DeepEnigma
Gold Member
Yep.
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Microsoft's internal documents recognize that adding games to Game Pass would lead to cannibalization of Buy-To-Play sales
- Thread starter DeepEnigma
- Start date
Beastclaw Raider
Banned
Yes because they don't need to pay for the infrastructure and monthly costs and staff. Pure profits!
When you have games like halo and Forza free day one with gamepass, the only ones profiting from this are gamers
Lucifers Beard
Member
Didn’t they openly come out and say that Game Pass would lead to more game purchases? Because that statement was fucking stupid at the time and even more stupid now.
Xbox have kind of shots themselves in the foot by releasing so many brand new games on the platform. I’ve seen and heard so many comments on here, Reddit and even from people at work that they’ll just wait for a game to hit Game Pass.
Some people I know also don’t buy games anymore and they’ll only play what’s on the service. I’m sure there are loads more people who do the same.
With all the above in mind, how long is it before Xbox need to dial back the service offering or start to offer a tiered approach to help increase profits? It’s also worth mentioning that if the Activision buyout happens, Game Pass is almost definitely going to get a big price hike.
Xbox have kind of shots themselves in the foot by releasing so many brand new games on the platform. I’ve seen and heard so many comments on here, Reddit and even from people at work that they’ll just wait for a game to hit Game Pass.
Some people I know also don’t buy games anymore and they’ll only play what’s on the service. I’m sure there are loads more people who do the same.
With all the above in mind, how long is it before Xbox need to dial back the service offering or start to offer a tiered approach to help increase profits? It’s also worth mentioning that if the Activision buyout happens, Game Pass is almost definitely going to get a big price hike.
BlackTron
Member
I must admit the only game I bought on Series X was Cyberpunk when Best Buy had it for five bucks and and a few digital titles on steep discount.
Gamepass isn't even really stealing my sales from Xbox. It's stealing games from other platforms. I would have bought Shredder's Revenge on Switch and Hi-Fi Rush on Steam. Poor Xbox lol
BlackTron
Member
They need timed exclusivity on games and tiers.
I can see a model where a new game comes out and its available on GP for a few weeks to a month. To keep playing the game you need to either buy it, get the next tier, combination of the two plus other ideas, whatever.
This *might* actually lend to some game sales because the launch period would serve as a tryout/demo period that is long enough to get you hooked on the game. Pretty much still able to use it like trying out/renting games back in the day, without giving away the whole store.
Of course this would be very good for genuinely good games with depth or length. And very bad for shallow games where you can get your fill and move on in 1-2 days.
Edit: When you think about it, if your game is really good AND only available for a short time on GP with a normal sub, just being on GP could create a lot of exposure to the game that would not otherwise exist. I'm willing to bet all the free positive impressions from GP players helped fuel the deluge of people wanting to buy Hi-Fi Rush on steam. I'm sure it would do well anyway, but it's fascinating to wonder whether Steam's sales for this game would have been higher or lower if it wasn't on Gamepass.
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bluecowboys
Banned
Revenue != profit
PropellerEar
Member
Beastclaw Raider
Banned
Exactly, so saying they have a revenue from a million gamepass users, is pointless.
mckmas8808
Mckmaster uses MasterCard to buy Slave drives
It's becoming easier and easier to root against the Xbox brand now. And I DON'T want to. But it honestly looks like everything they want to do goes against what's best for me as a gamer.
Havoc2049
Member
Microsoft already does this. Physical CE/LE editions aren't really a game changer though and probably account for very little in revenue, in the grand scheme of things. CE/LE editions are more of a fan service for the hardcore fans.
Daneel Elijah
Gold Member
Brazil is a special case in my opinion. They have laws that made importing really costly for many things. So if the country is massively pro digital it make sense to stop making games. I can see Sony and Nintendo to the same in the future. But it is not helping them in terms of public opinion of course.
DeepEnigma
Gold Member
MS manufactures over there though to get around the super high import tax.
bluecowboys
Banned
I never said profit in my original post. Every company reports revenue in their fiscal reports as it is a good measure to see how much the company is growing.
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Daneel Elijah
Gold Member
Exacly.
TonyK
Member
If Microsoft started complicating Gamepass in that way, adding games for a month and tiers, I would sell the console and return to PS5.
TonyK
Member
But then, what about Netflix, HBO, Spotify...?
demigod
Member
Shit i overpaid. I paid $10!
Bumblebeetuna
Member
They have said GP is profitable.
MasterCornholio
Member
Yes why get rid of people that made the franchise great or successful?
I would think they would like to keep them instead of sacking them.
Pelta88
Member
Looks like market analysts have been copying our homework
wccftech.com
Damn near every word lifted from Neogaf members who look beyond PR.
Xbox Game Pass Business Model Doesn’t Seem to Work While Nintendo’s Switch Online Does, Says DFC Intelligence
According to DFC Intelligence, Microsoft’s Xbox Game Pass doesn’t appear to be a sustainable long-term business model.
wccftech.com
Damn near every word lifted from Neogaf members who look beyond PR.
Gambit2483
Member
Oh wow, maybe they saw my thread from last year https://www.neogaf.com/threads/is-a...l-truly-sustainable-in-this-industry.1644509/
IndianaJack
Member
Xbox had to do something different since normal sales were tanking back in 2014.
Big_Dude
Neo Member
The difference is 10s to 100 plus million in production cost. Which most of the content on those services don’t cost as much to produce.
bentanchorbolt
Banned
There are shows that cost around $10m-$15m to make per episode, some of those MCU tv series are clocking in at $25m episode. $225m just for a single season of Wandavision, lol. $270m for Season 4 of Stranger Things.
I think the only thing that matters is the return. As long as Game Pass is profitable or they think it will be on a long enough timeline, then its a good investment.
But as I've said before, if it turns out to be a farce and they pivot back to normal software sales or exit the market entirely, the market will correct itself as it always does.
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Oh really? Big time tv costs money. So 10 hours of viewers only cost only 200 million dollars. Sounds more expensive to to me for a lot less hours to content. A 100-150 million dollar assins creed get you 80 hours plus.
‘House of the Dragon’ Just “Fixed” George R.R. Martin’s Least Favorite ‘Game of Thrones’ Scene
The author's "least favorite scene in all eight seasons" of 'Thrones' just got a bit of a do-over in Sunday's third episode of 'Dragon.'
www.hollywoodreporter.com
Once again, Dragon staged its own version of a jousting tournament in the show’s debut episode, with an extended sequence in front of a very large (albeit CG-enhanced) crowd. Obviously, Dragon having a budget of nearly $20 million per episode helped the production go a bit bigger.
Bumblebeetuna
Member
GamePass isn’t directly comparable to most of the video services because a vast majority of the Xbox revenue is generated the old fashioned way, selling games. They don’t see GamePass being the way most of their customers play games. Netflix and Hulu etc rely on the sub revenue.
Thirty7ven
Banned
MS has stopped looking at the business of videogames as an entertainment one long algo. It’s software for them, a game is like a social media app. It’s why they want ABK.
BlackTron
Member
I would probably still use Gamepass even if it was just the basic tier. Because I always liked renting games and demo disks. It works on PC too.
aries_71
Junior Member
That’s not necessarily bad, isn’t? I mean, we are gamers, I believe…
Beastclaw Raider
Banned
Oh for sure, like I said I cant complain as a gamer's point of view. Im spoiled with their pc gamepass, this with a ps5 and switch I'm covered on all fronts
Spencer's exact words are:
"Today Gamepass is an overall part of our Content and Service revenue, it's probably 15%. I don't think it gets bigger than that, I think the overall Revenue grows so 15% of a bigger number is a bigger number, but we don't have this future where I think 50, 60, 70% of our Revenue comes from subscriptions. The largest business model in video games is Free-to-Play; you download a game that's free- you and I were talking about Fall Guys, great game, or Fortnite- these are games that you have a device you can download the game and then they will sell you things in-game to monetize so that they do actually run a business in the game but you're not forced to go buy those things in order to play the game. That's the largest gaming business model across all screens, it's Free-to-Play. As you mentioned there's retail, people still buy video games, a lot of them that's far larger than Gamepasses for us, and we have the option of a subscription which we love as a choice but not to the extent, not trying to kind of cannibalize the other businesses, we see it as just a customer choice and I think it will stay in that 10 to 15% of our overall revenue and it's profitable for us."
Phil is very good with weasel words, just like his usage of "growing profitably". If I was to interpret his word salad above, my interpretation would be, "Our Content and Services remains profitable as long as Gamepass remains 10 to 15% of our overall revenue."
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DryvBy
Member
You know why MS can't keep up? I know this is going to sound like bait but it's my honest opinion. Ready?
They are awful at making video games.
In my ye olde school days, we had Microsoft taking risks that made sense to gamers. They put out so many gems, some hidden but still. Being a PC gamer in the 90s, you had a few major Microsoft titles in your library. I actually was a huge fan and consider some of their early library GOAT worthy. When they unveiled the Xbox, that tech was amazing and they managed to revolutionize gaming not by new but by being good at it with a quality closer to the PC experience (online, voice chat, hard drives). The laziness and cheapness of the 360 era burned so many people, but at least they still had quality games. Gears of War was my nightly go-to for months along with Halo 3.
Not even half way through, this apathetic movement happened. We weren't getting the fun smaller games from MS. Nothing groundbreaking. No risks. We were getting the same stuff over and over. Even when they were buying companies, like Rare, it took how long to get a game from them that didn't financially suck? And with Sea of Thieves, it was how long before that didn't suck? One of the things Microsoft has really pushed is one of my least favorite features in Steam and that's early access. While they label things Game Preview, almost all of their games feel like they should be labeled Game Preview. Halo Infinite was missing core content and modes for months!
Age of Empires 4 was supposed to be their return to RTS in a big way. My hype from the trailers was unbelievable. When that game finally hit, Gamepass's $1 monthly deal (which I seem to get constantly) saved me ever buying that game because they couldn't even produce a brand new AOE without turning it into a DLC pit for civilians, something the game terrible lacks.
Where is Fusion Frenzy? Crimson Skies? A good Halo? Conkers? Fable (it's coming doesn't count because they never come)? Midtown Madness? Even Asheron's Call II?
Forza is their one saving force and it's starting to get stale with just map changes. Can someone put out some frickin games? Conkers Bad Fur Day 2, with Chris. Just anything from the ground up!
demigod
Member
I don’t have switch sub, do they give out free contents? Maybe Sony will copy that model.
SLB1904
Banned
This chain of quotes really went sideways
Ozzy Onya A2Z
Member
This is incorrect, F2P, passes/subs and MTX/DLC across all gaming account for nearly 75% of all global gaming revenue.
The "sale of the game upfront" isn't the tentpole it used to be. There is a reason even Sony are on record that those AAA tentpole games aren't sustainable due to increasing complexity, dev times and costs etc.
Azurro
Banned
Disney+ lost billions in a single quarter and Disney is slashing costs by 5.5 billion. Streaming is not really what's cracked up to be.
SLB1904
Banned
All the Sony games are getting sequels and selling like never before.
Nonsense
Ozzy Onya A2Z
Member
I didn't say they're not profitable or not getting sequels, as usual console warring just blindsides replies at GAF. Jim Ryan last year stated how complex and expensive the development of such titles are spiralling. Just look at industry statements and threads about 10Million being break even for AAA.
It's ok, I'm not attacking your favourite brand or game.
SLB1904
Banned
Thats bullshit and was obvious some of you would try to run with it.
Jim was saying these same AAA games are not sustainable on subscription. And he absolutely right. You never going to make money back by putting gow on subscription service
demigod
Member
Haha you believe dumbass grubb, you are gullible.
Ozzy Onya A2Z
Member
I guess you're correct, GoW only had to do 1Mil for break even, right? /s
Never said I agree with the exact number, that is far too variable. It's a far better indicator than your factless and tactless replies.
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demigod
Member
I’m not the one throwing out baseless numbers from my ass. Do you honestly think a game like Callisto Protocol really need to sell 10 million copies just to break even? If so you can explain, i’ll wait.
intheinbetween
Member
Well, it certainly does. I can tell from my own experience I ended up buying Eastward on Switch, otherwise I wouldn’t have know about it, so yes it does
James Sawyer Ford
Member
Microsoft is playing a dangerous game with GamePass. Pre-conditioning their audience to expect games on GamePass, or that Xbox just becomes a "GamePass machine", they sub to GamePass, and ONLY play what is on GamePass because they're paying for the subscription and simply don't care enough to buy retail content.
I feel like sales of third party games like Hogwarts is going to be a massacre for Xbox. The Ratio of PS5 sales to Xbox sales is probably going to be abysmal.
I feel like sales of third party games like Hogwarts is going to be a massacre for Xbox. The Ratio of PS5 sales to Xbox sales is probably going to be abysmal.
MasterCornholio
Member
Does NPD still gives us splits?
DeepEnigma
Gold Member
I don’t think so. Not since the creamsugar leaks. NPD did a lot of bowing down to MS and hiding data over the years to “please their partner(s)”
James Sawyer Ford
Member
Unfortunately not. But we still get them for UK data, which is a good proxy for the US
MasterCornholio
Member
Ah OK. So they did give us those numbers.
The US is Xboxs strongest market so it definitely would be interesting to see the splits in that region. Everywhere else is probably lopsided except maybe the UK.
TheGodfather07
Member
Lol. The sale upfront is exactly what needs to remain for it to be sustainable. Its the subscription model that makes it unsustainable. That's what Sony were actually saying. Check first, next time.
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