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Microsoft admits Xbox Game Pass is Not a Big Money Maker ATM
- Thread starter xStoyax
- Start date
StreetsofBeige
Gold Member
Who says it even has to be a money maker? Not every company's product lines always make money.
At one point, Sony's TV division lost money for like 8 years in a row and lost $10 billion. Yet it's still around like nothing happened.
At one point, Sony's TV division lost money for like 8 years in a row and lost $10 billion. Yet it's still around like nothing happened.
intheinbetween
Member
Shocking... with all those subs at 1$
/sarcasm
At least I hope they’re not losing money with this, not that I care personally for their company, but it would be a huge loss if they had to cancel GP, since it is one of the best services from current-gen
/sarcasm
At least I hope they’re not losing money with this, not that I care personally for their company, but it would be a huge loss if they had to cancel GP, since it is one of the best services from current-gen
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KingdomHeartsFan
Member
Phil been walking over eggshells carefully choosing his words over every interview when this subject comes up, always being vague and not giving any details...then this big buffoon comes in lmao.
StreetsofBeige
Gold Member
It also depends on the definition of profitability.
If it's solely on GP subscription revenue, that's one thing. If MS figures out total revenue by including microtrans, Gold subs, people buying games after trying it on GP that's a totally different calculation.
It's like saying why should grocery stores sell basic milk and cheese when both the grocery stores and dairy companies make nothing on it? Why bother? It's to get people into the store to buy other stuff, and the dairy companies can make their profits off other higher margin products.
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M1chl
Currently Gif and Meme Champion
I still don't understand why is Greenberg still with Xbox, most dumbass shit comes from his mouth.
MiyazakiHatesKojima
Banned
Yikes.
Panajev2001a
GAF's Pleasant Genius
That is what I have always asked... how is this service going to get its money back / return on investment? Even for a $19.99 fee a month, the system does not seem designed to scale in a waythat can compensate the perceived loss in game’s value it would bring if it took more and more hold. I am not looking forward to an even potential FREE/99c future like I have seen on the App Store and the micro transactions and subscriptions/GaaS economy it spawned.
Panajev2001a
GAF's Pleasant Genius
Sure, as if for months people had not fallen back to “Phil said it is profitable because XYZ must mean WZX”...
.
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slade
Member
So it's not making money for MS at the moment. Does it really matter? You have indie studios saying that the service has helped them engage a wider audience and it's not like they are locked into Gamepass forever.
One thing to keep in mind, this industry is too big for Sony and Nintendo to support all developers. If MS can come in and spread some of their wealth around, it should be commended.
One thing to keep in mind, this industry is too big for Sony and Nintendo to support all developers. If MS can come in and spread some of their wealth around, it should be commended.
ScarletSpider
Banned
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00_Zer0
Member
I like Gamepass, but MS made it so cheap who wouldn't want to try it out? Since I mostly game on PC where great deals can be had everyday I will probably drop Gamepass once it expires for me sometime in 2021. At some point MS will stop all the deals and have to make money and when they inevitably start the price hike I'm out.
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Jack Peterson
Banned
Why is Greenberg so dumb?
NoMoChokeSJ
Banned
I don't understand the weird GAF obsession with Game Pass profitability. If it provided a value to you, who cares if MS profits from it. If it isn't a viable service to them and remain in whatever parameters they set.. they'll scratch it. They are obviously playing the long game.. just like they were with xbox live.
Kerotan
Member
There's no way this service is making them money. Take Halo infinite for example, budget rumoured to be $500M+. You would need 4 million people paying full price for 12 months to get a return on just that game alone. Now add in all their first party titles and hundreds of third party titles and you can easily see this thing being a bad short term investment.
If the next xbox flops and GP subs can't reach 30-40M I can't see them every making a profit.
If the next xbox flops and GP subs can't reach 30-40M I can't see them every making a profit.
If you love GP surely you want to see it making a healthy profit to ensure it's long term viability.
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DavidGzz
Member
You say that like there are 50 million Game Pass subs and there will be no stand alone Halo sales. Steam sales alone will pay for it. PC sales are a big reason this isn't as much of a money sink as it could be.
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Freeman
Banned
Obvious to anyone that wasn't in denial. I got so far about 8 months of PC gamepass for less than $2.
Not only are they killing their traditional first party games sales and viability (pushing them all to be GaaS), it can't be cheap to pay all those third party devs, specially if you are including games like RDR2.
If you are a dev you just make a calculation if the money MS is offering you is worth the risk off going after your projected sales or not. On the long term however, gamepass is killing the potencial sales of everyone.
Not only are they killing their traditional first party games sales and viability (pushing them all to be GaaS), it can't be cheap to pay all those third party devs, specially if you are including games like RDR2.
If you are a dev you just make a calculation if the money MS is offering you is worth the risk off going after your projected sales or not. On the long term however, gamepass is killing the potencial sales of everyone.
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Coulomb_Barrier
Member
$1 x 5m subs = $5m a month.
That's enough money generated to create several A, AA and AAA experiences each month.
That's enough money generated to create several A, AA and AAA experiences each month.
No it's peanuts
turtlepowa
Banned
Surprise. It took Netflix years to make money.
Because is important. If the service is not profitable, means probably you will not have the current service quality on 2-4 years from now, or even the service could be dropped.
Herr Edgy
Member
I'm not console warring and I don't stand for people console warring.Sure, as if for months people have not fallen back to “Phil said it is profitable because XYZ must mean WZX”...
Bryank75
Banned
Great point and the good MS / Xbox does is often lost in all the talk of what people want them to do....
Personally I am not cool with all the subscription stuff they are bringing in but on the other side it does give an income stream and visibility to indies and other games that would otherwise fail in the large market.
Bryank75
Banned
Well, yes... that's why Halo is called infinite.... it will get loads of expansions that you pay for. The next Forza also doesn't have a number, so I expect that is a GAAS also.....
I would guess many of the games thye are making will be like that.... Everwild for instance!
turtlepowa
Banned
It's quite simple. New consoles are going to be released soon and the warriors are preparing for battle. So the follwoing things are utter crap:
- The complete showcase
- Halo
- Spencer
- Lockhart
- Current gen support
- Game Pass
- 12 TF
NoMoChokeSJ
Banned
Ok... As a consumer I still don't see how this concerns me. If the service quality drops, so will subscriptions, and the service will fail. Then you go back to buying game like normal. Ms loses money.. it doesn't come out of my wallet.
Because they will develop shit games with poor budget just to fill the gamepass instead of good high quality games if they keep going in this direction
Schmick
Member
Exactly. Why people are making such a big thing of this i don't know.
You got to invest in something first to make money.
Schmick
Member
I disagree, when you look at the spectacular game FS2020 and the fact that Forza is revealed as being in early development despite already being in 2-3 years development. Turn 10 clearly are not being asked to rush out the product.
Freeman
Banned
Come on, GaaS was always the plan, it's in the name.
The price is also going to be increased overtime, the fact that they want to include streaming in it is a huge indication of that, it ain't going to be cheap to keep all those servers running.
The potencial market for gamepass/gamestraming is way smaller than the market for video streaming, as evidenced by everyone that tried to push for it including Google.
Netflix alone has more subscribers than Live Gold and PS+ combined. My mom ain't about to play Halo anytime soon.
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GHG
Member
They're not making money, they are still buried in mountains of debt financing.
These are the types of questions everyone should be asking about all of these subscription services (not just gaming), but nobody is.
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DarkBatman
SBI’s Employee of the Year
To be honest: 343 also wasn't being asked to rush out a product and look what we got (as of now, who knows, maybe the following months will bring some kind of miracle).
The problem is that a service like this could make changes on the industry. Imagine AAA being irrelevant because this, and after MS drop this because low profit.
Anyway, there are people who paid several years already.
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Geki-D
Banned
Spotify & Netflix were never practically giving away year subs. Assuming MS aren't paying publishers, like, 0,0001$ per download (Spotify pay $0.006 to $0.0084 per play on music with an average run time of 4mins, I'm sure per download MS are paying way more seeing as GP isn't a streaming service), I imagine MS are losing money on any even averagely popular game on the service from those 1$ subs.
It's unsustainable and the "plan" Aaron Greenberg is obviously referring to is raising the price and killing all of these ridiculous deals.
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Geki-D
Banned
They're hoping that when they raise the price people will just keep paying.
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