we have a low end of $414.294 million GamePass profit for 2021, to a high end of $826 million for 2021, which is slightly higher than the ~ $750 million Heisenberg007 and I arrived at months ago doing some numbers off the Axios reports and cobbling from several other sources (though in my case, I didn't delineate between revenue and profit at that time when I should've).

That's effectively an APPU (Average Profit Per User) of $33.04/year, or $2.75/month at best for GamePass. And that's about the best we can arrive at, because Microsoft don't report their actual profit margins for the Xbox division, let alone specific parts of the division like gaming services, peripherals, consoles, software sales etc. The lack of transparency is maddening at times when you think about it, because it prevents us from having wholistic discussions on topics like this which, for an enthusiast forum, just plain sucks. And I'm sure the shareholders would like those profit margins and breakdowns (or at least revenue breakdowns) to division segments as well.

Why are you assuming that that 2.9 bn figure contains xblive revenue?

 

[Dolomite]

Gamepass is unsustainable ]

 

[kikkis]

I enjoy game pass a lot but I am not sure if i am willing to pay more than gold to game pass conversion.

 

[DenchDeckard]

If Microsoft is out here getting better deals on games than Sony for gamepass, how is it unsustainable?

Ps plus has been around for years and is unquestioned on ROI, it costs half of what GPU costs, maybe less?

I'm really not getting the concern??

 

[Sw0pDiller]

You would be hard pressed to spend the entire revenue on the games added.

You are right, thats not the case obviously. They have to pay a serious amount of money spend on marketing, the 1 dollar promo will cost them. but the biggest i think is the rent of the azure servers. but that money also end up in the revenue numbers of that ms division. i feel that because MS is not having to rely on 3rd party and are free to move around money within the coorporation is wath makes this GamePass a little dodgy. the are capable to hold out for a very vey long time while pumping money around from onther absurdly profitable divisions. that way they can break the compitition. teh amount of meney spent to keep the service running will never be really clear.

And it accounts for less than 20% of Xbox overall revenue.

that's because people spend money on games, hardware, and xbox live. offcourse is less than that. 2,9 bilj dollar /180 a year comes out on 16,1 milion subs.

 

[phil_t98]

First, while I don't support Game Pass (because I prefer to buy and own the game instead of having a subscription where a game can be removed at any time) I am not an anti-Game Pass person.

Second, the point about other subscription services taking many years to profit, or not profiting at all after many years (looking at you, Spotify), was exactly what I was trying to get across. I never said that Microsoft not profiting off of Game Pass was good, bad, or neutral. I just said it's possible that they're not profiting yet, and the history of subscription services is the reason I doubt that Game Pass is profitable this early in its life.

The problem here is that there are staunchly pro-Game Pass individuals who are arguing that Game Pass is profiting due to the revenue announcement. It's okay to speculate that there may be a profit. It's not okay to tell people that it is a fact that Game Pass is generating a profit. We simply don't have the data to prove that there is or is not a profit from Game Pass. That was my entire point, but people like @Ozriel are dead-set on making me out to be a crazy anti-Game Pass lunatic because I said (to a completely different user) that revenue is not the same thing as profit, and since we don't know the outgoing expenses we can't definitively say that Game Pass is generating a profit for Microsoft. That shouldn't be a divisive comment because it's a 100% factual claim. But here we are.

the thing with comparing it to Spotify is that they had to pay to get practically the worlds music library on the service were as gamepass has a select5 library of games so would be much cheaper to run in that respect. imagine how much Spotify must of had to pay or promise to pay for the millions of songs on there

 

[Dick Jones]

Where did you get that the amount is equal to full price GPU every month? Let's do some basic math:
Revenue: 2.9 Billion
Users (as of January): 25 million
2,900,000,000/25,000,000=116
So revenue per user is $116 annually, or $9.66 on a monthly basis.

That seems totally doable, doesn't it? I mean console or PC Gamepass are $10 a month their own, and GPU is $15. I really don't know how you got to am average cost that is equal to GPU. Might want to check your math

The revenue figures is based off full price of the good/service and any discount allowed is an expense further down the sheet in your p&l.

The 16.1m average monthly subscribers is based off all subscribers being part of GPU. As we don't have a breakdown of Gamepass v GPU the minimum average monthly subscribers is 16.1m to Gamepass.

If you think an extra subscriber using the $1 upgrade equates to an extra $1 in revenue, you couldn't be more wrong. It would actually be an extra $180.

Your average is under 10 dollars when the average must lie between minimum 10 [GP] and maximum 15 [GPU]. I wouldn't call out others figures when your own equation looks like 2+2=Thomas Jefferson.

 

[Petopia]

You're not allowed to ask about that or profit.

Why not if other companies can do it why not the billion dollar company Microshaft do it I mean I like Windows every thing else not so much.

 

[drganon]

Why not if other companies can do it why not the billion dollar company Microshaft do it I mean I like Windows every thing else not so much.

I was being sarcastic. As for the reason they don't share that info, all we can do is speculate. Occam's razor, it's probably not profitable as of yet.

 

[Bumblebeetuna]

Why are you assuming that that 2.9 bn figure contains xblive revenue?

Speculation, like everything else in the post. The weirdest part is he assumes Sony pays less for games because of their “user base advantage” and “games sell more on PS”. Wouldn’t that make them have to pay MORE for games to be in their service? That’s more gamers accessing them, and more potential lost sales. Just look at the Ark numbers, Sony paid 3.5M to have it for one month, MS paid 2.5M for six months. That’s a massive massive difference.

 

[IFireflyl]

The profitability of Game pass is largely irrelevant if the rest of the gaming division is making money. In addition Phil Spencer has said on many occasions that the service is very very sustainable. If the service makes enough money to keep itself running making a profit it in itself doesn't really matter. This is especially true if Xbox get revenue from other areas of the business. If you noticed Game pass isn't the only part of the business generating money.

I never stated that the profitability of Game Pass is relevant. I said that it can be used as a metric to determine if something is a success or a failure. The last sentence here isn't relevant since the discussion at the time was wholly focused on Game Pass and not Xbox/Microsoft as a whole.

If you are hung up on whether or not Game pass is profitable I'd imagine you'd apply that logic elsewhere with other subscription services. I was looking to see how consistent your reasoning is. Your refusal to answer speaks volumes.

Again, I'm not hung up on Game Pass' profitability. I have stated repeatedly that it's possible that it is profitable. I am hung up on people stating factual claims without proof. You can't tell me Game Pass is 100% profitable when the only numbers we have are total revenue and we don't know what the expenses for Game Pass look like.

There wasn't much comment to skim. You picked one arbitrary metric and held it up as something to base Game pass success on. You didn't base it on the number of subscriptions or customer satisfaction, things actually related to gamers but profits something average gamers should not really care about if they are using the service. My comments about MS's profitability as a whole are just as valid as yours. Your inability to support your argument is your fault.

My argument was fully supported because my entire argument is that we don't know if Game Pass is profitable or not based on simple revenue numbers. Also, I didn't hold up profit as the sole basis of whether or not Game Pass is successful. As I have repeatedly told you, profit is one metric that is used to determine if something is successful or not. That's a factual claim, not an opinion. For-profit businesses look for profit, even if that profit takes years to come to fruition. If you're going to argue otherwise then you're showing major ignorance.

Your decision to get emotional and make personal attacks also speaks volumes about the sincerity of your entire argument.

I didn't get emotional and make personal attacks. You're the one who became sarcastic/snarky because you skimmed by post and didn't fully comprehend what I said. You made an assumption, called me out, and then I showed you how idiotic your post was. Instead of admitting you overlooked a keyword that changed the meaning you're here doubling down and looking more the fool.

If you don't like subscription services and don't use Game pass how much does it making a profit or not actually affect you?

It doesn't affect me, and I never said that it did. It interests me insomuch as I want to know the long-term ramifications of this business model, both good and bad.

 

[IFireflyl]

the thing with comparing it to Spotify is that they had to pay to get practically the worlds music library on the service were as gamepass has a select5 library of games so would be much cheaper to run in that respect. imagine how much Spotify must of had to pay or promise to pay for the millions of songs on there

As far as I'm aware Spotify doesn't pay to get music in their library, but rather they pay royalties for each track played (so long as more than X seconds of the track is played). Game Pass, however, does pay a large fee to get games put in it's library. The former seems more sustainable over time than the later, at least for single-player games that don't have continuous microtransactions. Netflix, however, is probably more akin to Game Pass in how they operate. It is interesting to see the similarities and differences between the different subscription giants.

 

[DaGwaphics]

Speculation, like everything else in the post. The weirdest part is he assumes Sony pays less for games because of their “user base advantage” and “games sell more on PS”. Wouldn’t that make them have to pay MORE for games to be in their service? That’s more gamers accessing them, and more potential lost sales. Just look at the Ark numbers, Sony paid 3.5M to have it for one month, MS paid 2.5M for six months. That’s a massive massive difference.

Seems like it would. Would be the complete reversal of the marketing and exclusive deals (where each side has to buy out a portion of the other camps user base) and flips it to where each side has to buy out a portion of their own user base (advantage MS). Though, to be fair, the PS+ is forever for the users that redeem it while the GP deal was limited to six months.

 

[DeepEnigma]

 

[DarkMage619]

I never stated that the profitability of Game Pass is relevant. I said that it can be used as a metric to determine if something is a success or a failure. The last sentence here isn't relevant since the discussion at the time was wholly focused on Game Pass and not Xbox/Microsoft as a whole.

You brought up profitability you clearly thought it was relevant. It just isn't a good metric in this specific case because Game pass is part of a much bigger structure. Game pass had more subscribers than any other game service available when the like for like numbers were available. We've now learned they've generated almost 3 billion dollars in one year on console and the CEO stated it was very sustainable. Yet you think profit is the metric of success? Dubious.

Again, I'm not hung up on Game Pass' profitability. I have stated repeatedly that it's possible that it is profitable. I am hung up on people stating factual claims without proof. You can't tell me Game Pass is 100% profitable when the only numbers we have are total revenue and we don't know what the expenses for Game Pass look like.

What did people claim without proof? Who claimed it was 100% profitable? This sounds like a strawman. You talking about Phil Spencer when he said it was sustainable? Perhaps that is the goal and profit could be gained from other avenues.

My argument was fully supported because my entire argument is that we don't know if Game Pass is profitable or not based on simple revenue numbers. Also, I didn't hold up profit as the sole basis of whether or not Game Pass is successful. As I have repeatedly told you, profit is one metric that is used to determine if something is successful or not. That's a factual claim, not an opinion. For-profit businesses look for profit, even if that profit takes years to come to fruition. If you're going to argue otherwise then you're showing major ignorance.

Your arguement wasn't fully supported and if you think profit of console Game pass is an important metric for this particular business it shows that ignorance you were talking about. That's why I brought up Spotify. Not a lot a profit few would say it isn't successful.

I didn't get emotional and make personal attacks. You're the one who became sarcastic/snarky because you skimmed by post and didn't fully comprehend what I said. You made an assumption, called me out, and then I showed you how idiotic your post was. Instead of admitting you overlooked a keyword that changed the meaning you're here doubling down and looking more the fool.

A weak mind resorts to personal insults over actually having a civil conversation.

It doesn't affect me, and I never said that it did. It interests me insomuch as I want to know the long-term ramifications of this business model, both good and bad.

If you say so.

 

[IFireflyl]

You brought up profitability you clearly thought it was relevant. It just isn't a good metric in this specific case because Game pass is part of a much bigger structure. Game pass had more subscribers than any other game service available when the like for like numbers were available. We've now learned they've generated almost 3 billion dollars in one year on console and the CEO stated it was very sustainable. Yet you think profit is the metric of success? Dubious.

I didn't bring up profitability. Stop saying I did. I responded to other people who brought it up, and the comments I made were purely factual. Profit IS a metric that is used in determining if something is successful. I never said it's the only metric. Heck, I didn't even say it's the best metric.

What did people claim without proof? Who claimed it was 100% profitable? This sounds like a strawman. You talking about Phil Spencer when he said it was sustainable? Perhaps that is the goal and profit could be gained from other avenues.

Don't use words like "strawman" when you obviously have no clue what it means. L Lasha stated that Microsoft is making money, and their implication with their post was that Game Pass is what is making them money. Here is the first post I responded to in this thread (that has now derailed into a half dozen pro-Game Pass extremists trying to attack me for telling them they were wrong):

Trying to point out that the sum is only revenue and not profit is coping. The reported Gamepass Revenue is enough to pay for the development of 20-30 AAA games. Microsoft is making money.

And then they doubled down with an explicit claim here:

2,900 Million is a lot of money. Gamepass alone generates more revenue than Ubisoft or Square-Enix. Profitability isn't a question. The question is the magnitude of profit.

That's the person I was countering. My counter was solely to state that we don't know what the expenses are, so we can't say for certain that they are profiting. Then you jumped on this bandwagon of idiocy, and you're now accuse me of "strawman" responses because you jumped into an ongoing discussion without following the discussion back to its roots. Once again, you're proven to be ignorant.

Your arguement wasn't fully supported and if you think profit of console Game pass is an important metric for this particular business it shows that ignorance you were talking about. That's why I brought up Spotify. Not a lot a profit few would say it isn't successful.

Again, my argument was fully supported because my entire argument has always been that we don't know for sure if Game Pass (not Microsoft or Xbox) is profitable. Revenue by itself doesn't tell us if something is profitable. That's not a claim that is debatable. It is fact.

And again, I never said that profit is the only metric for determining success, nor did I say it's the most important metric for determining success. You inferred it because you came into this discussion with a bias. I'm basically the "orange man bad" to you. Go suck a lemon.

A weak mind resorts to personal insults over actually having a civil conversation.

The discussion lost civility when you first responded by being sarcastic and snarky. You didn't engage in an actual discussion like others have done (whom I didn't insult). If you don't want personal attacks then don't start off a conversation by being an asshole. It's that simple. Lest you forget, here was your first response to me:

Spotify has over 150 million paying subscribers and it doesn't appear to be making a profit. So your conclusion is that it is a failure correct? Game pass is associated with Microsoft and Microsoft itself is incredibly profitable so that means Game pass is a success then right? I like how your mind works.

And again, that response was born out of your inability to properly read and comprehend what I said. The lesson here isn't that I'm some bad person who needs to learn how to properly debate. It's that you need to go into a discussion with civility, not by being a sarcastic prick after misreading someone's post.

 

[thicc_girls_are_teh_best]

Where did you get that the amount is equal to full price GPU every month? Let's do some basic math:
Revenue: 2.9 Billion
Users (as of January): 25 million
2,900,000,000/25,000,000=116
So revenue per user is $116 annually, or $9.66 on a monthly basis.

That seems totally doable, doesn't it? I mean console or PC Gamepass are $10 a month their own, and GPU is $15. I really don't know how you got to am average cost that is equal to GPU. Might want to check your math

The $2.9 billion wasn't just for GamePass revenue, it was also including other Xbox services, namely Xbox Live Gold.

Nope. They wouldn't. They care about revenue growth - but their financials are public record. The again, you don't invest in MS for Gamepass.

Though I'm impressed at your super random guessing here. That's a lot of work.

But is there really that much revenue growth with GamePass? Again, the $2.9 billion includes GamePass and Xbox Live Gold. I simply took ARPU of PS+ and halved the sub base for Xbox platforms since the ratios of subs to install base is likely at best similar (at worst lower for Xbox).

Their financials might be public but the granularity of their financials are severely lacking, as is transparency beyond lump division revenue and corporation profit. If I were an investor, I'd like to have some security on my end knowing what specific slices of divisions in a company are doing, so I can know where the dead weight might be, and bring that up in shareholder meetings or whatever. I'm the one putting money into your stock to increase your market cap and keep it afloat, I think I deserve that level of transparency especially if the company as a whole is doing well.

It's not like being a regular customer where I buy the end product; I'm actively financially involved deeper in the process of your company, I'm sure there are actual Microsoft shareholders who feel this way and would like more information on specific revenues and profits. As for GamePass specifically, yes, no one invests in Microsoft simply for that. But considering the entire company is throwing its weight behind the initiative and their biggest corporate acquisition in history is at least partially driven by GamePass, I think there are investors who either will take GP into much bigger consideration going forward, or would actually invest purely on knowing some actual numbers pertaining to GamePass revenue and profits, and how those are contributing to the wider Xbox division.

Why are you assuming that that 2.9 bn figure contains xblive revenue?

Because it does?

The CADE document pertained to GamePass AND Xbox Live Gold, when the original reporting got out folks who did so simply didn't read the document right. Many of those same places have since updated to show it reflects GamePass & XBL Gold combined revenue.

 

[thicc_girls_are_teh_best]

Gamepass is unsustainable ]

You realize this kills the talking points that MS has to "always" pay higher than Sony for exclusivity deals (service exclusivity deals in this case), and that Sony prevent Microsoft from acquiring content for GamePass by forcing 3P pubs to ignore the service, right?

Those were both points brought up by Microsoft in the Brazilian court documents and this single example shows that those points don't actually hold up (outside of instances of games Sony have marketing rights, exclusivity or co-funding to. In which case it makes sense they would try stopping GamePass from getting equal or preferred treatment on those games). IJS

 

[DaGwaphics]

You realize this kills the talking points that MS has to "always" pay higher than Sony for exclusivity deals (service exclusivity deals in this case), and that Sony prevent Microsoft from acquiring content for GamePass by forcing 3P pubs to ignore the service, right?

Those were both points brought up by Microsoft in the Brazilian court documents and this single example shows that those points don't actually hold up (outside of instances of games Sony have marketing rights, exclusivity or co-funding to. In which case it makes sense they would try stopping GamePass from getting equal or preferred treatment on those games). IJS

You realize that deal has nothing to do with exclusivity for anyone involved right? LOL, I don't think anyone ever thought that Sony blocked everything (there wouldn't be anything on GP from third parties if that were the case). Exclusivity deals that covered subs and retail sales would be quite different.

 

[DeepEnigma]

LOL, I don't think anyone ever thought that Sony blocked everything

Do you even Gaf, bro?

 

[DarkMage619]

I didn't bring up profitability. Stop saying I did. I responded to other people who brought it up, and the comments I made were purely factual. Profit IS a metric that is used in determining if something is successful. I never said it's the only metric. Heck, I didn't even say it's the best metric.

You first say you never brought up profitability then proceed to argue about how useful a metric it is to show success. You seem to be a bit confused. Regardless it isn't a good metric to show success in this specific case of Game pass. Similar to the Spotify example you refuse to engage with.

Don't use words like "strawman" when you obviously have no clue what it means. L Lasha stated that Microsoft is making money, and their implication with their post was that Game Pass is what is making them money. Here is the first post I responded to in this thread (that has now derailed into a half dozen pro-Game Pass extremists trying to attack me for telling them they were wrong):

It is a strawman because there isn't a bunch of people claiming Game pass is 100% profitable. You are attacking a claim no one is making and that is exactly what a strawman argument is. The guy you claim to be responding to didn't say it was 100% profitable either.

That's the person I was countering. My counter was solely to state that we don't know what the expenses are, so we can't say for certain that they are profiting. Then you jumped on this bandwagon of idiocy, and you're now accuse me of "strawman" responses because you jumped into an ongoing discussion without following the discussion back to its roots. Once again, you're proven to be ignorant.

This is hilarious. You talk about ignorant and idiocy and you invent claims that weren't said to try to show how smart you are? I agree we don't know if Game pass is profitable, not that it matters. No one said it was 100% profitable as you erroneously claimed.

Again, my argument was fully supported because my entire argument has always been that we don't know for sure if Game Pass (not Microsoft or Xbox) is profitable. Revenue by itself doesn't tell us if something is profitable. That's not a claim that is debatable. It is fact.

The fact is no one said anything about it being 100% profitable and Phil said it is very sustainable. Those are the facts.

And again, I never said that profit is the only metric for determining success, nor did I say it's the most important metric for determining success. You inferred it because you came into this discussion with a bias. I'm basically the "orange man bad" to you. Go suck a lemon.

Probably should avoid politics man. Again you are arguing with the voices in your head. I have a bias towards logic and good reasoning things your statement lacked.

The discussion lost civility when you first responded by being sarcastic and snarky. You didn't engage in an actual discussion like others have done (whom I didn't insult). If you don't want personal attacks then don't start off a conversation by being an asshole. It's that simple. Lest you forget, here was your first response to me:

Who's to say your post wasn't sarcastic? It made little sense that's why I threw your backwards 'logic' back at you. You didn't like and got bent out of shape.

And again, that response was born out of your inability to properly read and comprehend what I said. The lesson here isn't that I'm some bad person who needs to learn how to properly debate. It's that you need to go into a discussion with civility, not by being a sarcastic prick after misreading someone's post.

You ability to create a nonsense narrative, then get mad and start calling names, then start tossing out weird political references shows this conversation is above you. I hope you get some fresh air or something. Have a good day.

 

[akimbo009]

The $2.9 billion wasn't just for GamePass revenue, it was also including other Xbox services, namely Xbox Live Gold.



But is there really that much revenue growth with GamePass? Again, the $2.9 billion includes GamePass and Xbox Live Gold. I simply took ARPU of PS+ and halved the sub base for Xbox platforms since the ratios of subs to install base is likely at best similar (at worst lower for Xbox).

Their financials might be public but the granularity of their financials are severely lacking, as is transparency beyond lump division revenue and corporation profit. If I were an investor, I'd like to have some security on my end knowing what specific slices of divisions in a company are doing, so I can know where the dead weight might be, and bring that up in shareholder meetings or whatever. I'm the one putting money into your stock to increase your market cap and keep it afloat, I think I deserve that level of transparency especially if the company as a whole is doing well.

It's not like being a regular customer where I buy the end product; I'm actively financially involved deeper in the process of your company, I'm sure there are actual Microsoft shareholders who feel this way and would like more information on specific revenues and profits. As for GamePass specifically, yes, no one invests in Microsoft simply for that. But considering the entire company is throwing its weight behind the initiative and their biggest corporate acquisition in history is at least partially driven by GamePass, I think there are investors who either will take GP into much bigger consideration going forward, or would actually invest purely on knowing some actual numbers pertaining to GamePass revenue and profits, and how those are contributing to the wider Xbox division.



Because it does?

The CADE document pertained to GamePass AND Xbox Live Gold, when the original reporting got out folks who did so simply didn't read the document right. Many of those same places have since updated to show it reflects GamePass & XBL Gold combined revenue.

You can kick and scream, but showing profit margins in the structure you're asking is a competitive disadvantage and not something any company would reveal. I'm sure Sony would love to see them.

And MS does show profit, in tens of billions. This isn't an area that materially impacts an investors decision today.

Again, GP has been around for about 5 years. Growing to a 2.9B business in that time period is very good growth. Not sure it could be argued otherwise since being a billion+ business alone is pretty rarified air in itself.

 

[adamsapple]

You realize this kills the talking points that MS has to "always" pay higher than Sony for exclusivity deals (service exclusivity deals in this case), and that Sony prevent Microsoft from acquiring content for GamePass by forcing 3P pubs to ignore the service, right?

Those were both points brought up by Microsoft in the Brazilian court documents and this single example shows that those points don't actually hold up (outside of instances of games Sony have marketing rights, exclusivity or co-funding to. In which case it makes sense they would try stopping GamePass from getting equal or preferred treatment on those games). IJS

What is this word salad lol, this post makes no sense.

Who/when/where made the talking point that MS always pay more than Sony ?

 

[IFireflyl]

You first say you never brought up profitability then proceed to argue about how useful a metric it is to show success. You seem to be a bit confused. Regardless it isn't a good metric to show success in this specific case of Game pass. Similar to the Spotify example you refuse to engage with.

I never brought it up. Other people brought it up, and I discussed it after it was brought up. This shouldn't be difficult for you to comprehend.

It is a strawman because there isn't a bunch of people claiming Game pass is 100% profitable. You are attacking a claim no one is making and that is exactly what a strawman argument is. The guy you claim to be responding to didn't say it was 100% profitable either.

This is hilarious. You talk about ignorant and idiocy and you invent claims that weren't said to try to show how smart you are? I agree we don't know if Game pass is profitable, not that it matters. No one said it was 100% profitable as you erroneously claimed.

The fact is no one said anything about it being 100% profitable and Phil said it is very sustainable. Those are the facts.

Here is the post that you're willfully ignoring:

2,900 Million is a lot of money. Gamepass alone generates more revenue than Ubisoft or Square-Enix. Profitability isn't a question. The question is the magnitude of profit.

That is 100% conclusive that they stated that Game pass is 100% profitable. I am not resorting to strawman. The proof is right there. You just need to open your eyes and work on your reading comprehension.

Probably should avoid politics man. Again you are arguing with the voices in your head. I have a bias towards logic and good reasoning things your statement lacked.

I'm not bringing in politics. It's a simple analogy. If you want to read that as too political then report me and let the mods handle it. The only one I'm currently arguing with is you. You keep being disproven, but then you double down because you're too arrogant to say, "You're right. Sorry I was unnecessarily aggressive. I see your point, even if I don't completely agree with you."

Who's to say your post wasn't sarcastic? It made little sense that's why I threw your backwards 'logic' back at you. You didn't like and got bent out of shape.

Your rebuttal is that maybe my post (which wasn't even directed at you) might have been sarcastic, so you thought you had the right to be snarky and sarcastic in your first response to me? First, that's moronic logic. Second, this was my post that you originally quoted:

Who's shutting anything down? I asked the question why do you care about Gamepass making a profit? If you don't even use it it's a stupid concern and if you fo, I'm not sure why. As a consumer I don't really give a shit about the trillion dollar businesses profitS unless I'm a shareholder.

This has been a thread about revenue anyway, and clearly that's going well.

So it's a genuine question - it's not shutting anything down. If anything, you've made this personal and attacked me versus answering the question.

Not the person you were talking to, but profits helps in determining if something is a success or a failure. I don't like Game Pass for my own reasons, but I'm still going to keep an eye on it as its success or failure will help determine where the industry is heading.

I responded to their second question regarding why someone cares about Game Pass making a profit. No person in their right mind is going to see my response and think that I was being sarcastic. Heck, even akimbo009 didn't take it that way, and he was the one I was actually responding to. Also, he and I were able to have a civil discourse after that post because, regardless of whether or not we were on the same side of the issue, he didn't choose to engage me by acting like a jerk. I have respect for posters like him because it shows that two people can approach things from different viewpoints and still get along even if they don't completely agree with each other. You, however, started a discussion with my non-antagonistic post by being antagonistic. Your entire purpose in posting is to prove that you're better than someone, and that's childish.

You ability to create a nonsense narrative, then get mad and start calling names, then start tossing out weird political references shows this conversation is above you. I hope you get some fresh air or something. Have a good day.

Again, if the analogy hurt you there's a report button. I have backed up every claim I have made ten-fold. You're the one talking out of your ass and ignoring things that disprove your arguments. Like I said before, go suck a lemon. Microsoft isn't going to give you money for defending them. Especially since I never said anything negative about Game Pass, Xbox, or Microsoft in the first place.

 

[IFireflyl]

What is this word salad lol, this post makes no sense.

Who/when/where made the talking point that MS always pay more than Sony ?

I think they might be referring to this:

https://www.geekwire.com/2022/micro...s-devs-to-not-push-content-to-xbox-game-pass/

In a filing to Brazil’s national competition regulator, Microsoft has claimed that Sony pays unnamed video game developers to prevent them from adding content to the Xbox Game Pass.

The claim was found in an Aug. 9 document that Microsoft filed with Brazil’s Conselho Administrativo de Defesa Econômica (CADE), as it attempts to get regulatory approval for its acquisition of the California-based video game studio Activision Blizzard.

In a translation posted by The Verge, Microsoft states that its ability to continue expanding Game Pass “has been hampered by Sony’s desire to inhibit such growth.” It goes on to claim that “Sony pays for ‘blocking rights’ to prevent developers from adding content to Game Pass and other competing subscription services.”

It’s a bold statement, but Microsoft doesn’t provide any more information than that in the filing, and Sony has yet to comment. There are a couple of interesting details here, however.

Brazil’s CADE is one of many competition regulatory agencies that Microsoft has to get by in order to finalize its acquisition of Activision Blizzard. Unlike most of its international equivalents, however, CADE’s review process is public, and many of the relevant documents have been made freely available via its website.

As a rule, major video game companies tend to keep their internal data private whenever possible; Microsoft in particular hasn’t announced sales numbers for the Xbox in years. CADE’s regulatory transparency, much like last year’s Apple vs. Epic suit, offers a rare opportunity to look behind the curtain. As a result, a thread on the games forum ResetEra has been digging into Microsoft’s CADE filings since the end of July.

 

[adamsapple]

I think they might be referring to this:

https://www.geekwire.com/2022/micro...s-devs-to-not-push-content-to-xbox-game-pass/

Oh yeah I'm aware of that 'blocking' claim, even then one games example of Ark 1 or 2 doesn't refute that.

I'm more puzzled about the other line that 'this somehow defeats the talking point that MS pays more for exclusives'. That has never been a talking point at all, namely because we barley get to find out how much either company pays to get games on their services. This is an extremely rare case.

 

[DaGwaphics]

What is this word salad lol, this post makes no sense.

Who/when/where made the talking point that MS always pay more than Sony ?

I think MS did, and it seems reasonable when talking about exclusivity (which the Ark deal wasn't). When MS makes an exclusivity deal with a third party, the dev is probably going to want more from them in comparison to what they would ask from Sony (because the market that they are loosing access to is bigger). It's one of the ways that Sony can use to leverage its dominant position to shield itself from any threats to that position.

 

[IFireflyl]

Oh yeah I'm aware of that 'blocking' claim, even then one games example of Ark 1 or 2 doesn't refute that.

I'm more puzzled about the other line that 'this somehow defeats the talking point that MS pays more for exclusives'. That has never been a talking point at all, namely because we barley get to find out how much either company pays to get games on their services. This is an extremely rare case.

If I'm not mistaken, and I very well could be since I'm not the person who made the argument, I think they're saying that the fact that Ark: Survival Evolved was on Game Pass and PlayStation Plus negates the talking point that Sony is paying third party publishers to not put their games on Game Pass. And since it cost less money for Ark: Survival Evolved to come to Game Pass than PlayStation Plus this would negate any argument that Microsoft may have in that Sony gets better deals. I don't know that the later argument is an argument Microsoft has ever made, but if it is/was then this would be a factor used in negating that argument.

Again, not the person you're referring to, so I may have made a wrong assumption about what they're saying. But that would make the most sense to me based on the reference to Brazil.

 

[adamsapple]

If I'm not mistaken, and I very well could be since I'm not the person who made the argument, I think they're saying that the fact that Ark: Survival Evolved was on Game Pass and PlayStation Plus negates the talking point that Sony is paying third party publishers to not put their games on Game Pass. And since it cost less money for Ark: Survival Evolved to come to Game Pass than PlayStation Plus this would negate any argument that Microsoft may have in that Sony gets better deals. I don't know that the later argument is an argument Microsoft has ever made, but if it is/was then this would be a factor used in negating that argument.

Again, not the person you're referring to, so I may have made a wrong assumption about what they're saying. But that would make the most sense to me based on the reference to Brazil.

I think in this case, the 2.5M they paid *now* for Ark 1 is the renewal/perpetual 'upgrade' to the deal. The game has been on Game Pass for years now with it making its PS+ debut earlier this year.

Probably a negotiation perk to get Ark 2 for < $3m to go with it. So they've probably raked in around $8~10m from MS in total for the 2 games if I were a guessing man.

 

[IFireflyl]

I think in this case, the 2.5M they paid *now* for Ark 1 is the renewal/perpetual 'upgrade' to the deal. The game has been on Game Pass for years now with it making its PS+ debut earlier this year.

You're probably right. I haven't followed that very closely as it's not a game I play.

 

[akimbo009]

You're probably right. I haven't followed that very closely as it's not a game I play.

Don't blame you

 

[thicc_girls_are_teh_best]

You realize that deal has nothing to do with exclusivity for anyone involved right? LOL, I don't think anyone ever thought that Sony blocked everything (there wouldn't be anything on GP from third parties if that were the case). Exclusivity deals that covered subs and retail sales would be quite different.

Service exclusivity, length of time durations, etc. all share some similar aspects to outright console exclusivity deals, lead marketing rights, and so forth. Perhaps not massively, but there are a few points in common.

But also, trust me, a LOT of people here and elsewhere were running with the narrative Sony were cockblocking Microsoft on 3P games in general getting GamePass deals, once that part of the Brazilian filings got out. I can't easily forget that ridiculousness.

Do you even Gaf, bro?

Exactly. Tons of people were saying it.

You can kick and scream, but showing profit margins in the structure you're asking is a competitive disadvantage and not something any company would reveal. I'm sure Sony would love to see them.

By that notion, why should any company ever share profits to shareholders, or specific revenue and profit slices for different parts of any given division?

Companies like MS are the ones out here betting big on a subscription-based gaming future. If you want to prove that's where the real money is at (or is trending to be at), you do that by putting up the numbers. Subscription revenue, subscription profits, etc. Companies like HBO Max are already getting called out for inflating subscriber numbers, so I'd expect calls for upfront sub revenue figures at the very least, to become more common among not just fans & consumers, but shareholders as well.

MS's investments into Zenimax & ABK gaming-wise are in a huge part driven by GamePass (and xCloud). GamePass is hardware-agnostic, for the most part, particularly once xCloud (which is currently only available through GamePass) is factored in. Saying it's perfectly fine Microsoft don't provide GamePass revenue or profit numbers to even shareholders, is like saying Sony would be perfectly fine withholding PlayStation sales revenue and division profits from their shareholders, which I don't think shareholders would like, considering what a pillar PS is to Sony...

..and what a pillar GamePass obviously is becoming to Microsoft as a whole, so I'm expecting more shareholders to want more transparency on those aspects of fiscal reports.

And MS does show profit, in tens of billions. This isn't an area that materially impacts an investors decision today.

Yes, for the entire company. They MAY provide Office, Azure & Windows profits but I don't think so, otherwise between that and overall profit we could easily deduce Xbox's division profits (or just about).

And again, I'm talking in parts about what investors will want in the future. GamePass is becoming a critical part of Microsoft's overall growth strategy as a corporation, not just on the consumer end, but on the business end in terms of acting as a bridge to get game devs & pubs as clients for their Azure services (which IMO is what Microsoft really wants from all of this anyway).

More investors will want to see specific fiscals WRT GamePass sooner rather than later going forward.

Again, GP has been around for about 5 years. Growing to a 2.9B business in that time period is very good growth. Not sure it could be argued otherwise since being a billion+ business alone is pretty rarified air in itself.

The $2.9 billion is not just GamePass revenue, but also includes XBL Gold revenue. At best, GamePass revenue is around $1.625 billion annually.

What is this word salad lol, this post makes no sense.

Who/when/where made the talking point that MS always pay more than Sony ?

Literally MANY people. Sony having a larger install base of consoles, meaning lower amounts to pay for exclusivity of 3P titles on the platform. It would be natural to assume that is likely the case, then also extrapolate that to getting 3P games on the respective sub services.

However, ARK shows that isn't actually always the case. I'm guessing MS and that game's publisher arranged a deal including some percentage during that six-month period paid out based on player metrics, too. Would explain the lower upfront cost on MS's end for the longer period.

 

[adamsapple]

Literally MANY people. Sony having a larger install base of consoles, meaning lower amounts to pay for exclusivity of 3P titles on the platform. It would be natural to assume that is likely the case, then also extrapolate that to getting 3P games on the respective sub services.

However, ARK shows that isn't actually always the case. I'm guessing MS and that game's publisher arranged a deal including some percentage during that six-month period paid out based on player metrics, too. Would explain the lower upfront cost on MS's end for the longer period.

You're missing one very crucial thing.

Ark has been on game pass for at least 2~ years already. This deal is just a 'renewal' and as per the filings, it makes Ark's stay on game pass 'perpetual'. Comparatively, Sony's payment was for the first time arrival for Ark on PS+.

I think we can safely say MS has paid more for Ark if we use even a mediocre number for the original deal and this renewal one.

 

[SLB1904]

13 pages later... do we have any concrete source for this or we just going around arguing around about some random "estimations" on twitter.

Regardless if this is true or not isn't xbox revenue in 2021 around 16b?
Honestly I would expect the gamepass to be the bigger part of it

 

[Chukhopops]

13 pages later... do we have any concrete source for this or we just going around arguing around about some random "estimations" on twitter.

Regardless if this is true or not isn't xbox revenue in 2021 around 16b?
Honestly I would expect the gamepass to be the bigger part of it

The source for the 2.9bn is the CADE statement so it’s definitely true unless you think MS would lie to a regulation authority.

20% of total gaming revenue is actually quite a lot, but it also means that MS isn’t gambling the entire house on just GP, they keep selling games, getting their platform cut, etc.

As far as I can tell there’s nothing incorrect with the conclusions of the article.

 

[pasterpl]

The $2.9 billion is not just GamePass revenue, but also includes XBL Gold revenue. At best, GamePass revenue is around $1.625 billion annually.

The op doesn’t mention xblive at all. So not sure why you are trying to bundle that in.

 

[SLB1904]

The source for the 2.9bn is the CADE statement so it’s definitely true unless you think MS would lie to a regulation authority.

20% of total gaming revenue is actually quite a lot, but it also means that MS isn’t gambling the entire house on just GP, they keep selling games, getting their platform cut, etc.

As far as I can tell there’s nothing incorrect with the conclusions of the article.

As far as i can tell they are basing the revenue based on the numbers of subscribers. Microsoft didn't release the revenue number

 

[DaGwaphics]

As far as i can tell they are basing the revenue based on the numbers of subscribers. Microsoft didn't release the revenue number

I don't think so. Regulatory agencies don't just make up numbers, they would use the ? if they didn't have firm numbers (like they did for Sony). The chart is filled in with numbers provided to them by the parties involved.

 

[IFireflyl]

The op doesn’t mention xblive at all. So not sure why you are trying to bundle that in.

I agree with you, but I do see another wrinkle. I'm assuming that Game Pass' revenue is including the Game Pass subscription. It'd be silly if it didn't. However, if there are 25,000,000 subscribers, those subscribers are no longer paying for Xbox Live Gold. Since the bulk of those subscriptions were people who were already paying for Xbox Live Gold, a big chunk of this $2.9 billion revenue is just the funds that Xbox was already making with Xbox Live Gold, but now moved to Game Pass' revenue stream.

If every one of the 25,000,000 Game Pass subscribers was previously on the yearly Xbox Live Gold plan that was $60 (this is the cheapest option as the monthly plans would be $120/year) that comes out to $1.5 billion. That's over half of Game Pass' revenue stream, but really that is just Xbox Live Gold money that is now being shuffled around and being called Game Pass revenue.

Now, I'll admit that I don't know all of the particulars and its possible that I'm overlooking something, but with this in mind that $2.9 billion in revenue doesn't seem as impressive to me. It was already money that Xbox was making, and it's essentially being used to artificially inflate Game Pass' revenue. After all, people aren't paying for Xbox Live Gold and Game Pass, so that means Microsoft had to lose money from their Xbox revenue stream to account for those 25,000,000 people who are no longer paying for Xbox Live Gold.

To everyone on this, feel free to poke holes in this. Maybe I'm missing a piece of the picture. If I'm misunderstanding something I want to know.

 

[SLB1904]

I don't think so. Regulatory agencies don't just make up numbers, they would use the ? if they didn't have firm numbers (like they did for Sony). The chart is filled in with numbers provided to them by the parties involved.

The twitte literally says based on our estimations. There is no official revenue numbers

 

[DaGwaphics]

The twitte literally says based on our estimations. There is no official revenue numbers

I was talking about the charts from the CADE decision, did it say it was an assumption in that document? Although, it could have been Sony's position they were referring to, as they estimated a market % for them, but did not have numbers.