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Microsoft will no longer include Gaming Revenue or XBL Monthly Users in its earnings reports.

mckmas8808

Mckmaster uses MasterCard to buy Slave drives
I don't own either an Xbox or Playstation. No investment at all :messenger_grinning_smiling:

So why advocate for less information? What do you gain by knowing less about the industry that you are entertained by (I'm assuming you're a gamer since you are on GAF)?
 

DanielsM

Banned
I share your view on this issue. They essentially just need a 1 in 15 retention rate to stay revenue neutral I would think. But perhaps D DanielsM is looking at it from a different angle. Perhaps he is implying its not really making money or even losing money currently due to costs. If that were true, then a 1-15 retention rate might be devastating. Or maybe the profitability point requires microtransactions which require large bases.

They booked Xbox Live Gold revenue from the future, by having users extend XBLG for 1-3 years, while attaching Game Pass (for basically free) to it. So, they generated more "service" revenue but not really any significant new Game Pass revenue. The goal is to get people to pay for Game Pass, but obviously there was no growth there at $9.99 a month at this point.... hence the deal.

If I were to guess, you have peak Xbox Live Gold subscription last Q at best... as hardware is no longer the focus... people don't need Xbox Live Gold on PC.

I'm still confused as to what has changed, just looks like they are reporting "content" and "services", not sure what "content" is and isn't... game revenue will be in the 10k. Guessing they won't report hardware revenue anymore.... and since we don't know what the "service" revenue was... other than a yoy change percentage... its like comparing apples to orange for some time.
 
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Jigsaah

Gold Member
That's not how it works.

None of these "all you can eat" subscription models are priced in a way that the company breaks even, even if everyone pays full price.

In a few years we are going to look back on these days of Netflix, Prime, Gamepass etc and say it was the golden age.

Because what comes next is that we all get fucked up the arse once they know we have no alternative but to subscribe to these services if we want home media entertainment.
I'm not speaking from a consumer perspective. I agree that having subscriptions as the only method of getting to this media is a bad thing. I'm speaking strictly from a monetary and business angle. As for the break even part...again...the math just doesn't add up on that.. Why do this at all if it's not going to turn a profit? People keep claiming that Netflix as shedding billions of dollars every year. I may be a laymen when it comes to business, but wouldn't this mean they'd have to make or get loans for this amount in order to lose it?

To me it's kinda like what they say about Donald Trump and losing a billion dollars. I mean he would have to have those kind of assets in some way or form in order to lose it. Of course it doesn't look good for Netflix, or Trump, if this is true, but at some point, this method was working.
 
I feel if they were doing really good, I guarantee they would be flaunting numbers like crazy. Hmmm, I’m getting the console sales don’t matter vibe all over again.

“Console sales don’t matter!”

*hides console numbers*

Hmmm, game revenue and XBLive users are down.....

Hide them!! They are not important!!!
 

Gamernyc78

Banned
I feel if they were doing really good, I guarantee they would be flaunting numbers like crazy. Hmmm, I’m getting the console sales don’t matter vibe all over again.

“Console sales don’t matter!”

*hides console numbers*

Hmmm, game revenue and XBLive users are down.....

Hide them!! They are not important!!!

It's all about the Mega Asses and Uranus 😂(MAU baby)
 

NickFire

Member
They booked Xbox Live Gold revenue from the future, by having users extend XBLG for 1-3 years, while attaching Game Pass (for basically free) to it. So, they generated more "service" revenue but not really any significant new Game Pass revenue. The goal is to get people to pay for Game Pass, but obviously there was no growth there at $9.99 a month at this point.... hence the deal.

If I were to guess, you have peak Xbox Live Gold subscription last Q at best... as hardware is no longer the focus... people don't need Xbox Live Gold on PC.
Alright, now I get it I think. You are just saying they changed metrics to make the last period look really good, even though it sets up negative reports in the future. If I am correct, it makes sense based on the new metrics being growth related.
 

Jigsaah

Gold Member
I share your view on this issue. They essentially just need a 1 in 15 retention rate to stay revenue neutral I would think. But perhaps D DanielsM is looking at it from a different angle. Perhaps he is implying its not really making money or even losing money currently due to costs. If that were true, then a 1-15 retention rate might be devastating. Or maybe the profitability point requires microtransactions which require large bases.

Personally, I really doubt that gamepass is in any sort of trouble. I think MS gaming side financial health only impacts the company and industry in two possible ways. Staying with or dropping hardware, and bringing gamepass to PlayStation or not. With Sony's move to their servers, and MS removing focus from certain data, I'm starting to believe I might really play Halo on a Playstation someday. If financial metrics show that gamepass will generate huge numbers there, hardware is losing money, and they control the hosting servers, it starts to look like a no brainer.

But no matter what, I do not see any risk to the next Xbox's launch. There's just no way they would pull out now.

Well yes, of course over all there are more costs to consider when you're looking at the bottom line. I wasn't going that far into it honestly. D DanielsM wasn't looking at a different angle so much as a deeper angle. 1 in 15 breaks even in terms of just subscription revenue. That's easy math. However they need to convert at a much higher rate to cover their costs for studios and loss of retail revenue. What would be disastrous if people pull a move like what they pull with HBO Now and Game of Thrones. You subscribe for a reduced price for a month, pay for one more month to finish the season then cancel. The pricing and subscription structure depends on people essentially forgetting to cancel the subscription for a fair amount of time to make up the proper revenue.

Alternatively, or maybe even additively God forbid, there are even more dubious methods of boosting revenue. My example with HBO Now kinda hints at this. It's in-game advertisements. When we hit that level...the doomsday clock hits midnight for Xbox hardcore gamers, I'm afraid.
 
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GHG

Member
I'm not speaking from a consumer perspective. I agree that having subscriptions as the only method of getting to this media is a bad thing. I'm speaking strictly from a monetary and business angle. As for the break even part...again...the math just doesn't add up on that.. Why do this at all if it's not going to turn a profit? People keep claiming that Netflix as shedding billions of dollars every year. I may be a laymen when it comes to business, but wouldn't this mean they'd have to make or get loans for this amount in order to lose it?

To me it's kinda like what they say about Donald Trump and losing a billion dollars. I mean he would have to have those kind of assets in some way or form in order to lose it. Of course it doesn't look good for Netflix, or Trump, if this is true, but at some point, this method was working.

To put it simply, it's a whole lot of debt financing (in the case of Netflix, Uber, etc). In the case of Microsoft Amazon and Google they should (theoretically) be able to do this sort of thing without going into debt since cash reserves and profits from other areas of the business should be able to absorb the short-medium term losses.

A couple of articles you should read on the subject:





The method only works if they "win". Long term the market can't sustain this number of services all operating at a loss like this. Those who fail will fail spectacularly. The biggest players in the market are essentially gambling on the belief that if they keep doing what they are doing (raising more and more debt to fund growth) then there is no way that they won't win the majority of the market, both in terms of users and content.
 
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Wow... Xbox news makes more posts then ps4 news?

What PS4 news? Microsoft is diving head first on an uncharted territory and covering their asses so it doesn't blow up too hard (if it does). It's a circus, it's nice to talk about and you can shitpost about many things, like the death of physical media ("how do you listen to music today?!" is like a siren song for the excessively eager zoomer). Meanwhile, Sony is completely sleepwalking through 2019 until Death Stranding comes out. There's nothing to talk about there.
 
Z

ZombieFred

Unconfirmed Member
If only the gaming division had these trillions then the investors wouldn't be periodically trying to get Microsoft to get out of gaming 🤔👀😊

The past and present after many years with time changing can be a funny thing ;)
 

NickFire

Member
Well yes, of course over all there are more costs to consider when you're looking at the bottom line. I wasn't going that far into it honestly. D DanielsM wasn't looking at a different angle so much as a deeper angle. 1 in 15 breaks even in terms of just subscription revenue. That's easy math. However they need to convert at a much higher rate to cover their costs for studios and loss of retail revenue. What would be disastrous if people pull a move like what they pull with HBO Now and Game of Thrones. You subscribe for a reduced price for a month, pay for one more month to finish the season then cancel. The pricing and subscription structure depends on people essentially forgetting to cancel the subscription for a fair amount of time to make up the proper revenue.

Alternatively, or maybe even additively God forbid, there are even more dubious methods of boosting revenue. My example with HBO Now kinda hints at this. It's in-game advertisements. When we hit that level...the doomsday clock hits midnight for Xbox hardcore gamers, I'm afraid.
I don't think gamepass revenue will a primary arbiter of any impact on people who buy the next console. My guess is it will ultimately be user base. If enough consoles sell for 3rd parties to keep porting games in the event MS goes primary services model, my guess is Sony would allow cross play in exchange for a slice of gamepass revenue generated by its user base.
 

manfestival

Member
Looks like another win for those people that keep proclaiming the praises of game pass faux sales. "This is so much better for microsoft!"
Yeah I mean if I were Microsoft, I mean I would totes prefer to take a $1-$15/mo game pass over a person spending $60 for the game of that month. Makes brain sense duh. /s
 

Jigsaah

Gold Member
To put it simply, it's a whole lot of debt financing (in the case of Netflix, Uber, etc). In the case of Microsoft Amazon and Google they should (theoretically) be able to do this sort of thing without going into debt since cash reserves and profits from other areas of the business should be able to absorb the short-medium term losses.

A couple of articles you should read on the subject:





The method only works if they "win". Long term the market can't sustain this number of services all operating at a loss like this. Those who fail will fail spectacularly. The biggest players in the market are essentially gambling on the belief that if they keep doing what they are doing (raising more and more debt to fund growth) then there is no way that they won't win the majority of the market, both in terms of users and content.

An Interesting article. Does Microsoft financial position as a company change the perspective of this at all. Being almost a trillion dollar company...much like Google and Amazon...might they be able to afford to approach this differently than Netflix?
 

NickFire

Member
Looks like another win for those people that keep proclaiming the praises of game pass faux sales. "This is so much better for microsoft!"
Yeah I mean if I were Microsoft, I mean I would totes prefer to take a $1-$15/mo game pass over a person spending $60 for the game of that month. Makes brain sense duh. /s
With all due respect, have you seen how much revenue some F2P games make? Guaranteed that MS is hoping for revenue from x amount of players at 15 a month, vs. revenue from a smaller amount of players who actually buy a game per month. And adding potential in game purchases on top of that. From their perspective there's probably much more to be had from smaller monthly in flows than from a much larger pool of paying customers, especially when factoring in PC and perhaps another console or two down the road.

But all that said, we don't know what MS's cost is to run and keep gamepass stocked with games. Maybe its not a great profit generator. So you might be right still. And even if you're not, I do think your point is a valid one from the consumer perspective. Some people will end up paying more to rent games than to own the couple they play. And it is a model that will probably push the industry further down the micro-transaction rabbit hole.
 
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iW1xn0s.gif
From MAU, to MASH (Monthly Active Steamed Hams).
 

manfestival

Member
With all due respect, have you seen how much revenue some F2P games make? Guaranteed that MS is hoping for revenue from x amount of players at 15 a month, vs. revenue from a smaller amount of players who actually buy a game per month. And adding potential in game purchases on top of that. From their perspective there's probably much more to be had from smaller monthly in flows than from a much larger pool of paying customers, especially when factoring in PC and perhaps another console or two down the road.

But all that said, we don't know what MS's cost is to run and keep gamepass stocked with games. Maybe its not a great profit generator. So you might be right still. And even if you're not, I do think your point is a valid one from the consumer perspective. Some people will end up paying more to rent games than to own the couple they play. And it is a model that will probably push the industry further down the micro-transaction rabbit hole.
That is not a direct comparison at all. Apples to oranges. Paid service(let alone the full game still being $60 if you do not do the $15/10 service) vs F2P. I get what you are saying and there is SOME truth to that(already considered) but this is still very different. MS is purposely hiding that stuff(I don't blame them either since they have shareholders to protect). People are blindly defending Microsoft(since they do not have any meta data to support their stance). Also people paying for a service AND buying the game is the ideal scenario for them, let's not kid ourselves and pretend that the service is the only thing they WANT.
 

NickFire

Member
That is not a direct comparison at all. Apples to oranges. Paid service(let alone the full game still being $60 if you do not do the $15/10 service) vs F2P. I get what you are saying and there is SOME truth to that(already considered) but this is still very different. MS is purposely hiding that stuff(I don't blame them either since they have shareholders to protect). People are blindly defending Microsoft(since they do not have any meta data to support their stance). Also people paying for a service AND buying the game is the ideal scenario for them, let's not kid ourselves and pretend that the service is the only thing they WANT.
I agree its not a direct comparison, but my point still stands despite your correct assertion that selling games and gamepass is their ideal situation.
 
What is the shocking part, is that it seems MS realised that the number of active players have gone down from last year, the number of hours played and enemies killed are down too. These statics are only bullshit because we have no knoledge of what a "good" MAU and what a "bad" MAU looked like.
Enemies killed is especially strange, if a game with hordes of zombies is released this year it will inflate the kills numbers, even if people only play a second... and do you count the lines that are cleared or the pieces that vanish in Tetris? How about a game like Overcooked? do you count every ingredient that gets cut (killed), or only the served plates?
 

NickFire

Member
M$'s ultimate goal should be winning next generation.
Real question - does that still make the most sense after their successful work that induced Sony to adopt bc next gen? Not a hit piece masked as a question at all. I truly think MS did us all a solid and feel kinda bad that it gives 90-100 million potential customers reason to stay with their competitor.
 

GHG

Member
An Interesting article. Does Microsoft financial position as a company change the perspective of this at all. Being almost a trillion dollar company...much like Google and Amazon...might they be able to afford to approach this differently than Netflix?

Yes absolutely, it just depends on the company's appetite to head down a path where all of their other divisions might need to prop up the gaming division while they burn money pursuing this venture over the next few years.

The continuing revenue from Xbox Live will help alleviate the pain somewhat since its essentially free money for them at this point (which I why I don't see them getting rid of it anytime soon) and any microtransaction sales within gamepass games will help, but overall it will require the backing of the company as a whole.

The way I see it, currently only 3 companies in this space can afford to go toe to toe without the aid of external investment (and/or debt financing) - Microsoft, EA and Google.

Microsoft are in a unique (and favourable) position compared to the other two because:
  • They have a large existing user base they can leverage both from Xbox consoles and gamers on Windows 10.
  • They already have existing strong relationships with all the third party companies which will help with content procurement.
  • They now have a strong stable of first party development studios who will be able to consistently deliver exclusive content to the service.
  • While dedicated gaming hardware is still desirable (which it currently is) they can build up a strong subscriber base without the pain of relying on delivering content via streaming on unsuitable Internet infrastructure.
Google are essentially aiming to skip many of these stages with Stadia and head to the "end game" where everything is delivered via streaming only. In my opinion it's a service that's launching too soon and as a whole the proposition isn't attractive enough for the type of customer they are primarily targeting.

EA are somewhere in the middle. They are happy to rely on existing hardware to deliver their subscription service while playing the waiting game for streaming to become more viable. They're also taking an approach which means they are unlikely to be hemorrhaging a load of cash because of EA access - the games only get added to the service after retail/digital sales have tailed off to a certain point. The games are then added to the service with the view of being able to sell microtransactions/Lootboxes to subscribers, further softening the blow of the cheap subscription fee. Once streaming becomes more viable and dedicated hardware sales start to drop they might look at pulling support for xbox/playstation/Nintendo and just offering their games via streaming (ip's like FIFA are strong enough to be able to attempt a move as bold as this) but that's a long while off.

What the likes of Sony/Nintendo do in all of this remains to be seen but it's going to be interesting to witness whatever they decide to do.
 
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EverydayBeast

thinks Halo Infinite is a new graphical benchmark
Real question - does that still make the most sense after their successful work that induced Sony to adopt bc next gen? Not a hit piece masked as a question at all. I truly think MS did us all a solid and feel kinda bad that it gives 90-100 million potential customers reason to stay with their competitor.
Gamepass doesn't prove anything to SONY, and M$ inspires to surpass SONY. You don't get extra credit for maxing out Xbox Live. Gamepass doesn't mean anything.
 

NickFire

Member
Gamepass doesn't prove anything to SONY, and M$ inspires to surpass SONY. You don't get extra credit for maxing out Xbox Live. Gamepass doesn't mean anything.
I'm not following. Was referring to backwards compatibility being a net positive to gamers thanks to MS, while simultaneously giving MS main competitor an advantage (more incentive to stay within existing eco system).
 

Vawn

Banned
Wow... Xbox news makes more posts then ps4 news?

Well, yeah, they're in a more interesting position. PlayStation is doing what they always do - dominating in a combination of exclusive software and third-party multi-platform titles (whether those are PS4/Switch games or PS4/Xbox games).

Xbox, on the other hand, is at a crossroads and has been mysterious about their future plans. They're clearly not doing well by themselves, as they look for more ways to remain relevant.

It's interesting. Will they go full third-party? What will they do if their plans to become a fully subscription-based platform on other devices fails?
 

Bkdk

Member
The game pass for pc numbers could be pretty good though, for such low price it’s a good number to show.
 

daninthemix

Member
The game pass for pc numbers could be pretty good though, for such low price it’s a good number to show.

I mean for £4 / month it's a complete no-brainer and people will stay subscribed. Not necessarily the case when they jack the price to £8 or £10 (I forget which is supposed to the final cost after it leaves Beta).
 

mckmas8808

Mckmaster uses MasterCard to buy Slave drives
I mean for £4 / month it's a complete no-brainer and people will stay subscribed. Not necessarily the case when they jack the price to £8 or £10 (I forget which is supposed to the final cost after it leaves Beta).

I always found it interesting that people talk about Gamepass being so good, yet they only talk about how good the "deal" is. As in, if it was $15 a month it wouldn't be worth it at all. Rarely do I see people say Gamepass is awesome without talking about price.

It's like most people believe the service is okay, but it's the low $1 price that makes people love it more.
 

Jigsaah

Gold Member
I always found it interesting that people talk about Gamepass being so good, yet they only talk about how good the "deal" is. As in, if it was $15 a month it wouldn't be worth it at all. Rarely do I see people say Gamepass is awesome without talking about price.

It's like most people believe the service is okay, but it's the low $1 price that makes people love it more.
I've definitely said that at $10 bucks a month (Game pass, not Gamepass Ultimate) was a great deal. $120 a year means as long as you get 2 first party games in that year that you would have been willing to buy at full price otherwise, Gamepass essentially has paid for itself from that alone. Add in the fact that you get to play a boatload of other games in between those 2 games and it just adds bonus to the value. Anybody who can't see this simply doesn't want to.
 

Klayzer

Member
If you truly believe billions of dollars is "very little" then oh boy.
Compared to what their office suite brings in, yes Xbox brings in very little. Still don't know if Xbox is end the black from the billions of dollars Microsoft has invested in platform since start up.
 
Z

ZombieFred

Unconfirmed Member
Compared to what their office suite brings in, yes Xbox brings in very little. Still don't know if Xbox is end the black from the billions of dollars Microsoft has invested in platform since start up.

If you have a good hour or so to spare then you should investigate online without any bias and see for yourself ;)
 

Kokonoe

Banned
I don't think anyone should be sharing sales data, to be honest. I hope the others follow suit.

The only people who need this information is investors.

The only people who care are the warriors.
Agreed.

Just post numbers after they've moved on to the next console. The rest of that should really just go to investors.
 

TwiztidElf

Member
So customers who are looking to make an expensive purchase can't have access to the financial health of the company or the division that are selling the product?
Sure, sounds reasonable.
 

Jigsaah

Gold Member
I feel if they were doing really good, I guarantee they would be flaunting numbers like crazy. Hmmm, I’m getting the console sales don’t matter vibe all over again.

“Console sales don’t matter!”

*hides console numbers*

Hmmm, game revenue and XBLive users are down.....

Hide them!! They are not important!!!
I think Gears 5 stats have a lot to do with this. 23k sold in the UK week 1. However 3 million players on Gamepass. If you're measuring success...you need to use relevant metrics.

That's like me saying...in a hotdog eating contest "Well how many hotdogs did you eat?" Wouldn't the best way to measure that success be to report the number of hotdogs you ate as opposed to....how many ounces of water you drank along with the hotdogs?

That's why I say this is in liine with what their plan is. There's nothing ominous or untruthful about it. It's just that people are having a hard time adjusting the metrics that matter in their own head. For years we've looked at games and hardware sales. Consecutive generations have been measured by these metrics. Microsoft is essentially changing the game and so different metrics are warranted. You think Google Stadia is gonna be reporting hardware sales? No...because the only hardware they have is their controller. They will be reporting to their investors in the same language Microsoft is. How do you garner investors from other platforms? Speak to them in a language and the metrics they understand and care about.

Let's not over think this guys. These conspiracy theories don't help anyone.
 
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mckmas8808

Mckmaster uses MasterCard to buy Slave drives
I think Gears 5 stats have a lot to do with this. 23k sold in the UK week 1. However 3 million players on Gamepass. If you're measuring success...you need to use relevant metrics.

That's like me saying...in a hotdog eating contest "Well how many hotdogs did you eat?" Wouldn't the best way to measure that success be to report the number of hotdogs you ate as opposed to....how many ounces of water you drank along with the hotdogs?

That's why I say this is in liine with what their plan is. There's nothing ominous or untruthful about it. It's just that people are having a hard time adjusting the metrics that matter in their own head. For years we've looked at games and hardware sales. Consecutive generations have been measured by these metrics. Microsoft is essentially changing the game and so different metrics are warranted. You think Google Stadia is gonna be reporting hardware sales? No...because the only hardware they have is their controller. They will be reporting to their investors in the same language Microsoft is. How do you garner investors from other platforms? Speak to them in a language and the metrics they understand and care about.

Let's not over think this guys. These conspiracy theories don't help anyone.

They aren't changing any game. Why not release the numbers for both if they are "REALLY" changing the game?
 
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