Based off? Assumptions? How you dividing the gamepass revenue from MTX from typical revenue on game sales
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Shawn Layden: Consolidation is the enemy of diversity
- Thread starter saintjules
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I would also add that's probably a bad year for profit for Sony given they are selling consoles at a loss. I also think the xbox servers are being used for other things like Azure.
I also would be interested in figuring out the employee count of each company, Microsoft does have some very small studio's.
SlimySnake
Flashless at the Golden Globes
Someone else said this above and I completely agree. He seems to be clueless. Indies games have never been easier to make. Epic is literally giving away all the UE5 megascans for free to indies. You dont even have to pay them any royalties until after they make their first million. Three ex-DICE developers made this massive world in just three weeks.
We have seen several indie devs release and find success lately. Sony's own show had like half a dozen indie games. Kena is from a smallish studios and its their big game this fall. Ascent is coming out this week and looks absolutely stunning.
People love Shawn but some of his comments were just baffling back when he was with Sony. He said he doesnt like doing PSX and other big E3 shows. He said the reason he doesnt invest in FPS and MP games is because he doesnt want to compete with third parties. Seeing as how GoW and Horizon started dev in 2017 and 2018, i wouldnt be surprised if he was responsible for them being cross gen since he only left in 2019.
I would actually question why 100 man teams are taking 7 years to make games like Ghost of Tshushima and Days Gone when other 100 man teams like Kojima production can literally start from scratch building up a studio and deliver in 3.5 years.
Their studios are poorly managed. Why did Horizon take 6 years? Why is Horizon 2 taking 5 years? Why is Insomniac so much more productive? Even ND, their most productive studio in the PS3 gen with 4 games, had their output literally halve to 2 not counting a smaller expansion title like Lost Legacy. Their studio has actually doubled in size and are not able to produce games quickly. Thats on Shawn Layden and the upper management at SCEA which is now basically SIE since they run their playstation business out of San Mateo now.
I wouldnt be surprised if Herman is cleaning up his mess. Though wasting two years of Sony Bends time with rejected pitches doesnt give me enough confidence in him either.
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sainraja
Member
I am saying games that usually push MTX are also ones that are F2P. I am not too familiar with Fifa but did read a headline today that stated EA is making Fifa F2P. If the game in its current state has MTX and is a paid title, well, it's EA so not surprising....at all. But generally MTX heavy games are also free to play.
And Destiny 2 is a free to play game. The value that Game Pass provides us there is with the existing expansions but I am not questioning value here. I was just pointing out to you that MTX and F2P go together and access to the game isn't the benefit of a subscription, so that game having MTX doesn't help Game Pass or hurt it.
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alabtrosMyster
Banned
Giant corporations will crumble under their own weight.
Heisenberg007
Gold Journalism
That is true. They have started earning profits per PS5 unit sold from July. I totally expect them to earn $4 billion in net profit this fiscal year -- especially if Horizon Forbidden West releases in 2021.
Microsoft does have smaller-ish studios, but they also have some very big ones now: Obsidian, 343i, Playground, Bethesda, etc. Also, their studios have many smaller teams with them working on multiple games simultaneously (reportedly).
kingfey
Banned
it helps in term of sales. MS gets 30% cut.
Mot modern games have some sort of mtx. Its not limited to xp or equipments.
You have characters, armors, skins.
In easy term, its the adds on. like resident evil games, which gives you characters, outfits as mini dlcs, or adds on.
James Sawyer Ford
Member
I can’t imagine what we’d be getting if Shawn was still leading PlayStation
getting rid of “risky” 200M games in favor of more Vib Ribbons.
AAA is in Sony’s DNA, it’s proven to be profitable, and I suspect it will grow the industry.
he says gaming hasn’t grown based on console sales (false), but the more accurate metric is game sales
compare God of War sales to God of War 1 or 2
Portugeezer
Member
Wise man.
kingfey
Banned
the problem with this statements, is that it doesnt work in the current timeline.
It would have in the past, but nope as of now.
Both these guy shave the mentality of the short profit, which is why services like gamepass is impossible to them.
If you consider the sub only, and dont pay attention to the game add on, dlc, the ability to buy the games as a revenou. Yes those service wont make that much money.
The All In-game Rewards Unlock item costs $4.99 and grants immediate access to “The 4th Survivor” and “The Tofu Survivor” scenarios, as well as costumes, the infinite bonus weapon, and in-game models and concept art.Apr 8, 2019
That is for resident evil 2 remake. 1 single game. Now imagine 18m have access to a game like that. and 100k bought it. that is a 30% cut for Microsoft. With 475+ games having some form of adds on, how much money do you think Microsoft can make? This is no counting actual dlcs, or buying the actual game.
kingfey
Banned
You dont need god of war.
human fall flat managed to actually sell 30m copies. That i show much gaming have become.
Sorry about my post there. Scroll up.
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JerryinSoCal
Member
Yep plus the infrastructure costs involved with delivering the game, azure doesn't run for free. There are a lot more costs that go along with just the straight up dev cost, employees that aren't included in that need to be paid, marketing etc it's a lot more than people here think. His figure may be a little high but it's probably closer to realistic than someone who thinks the straight up dev budget for a single game is all that they need to make. They don't just need to recoup the dev cost anyway they need to make a profit.
nikolino840
Member
I smell the fear for gamepass
Why start to speak of subs. in an interview? Why he cares? Downplay and looking for spread the news for investors and publishers?
Insert the complot meme i know
Why start to speak of subs. in an interview? Why he cares? Downplay and looking for spread the news for investors and publishers?
Insert the complot meme i know
The Pleasure
Member
What about servers, data costs, patches, maintenance and so forth? Servers and data aren't free. Maintenance isn't free. Continued development isn't free. I assume the 200 mil is the base cost to make and then the expenses pile from there.
Salty Popsicle
Banned
Microsoft has been around for 46 years now and is the second highest valued company in the world. I don't think they need Shawn Layden or any of us to crunch numbers for them, the seem to know what they're doing. If Satya Nadella didn't think GamePass and Xcloud would be feasible endeavors, he would have cut funding on those initiative's before we even heard of them.
He doesn’t really care outside of the health of the industry. He mentioned that the 10$ increase of games help but doesn’t solve the issue of ballooning cost of making games. Which was his main point btw. So if 70$ per game won’t save the industry with a user base that hasn’t grown since the PS1 days, then how are other payment models going to solve this problem.
His main point that it concentrates the industry to the same avenues that have found it success which negatively impacts diversity. The health of the industry goes beyond payment models.
SlimySnake
Flashless at the Golden Globes
yeah thats a headscratcher. PS as a business has grown. Half of Fortnite's $9 billion in revenue is on PS4. MS fortnite revenue is lower because their install base is smaller. I dont know wtf hes talking about.
The part about not needing consoles if a streaming service is available is kinda bizarre too. Consumers arent stupid. if their tv ran GTA just as well as it runs Netflix and Disney+ tv shows then of course they wont buy consoles. But consoles are in higher demand than ever because consumers know thats literally the best and most cost effective way to play games. He sounds like one of those early 2010s analysts like Pachter who though console gaming was going to die. If anything, the launch hysteria of next gen has proven that console gaming will be around for a long time. And given how expensive things are, I highly doubt streaming becomes a thing anytime soon. You are expecting cloud to have 100 million instances running at once which means a massive initial investment of 100 million consoles. These guys cant even produce more than 1 million consoles for the launch, and we expect the PS6 and the next Xbox to have enough servers to meet day one demand and have MS and Sony eat up literally 100 million * $500 = $50 billion of up front server costs because?
BabyfaceRe
Member
His take is fairly accurate but also pretty odd considering the business model he propagated at Sony.
For a start Sony have been buying up studios since long before MS's spending spree began, overtly consolidating talent and locking it to a single platform.
Not only that, Sony have been one of the biggest if not THE biggest advocates for ridiculous levels of quality in their games and the ridiculous budgets that go along with it. As much as what he says is true it also seems like he takes no responsibility for actually creating that standard. As far as mainstream/casuals are concerned, a game that doesn't look like TLou 2 or GoW or R&C is often considered as a not very good looking/subpar/trash game. The people who set the standard for talent consolidation and insane budget for games are the ones to blame and unfortunately Shawn Layden played as a much a part in that as anyone else.
Games like Hades and Ori and the Blind Forest don't even reach budgets close to 10 million. The idea that games have to cost 100-300 million is kind of ridiculous when you consider the person saying that is someone who helped fuel that trend.
For a start Sony have been buying up studios since long before MS's spending spree began, overtly consolidating talent and locking it to a single platform.
Not only that, Sony have been one of the biggest if not THE biggest advocates for ridiculous levels of quality in their games and the ridiculous budgets that go along with it. As much as what he says is true it also seems like he takes no responsibility for actually creating that standard. As far as mainstream/casuals are concerned, a game that doesn't look like TLou 2 or GoW or R&C is often considered as a not very good looking/subpar/trash game. The people who set the standard for talent consolidation and insane budget for games are the ones to blame and unfortunately Shawn Layden played as a much a part in that as anyone else.
Games like Hades and Ori and the Blind Forest don't even reach budgets close to 10 million. The idea that games have to cost 100-300 million is kind of ridiculous when you consider the person saying that is someone who helped fuel that trend.
kingfey
Banned
Its already being paid by the xbox other revenue. Gamepass isnt a new service. The only thing for Azura is the xcloud. It operates the same way playstation operates.
The 200m revenue gamepass brings from the subs alone covers the game agreements for that month.
As for the infrastructure, its already there. They are using the already built in xbox infrastructure. Only additional fees would be from Xcloud from Azura.
iHaunter
Member
Microsoft is planning to do many future games as a service now. So it may work with that shitty model.
Halo Infinite for example.
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Stooky
Member
Its not easy to make a game except for maybe Flappy Bird. You gotta pay your workers at some point. the pay will dictate what quality you get, that is the direct result how much funding a dev gets (or how much percentage the dev has to give up) which is one of the hardest obstacles to overcome. I've seen several people go through this. Most don't survive. Also comparing dev times on games is waste of time. Each game being developed has its on own unique battles some will take longer and cost more others wont.
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Punished Miku
Gold Member
Seriously. That's a fantastic point. Now it suddenly means "enemy of diversity."
Kagey K
Banned
All those costs are still there with or without a Subscription service, they are all part of releasing games on the ecosystem.
Or are all those things suddenly gone if gamepass goes away and we go back to only being able to buy games?
Kenpachii
Member
Shawn Layden: Consolidation is the enemy of diversity
At Gamelab last year, Shawn Layden grabbed headlines for calling out the spiralling costs of game development.Although …www.gamesindustry.biz
The guy sucks at math.
Subscription service is 10 bucks = 500m = 5 billion bucks, if a game costs 200m to make ( which barely any game does ) it will mean u can make a whooping 25 games and that's just for a single month, so on a year base that's 300 games of 200m.
Now that's obviously taking everything away from it like costs etc that come with it but lets be honest no way we going to see that amount of games even being a thing let alone from those budgets. Because there is no industry to support it with devs.
There is a reason why microsoft is booting a netflix model up. its massive bank.
About smaller devs,
a smaller dev can choose to be bought out or he can truck forwards the way he likes too. For example 2-5 people with valheim made a juggernaut of a success game that sold about 7m copy's at lets say 10 bucks ( as there is a fee ), that's what a whooping 70m bucks. Yea i am sure they are very very worried about stuff.
Honestly there is no issue here.
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RCU005
Member
Also, the company with the streaming service doesn't get 100% of the subscription. They need to pay licenses, etc.
Null Persp
Member
That's a very dumb comment about Game Pass.
Not every game needs that budget and they don't need that ridiculous number of subs to recoup the costs, they are not even exclusive on the service or releasing only on Xbox, they sell them even on PC where are usually on the top spot of steam charts, not even counting the MTXs and DLCs.
Not every game needs that budget and they don't need that ridiculous number of subs to recoup the costs, they are not even exclusive on the service or releasing only on Xbox, they sell them even on PC where are usually on the top spot of steam charts, not even counting the MTXs and DLCs.
The Pleasure
Member
If we are going to make cloud based gaming even remotely usable there needs to be a lot more servers. And the infrastructure is always upgraded so it's not a one and done deal as there is always maintenance and capacity and so forth. It's ongoing costs.
You also state agreements for the month. How often are these worked? How often do companies pull out amd how often do contracts have to be reworked?
TheThreadsThatBindUs
Member
I don't think that's what he's advocating.
The problem with $200m games is the lack of creative risks that will be taken, and the larger the upfront investment by publishers, the larger their appetite to maximise monetisation by shunting more and more MTXs into the games, which from a gamer perspective can have a hugely deleterious effect on overall game quality.
You don't need a AAAA budget to make a great quality cinematic single-player game, and I'd argue the latter is what is in Sony's DNA, not so much the scale of budgetary spend.
With the democratisation of utter top-tier game development tools like UE5, indie devs also have the opportunity to scale budgets up from what would be considered traditional indie games to something akin to the AAA games of previous generations (but with modern graphics).
Being able to promote a diversity of content across game genres as well as scope of content will be key to future platform success and the ability to continue to delight gamers.
As the top end AAAA games become more homogenised and more deeply monetised, the smaller "small", "medium" and "large" indie titles can begin to plug the genre, creativity and originality gaps that will inevitably appear in the top end content that by definition necessitates targetting the broadest possible appeal.
Naaaaah!!!!
A greater breadth of content is what will grow the industry. As AAA becomes AAAA and then AAAAA, the content focus will narrow, become more and more homogenised and thus ultimately peak in terms of overall appeal.
Smaller scope games will be absolutely necessary to provide that "something for everyone" for the cross-sectional groups of gamers whose tastes lead them away from the biggest blockbuster titles to some of the more artistic, niche, quirky and interesting stuff.
I agree with this point.
Heisenberg007
Gold Journalism
Yeah some of this thoughts seem outlandish. I feel happy that he is not in charge anymore. Things could have been much differrent if he was. I don't think we would be getting many AAA games from Sony if he was.
kingfey
Banned
They own the servers. They dont have to pay anything. Azura clients pays the fees.
They do an agreement for certain amounts of money. like epic did in their latest report. unlike new accounts, MS has something else in place for it.
The only thing you need to look at is the value of that month. Outriders and mlb the show are the most expensive they had, since they were day 1. Those are expensive. last month was cheap. Since there was no significant game day1.
Warablo
Member
Ya, clearly all these companies with subscription services clearly don't know what the hell they are doing.Experience is talking here.
StreetsofBeige
Gold Member
They've been profitable for a long time.
That means nothing.
Microsoft and Apple have debt too.
And profits are calculated based on revenue and costs. Not loans.
thicc_girls_are_teh_best
Member
But he has no experience leading a business model anywhere similar to what GamePass is doing, and he doesn't have access to Microsoft's financial numbers.
He's not even necessarily talking solely about Microsoft in this, his comment applies to subscription services as a whole, but it's a bit like a blunt ax of a comment for a row of individual fine steaks; it won't really specifically fit any one in particular.
His other comments do seem to shine more light on what he might perceive as a frustration with aspects of the industry that, while affecting companies other than the one he was working for up to 2019, might've led to specific frustration with said company he used to work at and could be at the root of his departure. I feel him on prospects of another Vib-Ribbon or Parappa probably not getting greenlit, not as an internally developed, first-party title anyway.
Ironically however, I think there's a better chance for those games getting funding through a subscription-like service, if anything.
thicc_girls_are_teh_best
Member
Yep; the go-to seems to always be Netflix because it's the first to roll off the tongue and probably easiest to understand, but it's not similar to what a company like Microsoft seems to be doing. The Netflix comparison works better with, say, Stadia in that context.
iHaunter
Member
So it's our fault Microsoft made shitty games? And now has a subscription model around shitty live service games?
Seriously?
bender
What time is it?
Math is hard unless you want the Game Pass catalog to be 1 game.
itsjustJEFF
Member
I love the Monday Quarterbacking of the financials... damn, you guys make it sound so easy.
If I remember right, he's likely the only one (on this forum) who has been a part of the talks and the numbers behind a sub service. He definitely wasn't a part of calculating the numbers team, but you better believe that those numbers were reported to him. He's had meetings with the financial guys and everyone else below him on how it all shakes out financially. He might be a little hyperbolic, but he's speaking from experience.
If I remember right, he's likely the only one (on this forum) who has been a part of the talks and the numbers behind a sub service. He definitely wasn't a part of calculating the numbers team, but you better believe that those numbers were reported to him. He's had meetings with the financial guys and everyone else below him on how it all shakes out financially. He might be a little hyperbolic, but he's speaking from experience.
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Bernd Lauert
Banned
No wonder this guy got fired. He doesn't seem to have a clue (that math lmao) and seems stuck in the 90s or something.
Bladed Thesis
Member
Unhinged concern is the best.
recursive
Member
Yea I don't disagree. Fuzzy math was used.
sainraja
Member
Yes it benefits Microsoft. I am saying it's not a benefit of the subscription since the game is free to play. Switch Microsoft with Sony and you should get my point. Free 2 Play games with MTX benefit both Sony and Microsoft equally and Sony doesn't have Game Pass.
He eloquently states issues I have not only with gaming but also with cinema. All of these companies “consolidating” may still offer diverse games initially, but it is all too easy, and common for the parent company to turn these once unique companies into factories for their biggest selling titles. Look at Raven software for example.
It seems like you either need all the money in the world or “no” money to make a game these days.
It seems like you either need all the money in the world or “no” money to make a game these days.
Hobbygaming
has been asked to post in 'Grounded' mode.
Debt means nothing? Lmao Even to a trillion dollar company they want to start seeing a return on their investments within a certain time frame.
Example: Mixer
kingfey
Banned
It depends on what the value of these f2p has.
The point of value is to tie to a certain sub and make it seem good value.
For example, destiny 2 has all dlc on gamepass. Same for rainbow siege deluxe edition. People will likely play it on xbox, and spend their mtx on xbox console, since they are getting value from it, while enjoying other gamepass games.
Its all coming together. Gamepass benifits the xbox console, by bringing more people. More xbox players will sub to the service. And both raise the revenue for xbox.
From resetera.
Microsoft Corp. today announced the following results for the quarter ended June 30, 2021:
- Revenue was $46.2 billion and increased 21%
- Operating income was $19.1 billion and increased 42%
- Net incomerevenu was $16.5 billion and increased 47%
- Diluted earnings per share was $2.17 and increased 49%
Gaming
- Gaming revenue increased $357 million or 11% driven by growth in Xbox hardware, offset in part by a decline in Xbox content and services.
- Xbox hardware revenue increased 172% driven by higher price and volume of consoles sold due to the Xbox Series X|S launches.
- Xbox content and services revenue decreased $128 million or 4% driven by a decline in third-party titles on a strong prior year comparable that benefitted from stay-at-home scenarios, offset in part by growth in Xbox Game Pass subscriptions and first-party titles.
kingfey
Banned
Here. Hope this helps you confirm your proof.
Microsoft Corp. today announced the following results for the quarter ended June 30, 2021:
- Revenue was $46.2 billion and increased 21%
- Operating income was $19.1 billion and increased 42%
- Net incomerevenu was $16.5 billion and increased 47%
- Diluted earnings per share was $2.17 and increased 49%
Gaming
- Gaming revenue increased $357 million or 11% driven by growth in Xbox hardware, offset in part by a decline in Xbox content and services.
- Xbox hardware revenue increased 172% driven by higher price and volume of consoles sold due to the Xbox Series X|S launches.
- Xbox content and services revenue decreased $128 million or 4% driven by a decline in third-party titles on a strong prior year comparable that benefitted from stay-at-home scenarios, offset in part by growth in Xbox Game Pass subscriptions and first-party titles.
Azurro
Banned
I'm afraid you are the one that hasn't thought it through. the 9.99 isn't pure profit for MS, they have to spend money on creating the content, multiple teams at a time, maintaining the infrastructure, paying publishers for Gamepass content and so on. All of that isn't cheap.
When people get into these shilling arguments, they forget that business not only receive income, but have expenditures, vast ones in the case of MS. That's why GamePass is still a money hole.
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