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[feynoob]

What? The $1 deal lasts 3 years…

Also GP is free with chips these days…
https://news.xbox.com/en-us/2022/10/03/doritos-rockstar-xbox-game-ultimate-partnership/

No one is paying full price for it. If you can’t find the obvious discounts, you’re certainly unable to know how to even sign up for GP in the first place. In fact I’d doubt you have a credit card…

10k copies is not 1m sales.
These are tiny drops compared to the 25m recurring monthly payments.

Do people seriously think these stuff does millions?

 

[Gamezone]

Call of duty is already on Steam.

Yeah, but how about Tony Hawk, Diablo, Warcraft, Starcraft and Overwatch? If the deal goes trough, we can have these games on Switch, Gamepass, Steam and major streaming services. Probably EGS too. And COD will still excist on PlayStation. There are only benefits with this deal.

 

[ToadMan]

One question: is it allowed to bring an ERA post, crediting the OP, so it can be discussed here? Or would it be considered no-go?

As far as I can tell a lot of the posters ITT are just parroting stuff from REE.

Quite funny - they slate the place one moment, and then go scavenging for crumbs from there the next.

So sure - if REE is the kind of place you identify with go ahead and repost that here.

Just don’t mention Harry Potter…

 

[POKEYCLYDE]

I have difficulty seeing the end goal MS has for Bethesda, from a business only POV. They spent a lot of money buying Zenimax, then cut their game sales by half (max estimate) by not releasing new games on Playstation and then even more by putting them on gamepass day one, but games still cost the same to make.
How can Zenimax report any profit at the end of each quarter like this?
Some people at Zenimax must be chugging Zanax like they are Smarties to go to work every day.

Contrary to some popular talking points, Microsoft wants to sell Xbox's and get people into their ecosystem. The most effective way to do this is by making games exclusive.

No one wonders why Sony doesn't release games like The Last of Us and God of War on Xbox or PC.. because those games move consoles. Starfield will likely be a system seller.

If 1 million people buy an Xbox to play Starfield, Microsoft isn't just getting money from the console and game sold, they may possibly get revenue from other software, microtransactions or services. A new customer could potentially bring in more revenue then they lose from a single game being sold on Playstation.

Math on how Gamepass probably works below:
As for Gamepass, once it reaches a certain amount of subscribers, the revenue will cover development costs and 3rd party deals, plus be profitable. We have no idea what that number is, but supposedly Microsoft says Gamepass is already profitable.

If we assume all 23 of Microsoft's studios are making AAA games with a cost of 200M to make over 4 years, Microsoft would need to make 1.15B to recoup the costs of first party development. Let's also say that 3rd party deals cost 1.35B a year to round out the total cost at 2.5B a year.

Then if we assume the average Gamepass subscriber is paying $10 a month or $120 a year, with 25 million subscribers, Microsoft would be making 3B, more than enough to cover costs of development and 3rd party deals on Gamepass. The higher that subscriber count goes, the more profit Microsoft makes, as development costs stay the same. However, as subscriber count climbs, 3rd party deals would become more expensive.

These are just estimates on what dev costs and what not are, but you can see how Gamepass could be profitable enough to cover costs.

 

[feynoob]

Incase people want to argue about this 1$ deals.

Lets say MS does do 100k copies for these chips for that 1 month.l, but only 50k people stay for the service.
That is $8.250m by the end of that year, since you will get charged 15$ once your free 1 month ultimate finishes.

And all they lost was $1.5m for that month, but gained $8.250m in the process.

That is not a loss.

 

[ToadMan]

10k copies is not 1m sales.
These are tiny drops compared to the 25m recurring monthly payments.

Do people seriously think these stuff does millions?

Friends don’t let their friends pay full price for GP.

 

[feynoob]

Friends don’t let their friends pay full price for GP.

But do people have 1m friends?
And what if those friends also joined gamepass because of those sharing?
Wouldn't they be helping MS in the process?

 

[Edmund]

I'm not a crybaby.

I caught you crying on Twitter the other day and posted it here. I wasn't even following you. Your tweet just popped up randomly and you were crying.

 

[Ar¢tos]

Contrary to some popular talking points, Microsoft wants to sell Xbox's and get people into their ecosystem. The most effective way to do this is by making games exclusive.

No one wonders why Sony doesn't release games like The Last of Us and God of War on Xbox or PC.. because those games move consoles. Starfield will likely be a system seller.

If 1 million people buy an Xbox to play Starfield, Microsoft isn't just getting money from the console and game sold, they may possibly get revenue from other software, microtransactions or services. A new customer could potentially bring in more revenue then they lose from a single game being sold on Playstation.

Math on how Gamepass probably works below:
As for Gamepass, once it reaches a certain amount of subscribers, the revenue will cover development costs and 3rd party deals, plus be profitable. We have no idea what that number is, but supposedly Microsoft says Gamepass is already profitable.

If we assume all 23 of Microsoft's studios are making AAA games with a cost of 200M to make over 4 years, Microsoft would need to make 1.15B to recoup the costs of first party development. Let's also say that 3rd party deals cost 1.35B a year to round out the total cost at 2.5B a year.

Then if we assume the average Gamepass subscriber is paying $10 a month or $120 a year, with 25 million subscribers, Microsoft would be making 3B, more than enough to cover costs of development and 3rd party deals on Gamepass. The higher that subscriber count goes, the more profit Microsoft makes, as development costs stay the same. However, as subscriber count climbs, 3rd party deals would become more expensive.

These are just estimates on what dev costs and what not are, but you can see how Gamepass could be profitable enough to cover costs.

I can't see 1m people buying an Xbox console just to play Starfield (or any Bethesda game), I don't think Bethesda has that much leverage, specially with a new IP. TES 6 would be their game with most appeal. COD however can move masses of casuals and younger players.

 

[DenchDeckard]

Its a huge investment but the numbers actually work against the idea. You don't spend $70B to reduce your revenue by $5B per year. You do it to increase it. Spending $140B on an acquisition doesn't make it twice as likely you would say goodbye to that revenue since thats a deal 24x it. If anything you would be trying to raise revenue whereever you can to make it worth that investment in as short a time as possible.

Activison makes around $7B revenue per year. now imagine you take $5B + whatever percentage of that $7B that's attributed to the UK off of that. That might make your revenue increase from the acquisition somewhere around $1B, meaning it might take 70 years for you to see a ROI in revenue alone.

Yes, BUT it's a poker play. It doesn't mean they will do it. Just imagine that they bluff that they will. How would the CMA respond to Microsoft not operating in the UK anymore because they were the only body didn't ok the deal, say if hyperthetically the rest of the world ok it?

It would crush UK business if MS weren't operating here.

 

[feynoob]

Contrary to some popular talking points, Microsoft wants to sell Xbox's and get people into their ecosystem. The most effective way to do this is by making games exclusive.

MS abandoned that route in 2015.
The moment they started day1 PC, was the moment their consoles started to lose value in term of exclusivity.

Sony is heading in that direction too, once they do day1 games.

 

[POKEYCLYDE]

I can't see 1m people buying an Xbox console just to play Starfield (or any Bethesda game), I don't think Bethesda has that much leverage, specially with a new IP. TES 6 would be their game with most appeal. COD however can move masses of casuals and younger players.

I don't know how many people would buy an Xbox for just Starfield, but with enough exclusives it will move the needle. Redfall and Starfield are just the beginning. Pentiment, Grounded and Hi-Fi Rush are amazing games (All new IP, and again, alone may not move the needle).

But what happens when games like Avowed, Fable, Everwild, Hellblade 2, Perfect Dark, State of Decay 3, Outer Worlds 2, Elder Scrolls 6, the next Doom and Wolfenstein come out? That's all not including ABK. If the ABK deal goes through, things like Diablo or the survival game Blizzard is working on will be on Gamepass and possibly exclusive. There's also the possibility of fan favourite games coming back. Obsidian has said they're interested in making a New Vegas remastered. Maybe a good Banjo Kazooie game comes out?

None of these move the needle by themselves, but it piles up, and on top of that they would all be in Gamepass.

 

[jm89]

Yes, BUT it's a poker play. It doesn't mean they will do it. Just imagine that they bluff that they will. How would the CMA respond to Microsoft not operating in the UK anymore because they were the only body didn't ok the deal, say if hyperthetically the rest of the world ok it?

It would crush UK business if MS weren't operating here.

Good thing it's just xbox fanboy revenge fanfic and nobody is that delusional to believe that. Right?

 

[POKEYCLYDE]

Items 1 and 2 are arguably bad for the long term quality of CoD

Item 3 is uncertain

I know a certain CCO you might jive with lol. She also likes to suggest unionization is bad.

 

[Ar¢tos]

I don't know how many people would buy an Xbox for just Starfield, but with enough exclusives it will move the needle. Redfall and Starfield are just the beginning. Pentiment, Grounded and Hi-Fi Rush are amazing games (All new IP, and again, alone may not move the needle).

But what happens when games like Avowed, Fable, Everwild, Hellblade 2, Perfect Dark, State of Decay 3, Outer Worlds 2, Elder Scrolls 6, the next Doom and Wolfenstein come out? That's all not including ABK. If the ABK deal goes through, things like Diablo or the survival game Blizzard is working on will be on Gamepass and possibly exclusive. There's also the possibility of fan favourite games coming back. Obsidian has said they're interested in making a New Vegas remastered. Maybe a good Banjo Kazooie game comes out?

None of these move the needle by themselves, but it piles up, and on top of that they would all be in Gamepass.

Yes, but the problem is that while the build up happens (and I am one of the ones waiting for that build up to buy a XSS, mainly Fable) these studios just bleed money. Doesn't seem to be sustainable.

 

[feynoob]

Its a huge investment but the numbers actually work against the idea. You don't spend $70B to reduce your revenue by $5B per year. You do it to increase it. Spending $140B on an acquisition doesn't make it twice as likely you would say goodbye to that revenue since thats a deal 24x it. If anything you would be trying to raise revenue whereever you can to make it worth that investment in as short a time as possible.

Activison makes around $7B revenue per year. now imagine you take $5B + whatever percentage of that $7B that's attributed to the UK off of that. That might make your revenue increase from the acquisition somewhere around $1B, meaning it might take 70 years for you to see a ROI in revenue alone.

There is also another value which Activision brings outside of revenue. It increases their console sales, which also brings more revenue.

For example, if activitision deal allows them to sell extra 20m consoles, that is extra revenue, which otherwise they wouldn't have been able to get it without them.
If each user spends up to 100$ a year for 10 years, that is extra $20b revenue.

Then you have to account gamepass increase and having more 3rd party supporting their system. That is extra revenue too.

MS can recoup those investment faster under 10-20 years.

 

[jm89]

But what happens

 

[feynoob]

Yeah, but how about Tony Hawk, Diablo, Warcraft, Starcraft and Overwatch? If the deal goes trough, we can have these games on Switch, Gamepass, Steam and major streaming services. Probably EGS too. And COD will still excist on PlayStation. There are only benefits with this deal.

The only true benefit to this deal is MS having more reach than before.
This deal will shape Xbox future like x360.

CoD will be the face of Xbox. MS will have a lot of marketing power thanks to Activision popularity.

Gamepass will get more day1 games, because COD is dropping day1 on the service.

The value is insane for MS, and that is from the console department.

For us plebs, it will be another Monday.

 

[MasterCornholio]

Yes, BUT it's a poker play. It doesn't mean they will do it. Just imagine that they bluff that they will. How would the CMA respond to Microsoft not operating in the UK anymore because they were the only body didn't ok the deal, say if hyperthetically the rest of the world ok it?

It would crush UK business if MS weren't operating here.

Maybe they would announce that to the public?

Just a thought.

 

[feynoob]

It would crush UK business if MS weren't operating here.

Are Americans this much stupid?
MS is the one that will lose a lot of money, compared to UK government.

There are companies who do the same work as MS. Those will have more appeal, if MS exists UK market.

 

[JLB]

What? The $1 deal lasts 3 years…

Also GP is free with chips these days…
https://news.xbox.com/en-us/2022/10/03/doritos-rockstar-xbox-game-ultimate-partnership/

No one is paying full price for it. If you can’t find the obvious discounts, you’re certainly unable to know how to even sign up for GP in the first place. In fact I’d doubt you have a credit card…

Earth is flat.
Our presidents are lizards.
Chemical in water is turning people gay.
Paul McCartney dies and was replaced by a double.
Prince Charles is a vampire.
The moon does not exist.
Obama could control the weather.
No one is paying for Gamepass.

 

[Heisenberg007]

Don’t overthink it.
You like Playstation - No pretending, would you not like if Sony owned Activision Blizzard or Take-Two or Capcom or Square Enix or Kojima Productions etc if you knew it would mean that you’ll get all their previous and upcoming games for free on a service you’re already perfectly fine subscribing to?
For most I’d say it’s really that simple. More games for less money.

Microsoft does not need to acquire publishers to get games on Game Pass. For $70 billion, they can get every game on the planet on Game Pass without acquiring anyone. Shouldn't that be preferred over buying ABK if Game Pass is your primary reason?

 

[Demon2blades]

What's with all this talk about Ms leaving the UK... Ms is not gonna quit the UK lol id guess it would cost them loads in lost revenue and open up the UK to it's competition in office software and everything else... also are we saying Microsoft is more powerful than an actual country now and can hold them ransom ? The UK is not some 3rd world country .

 

[MasterCornholio]

What's with all this talk about Ms leaving the UK... Ms is not gonna quit the UK lol id guess it would cost them loads in lost revenue and open up the UK to it's competition in office software and everything else... also are we saying Microsoft is more powerful than an actual country now and can hold them ransom ? The UK is not some 3rd world country .

Think about what would happen if this was revealed in public. What would the other regulators think about this and how would it affect future acquisitions?

 

[SteelCurtain 59]

You have to remember there is a lot of money tied up in Acti stock on the assumption it’ll get to $93 or whatever the price was.

Now its stuck in the $70s.

Good news stories pump the price now - some can get out t water, others limit losses.

If the original deal ends up back in the hands of ABK and MS to go back to shareholders, or just totally shelved the stock reverts back down to where it should be, and it’ll be plebs left holding the bags as usual. The guys doing the leaking now will be long gone.




Doesn’t require acquisition.



Debatable but regardless, not a consideration for regulators.

So zero positives of consequence…

It does for all intents and purposes, would cost a fortune to get COD on game pass day one (let alone all other Activision games) and the games would leave after a likely short period of time,

And most importantly, it wouldn't stop Activision from making a deal with Sony to prevent COD or other games from going on game pass, or Sony signing exclusivity contracts or buying Activision, you can be against the acquisition all you want but your argument is incredibly flawed, Xbox owning Activision would greatly benefit Xbox gamers in many ways, and constantly renewing a game pass deal with Activision would have way less roi than buying Activision, while still having way more risk than buying them

 

[bitbydeath]

Yes, BUT it's a poker play. It doesn't mean they will do it. Just imagine that they bluff that they will. How would the CMA respond to Microsoft not operating in the UK anymore because they were the only body didn't ok the deal, say if hyperthetically the rest of the world ok it?

It would crush UK business if MS weren't operating here.

It’s only about Xbox not Microsoft, and even that is baloney. If Microsoft stopped operating in the UK they would be in a world of pain. They would no longer be a trillion dollar company sort of pain.

 

[POKEYCLYDE]

Yes, but the problem is that while the build up happens (and I am one of the ones waiting for that build up to buy a XSS, mainly Fable) these studios just bleed money. Doesn't seem to be sustainable.

25 million subscribers at $120 a year is $3B. Assuming everyone of Microsoft's current 23 studios is making a AAA game that costs $200M over 4 years, the developer costs would be $1.15B. That's profit of near $2B.

 

[X-Wing]

25 million subscribers at $120 a year is $3B. Assuming everyone of Microsoft's current 23 studios is making a AAA game that costs $200M over 4 years, the developer costs would be $1.15B. That's profit of near $2B.

And you think the third party games that are on the service get there for free? Especially third party games that get released there on day one?

 

[Edmund]

Yes, BUT it's a poker play. It doesn't mean they will do it. Just imagine that they bluff that they will. How would the CMA respond to Microsoft not operating in the UK anymore because they were the only body didn't ok the deal, say if hyperthetically the rest of the world ok it?

It would crush UK business if MS weren't operating here.

Microsoft will leave the UK and Rishi Sunak will suicide. MS will proceed to acquire every country in the world. Phil Spencer will be made overlord of the whole universe.

Every hungry person in countries like Somalia will get a Series S and lifetime subscription of GamePass and the whole world will be a better place.

Kumbaya will be made national anthem of the Nation of Microsoft.

 

[Demon2blades]

Think about what would happen if this was revealed in public. What would the other regulators think about this and how would it affect future acquisitions?

Its like basically saying they can do/buy what they want else they'll pull out of a country and that country will die it's ludicrous thinking.. I think people are used to them loss leading in the gaming industry and just eating costs but the only reason they can do that is because of the other lucrative sectors they operate in they will not upset those sectors because of this .

 

[POKEYCLYDE]

All the games outside of Banjo and NV remastered are in the works or highly likely in the works, and obsidian has said themselves they'd love to make NV remastered.

Maybe half of the games listed will be trash, maybe some like Perfect Dark and Everwild will be cancelled, but a vast majority of those games are coming out and will most likely be exclusive.

If you don't think all that is enough to persuade consumers to buy an Xbox, okay. I disagree.

 

[GHG]

The UK is not some 3rd world country .

Yet. It will be when Microsoft exits, just you wait and see.

 

[POKEYCLYDE]

And you think the third party games that are on the service get there for free? Especially third party games that get released there on day one?

I had a post earlier with the same math expanded with 3rd party deals. It's harder to know what 3rd party deals are priced at, so I went with $1.35B a year to round out Microsoft's dev/gamepass expenses at $2.5B, still lower than what Gamepass could be making right now.

 

[MasterCornholio]

Its like basically saying they can do/buy what they want else they'll pull out of a country and that country will die it's ludicrous thinking.. I think people are used to them loss leading in the gaming industry and just eating costs but the only reason they can do that is because of the other lucrative sectors they operate in they will not upset those sectors because of this .

Excellent point. Imagine in the future Microsoft wants to buy another publisher. The EC and FTC will look at what they did to the CMA and that would influence their decisions.

Regulators are suppose to have the ability to stop anti competitive practices. If companies don't want to work with them then they need to do something to ensure that they do. I'm guessing an automatic denial of future acquisitions could happen due to this.

 

[jm89]

All the games outside of Banjo and NV remastered are in the works or highly likely in the works, and obsidian has said themselves they'd love to make NV remastered.

Maybe half of the games listed will be trash, maybe some like Perfect Dark and Everwild will be cancelled, but a vast majority of those games are coming out and will most likely be exclusive.

If you don't think all that is enough to persuade consumers to buy an Xbox, okay. I disagree.

It's a nice list i'll give you that.

 

[Ozriel]

How many of those 25 million are just trying it out for a $1? Or converted up to 3 years of xbl gold for a $1, giving a price equivalent of $5 per month or less?

https://www.pcworld.com/article/397667/get-3-years-xbox-game-pass-ultimate-tip.html

I’d wager it’s only a minority of these users taking advantage of deals of that nature. Not to mention that the 25 million count was for monthly active users, so folks consistently subscribed.

Either way, it’s mildly amusing that there’s so much chatter about MS having to increase subscription costs down the line…when it’s more likely that they’ll curb these cheap monthly trial subs to increase revenue.

 

[Pelta88]

Yes, BUT it's a poker play. It doesn't mean they will do it. Just imagine that they bluff that they will. How would the CMA respond to Microsoft not operating in the UK anymore because they were the only body didn't ok the deal, say if hyperthetically the rest of the world ok it?

It would crush UK business if MS weren't operating here.

This has to be a joke, right?

Crush UK business? Microsoft would go through a public civil war before any division misses out on UK revenue and that Great British Pound. Even worse, give their competitors a foothold in one of their most profitable countries. Reading through this thread sometimes has me like

 

[feynoob]

This has to be a joke, right?

Crush UK business? Microsoft would go through a public civil war before any division misses out on UK revenue and that Great British Pound. Even worse, give their competitors a foothold in one of their most profitable countries. Reading through this thread sometimes has me like

American education standards have been soo low these days.

 

[Thirty7ven]

Bright red clown shoes.

 

[3liteDragon]

Microsoft’s not leaving the UK for CoD lmao, if the CMA blocks it, it’s done, end of story.

 

[TheGodfather07]

UK was like the only place in the entire world where xbox almost sold the same amount as the competition last year and some of you actually think it would even cross their minds to stop operating in the UK. Holy fucking shit at the stupidity. Some of you need to get off twitter and stop regurgitating takes from 12 year olds. They're getting outsold 2 to 1 in the US. Microsoft need the UK more than they ever have. They're actually relevant here.

 

[DarkMage619]

Seems a bit silly, they going to pull out of the US too if the FTC don’t pass it? I don’t buy it.

The US unlike the UK is where MS is headquartered. If the FTC gets a court injunction they could technically block the deal by freezing bank assets. They would make the transaction illegal. The UK does not have the authority to prevent MS from buying Activision only preventing MS from conducting business in their territories.

All that said I doubt MS would completely cease all operations in the UK over this deal only perhaps just not selling any Activision games on any platform in the region since this deal is about Activision specifically.

The CMA claimed that MS and Sony have an important rivalry so MS pulling completely out should be a concern if they are really serious about preserving competition. Would a PlayStation only presence in the UK be better for UK gamers than a MS owned Activision? I doubt we'll ever find out.

 

[MasterCornholio]

Microsoft’s not leaving the UK for CoD lmao, if the CMA blocks it, it’s done, end of story.

If Microsoft really wants COD they will have to make some pretty big concessions to the CMA. I don't think your typical 10 year deal will cut it.

 

[ManaByte]

Microsoft’s not leaving the UK for CoD lmao, if the CMA blocks it, it’s done, end of story.

A company called The Call of Duty Company will be founded in the UK to own Call of Duty there. It'll be run by some new guy called Sil Pencer.

 

[3liteDragon]

If Microsoft really wants COD they will have to make some pretty big concessions to the CMA. I don't think your typical 10 year deal will cut it.

And they’re still running with the 10-year licensing deal for Sony, which is why I think it’s most likely getting blocked. Unless good guy Phil has something up his sleeve…

 

[intheinbetween]

I don't know how many people would buy an Xbox for just Starfield, but with enough exclusives it will move the needle. Redfall and Starfield are just the beginning. Pentiment, Grounded and Hi-Fi Rush are amazing games (All new IP, and again, alone may not move the needle).

But what happens when games like Avowed, Fable, Everwild, Hellblade 2, Perfect Dark, State of Decay 3, Outer Worlds 2, Elder Scrolls 6, the next Doom and Wolfenstein come out? That's all not including ABK. If the ABK deal goes through, things like Diablo or the survival game Blizzard is working on will be on Gamepass and possibly exclusive. There's also the possibility of fan favourite games coming back. Obsidian has said they're interested in making a New Vegas remastered. Maybe a good Banjo Kazooie game comes out?

None of these move the needle by themselves, but it piles up, and on top of that they would all be in Gamepass.

Exactly, imo people would buy a XBOX for Starfield and Gamepass

 

[Fredrik]

Microsoft does not need to acquire publishers to get games on Game Pass. For $70 billion, they can get every game on the planet on Game Pass without acquiring anyone. Shouldn't that be preferred over buying ABK if Game Pass is your primary reason?

Nobody has tried that route yet, would be similar but I’m thinking it would be a timed thing. 3rd party games may occasionally be there but after awhile they go away. The internal 1st party games always stay on the service since their whole purpose is to pull people in, makes it less of an issue to not actually own anything.

Edit: But in what way would it be better for anyone if MS actually used those billions and payed to have all Activision Blizzard games exclusively on Xbox and Windows Store and Gamepass from now til forever?

 

[Ozriel]

If Microsoft really wants COD they will have to make some pretty big concessions to the CMA. I don't think your typical 10 year deal will cut it.

Nothing 'typical' about a 10 year deal. And it's probably likely that's good enough to pass, especially if CMA is convinced there's sufficient enforcement and monitoring to ensure they keep to the deal.

 

[MasterCornholio]

Nothing 'typical' about a 10 year deal. And it's probably likely that's good enough to pass, especially if CMA is convinced there's sufficient enforcement and monitoring to ensure they keep to the deal.

I don't remember the CMA saying that they accepted the 19 year deal. It was announced way before they gave us the concessions.

 

[mrmustard]

I'm afraid crows may go extinct once this deal is done.