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
demigod
Member
Damn, who swallowed Martin?
Majukun
Member
wait, define risks here because now you are starting to lose me...
AAA releases like, dunno, last of us, are high risk?an elder scroll game is high risk?
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Yoboman
Member
Majukun
Member
that's not how risk works though
focus tested AAA from tried and true franchises are about the less risky games you can develop.
there's always a chance of failure, but in those cases is reduced to "did you make your game good enough"..if you did, the audience is already receptive and ready to buy.
and sometimes not even that, look at the disaster that was fallout 76 and how it made still enough money and sales that the devs had time to basically finish the unfinished mess they released (some say it's now good, didn't try it)...
creative and atypical (you can call them "strange") games from non established franchises, regardless of money spent, are instead a jump in the dark....they might be the best game out there but if somehow marketing fails, or the franchise just fails to get traction, you burned up a lot of money
that, for me, is risky
Yoboman
Member
I am looking at it from a publisher or even platform holder POV.
A game like Pentiment fills the content parameters they need to hit. It can have relatively high engagement for low costs.
A AAA game runs the risk of not meeting expectations even with big numbers. It really needs to move the needle on a platform like Gamepass in terms of new subs, engagement, retention, revenue from DLC/MTX etc. to justify the cost pur behind it. Halo Infinite for example we know wasn't considered a success despite high launch player counts
If you are running Gamepass are you feeling better off with 12 Hi Fi Rushes a year or 1 massive AAA game? Sure maybe your AAA game is the next Fortnite, but just as likely it's the next Halo Infinite and youve invested hundreds of millions. And when it comes to single player AAA experiences it's an even harder sell
Gaelyon
Member
Sure but with Spotify/Deezer etc you have a permanent access to 99% of worldwide music, any genre any era. Will Gamepass give 99% access to world library of video games from all times and every platform with no rotation ? We're far away from music subscription services.
Majukun
Member
well expectations are usually around how much the publisher wants to profit, they still break even and are even in the green, but they were expecting more.
more risky games have the chance to just release in a dead market and convert in pure loss, that's the kind of thing that sinks studios
regarding halo, I can't comment on the game since i'm not an halo player by any stretch, but what i heard from people that are, it seems to fall into the "not good enough" category , or better, the "we were just focused on mtx" kind.....i mean they didn't even have couch co-op IFRC, which has been a staple of the series and something they swore would never take out.
to me it sounds more a failing of MS in QA than an inherent risk given from the franchise...the user base was there and ready, they just needed a good enough game.
about single player AAA being an hard sell, it has mostly been a myth propagated by the likes of EA CEOs and such..great single player experiences seem to have as much success rate as all the multiplayer online shooters and whatnot..hell, actually with so many big players already in the "recurrent user spending" category, a focused single player experience has more room to breathe and find an audience than a fortnite clone that will be smoldered by said fortnight in a month.
Mibu no ookami
Banned
That's the thing though. You have no relationship with the developer. You have a relationship with Microsoft and Microsoft (who in this case owns the developer) has a relationship with the developer.
How much you play any individual game (largely has no impact on how developers make money on gamepass, unless microsoft has bonus structures).
So you have to look at the math problem from a different perspective. It's not about whether you would have purchased Hi-Fi rush or not, it's about how much would you have spent on Xbox games in the time period in which you started subscribing to GamePass.
The easiest way to determine that is YOY spend Year 0 the year before you had gamepass and year 1 the first year you had gamepass.
Let's say year 0 you bought 6 games averaging a cost of 40 dollars for a total of 240 dollars.
Let's say year 1 you bought 2 games averaging a cost of 50 dollars, but also paid 10 dollars a month for gamepass for a total of 220 dollars.
From here, you have to calculate Microsoft's operating cost for you to spend the 220 dollars vs the 240, but in these scenarios Microsoft almost certainly generated more revenue from you.
Maybe year 0 you bought 3 Microsoft games and 3 3rd party games and in year 1 you bought 2 3rd party games that weren't on gamepass.
40*3 + 40(.30)*3 which would be 156 compared to 50(.3)*2+120 = 150
You have to assume GamePass has a significantly higher operating cost than not. So when you look at the profitability... it's down.
The imapct on the developer comes to whatever agreement they have with Microsoft in this case being a Microsoft owned studio, it all comes down to operating costs and whether those operating costs increase (raises, promotions, bonuses e.t.c.).
qwertz12345
Banned
Would probably explain the mass sackings that have occurred at 343 Industries recently, along with the fact that there have been numerous threads on here which go some way towards suggesting that GamePass subscribers don't actually buy any games.
https://www.aroged.com/2023/02/08/x...es-game-sales-admits-microsoft-in-a-document/
https://www.aroged.com/2023/02/08/x...es-game-sales-admits-microsoft-in-a-document/
Maddoxswe
Member
intheinbetween
Member
I don't think that explains anything at all at 343i, they haven't met expectations, Bungie left a big void to fill
feynoob
Banned
That is not the reason why they got lay off.
343i messed up halo, that is why there was layoff. Not to mention MS had mass layoff too.
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Evil Calvin
Afraid of Boobs
Duh! Ya think?
HeisenbergFX4
Member
This
If 343 would have delivered an amazing Halo do we think there would have still been those layoffs there?
I don't
Guilty_AI
Member
"Unmentioned internal documents discussing gamepass and sales-cannibalization, some unmentioned amount of sales decline in a 12 month period that could've had different causes."
"Gamepass leads to sales cannibalization and MS games saw a decline as a result of it"
"MS game sales have been badly affected as a result of game pass"
All coming from a 2 brief passages in a document that wasn't even released by microsoft itself and gives absolutely no data to work with.
I don't use gamepass, and i abhor the idea of using it at least for myself, but this internet cordless phone play is just plain ridiculous.
"Gamepass leads to sales cannibalization and MS games saw a decline as a result of it"
"MS game sales have been badly affected as a result of game pass"
All coming from a 2 brief passages in a document that wasn't even released by microsoft itself and gives absolutely no data to work with.
I don't use gamepass, and i abhor the idea of using it at least for myself, but this internet cordless phone play is just plain ridiculous.
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ComputerBlue
Member
Famous lol
Punished Miku
Gaslighter Pro: 16.7 Fireflops
I've definitely enjoyed the subscription and saved a lot of money. Its been horrible.
Flutta
Banned
You mean the pocket change? Prob Phil's and Booty's Salary.
RainblowDash
Gold Member
Xbox game devs should put in effort to offer Limited and Collector editions to make physical copies worth a purchase.
feynoob
Banned
So we are going to use the 1$ narrative?
intheinbetween
Member
Exactly, they had a big shoe to fill and they haven't met what they were expected to. Gamepass has nothing to do with it, if a game is great it will be bought no matter its's on Gamepass or not, especially when not all of the XBOX consumer base is subscribed to Gamepass
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Flutta
Banned
What GP makes is basically "pocket change" for MS if you didn't get that already.
I don't even think you understand why GP exist in the first place.
Hint: it's not about the sub money…..
ChorizoPicozo
Member
to MS duh
feynoob
Banned
Sorry man, it's hard to get high these days.
Inflation is holding my supplies.
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feynoob
Banned
Wish I can get some of those money.
MS is too stingy. They don't believe in sharing is caring
.
ChorizoPicozo
Member
is going to be very fun to hear what Jez has to say about this in their podcast.
Beastclaw Raider
Banned
I think that gamepass in the long run isn't viable financially. Yeah sure I get that they wanted people to buy the console and subscribe to it and hoping theyd buy games but it's just not what is happening
Can't complain though as a gamer's point of view. Gamepass on PC gives me everything I need from them
Can't complain though as a gamer's point of view. Gamepass on PC gives me everything I need from them
feynoob
Banned
He is busy licking Phil's
.bluecowboys
Banned
Disagree. 100 million game pass users x 10 dollars a month equals 1 billion in revenue a month.
ComputerBlue
Member
I think their goal is to completely get rid of physical and eliminate any second hand market resell possibilities.
ChorizoPicozo
Member
but this is not the complete equation.
ChorizoPicozo
Member
this is the thing. Game Pass is here to stay, because is just and evolution of previous services nothing less, nothing more.
Now...is because of the Xbox's Marketing and PR that there is a lot of hotcakes around the service. Xbox sold Game Pass as this Promised land of cheap ass access to new/day-one AAA games.
the last bit....ain't computing. it was just a snake oil salesperson's last attempt to gain even more time and cheap momentary praise.
Now...is because of the Xbox's Marketing and PR that there is a lot of hotcakes around the service. Xbox sold Game Pass as this Promised land of cheap ass access to new/day-one AAA games.
the last bit....ain't computing. it was just a snake oil salesperson's last attempt to gain even more time and cheap momentary praise.
feynoob
Banned
The proper math should be:
Subs*cost(world wide currency, not $) which should average -cost of 3rd party games-portion of first party cost.
feynoob
Banned
Worse is that there is no reliable release for their 1st party games.
If it werent for gamepass, I wouldn't have bought Xbox at all.
"Unmentioned internal documents discussing gamepass and sales-cannibalization, some unmentioned amount of sales decline in a 12 month period that could've had different causes."
"Gamepass leads to sales cannibalization and MS games saw a decline as a result of it"
"MS game sales have been badly affected as a result of game pass"
All coming from a 2 brief passages in a document that wasn't even released by microsoft itself and gives absolutely no data to work with.
I don't use gamepass, and i abhor the idea of using it at least for myself, but this internet cordless phone play is just plain ridiculous.
The data was released in October 2022 I think at one point without the redaction. it's internal MS data and it was released by MS itself for a regulator meaning it legally shouldn't be bullshit.
It's true that game sales have been affected badly by gamepass but it doesn't mean much if MS knew it would be.
As much as people pretend it doesn't it does. You have it coming from MS themselves and you have it in the sales data that we get. For example, Hifi rush according to some was a huge success on steam yet the latest GSD UK data doesn't even see it chart in the top 20 in its launch month.
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mckmas8808
Mckmaster uses MasterCard to buy Slave drives
Who said this silliness?
DeepEnigma
Gold Member
Phil Spencer: Xbox More Focused on Player Engagement Than Console Sales
Head of Xbox Phil Spencer in an interview with IGN said Xbox is more focused on player engagement [...]
www.vgchartz.com
mckmas8808
Mckmaster uses MasterCard to buy Slave drives
This will be bad for gamers.
Phil Spencer: Xbox More Focused on Player Engagement Than Console Sales
Head of Xbox Phil Spencer in an interview with IGN said Xbox is more focused on player engagement [...]
I swear to god I didn't know the answer to my question. Phil is an insane person. But worse are the people that love him. He sounds like the worse of all corporate execs these days. Engagement over sales? Are you kidding me?!?! I'm now not surprised by MS' output over the last 3 years.
They told us gamers upfront what they are about.
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feynoob
Banned
What do you expect from Chelsea fan?
feynoob
Banned
They are just ahead of the curve. Others would follow them soon.
DeepEnigma
Gold Member
Maybe they make more revenue harvesting data while you're "engaged?"
bluecowboys
Banned
You are right 1 billion dollars * 12 months equals 12 billion dollars a year.
feynoob
Banned
They are a tech business for a reason.Maybe they make more revenue harvesting data while you're "engaged?"
Those data are worth more money.
For gamepass users, you can harvest their playing habits, type of games, how much they play, what type of game they buy the most.
And because gamepass is sub, it's easy to gather more data.
chromatic9
Member
It's one way of buying the gamer but if they don't migrate and MS is behind on console sales then it becomes difficult for even MS to keep subsidizing. Swallowing up more major third party publishers and stopping the games appearing on rival platforms is key.
Some devs can be happy their sales get paid up front, they will make more initially on a small game as the cost per game can vary and might exceed typical projections. There is some plus points to a large company throwing money around for new titles on their subservice but overall the motive is buying up the game industry instead of competing head on with Sony. They just want the gamer space won long term, Nadella is on board with it and digging deep.
I would've thought Xbox would be doing better in the US and UK at least but Sony and Nintendo are still doing a great job for smaller companies. Just wonder how long they can hold out.
Don't be fooled with Phil's gaming family speeches, it's a very hostile maneuver MS are doing with game pass and buying up major third party publishers after not making much ground in the last 20 years.
Some devs can be happy their sales get paid up front, they will make more initially on a small game as the cost per game can vary and might exceed typical projections. There is some plus points to a large company throwing money around for new titles on their subservice but overall the motive is buying up the game industry instead of competing head on with Sony. They just want the gamer space won long term, Nadella is on board with it and digging deep.
I would've thought Xbox would be doing better in the US and UK at least but Sony and Nintendo are still doing a great job for smaller companies. Just wonder how long they can hold out.
Don't be fooled with Phil's gaming family speeches, it's a very hostile maneuver MS are doing with game pass and buying up major third party publishers after not making much ground in the last 20 years.