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Is 7.5 billion too much and MS overpaid?

phil_t98

#SonyToo
Wait, you're not being serious here are you?

Firstly you have the number of people paying $1 a month (some of whom are on long-term deals).

Then you have the associated development and marketing costs of the Zenimax games, plus the all the other studios.

Then you have the costs of paying third-parties to put their games on the GamePass platform, and the cost of paying them for every download.

Then you have the maintenance/infrastructure costs, and the general costs of marketing the platform itself.

The level of naivety regarding actual industry profits is staggering. There's a reason Microsoft won't disclose the financials on GamePass, even that clown Greenberg admitted it's not making them money. It's a money sink, and this acquisition just increase the pressure on them to significantly increase both the subscriber base and the monthly prices, because no matter what some fanboys might think shareholders always insist on a return on investment. And $7.5bn is a massive investment.

it isn't when you look at the money Microsoft have and what they would have to pay in tax if it was just sitting in the bank. they have a plan and its different to Sonys

I think you over estimate the amount of people who are paying £1 a month tbh, remember this forum is such a small portion of console users and the average person won't be paying that.
 

MonarchJT

Banned
It's normal to sink money on things like this for years out of the gate. Hence, why part of the CEOs compensation package is based on GP subscriber growth (not profitability of the service). I'm sure the goal is to reach a subscriber number that is roughly equivalent to a healthy console generation, 40 or 50m at minimum. I would guess that they will spend what they need to in the interim.
if they reach to have stably 50 mil is not just healthy is like have reached a great milestone for example if we say that 25 million will be ultimate subs and 25 normal subs they would have a monthly revenue (just from the service) of 625 millions that's like 7.5 billions (the entire cost of Bethesda acquisition) yearly just from the service excluding dlc's ..games bought ..hw and all the other form of revenue. certainly someone can argue that revenue is not profit. but this applies to everyone
 
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If they make all Bethsoft titles Xbox/PC exclusive it will be the best first party studio out there. Doom, Fallout, Elder Scrolls, Arkane's project after the weird thing they're making now. Great lineup. Real heavy hitters.
 
It also severely undervalues their own platform.
I understand this pov though I disagree.

Microsoft could advertise this as Xbox owners getting games for 'free' while you have to pay X to play the same game on the PlayStation.

The way this could fail is by the old marketing rule of 'the more expensive something is, the higher the quality' but I believe the average gamer is brain dead so I can't see this slogan taking root
 

Hezekiah

Banned
it isn't when you look at the money Microsoft have and what they would have to pay in tax if it was just sitting in the bank. they have a plan and its different to Sonys

I think you over estimate the amount of people who are paying £1 a month tbh, remember this forum is such a small portion of console users and the average person won't be paying that.
He specifically said that Microsoft will make the money back in three or four years.

That's absolutely not the case. They wont even make it back the entire generation, or even get close.

Xbox is its own separate division, it needs to generate money on its own. Too many people talk about MS being worth X amount, therefore they'll just keep putting money into Xbox ad infinitum. These people are clueless when it comes to understanding business. Some people genuinely believed Microsoft the corporation was going to sell the Series X for an enormous loss and undercut by Sony $100+. These same people think they will continue giving access to GamePass for chump change long into the future.
 
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MonarchJT

Banned
He specifically said that Microsoft will make the money back in three or four years.

That's absolutely not the case. They wont even make it back the entire generation, or even get close.

Xbox is its own separate division, it needs to generate money on its own. Too many people talk about MS being worth X amount, therefore they'll just keep putting money into Xbox ad infinitum. These people are clueless when it comes to understanding business. Some people genuinely believed Microsoft the corporation was going to sell the Series X for an enormous loss and undercut by Sony $100+. These same people think they will continue giving access to GamePass for chump change long into the future.
dosn't work like this ..stop it hurts the brain
 
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Braag

Member
They did acquire The Elder Scrolls which is massive. Also Fallout, Doom and countless other IPs.
If they actually make some good games now, they should get their money back pretty fast.
 

dcmk7

Banned
They did acquire The Elder Scrolls which is massive. Also Fallout, Doom and countless other IPs.
If they actually make some good games now, they should get their money back pretty fast.
With the revenue from additional subscribers to GamePass? Genuinely curious about this.
 
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Braag

Member
With the revenue from additional subscribers to GamePass? Genuinely curious about this.
Don't think it's just gamepass. Plenty of people still rather buy games which are available in GamePass (like myself).
But I do have friends who are subbed and essentially only play GamePass games cause they can just try stuff out to see if they like it.
I have a feeling they will eventually start increasing the price of GP though.
 
Wait, you're not being serious here are you?

Firstly you have the number of people paying $1 a month (some of whom are on long-term deals).

Then you have the associated development and marketing costs of the Zenimax games, plus the all the other studios.

Then you have the costs of paying third-parties to put their games on the GamePass platform, and the cost of paying them for every download.

Then you have the maintenance/infrastructure costs, and the general costs of marketing the platform itself.

The level of naivety regarding actual industry profits is staggering. There's a reason Microsoft won't disclose the financials on GamePass, even that clown Greenberg admitted it's not making them money. It's a money sink, and this acquisition just increase the pressure on them to significantly increase both the subscriber base and the monthly prices, because no matter what some fanboys might think shareholders always insist on a return on investment. And $7.5bn is a massive investment.
It does shock me people just can't understand that there is costs to run Live, costs to pay developers to have access to games for subscribers, costs to run studios and pay people that work there.

Many just think every $ paid for gamepass goes to MS's bank account and running things cost zero.
 

phil_t98

#SonyToo
He specifically said that Microsoft will make the money back in three or four years.

That's absolutely not the case. They wont even make it back the entire generation, or even get close.

Xbox is its own separate division, it needs to generate money on its own. Too many people talk about MS being worth X amount, therefore they'll just keep putting money into Xbox ad infinitum. These people are clueless when it comes to understanding business. Some people genuinely believed Microsoft the corporation was going to sell the Series X for an enormous loss and undercut by Sony $100+. These same people think they will continue giving access to GamePass for chump change long into the future.

people forget that people buy games as well as game pass, download content costs to. There is every possibility Microsoft will make there money back on this is 3-4 years depending on how they do it. Dont forget these games will be on pc as well as Xbox.

once the big guns come out from these company’s subscriptions will go up if they are only on one consoleZ that will increase console sales as well as game sale or subscriptions. It’s a different plan from Sony’s so you can’t compare the 2

when you look at the revenue of one game sells 10 million and then look at how many subscribers are on game pass you can’t tell me the subscription service ain’t the way to go for Microsoft when you look at what they are bringing in financially a month
 

DaGwaphics

Member
people forget that people buy games as well as game pass, download content costs to. There is every possibility Microsoft will make there money back on this is 3-4 years depending on how they do it. Dont forget these games will be on pc as well as Xbox.

once the big guns come out from these company’s subscriptions will go up if they are only on one consoleZ that will increase console sales as well as game sale or subscriptions. It’s a different plan from Sony’s so you can’t compare the 2

when you look at the revenue of one game sells 10 million and then look at how many subscribers are on game pass you can’t tell me the subscription service ain’t the way to go for Microsoft when you look at what they are bringing in financially a month

What people fail to understand is how low the attach rate really is on average for each generation. Typically 10 - 12 games per console at best, and not all of them at $60 a pop. Compared with a subscription where the revenue generated per user over a 7-8 year period would be a far bigger number. GP brings in more $$$ not less than the traditional model. Since all platforms are earning more from microX than game sales, the outlook looks that much better. If they scale this big enough (say twice where they are now or more) they will have no problem covering the costs of first-party development and the third-party library with big profits to spare. We might even see more splashes to buildout the first-party even further, content is king in the subscription business.
 
Fallout is on the rise - after the last car crash release? A lot of work will need to be done to mend relationships with gamers, that franchises' reputation is in the gutter.

I can't see them making their money back any time in the next decade - Xbox continues to remain the least popular platform, and many of these franchises are associated with PC anyway. Overall though sales will be down, they will need a vast increase in the number GamePass subscribers, and in the price they're paying to see a return.

Fallout ip is on the rise. Yes despite trainwreck that was Fallout 76.

Just make a poll asking if gamers want tp play a Obsidian made Fallout game. You will start to see potential it has.

Also TES will turn into GTA level juggernaut if handled properly (not a given. they have squandered Halo)
 
Exactly. Was Bethesda worth 7.5 billion? no way

Is it worth 7.5b to Microsoft considering their shitty position? maybe
I get you, I still think its way too much to spend but I don't care what MS does with its money. I have 2.5 years of ultimate left on my subscription and maybe I'll get a couple games that interest me. I don't like most Bethesda garbage collecting games except Wolfenstein new order.

Timing of the announcement tells you everything.
 

EDMIX

Member
same logic would mean that Sony should release some of th

Yea ignored and didn't even bother to read the rest of that post.

Sony nor Nintendo are out here making statements like this


or moves like this.

https://news.microsoft.com/2020/09/...ia-and-its-game-publisher-bethesda-softworks/



Stop fucking looking to argue about everything simply because some of you are triggered MS is going this 3rd party route. I think it makes sense for MS to do this. They have the money, infrastructure, studios etc.


GaviotaGrande GaviotaGrande "I realize that a dedicated piece of hardware to play games is less and less relevant and soon will be completely irrelevant" Agreed. I think MS is on to something with Gamepass being this Netflix for games as its not like I buy an exact thing to play Netflix, I play it on anything I have around. Gaming very well might end up being that and MS sees that being the likelihood and wants to have a piece of that market.

I don't use Stadia, I don't use PS Now and I have no plans to use Gamepass, that doesn't mean someone won't, or it won't be a massive part of gaming in the future. Lets say Internet in the future becomes this RIGHT and its free for everyone in the United States or something, that greatly changes this conversation as one part of that issues is eliminated and little Billy doesn't have to worry about if they have enough PS7 or XBNEXT2.0's in stock, they simply get hype for a new game on a gamepass subscription. If cross play becomes this default, folks won't even fucking know for sure what device someone is playing the new Call Of Duty on anyway.

MS is making very, very smart moves here that I think people won't really understand until a solid 10 to 15 years from now.
 
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Son, we talking about a company whose Retired Chairman/ Founder donates 4-5billion in charity.



7b nothing for MS.


And MS paid premium price as you have to pay premium in deals like these.

ES franchise alone worth billion dollars and then you get Idtech engine and their VR and cloud streaming technology Osiris nd all. Lot of big name studios and IPs.
 
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EDMIX

Member
Son, we talking about a company whose Retired Chairman/ Founder donates 4-5billion in charity.



7b nothing for MS.


And MS paid premium price as you have to pay premium in deals like these.

ES franchise alone worth billion dollars and then you get Idtech engine and their VR and cloud streaming technology Osiris nd all. Lot of big name studios too.

Agreed.

It makes complete sense for MS. Its a very smart move.

MS basically saw this before they purchased.





They see the end game. This only helps MS in the long run with their 3rd party efforts.
 

MonarchJT

Banned
Yea ignored and didn't even bother to read the rest of that post.

Sony nor Nintendo are out here making statements like this


or moves like this.

https://news.microsoft.com/2020/09/...ia-and-its-game-publisher-bethesda-softworks/



Stop fucking looking to argue about everything simply because some of you are triggered MS is going this 3rd party route. I think it makes sense for MS to do this. They have the money, infrastructure, studios etc.
everyone will start to release on everything when streaming start to be a serious thing (when 5g will hit hard). Ms is currently ahead of the competition because it has the infrastructures, the software, the services and the support of the devices already here ... to be able to do it Do you think Sony or anyone else will continue to reset generations starting from scratch by releasing exclusives that will be forced to sell little for lack of new userbase on new hw (like demon soul remake). When you can solve the problems of a lot of users by giving them an instant gaming experience wherever they are .. solving any problem that is hw , security, piracy and software updates?
I am not saying that we are already there and that the consoles will be abandoned now, personally I think this is the penultimate generation with console hw .. after the ps6 / xsx2 they will all go in streaming and that basically means "third party"
 
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EDMIX

Member
everyone will start to release on everything when streaming start to be a serious thing (when 5g will hit hard). Ms is currently ahead of the competition because it has the infrastructures, the software, the services and the support of the devices already here ... to be able to do it Do you think Sony or anyone else will continue to reset generations starting from scratch by releasing exclusives that will be forced to sell little for lack of new userbase on new hw (like demon soul remake). When you can solve the problems of a lot of users by giving them an instant gaming experience wherever they are .. solving any problem that is hw , security, piracy and software updates?
I am not saying that we are already there and that the consoles will be abandoned now, personally I think this is the penultimate generation with console hw .. after the ps5 / xsx2 they will all go in streaming and that basically means "third party"

I agree.

I prefer a team only working on 1 device, but most of gaming isn't that and won't be that in the future. MS has a massive leg up on this as they see where the market is headed in the future. That "instant gaming experience wherever they are" is a massive deal. I will always prefer developers focusing on 1 system to get the most quality out of something, it doesn't mean I ignore reality.

Fortnite exist, Call Of Duty exist, PS Now and Gamepass exist. Me not using them or me not liking them doesn't change that reality. So I do see what MS is doing as where the majority of gaming will head to. Especially if internet caps or price is no longer an issue in the United States with some act or law that makes it a right for everyone.

I see the next generation of youth playing many of theses big AAA games on their phones. Many of us would have never fucking seen the massive raise in that shit simply because many of us just don't game that way.

Many will in the future though. MS is thinking about that end game Netflix of gaming, be everywhere type set up. It makes complete sense. I think you'll ultimately end up seeing home consoles like you see many unlocked phones or something (not the best example lol) and it will simply be down to OS and controller preference.
 
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MonarchJT

Banned
I agree.

I prefer a team only working on 1 device, but most of gaming isn't that and won't be that in the future. MS has a massive leg up on this as they see where the market is headed in the future. That "instant gaming experience wherever they are" is a massive deal. I will always prefer developers focusing on 1 system to get the most quality out of something, it doesn't mean I ignore reality.

Fortnite exist, Call Of Duty exist, PS Now and Gamepass exist. Me not using them or me not liking them doesn't change that reality. So I do see what MS is doing as where the majority of gaming will head to. Especially if internet caps or price is no longer an issue in the United States with some act or law that makes it a right for everyone.

I see the next generation of youth playing many of theses big AAA games on their phones. Many of us would have never fucking seen the massive raise in that shit simply because many of us just don't game that way.

Many will in the future though. MS is thinking about that end game Netflix of gaming, be everywhere type set up. It makes complete sense. I think you'll ultimately end up seeing home consoles like you see many unlocked phones or something (not the best example lol) and it will simply be down to OS and controller preference.
absolutely yes. and not being very young too I would prefer to have only one device where i can play but perhaps thinking about it this is now anachronistic.
 
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EDMIX

Member
absolutely yes. and not being very young too I would prefer to have only one device where i can play but perhaps thinking about it this is now anachronistic.

Agreed. I think that is how its going to be. Like how we already see the streaming market (a better example lol). Many devices, many apps, all interchangeable.

Amazon makes Firestick, Netflix and Apple TV app is on it.
Apple makes that TV box, Amazon Prime and Netflix run on it etc.

People will have their controller and OS preferences and will buy based on that.
 

DaGwaphics

Member
If streaming takes flight due to satellite internet, and the lower latency associated with that, than the conversation is different. Consoles would quickly be a thing of the past then, the big 3 would all be in streaming mode at that point, likely competing on the same devices. If MS moved to make their software GP exclusive, that might also push them to try and be available on other consoles. I can't see them trying to bolster Sony's offer in the short-term however.
 

DaGwaphics

Member
Agreed. I think that is how its going to be. Like how we already see the streaming market (a better example lol). Many devices, many apps, all interchangeable.

Amazon makes Firestick, Netflix and Apple TV app is on it.
Apple makes that TV box, Amazon Prime and Netflix run on it etc.

People will have their controller and OS preferences and will buy based on that.

This thinking ignores the profitability factor of being the chosen box (licensing fees, the 30% cut on microX from third-party software, etc.), MS is stupid if they are willing to give that up completely. Media streaming and gaming are not comparable because of how differently they are monetized.
 
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Hezekiah

Banned
you underestimate how much they will make off these games then
...it will be the same as their other games. On PC and the smallest console platform this gen. Phones and tablets, yeah good luck with that if you're expecting that to massively increase their profits.

And a lot of people don't understand the difference between revenue and profit. Xbox revenue in 2019 was $10.3bn, profit hidden because Microsoft apparently too ashamed to share it. Would love to know how Zenimax will pay itself off inside four years ffs.
 

tusharngf

Member
Todd is phil's bitch.. what else do you want in 7.5 billion dollars lol

1 elder scroll game alone will make 2-3 billion dollars in sale.
 
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phil_t98

#SonyToo
...it will be the same as their other games. On PC and the smallest console platform this gen. Phones and tablets, yeah good luck with that if you're expecting that to massively increase their profits.

And a lot of people don't understand the difference between revenue and profit. Xbox revenue in 2019 was $10.3bn, profit hidden because Microsoft apparently too ashamed to share it. Would love to know how Zenimax will pay itself off inside four years ffs.
So one of the richest company’s in the world has made a mega investment and your questioning it?

do they have to share their profits with you ?

while Sony are successful with the console side of the business we all know other areas have struggled and is being propped up by the console sales.

now you bring up 2019 as a year where they massively invested in studios and new hardware development, so
Yeah figures may not be great

I never understand all the concern over sales and profits of these mega rich company’s
 

EDMIX

Member
This thinking ignores the profitability factor of being the chosen box (licensing fees, the 30% cut on microX from third-party software, etc.), MS is stupid if they are willing to give that up completely

They just spent almost 8 billion, I don't really think MS honestly gives a fuck about "30% cut" in regards to licensing fees. If that is what it takes to be on every device, that is like what MS would do. Would be like saying some shit like "MS is stupid if they are willing to give up 8 billion completely".

MS is in the business of making as much money as they can. I don't see them turning down the ability to be the Netflix of gaming because of a fucking licensing fee. Seeing the massive purchases they are making, any extra money is extra money. I don't think they are going to really care if they have to pay some fee tbh. It comically tries to limit their ambition while ignoring their historic purchase and their statements about being on every device.

Frankly, it doesn't even make sense.

Hezekiah Hezekiah MS is playing the long game. Many don't see it and only are looking at last year or this year or next year etc not realizing this move has more to do with what they will do 10 or even 15 years from now.

"Would love to know how Zenimax will pay itself off inside four years ffs."

I'm not sure it will be in 4 years, but I feel confident they will pay it off. Fallout is getting a show, Elder Scrolls is rumored to be getting a show, its very likely MS knew a lot of this when they were deciding to purchase or not. If MS plans to be some massive 3rd party and gamepass on all devices, they are laying out the ground work to dominate and I think it makes a shit load of sense.

They have the money, those IPs are famous, those studios are even working on new IP, they are crossing over to shows and other mediums. It makes sense for MS to buy now to invest. Now I don't know if they'll pay this off in 4 years, but I think it will work for them in the end.

I personally only really play on 1 or 2 platforms and don't rent or stream or any of that, but I see the popularity, I see just how the future might actually play out with such things even if I personally don't play my games that way. Sony isn't going to be the leader in this area, Stadia I doubt will be, MS just bought Zenimax....its clear they will be a massive fucking force in that market when its time for them to reap their rewards.

Don't think about 4 years.

Think about 15 years and a generation of Call Of Duty and Fortnite gamers that casually game and want to jump in and out and lets say missed out on the PS8 launch lol. Look at how much people game just digitally.....in 15 years that might be the percentage of people that are gaming thru streaming or thru services. So MS move makes a lot of sense if you stop thinking about how they will make it back in 3 or 4 years or something.
 
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12Dannu123

Member
It was a steal. I don't think people realise how prices of publishers and studios operate in a consolidating industry. Right now the prices studios in the film studio is astronomically high, because of bidding and competition.

If a company will be buying Ubisoft it will likely reach 20B+
 
So one of the richest company’s in the world has made a mega investment and your questioning it?

do they have to share their profits with you ?

while Sony are successful with the console side of the business we all know other areas have struggled and is being propped up by the console sales.

now you bring up 2019 as a year where they massively invested in studios and new hardware development, so
Yeah figures may not be great

I never understand all the concern over sales and profits of these mega rich company’s
Obviously a guy on a gaming forum knows more about big money investment than MS. If a person is looking for a vector to criticise MS they usually turn to the 'its costing the company too much money' angle to show that somehow its all a big ruse. MS has been in the gaming industry for 20 years but this time they'll drop out and become a 3rd party making non-existant games.
 

Maxwell Jacob Friedman

leads to fear. Fear leads to xbox.
Fallout ip is on the rise. Yes despite trainwreck that was Fallout 76.

Just make a poll asking if gamers want tp play a Obsidian made Fallout game. You will start to see potential it has.

Also TES will turn into GTA level juggernaut if handled properly (not a given. they have squandered Halo)
And fallout 4, people were widely disappointed with 4 not only story wise but also graphics.

peak was last gen with fallout 3, new vegas, skyrim and oblivion. They have been downhill ever since.
 

DaGwaphics

Member
@ EDMIX EDMIX believe what you want, and maybe you're right. But that 30% cut, which represents more than 70% of the revenue both Sony and MS generate from gaming, is more important than you think.

Wasn't it reported that Sony earned more from Fortnite, Destiny, and GTA V than all of their first-party output combined?
 
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MS is not competing for pole position. They don't care if they stay in third place for sales.


It's about constant income. Is it that hard to understand? MS is actually not competing with Sony in a direct way. It's all about those sweet subscribers and software sales, hardware sales is just an extra that they probably don't even consider that important. Just look at fucking Netflix - and yes, even making Zenimax IPs exclusive makes sense.

7.5 billion dollars is not that much. And lol at people saying they paid extra, have you ever seen a big name purchase before? Of course there's fucking extra involved, that's how you win bids.
 
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But they don't have high game sales either and gamepass is only on windows and Xbox 🤔
How about you think the way Netflix operates? I bet you will see MS making deals with TV manufacturers to incorporate it into their systems.

They will make sure it will be everywhere, minus Sony and Nintendo consoles. Not 100% sure, but makes sense.
 

Hestar69

Member
Yes...The fallout and the elder scrolls games will sell millions on pc/xbox alone and having those franchises not on your competitors system when people love them is a big gain for Microsoft.Then throw in the other games/IPS and microsoft might have a good first party gen unlike last gen which was AWFUL IMO
 

DaGwaphics

Member
Yes...The fallout and the elder scrolls games will sell millions on pc/xbox alone and having those franchises not on your competitors system when people love them is a big gain for Microsoft.Then throw in the other games/IPS and microsoft might have a good first party gen unlike last gen which was AWFUL IMO
I won't say it was awful, but definitely not enough quantity and variety. Relied a bit too heavy on their big three IMO.
 
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