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Opinion Business Game Dev Phil Spencer: Xbox Game Pass isn’t “burning money to gain customers”

Nikana

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Honestly, even then. If I like a movie or show, I'll still buy the Blu-Ray even if it's on a streaming site.
I guess you're proving my point lol. Seems nuts to me, but people do indeed buy stuff when they have a game pass sub meaning Microsoft basically gets to double dip.
 

Chromata

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Jul 11, 2019
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Maybe I am reading it wrong but most of the give away comments tend to be followed by people saying Gears 5 didn't do well etc.

And yes a lot of the games on game pass are sold for more elsewhere but these are stores that don't have subscriptions. Subscriptions will always take the price of something down. Thats the whole point of a subscription. Comparing a game to another store that has it for more money isn't really fair because its a completely different type of model and revenue.

If you have a movie on Hulu that's in the $6.99 tier but the blu ray is $14.99, you don't assume that Hulu has to be losing money. It's a different deal with different terms and expectations.

The games that are $60 at launch that are on game pass tend to be their own games, meaning that's where their biggest hit will come but since they are the publisher and developer its much easier to cut the losses.

But the other games on the service tend to be older and are already at a significantly cheaper price point. Along with most of the Day 1 game pass games that aren't MGS titles tend to be indie games which prices aren't set at very high.

Even if you look at the AAA games that are truly block busters like Witcher 3 and Doom, they are always on discount somewhere and even t regular price now they are in the $30 range before sales.

When it comes to people buying stuff they can get in a subscription I will never understand why people buy it either. But I worked in retail when House of Cards hit DVD/Blu Ray and we always sold a ton of them. I don't get it myself, but people still do buy things they could easily get a subscription for.
We could be referring to different comments or interpretations since I agree with you that they didn't just give away Gears 5.

I also agree with your Hulu comments, it's a different business model. I understand why subscription services are employed because the amount of money gained consistently over the sheer volume of subscribers adds up to a lot. Still, the value you get is unbelievably good for what amounts to less than a meal a month.

Not that I'm complaining, it's great for me as a customer, I just don't believe it's sustainable at this price long term. When PC comes out of beta it'll be $12, which makes more sense imo.

MS is holding on to the numbers though so we won't know for sure.
 

Nikana

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We could be referring to different comments or interpretations since I agree with you that they didn't just give away Gears 5.

I also agree with your Hulu comments, it's a different business model. I understand why subscription services are employed because the amount of money gained consistently over the sheer volume of subscribers adds up to a lot. Still, the value you get is unbelievably good for what amounts to less than a meal a month.

Not that I'm complaining, it's great for me as a customer, I just don't believe it's sustainable at this price long term. When PC comes out of beta it'll be $12, which makes more sense imo.

MS is holding on to the numbers though so we won't know for sure.
I think where people are getting hung up is on the monetary value of the library which is a lot but its like with any sub service. There are 100 plus games, but realistically, you are only playing 30 percent of them which are probably the games they paid most for. and that other 70 percent is content they paid very little for from developers that aren't going to pass up on a deal to get some cash for an older product they are no longer selling.
 

12Dannu123

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It doesn’t matter how big of a company you are - you don’t just absorb losses indefinitely. This is a big bet for Microsoft, if they don’t end up making money from it, they will abandon the strategy.
They will make money. It's pretty simple, you go into the Red for short term and medium term, you dominate the market and you increase the prices later, this is a common business tactic.

Sony probably realized that in order to compete with Microsoft, they would need to go deep into the red, worse than Microsoft and probably couldn't sustain the losses before reaching profitability.
 
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ShadowWolf712

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I guess you're proving my point lol. Seems nuts to me, but people do indeed buy stuff when they have a game pass sub meaning Microsoft basically gets to double dip.
Not necessarily. I know several people who have PC Game Pass for cheap, use it to try games, then buy them on PS4. 🤷‍♂️
 

stitch1

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I saw that new HellBlade trailer at the game awards. Looks cool. I hadn't even heard of the first one. But it's on game pass and I am going to check it out. Then I'll start on some others like The Outer Worlds, Metro Exodus, and maybe even Remnant. My wife and I have been playing some co-op in Halo Reach and some of the Lego games. I just finished the Witcher the other night and I have a friend that's been wanting me to play GTA online with him.

Point being all these games and more are on Game Pass and I am enjoying the service. I don't know, nor really care how or why they are offering it. All I care about is taking advantage of it. I have already played a lot of games offered on there. I also have sampled some indie games that I wasn't as sure about. Some weren't my thing and others, looking at you Oxenfree and Inside, were right up my ally. Heck, if I didn't purchase another game this generation I would be pretty well set for content until the next gen comes around.
 

CatLady

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Well, there was once a time when people doubted that PSNow was pulling its own weight. But then Sony released the subscriber and profit numbers for PSNow, so no one doubted them anymore.

We just need numbers. Taking Microsoft's word for it just isn't an option, and was never an option for multiple generations. For that matter, we can't take Sony or Nintendo's word for it either. We need companies to release numbers at official shareholder meetings, where they were legally obligated to tell the truth.
MS is under no obligation to give you their financials, unless you are a stockholder. If you are go attend your stockholder meeting otherwise quit worrying about a trillion with a T dollar company's numbers.
 
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MS is under no obligation to give you their financials, unless you are a stockholder. If you are go attend your stockholder meeting otherwise quit worrying about a trillion with a T dollar company's numbers.
They don't have to release any numbers, but we are not obligated to believe anything they say until they do.
And keep talking about your non-existant warchest. That worked so well this gen so far. If money is all you need to succeed than Stadia would be the leading gaming device by now.
 

CatLady

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They don't have to release any numbers, but we are not obligated to believe anything they say until they do.
And keep talking about your non-existant warchest. That worked so well this gen so far. If money is all you need to succeed than Stadia would be the leading gaming device by now.
Nonexistent warchest? As of today MS's market cap is 1.25 Trillion dollars. they could buy Sony with their lunch money if they wanted.

 
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What price bump down the road are we talking about? Link, maybe? Or you just pulling that shyte from your arse?
Obviously there is no link, to an announcement it's just common sense - launch new service at attractive price with almost free trial, raise the price when you have enough clients.

This is just how things work, wouldn't you think that only makes sense? or you think the price will remain the same forever?
 

Elenchus

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You are probably right — the internet would say the numbers are “fake”. At least it would be closer to something definitive than the PR speak we are typically presented with.
Really?! Interesting....so the numbers don’t actually matter then....

 
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Nonexistent warchest? As of today MS's market cap is 1.25 Trillion dollars. they could buy Sony with their lunch money if they wanted.

That also tells us that they don't like wasting money too much (obviously most of their projects fail miserably, until recently Windows and Office were their only two money making initiatives.... I would argue that Azure is not their main focus, with Office and Windows server (being phased out to Azure services ASAP), Xbox looks more like a "we are cool" branding effort.
 
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12Dannu123

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That also tells us that they don't like wasting money too much (obviously most of their projects fail miserably, until recently Windows and Office were their only two money making initiatives.... I would argue that Azure is not their main focus, with Office and Windows server (being phased out to Azure services ASAP), Xbox looks more like a "we are cool" branding effort.
This doesn't tell us anything about them not wasting money. If they weren't wasting money they wouldn't have spent $2 Billion on Minecraft or 7.5 Billion on a dev repository. If you want the definition of not wasting money look at PSNow and its constant focus on profit and cutting output as a result of cutting prices.

I don't think you understand what market cap is or means at all and it really shows.

Netflix worth more than Sony combined but losses billions every year.
 
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Nonexistent warchest? As of today MS's market cap is 1.25 Trillion dollars. they could buy Sony with their lunch money if they wanted.

And? So could Google. I am not sure what you are trying to argue here, are you saying the company with the most money, makes the best game sysem?
Then what do you feel about Stadia then?
 

SleepDoctor

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I just have to say thank you for all the entertaining reading you guys have provided me.
Phil: XBOX gamepass is doing great, numbers have doubled YOY.....
Phillipine 1 : How many are subscribed to Gamepass Uncle Phil?
Phil: With a Smirk, Can't disclose, you believe in uncle right?
Phillipine 2: Shoves his way through..... I believe you Uncle Phil....
Phillipine 1: But, but, the easiest way to prove such a thing is with numbers....
Phillipine 2 to Phillipine 1: Shhh!, Gamepass is doing great ok......
Phil to Phillipine 2: Datta Boy, you have such promise. I will be sure to send you some merch and loot bags filled with Gamepass Codes and the best MS games this gen.....
Phillipine 2: With the most endearing look ever.....Thanks Uncle Phil.....

I just have to say thank you. You guys provide some entertainment for when im bored, while at the same time showing your lack of intelligence lol.

I mean is this the best you can do? Not only embarrassed yourself, but showed how illiterate you are 😂😂😂. My 7 year old niece can write a better story than you lmao.

You guys are so emotional over a console you don't even own.... i love it 😉
 
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12Dannu123

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And? So could Google. I am not sure what you are trying to argue here, are you saying the company with the most money, makes the best game sysem?
Then what do you feel about Stadia then?
I think what's he's trying to argue is that Google, Apple and Microsoft can all play the long game on their respective services/platforms. He/She is right on that regard. There's no denying it. They don't care about short term profit, they could loose $10 Billion per year, but if they are gaining market share as a result of that loss, then they will keep sustaining the service until it reaches profit.

This is one of the biggest benefits in being purchased by the big tech companies, you no longer have to think about short term profit. Sony, Nintendo or any other gaming company doesn't have this benefit since Gaming is their core businesses.

IF Nintendo and Sony follow the exact same model as Game Pass, they would go under very quickly.

Frankly no even the most extreme fanboys can deny that Sony will likely go under trying to follow the Game Pass model.

But regards for Stadia. I think waiting for Stadia Basic and seeing the Youtube integration is what will really bring Stadia to life IMO.
 
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CatLady

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I think what's he's trying to argue is that Google, Apple and Microsoft can all play the long game on their respective services/platforms. He/She is right on that regard. There's no denying it. They don't care about short term profit, they could loose $10 Billion per year, but if they are gaining market share as a result of that loss, then they will keep sustaining the service until it reaches profit.

This is one of the biggest benefits in being purchased by the big tech companies, you no longer have to think about short term profit. Sony, Nintendo or any other gaming company doesn't have this benefit since Gaming is their core businesses.

IF Nintendo and Sony follow the exact same model as Game Pass, they would go under very quickly.

Frankly no even the most extreme fanboys can deny that Sony will likely go under trying to follow the Game Pass model.
Thank you, for explaining to this individual, so I don't have to respond further, I'm starting to get irritated with the deliberate obtuseness and don't want to catch a ban.

P.S. it's she :messenger_winking:
 
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I think what's he's trying to argue is that Google, Apple and Microsoft can all play the long game on their respective services/platforms. He/She is right on that regard. There's no denying it. They don't care about short term profit, they could loose $10 Billion per year, but if they are gaining market share as a result of that loss, then they will keep sustaining the service until it reaches profit.

This is one of the biggest benefits in being purchased by the big tech companies, you no longer have to think about short term profit. Sony, Nintendo or any other gaming company doesn't have this benefit since Gaming is their core businesses.

IF Nintendo and Sony follow the exact same model as Game Pass, they would go under very quickly.

Frankly no even the most extreme fanboys can deny that Sony will likely go under trying to follow the Game Pass model.

But regards for Stadia. I think waiting for Stadia Basic and seeing the Youtube integration is what will really bring Stadia to life IMO.
But why would Sony ever "follow the Gamepass Model"?
Sony is already making money with the model they have, why would they follow the third place finisher of this generation?
 
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kevin_trinh

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I think what's he's trying to argue is that Google, Apple and Microsoft can all play the long game on their respective services/platforms. He/She is right on that regard. There's no denying it. They don't care about short term profit, they could loose $10 Billion per year, but if they are gaining market share as a result of that loss, then they will keep sustaining the service until it reaches profit.

This is one of the biggest benefits in being purchased by the big tech companies, you no longer have to think about short term profit. Sony, Nintendo or any other gaming company doesn't have this benefit since Gaming is their core businesses.

IF Nintendo and Sony follow the exact same model as Game Pass, they would go under very quickly.

Frankly no even the most extreme fanboys can deny that Sony will likely go under trying to follow the Game Pass model.

But regards for Stadia. I think waiting for Stadia Basic and seeing the Youtube integration is what will really bring Stadia to life IMO.
No, the question is why should they follow the GP model when they are making more money than all the model of Xbox gaming division combined?
 

12Dannu123

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But why would Sony ever "follow the Gamepass Model"?
Sony is already making money with the model they have, why would they follow the third place finisher of this generation?
No, the question is why should they follow the GP model when they are making more money than all the model of Xbox gaming division combined?
Because if they want to expand to other devices, especially TV and Mobile, they need to embrace the Game Pass model. No one on Mobile devices will want to pay $60 per game, they're all conditioned to use subscriptions. The failure of Stadia showed that people don't want to spend $60 for a streamed game.

$60 per game model doesn't work on other demographics.

Going by your statement, Sony should ditch Cloud gaming in general, because their Cloud gaming service will go the way of Stadia as people aren't willing to spend $60 for a cloud game.


Xbox Gamers are also increasingly becoming disliking of purchasing single games and will wait until it appears on Game Pass.
 
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Because if they want to expand to other devices, especially TV and Mobile, they need to embrace the Game Pass model. No one on Mobile devices will want to pay $60 per game, they're all conditioned to use subscriptions.

$60 per game model doesn't work on other demographics.

Going by your statement, Sony should ditch Cloud gaming in general, because their Cloud gaming service will go the way of Stadia as people aren't willing to spend $60 for a cloud game.
If Microsoft want to go third party, that is their business. I have no idea why you think Sony has any incliination to become another SEGA. If Microsoft want to become Third Party because of their failure to lead the console industry, it is no reason for anyone else to follow suit.
 

12Dannu123

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If Microsoft want to go third party, that is their business. I have no idea why you think Sony has any incliination to become another SEGA. If Microsoft want to become Third Party because of their failure to lead the console industry, it is no reason for anyone else to follow suit.
Look all you're doing is spewing Console War nonsense, this has nothing to do with this. Sony can stick with a traditional business model that has worked for them. But it'll mean that they'll miss out and be exist within the potential of 2B gamers on other devices and especially when 5G becomes more mainstream in a couple of years.

If a developer were to create an exclusive for 100 Million sold Console platform (PS) vs a 100 Million ecosystem on PC, Cloud, Console etc (Xbox) which one do you think they'll pick?

They'll pick the Xbox platform because it's not bound to hardware and there's a much larger audience to tap into.
 
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kevin_trinh

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Because if they want to expand to other devices, especially TV and Mobile, they need to embrace the Game Pass model. No one on Mobile devices will want to pay $60 per game, they're all conditioned to use subscriptions. The failure of Stadia showed that people don't want to spend $60 for a streamed game.

$60 per game model doesn't work on other demographics.

Going by your statement, Sony should ditch Cloud gaming in general, because their Cloud gaming service will go the way of Stadia as people aren't willing to spend $60 for a cloud game.


Xbox Gamers are also increasingly becoming disliking of purchasing single games and will wait until it appears on Game Pass.
Yep, and that's will lower the game's value and their sale more and more, it's also lower the value of your hardware. Meanwhile Sony path is keep their exclusive game value as much as possible, use them to drive hardware sale, and make money from software purchase on those hardware. Even PSnow is the service to attract people to their hardware. Unlike MS, Sony does not want to go full 3rd party, they are the hardware company still.
 

12Dannu123

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Yep, and that's will lower the game's value and their sale more and more, it's also lower the value of your hardware. Meanwhile Sony path is keep their exclusive game value as much as possible, use them to drive hardware sale, and make money from software purchase on those hardware. Even PSnow is the service to attract people to their hardware. Unlike MS, Sony does not want to go full 3rd party, they are the hardware company still.
Frankly no one gives outside of console fanboys gives a shit about game value and game sales. Netflix and Game Pass are very good value despite being low fees and it shows with Netflix having 158 Million subs and being worth more than Sony.

Consumers these days will rather pick subscriptions to a unlimited amount of content over traditional purchases and the gaming industry will be no different.
 
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Because if they want to expand to other devices, especially TV and Mobile, they need to embrace the Game Pass model. No one on Mobile devices will want to pay $60 per game, they're all conditioned to use subscriptions. The failure of Stadia showed that people don't want to spend $60 for a streamed game.

$60 per game model doesn't work on other demographics.

Going by your statement, Sony should ditch Cloud gaming in general, because their Cloud gaming service will go the way of Stadia as people aren't willing to spend $60 for a cloud game.


Xbox Gamers are also increasingly becoming disliking of purchasing single games and will wait until it appears on Game Pass.
It's so cute to watch how you school these desperate, very concerned warriors.

Game Pass will dominate and will be the next BIG thing since peanut butter n Jelly(if it isn't already)

 

kevin_trinh

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Developers are. Less value = less money = less reason to give a better product.
Consumers these days? You? Please name me a sub model IN GAMING made more profit than traditional purchases on PSstore or Steam?
Frankly no one gives outside of console fanboys gives a shit about game value and game sales. Netflix and Game Pass are very good value despite being low fees and it shows with Netflix having 158 Million subs and being worth more than Sony.

Consumers these days will rather pick subscriptions to a unlimited amount of content over traditional purchases and the gaming industry will be no different.
 

12Dannu123

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Developers are. Less value = less money = less reason to give a better product.
Consumers these days? You? Please name me a sub model IN GAMING made more profit than traditional purchases on PSstore or Steam?
In depends on what value means for the consumer, but with all the hype and the big mindshare of Game Pass and people praising it because it provides value. To devs value is to create good content that keep people subscribed. Netflix has showed this and MS is moving towards. Traditional purchases itself doesn't mean it's magically more value. Would you say that a $120 game that is bad is better value than a high quality subscription service?

Oh the $120 game must be better value because it's $120!!

Profit is irrelevant to this discussion. Userbase is far better metric for success of subscription services.
 
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kevin_trinh

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In depends on what value means for the consumer, but with all the hype and the big mindshare of Game Pass and people praising it because it provides value. To devs value is to create good content that keep people subscribed. Netflix has showed this and MS is moving towards.

Traditional purchases itself doesn't mean it's magically more value.

Would you say that a $120 game that is bad is better value than a high quality subscription service?
Nah, bad game is bad, no matter the price. When i said low value game, i mean people in the sub model will wait for it and not buying it, therefore lower their sales. Less money = less reason to make a better product, they will just make an ok product to fill the gap of the service. It's also affect the hardware people choice, "why should i buy X if i can have the same things on Y"
 

12Dannu123

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Nah, bad game is bad, no matter the price. When i said low value game, i mean people in the sub model will wait for it and not buying it, therefore lower their sales. Less money = less reason to make a better product, they will just make an ok product to fill the gap of the service. It's also affect the hardware people choice, "why should i buy X if i can have the same things on Y"
It depends on the business model of that service. Netflix and GP model is that they pay outright for it to appear on their services, they are still getting money but the burden is only shifted somewhere else. This won't have devs release crappy games because there is a vetting process on Xbox side of things, even if it appears on Game Pass.

Subscription Gaming merely changes the way money is generated, it doesn't change the game design or value.
 
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kevin_trinh

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It depends on the business model of that service. Netflix and GP model is that they pay outright for it to appear on their services, they are still getting money but the burden is only shifted somewhere else. This won't have devs release crappy games because there is a vetting process on Xbox side of things, even if it appears on Game Pass.
Except it does, they will make as much as possible an OK game that meet Ms standard, no reason to make bigger, riskier game because why should they? Mean while the 3rd pt bigger dev will still give a shit about GP, they will sell it as much as they can then add to GP sometime later to maximum their profit. Where should they sell it? Sony hardware welcome you, because Ms hardware has no value at all.
 
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Kagey K

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Except it does, they will make as much as possible an OK game that meet Ms standard, no reason to make bigger, riskier game because why should they? Mean while the 3rd pt bigger dev will still give a shit about GP, they will sell it as much as they can then add to GP sometime later to maximum their profit. Where should they sell it? Sony hardware welcome you, because Ms hardware has no value at all.
Theres so much bullshit in this quote.

MS is curating the games they put on game pass so it doesn’t become a shovelware haven.


The devs get paid for putting the games on Gamepass and are happy about it.

And they find it increases their sales.

Keep making shit up man.
 
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kevin_trinh

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Theres so much bullshit in this quote.

MS is curating the games they put on game pass so it doesn’t become a shovelware haven.


The devs get paid for putting the games on Gamepass and are happy about it.

And they find it increases their sales.

Keep making shit up man.
You are just proving my point? Ofcoz indie dev is happy because GP increase their profit, or some sale. But bigger dev will not give a shit about it until their sale drop significant. And nobody trust Ms standard lul
 

Mattyp

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Yep, and that's will lower the game's value and their sale more and more, it's also lower the value of your hardware. Meanwhile Sony path is keep their exclusive game value as much as possible, use them to drive hardware sale, and make money from software purchase on those hardware. Even PSnow is the service to attract people to their hardware. Unlike MS, Sony does not want to go full 3rd party, they are the hardware company still.
Microsoft is not going third party. Gamepass is not coming to Sony or Nintendo consoles. Lowers the value of games? Are you purchasing games in the thought they'll appricate? Lowers the value of hardware?? If anything it inceases day one value. Oh look I can buy next gen for $500 and have all day 1 games for $10 bucks. Or I can spend $500 and then spend a few hundred more on SP games I'll rap up in a day each??

GTA is still one of the highest selling games and just came to game pass. Tell me again how bigger AAA games won't want to trust M$.
And they'll make more bank off sharkcards then they would of on sales for every person who grabs it on gamepass. Oh we'll the game cost me nothing I can spend $50 bucks on sharkcards that cost Rockstar absolutely nothing.
 
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RevenantX

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This guy can say anything and a certain group will take it as gospel.
So we should take you and nonsense posted by people like Last word, Daniel M nd all seriously over Phill who is head of Xbox and knows how much MS spending on Game pass.



Everyone tries to be arm chair analyst here. If u were that smart you would be working for MS and not wasting time on video games forum lol
 
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Kagey K

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1 dollar upgrade is one time deal only. Once it's over u can't get it. Mine one dollar upgrade expired and now it shows me regular price
Remember when it was everyone was playing their free month for free over and over again last year? I do.

Now it’s the same, but at 1.00

 

kevin_trinh

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Microsoft is not going third party. Gamepass is not coming to Sony or Nintendo consoles. Lowers the value of games? Are you purchasing games in the thought they'll appricate? Lowers the value of hardware?? If anything it inceases day one value. Oh look I can buy next gen for $500 and have all day 1 games for $10 bucks. Or I can spend $500 and then spend a few hundred more on SP games I'll rap up in a day each??



And they'll make more bank off sharkcards then they would of on sales for every person who grabs it on gamepass. Oh we'll the game cost me nothing I can spend $50 bucks on sharkcards that cost Rockstar absolutely nothing.
But its coming to TV and mobile right? According to 12Annu123, what the point of buying Ms hardware if i can play their games on my phone, or my TV, or my PC? And when its on GP, why should i bought the game?
 

Kagey K

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But its coming to TV and mobile right? According to 12Annu123, what the point of buying Ms hardware if i can play their games on my phone, or my TV, or my PC? And when its on GP, why should i bought the game?
I don’t know? Why did you buy God of War when it was just free on PSNow?

You need to start asking yourself those questions instead of asking others.
 
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stitch1

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At that point no hardware really matters. Xbox will be just another option. A good option but just an option. You don't see Netflix trying to sell you hardware. They are in it for the recurring subscription fee.
 

kevin_trinh

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At that point no hardware really matters. Xbox will be just another option. A good option but just an option. You don't see Netflix trying to sell you hardware. They are in it for the recurring subscription fee.
Coz they don't make hardware?
 

Kagey K

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At that point no hardware really matters. Xbox will be just another option. A good option but just an option. You don't see Netflix trying to sell you hardware. They are in it for the recurring subscription fee.
Nobody here wants to have an honest discussion about game pass, everyone is in free or 1 dollar trials and it isn’t sustainable.

That’s it, they aren’t here to argue in good faith and just want to bury the discussion, so let’s let them have it and move on.

They aren’t going to understand the value until they try it, but they won’t try it. It’s an u fight against the ignorant.
 

Kagey K

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Dec 18, 2013
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Because when i bought it isn't on PSnow?
Amazing, so would you say people would also buy games not available on Game Pass when they weren’t available?

Did it devalue God of War to you when it did become available on PSNow?
 
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