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Microsoft / Xbox - Quarter 4 Fiscal Year 2021 Results

Bryank75

Banned
The entry price is arbitrary. It's all about how many users they hold onto for multiple months after.
Well PSNow didn't hold on to me and I am a core PS user. People have so many subscriptions these days, they are looking for reasons to cancel. Netflix lost half a million subs in North America recently for instance. I love cancelling subscriptions and leaving horribly scathing feedback more than I actually use the damned things...
 

Heisenberg007

Gold Journalism
Good morning, everyone. Interesting numbers. Two questions (as I have yet to read the full report):

1. Did MS release updated Gamepass numbers? Last official numbers are 18m. Jez said a couple months ago that it's now 21m, so I am expecting MS to either confirm or deny that through this report.
2. Do we have an idea which third-party games (that were either delayed or lost user engagement) that may have caused the 4% drop? (I think the drop is more than -4%, and GP revenue is helping here and bringing this number back to -4%). Because with MLB (which wasn't on Xbox the previous year), I was expecting these numbers to go up.

It'd be interesting to see Sony's reports and see if they also see a similar decline. Could help us narrow down if those are first/second-party or third-party multiplatform games.
 
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Kagey K

Banned
Well PSNow didn't hold on to me and I am a core PS user. People have so many subscriptions these days, they are looking for reasons to cancel. Netflix lost half a million subs in North America recently for instance. I love cancelling subscriptions and leaving horribly scathing feedback more than I actually use the damned things...
To be fair Netflix is pretty terrible for anyone outside the US and not that good for people that live there.

Especially for thier asking price.

It might be harder to find stuff on Prime but the selection is way better imo.
 

Kagey K

Banned
Good morning, everyone. Interesting numbers. Two questions (as I have yet to read the full report):

1. Did MS release updated Gamepass numbers? Last official numbers are 18m. Jez said a couple months ago that it's now 21m, so I am expecting MS to either confirm or deny that through this report.
2. Do we have an idea which third-party games (that were either delayed or lost user engagement) that may have caused the 4% drop? (I think the drop is more than -4%, and GP revenue is helping here and bringing this number back to -4%).

It'd be interesting to see Sony's reports and see if they also see a similar decline.
1. No

2. It was mostly Warzone and Fortnite MTX, as they both exploded last year when everyone got locked down.

You are right it looks like it was about an 11% drop but gamepass sustained ot and held it to 4% meaning there had to be a large income boost to offset that 7%.

We see Sonys results for the same quarter Aug 4. I expect they will also be at a loss software side, but I'm not sure how much.
 
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Good morning, everyone. Interesting numbers. Two questions (as I have yet to read the full report):

1. Did MS release updated Gamepass numbers? Last official numbers are 18m. Jez said a couple months ago that it's now 21m, so I am expecting MS to either confirm or deny that through this report.
2. Do we have an idea which third-party games (that were either delayed or lost user engagement) that may have caused the 4% drop? (I think the drop is more than -4%, and GP revenue is helping here and bringing this number back to -4%). Because with MLB (which wasn't on Xbox the previous year), I was expecting these numbers to go up.

It'd be interesting to see Sony's reports and see if they also see a similar decline.
1. No.
2. No. I think it's more of a general engagement decline. I'd be very surprised if Sony has increased third party revenue in Q4.
 

Heisenberg007

Gold Journalism
1. No.
2. No. I think it's more of a general engagement decline. I'd be very surprised if Sony has increased third party revenue in Q4.
1. Surprising.
2. Yeah, could be. It'd be surprising but could also indicate a decline in first/second-party XGS games that may not have affected Sony (in case Sony does report higher numbers).

Also could be an anomaly in previous periods. I actually experienced a similar thing in my company while I was reporting numbers last month. It looked like June numbers were down MoM from May. But after further investigation, we found out that May numbers were artificially inflated because of uncontrollable factors, and June was on par.
 

Heisenberg007

Gold Journalism
The tweets that OP shows specifically says it was a decline in third party:
Yeah that's a good callout. I don't think there are any big third-party exclusive games that aren't available on PlayStation (e..g, Call of Duty, Fortnite, Battlefield, etc.)

In that case, Sony numbers will also show a similar decline -- or even bigger decline in % because they'd likely have a bigger market share for those games, so Sony would likely lose a bigger pie of third-party content revenue.

I believe Sony is releasing their reports soon? Looking forward to it.
 

reksveks

Member
2. Do we have an idea which third-party games (that were either delayed or lost user engagement) that may have caused the 4% drop? (I think the drop is more than -4%, and GP revenue is helping here and bringing this number back to -4%). Because with MLB (which wasn't on Xbox the previous year), I was expecting these numbers to go up.
I wonder if their q4 2020 got inflated by lockdown and therefore as we started to exit it, the engagement numbers dropped.
 

Heisenberg007

Gold Journalism
I wonder if their q4 2020 got inflated by lockdown and therefore as we started to exit it, the engagement numbers dropped.
Yeah, that is a possibility, which is why I mentioned a similar recent experience with me in my company.

But in that case, I'd also be expecting even bigger decline in PlayStation third-party revenue in the upcoming financial report because (1) these are third-party games so they would have affected PlayStation as well, and (2) a bigger decline because of the bigger market share and userbase on PlayStation, so the impact will be even bigger.
 

Kagey K

Banned
On the other side we have what some people call it "the xbox fan persecution complex."


I am just amazed how much of you can carry on this endless discussion that reaches no conclusion whatsoever. Why are people so defensive about gamepass? "evil" Sony fans going to steal it from xbox....
It's not a persecution complex when you literally aren't allowed to talk about it outside a single thread.

It's literally most people here can't handle the discussion like adults, so it turns to console wars.

If Sony is so great there are plenty of places to talk about that, but instead every Xbox thread is shit up and then get told its "persecution complex"
 
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reksveks

Member
But in that case, I'd also be expecting even bigger decline in PlayStation third-party revenue in the upcoming financial report because (1) these are third-party games so they would have affected PlayStation as well, and (2) a bigger decline because of the bigger market share and userbase on PlayStation, so the impact will be even bigger.
Will have to wait till the first week of August but think this might have been forecasted by Sony

Sony expects an increase in hardware sales -- no doubt with hopes that PS5 supply issues will ease -- although expects a decrease in sales of third-party titles and add-ons.

 
True, but the point about supply not being able to meet demand applies to both, probably even Nintendo as well tho Switch sales have kind of softened going into 2021 (OLED will most likely bring all of that back up, even if I think it's kind of a mediocre device technologically speaking, for the price).

I think the hardware sales particularly stand out due to them being better than 360's, so that gives us something to reference numerically speaking that hasn't necessarily been the case with Xbox for a while except for other people trying to extrapolate numbers from official data given. But for me personally, that takes a backseat to the revenue total which seems really impressive considering how much less systems they have in their console install base compared to Sony and Nintendo.

The one thing I was just wanting to show there is that the relationship between console install base and ecosystem revenue is nowhere near a linear one. Personally, I think it could be enough to give, say, Sony, some pause to consider if producing/selling 2.5x the number of consoles in a system lifetime is worth "only" a 46% increase in ecosystem revenue (and IIRC, the ecosystem annual profits for both are even narrower than that).

That being said, there's obviously some aspects of Sony's approach Microsoft could stand to look at to figure how to incorporate those successfully into their ecosystem. Chiefly, because Sony has more console presence in global markets, it affords them a mindshare in places Xbox simply doesn't have, and in terms of cultural impact on a global scale mindshare means a lot.

Microsoft probably wants to use methods like Xcloud for handling that, dunno if the costs in producing a ton more consoles outright, at least in the first couple of years, is something they desire to do, whereas for Sony they're kind of forced to do it as it's expected of them at this point (so it's both a blessing and a curse, in a way).



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C'mon, you can't tell me she not thicc ;) , look at dem thighs!!
Of course. I do like a bit of jelly with my toast. Avatar pic, Edit, Crop, Upload, Save.


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onesvenus

Member
But in that case, I'd also be expecting even bigger decline in PlayStation third-party revenue in the upcoming financial report
Do they report first and third party revenue separately? I ask because if they are grouped, even if 3rd parties are down, it might be offset by stronger first party sales. Microsoft didn't have a lot to compensate with

Will have to wait till the first week of August but think this might have been forecasted by Son
If I don't recall wrong, even Nintendo predicted a decrease for the quarter.
 

Kagey K

Banned
Will have to wait till the first week of August but think this might have been forecasted by Sony



Somebody in this thread said it would be a disaster for Sony if they had a 4% software drop, but Covid combined with TLOU2, Fortnite and Warzone, means it could see a double digit drop.

Rachet isn't going to offset those sales.

Same with Nintendo and Animal Crossing.
 

Kagey K

Banned
Do they report first and third party revenue separately? I ask because if they are grouped, even if 3rd parties are down, it might be offset by stronger first party sales. Microsoft didn't have a lot to compensate with


If I don't recall wrong, even Nintendo predicted a decrease for the quarter.
I think they just report software as one item.

First party won't offset it.

Tlou2 vs Rachet, who won that sales war? 3rd party decline will only amplify it.
 

onesvenus

Member
I think they just report software as one item.

First party won't offset it.

Tlou2 vs Rachet, who won that sales war? 3rd party decline will only amplify it.
Didn't realize TLoU2 was on this same quarter last year.

I wonder what people will say regarding slower sales without a Gamepass-like service those can be attributed to 😂
 

reksveks

Member
That 4% dip is interesting... Gamepass causing changes in purchasing behaviour?
Given that Sony and Nintendo are also expecting drops, either gamepass is impacting all gamers or its an external factor (maybe like everyone after lockdown bought a shit tonne of games)
 

Heisenberg007

Gold Journalism
That 4% dip is interesting... Gamepass causing changes in purchasing behaviour or are there less 3rd party games in general?
No, too soon to make that conclusion in this particular instance. First, we will have to see if Sony also reports a proportionately similar decline. As these are third-party games, they should affect Sony's revenue as well. The impact should actually be bigger for Sony because of their bigger userbase.

Also, we don't know yet how big of a percentage in this pool belongs to third-party software sales and how much belongs to MTX and in-game purchases. Sony's reports will be more detailed and will give us more to work with.
 

Heisenberg007

Gold Journalism
It literally says offset by GP subscriptions and first party … so GP helped keeping the loss lower ..
That's not correct, because this is all revenue. "Loss" would have been the correct term if we were discussing profit.

The more accuratte terminology would be to say "GP helped minimize the loss of revenue".

I know I'm probably coming as "one of those guys" but this is an important distinction.

Because for example, it is possible that Xbox's third-party revenue dropped from 100 to 70, and Gamepass revenue increased from 80 to 90. But the overall revenue decreased from 180 to 160, which would have dropped from 180 to 150 if it weren't for Gamepass. But at the same time, it is possible that Gamepass itself contributed to the overall operating loss, assuming the service actually cost Xbox 100, and the revenue generated was 90 (up from 85).

And this would have been true as well if GP itself shrunk, and the "off-set" is being defined as what would have happened to revenue if there was no GP.
 
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Banjo64

cumsessed
He said it wasn't massively positive. Not that it wasn't positive at all. It's his opinion too. If he feels that way, leave him be.

I don't get why you're calling for accounts to be banned just because someone else posted a less than glowing view on this report.

So he's point about people being sensitive holds. Imagine calling for an account ban for a post like that. Jesus fucking Christ. Are you on your period? Did someone piss in your cereal today?
Just repeated behaviour of low tier ‘concern’ trolling - you’re saying I’m on my period and over sensitive but you’ve just posted a big fanny wipe of a post because I think people should be banned for trolling? :messenger_tears_of_joy:
 

Azurro

Banned
And you will never get them anymore. As Phil said before the gen started, they could be 'winning' the gen and they still wont release numbers anymore.
People need to forget the sales warz aspect and accept that simple hardware sales are not the 'be all and end all' for Microsoft anymore.

BS. You and I know that if MS was moving more hw than Sony or Nintendo that they would be screaming their numbers from the top of a hill. They show whatever numbers are favorable for them, that's all.
 

Leyasu

Banned
Definitely hard to estimate the rest. But if the final goal for Gamepass is only a single billion a month at absolute peak, between the studio running costs, marketing costs, third party licensing costs, server blade capital expenditure and continuous running costs, plus the amortised capital expenditure for the acquisitions, it’s not leaving a huge amount of profits. You’d think upwards of 10 billion for acquisitions would generate more ROI than that in other divisions of Microsoft.
It all depends on how they are using that revenue. Its not the only stream and could be used primarily for content (studio running costs + 3rd party deals) and marketing.

I honestly don’t think that the studio acquisitions were paid for by gamepass. More like the acquisitions were green lit once subscriber numbers had reached a point where their operating costs could be covered by gamepass revenue.

As to the hardware that you mentioned. Could be gamepass that pays, Who knows
 
You paid 180$ up-front. In a sense, you are paying 60$ a year to use gamepass.
I didn’t even pay that much as I got cheap Gold it worked out at around $30 per year. And yes, that is how math works. What does that have to do with what I said? I’m not buying anything else on the service and with the number of games I’ll have paid for no added cost during those 3 years, they would have made a lot more money through individual purchases.
 

Heisenberg007

Gold Journalism
I didn’t even pay that much as I got cheap Gold it worked out at around $30 per year. And yes, that is how math works. What does that have to do with what I said? I’m not buying anything else on the service and with the number of games I’ll have paid for no added cost during those 3 years, they would have made a lot more money through individual purchases.
It's true.

And if someone says that you're spending more money after subscribing to GP (or PS Now, or any other subscription service), then isn't it counterintuitive? What's the point of subscribing in the first place if you are going to spend up even more?

Imagine if someone said that after subscribing to Netflix, you would be purchasing more of the movies you just watched via the subscription. The entire point of subscription services like these is to provide an incentive -- that you don't have to buy this content anymore. Otherwise, it's just added cost.

When MS said that GP users spend more than non-GP users, that statement was for shareholders and investors, not for gamers. They also didn't make it clear if that amount included the GP subscription or not -- let alone by how much they spend more.

I think more than 90% would buy less games/movies after subscribing to a service, because that's the whole point and pull of it.
 
Somebody in this thread said it would be a disaster for Sony if they had a 4% software drop, but Covid combined with TLOU2, Fortnite and Warzone, means it could see a double digit drop.

Rachet isn't going to offset those sales.

Same with Nintendo and Animal Crossing.
Might have been a misunderstanding, when I said 4% drop in content and services for Sony would be a big deal, I meant a 4% drop on the FY (full year) ie. 12 month basis.
 
It's true.

And if someone says that you're spending more money after subscribing to GP (or PS Now, or any other subscription service), then isn't it counterintuitive? What's the point of subscribing in the first place if you are going to spend up even more?

Imagine if someone said that after subscribing to Netflix, you would be purchasing more of the movies you just watched via the subscription. The entire point of subscription services like these is to provide an incentive -- that you don't have to buy this content anymore. Otherwise, it's just added cost.

When MS said that GP users spend more than non-GP users, that statement was for shareholders and investors, not for gamers. They also didn't make it clear if that amount included the GP subscription or not -- let alone by how much they spend more.

I think more than 90% would buy less games/movies after subscribing to a service, because that's the whole point and pull of it.
Yeah absolutely, I have no beef with any of that! My beef is with people who vehemently claim that most Gamepass subscribers are going to spend loads of extra money on DLC, MTX etc and will end up spending more overall. I don’t buy that bull… no way.
 
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Fredrik

Member
And if someone says that you're spending more money after subscribing to GP (or PS Now, or any other subscription service), then isn't it counterintuitive? What's the point of subscribing in the first place if you are going to spend up even more?
I think the point is that you’re more likely to buy more expansions if you haven’t already spent $60 on the game which many think is plenty enough. You get the base versions ”for free” so opening the wallet for a bit extra isn’t such a big deal.

I still spend way less money on Xbox than on PS5 though so I don’t know what people are saying here. And it’s not a bad thing, for us gamers. By buying three games on PS5 I’ve already payed more than for three years of games on Xbox. This is why PS5 is an exclusives-only platform now for me, and Xbox and PC is for everything else.
 

reksveks

Member
It's not gamepass that's got me buying more games on xbox/MS store, it's playanywhere and the promise of xcloud support and I know the latter is stupidly optimistic.

GamePass did make me get a series s though
 
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I think the point is that you’re more likely to buy more expansions if you haven’t already spent $60 on the game which many think is plenty enough. You get the base versions ”for free” so opening the wallet for a bit extra isn’t such a big deal.

I still spend way less money on Xbox than on PS5 though so I don’t know what people are saying here. And it’s not a bad thing, for us gamers. By buying three games on PS5 I’ve already payed more than for three years of games on Xbox. This is why PS5 is an exclusives-only platform now for me, and Xbox and PC is for everything else.
I don't even know if that part about the expansions is true on a broad scale? I mean, if you buy the game yourself and enjoy it, you've paid 60 and you can put up another 20 or 30 for more time in the same game you already enjoyed. Alternatively, you have to buy another game now that you're done, so I think quite a few people will buy the DLC. On Gamepass, you choice is buy the DLC for a game you enjoyed, but got at no added cost, OR, you can go play another one of the many games you haven't played yet on Gamepass, for no extra cost.

I think most people will choose the option to move on to another game at no extra cost, unless they really adored the game. I don't think it will work out as way more DLC sales overall.
 

Godot25

Banned
"only $7 billion"

dont know about you but thats a shit load. isnt that how much microsoft aquired bethesda for?
I think you missed whole point...

Considering PlayStation outsold Xbox 2,25:1 to 2,5:1 last gen and is still outselling Xbox this gen (albeit Microsoft is certainly closing the gap) and considering how many big sellers Sony had in terms of first-party in last few months (Miles Morales, TLOU 2, Ghost of Tsushima) you would think that gap in terms of revenue between Xbox and PlayStation would be much higher then 15,4b vs 24,2b.

Because that means that every customer on Xbox side is spending more in their ecosystem.

Yeah. 7 billion is huge number, but when we consider fact that Xbox One was a huuuuuge failure and PS4 was massively successful you would think that revenue difference would be higher.
It just show how non-telling number of consoles sold number really is. Because when Microsoft/Sony sold a console that is collecting dust and user is not spending on ecosystem, that is not great.
 
Iyou would think that gap in terms of revenue between Xbox and PlayStation would be much higher then 15,4b vs 24,2b

Not really, when most of both of those numbers are made up of very expensive once-off hardware sales of 500 a piece, which are both outstripping supply at the moment? It makes perfect sense that the full price hardware sales on both sides at the start of the gen are closing the gap. Remember, one purchase of a next gen console is 7-8 full game purchases, so it makes sense that the revenue from hardware dominates the overall figures.

The ecosystem spend gap still exists, but both consoles are making so much hardware revenue (which doesn't translate to profit due to low margins). This blurs the lines.
 
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Godot25

Banned
Not really, when most of both of those numbers are made up of very expensive once-off hardware sales of 500 a piece, which are both outstripping supply at the moment? It makes perfect sense that the full price hardware sales on both sides at the start of the gen are closing the gap.
Well then it is even better for Microsoft in terms of content spending
Since they had literally no new first-party game (outside of Flight Sim on PC) in last fiscal year, meanwhile Sony had TLOU 2, Ghost of Tsushima, Miles Morales, Sackboy etc.
They are selling consoles for less revenue 299+499 vs 399+499. And also Sony is still very successfully selling PS4 consoles, while Xbox One consoles sales dropped from cliff.
And they sold less consoles then Sony (aprox. 6,5 vs 10 million)

It implies, that Microsoft is either making billions from Minecraft per year or that average Xbox customer is spending more in ecosystem then Playstation's customer.
 
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It's not a persecution complex when you literally aren't allowed to talk about it outside a single thread.

It's literally most people here can't handle the discussion like adults, so it turns to console wars.

If Sony is so great there are plenty of places to talk about that, but instead every Xbox thread is shit up and then get told its "persecution complex"

When Sony sales report thread comes out.... I've never seen Xbox trolls flooding the comments with "yeah but"...."xbox is trash because"

It's only one way around. And they literally turn the xbox threads sour. And when people mention it they just turn on 'lol xbox fans have persecution complex'.
 
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Thirty7ven

Banned
Good news for Xbox fans, instead of royally fucking up, Xbox is riding along the industry trend, which is good news for the health of the market too!

Weird that there was a decline in content and services, but still, good news all around.
 

Outrunner

Member
Is there anything on how many Game Pass subscribers are new entries into the ecosystem and how many are people moving from Live Gold to GP? That would be very interesting to see.
 

EdGalTBR

Banned
Xbox Series X + S had reached 6.5 million as of June 30, 2021

PlayStation 5 sold more than 7.8 million as of March 31, 2021

PS5 may have reached 10 million by June 30, 2021.

So, Microsoft is selling ~6.5 Xbox for each ~10 Playstation 5 sold by Sony, which is very, very good.
 

Heisenberg007

Gold Journalism
I think the point is that you’re more likely to buy more expansions if you haven’t already spent $60 on the game which many think is plenty enough. You get the base versions ”for free” so opening the wallet for a bit extra isn’t such a big deal

I still spend way less money on Xbox than on PS5 though so I don’t know what people are saying here. And it’s not a bad thing, for us gamers. By buying three games on PS5 I’ve already payed more than for three years of games on Xbox. This is why PS5 is an exclusives-only platform now for me, and Xbox and PC is for everything else.
I have a slightly different opinion on this.

Like I can see more MTX % on Gamepass because a person got a game at no additional cost. In a way, a game for GP users would be similar to F2P games. So I see potential in spending more on MTX and in-game cosmetic-type purchases because of higher disposable income.

However, I think people would actually be spending less on DLCs and expansions for games they got via a subscription service (Gamepass, PS Now, PS+) because they don't own the base game. And their expansions would be useless if their subscription ever lapses, unless they buy the game they have already played via a subscription.

Of course, I could be wrong (because we have no data to either support or refute this), but it's just how I'd think in a situation like this. I won't buy expansion or DLC if I don't own the base game. But I could see myself spending more on MTX.
 
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