Chris Dring - I asked[Xbox] for clarification on the "Game Pass is profitable" claim, and was told no first party costs are included.

Phil pinging Jez Corden right now:

Need You GIF by ION
 
i love how people get so worked up over this. So a company is giving gamers something great at a good value and its our problem? Let microsoft figure that out....
 
Jigsaah said:
LOL so 1st party just works for free!?

Welp guess that answers my question about how Gamepass is sustainable? Basically you just have to not include first party costs even though every first party game is on the service.

This is such a joke.
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I'm honestly having a realization rn: These studios weren't just working for free, they were working for free AND they got the brunt of the losses this strategy incurred on their internal finances!

Look at Turn 10, they were a reliable sales getter with Forza Motorsport, they then get one flop that got amplified because they didn't even manage to get the day 1 purchases out of it, and now they're essentially shuttered!

Same is gonna happen to Ninja Theory and Compulsion games, just get their games into the GP woodchipper and then fire them later when the chips that come out aren't pure gold.

Insanity.
 
dorkimoe said:
i love how people get so worked up over this. So a company is giving gamers something great at a good value and its our problem? Let microsoft figure that out....
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Because it harms the industry. How is that not obvious? These are businesses, not charities, and at some point the piper has to be paid. The best thing for the industry is good sales at prices that will allow the companies to be profitable so they will continue to invest in the kinds of games gamers actually like. That is the true definition of "consumer friendly," not whatever gets tossed around here to generally mean someone gets stuff for an unsustainably cheap price.

So now we have an entire platform of people trained to not buy software, as I said would happen years ago when GP was announced. Of course a lot of people mocked and derided that stance, but here we are. :-)

So yes, Microsoft coming in and destroying the games industry with an obviously stupid offering is going to get people worked up when it's their hobby. We have companies and franchises that will cease to exist because of MS. Remember when people thought all of these purchases would mean IP revivals? Yeah, fat chance of that.
 
Dr Bass said:
Because it harms the industry. How is that not obvious? These are businesses, not charities, and at some point the piper has to be paid. The best thing for the industry is good sales at prices that will allow the companies to be profitable so they will continue to invest in the kinds of games gamers actually like. That is the true definition of "consumer friendly," not whatever gets tossed around here to generally mean someone gets stuff for an unsustainably cheap price.

So now we have an entire platform of people trained to not buy software, as I said would happen years ago when GP was announced. Of course a lot of people mocked and derided that stance, but here we are. :-)

So yes, Microsoft coming in and destroying the games industry with an obviously stupid offering is going to get people worked up when it's their hobby. We have companies and franchises that will cease to exist because of MS. Remember when people thought all of these purchases would mean IP revivals? Yeah, fat chance of that.
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the system needed to change. spending 70 bucks for a game that ends up sucking with no way to return is a stupid business model. Gamepass or death
 
dorkimoe said:
i love how people get so worked up over this. So a company is giving gamers something great at a good value and its our problem? Let microsoft figure that out....
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I love how you're worked up over people worked up over Gamepass. Let MS figure it out but canceling alot of projects and going full 3rd party.
 
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Astray said:
I'm honestly having a realization rn: These studios weren't just working for free, they were working for free AND they got the brunt of the losses this strategy incurred on their internal finances!

Look at Turn 10, they were a reliable sales getter with Forza Motorsport, they then get one flop that got amplified because they didn't even manage to get the day 1 purchases out of it, and now they're essentially shuttered!

Same is gonna happen to Ninja Theory and Compulsion games, just get their games into the GP woodchipper and then fire them later when the chips that come out aren't pure gold.

Insanity.
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It's obvious Xbox doesn't know what to do with their best IP. It's a simple formula, make good game, get good sales. From what I understand with Turn 10, they left the support side intact that basically helps with the Horizon side of Forza. Horizon is likely the more popular half but is it smart to basically kill Turn 10 because of one bad game? No. The problem is they wanted to turn the series into a live service and the plan was to just have this non-numerical Forza just be it and they were to keep updating that one game. That's why the team became expendable. They basically decided no more new Forza games from this game's release. Who decided this? Phil? Matt Booty? Idiots.

I bet sure as fuck there will be a Gran Turismo 8. There's a FIFA or whatever the hell EA calls it now every damn year. Xbox needed to find a way to do both. Release a new game every 3-4 years, oscillating between Horizon and Motorsport and find a way to do live service at the same time. To be fair though. Forza....7 (?) was embroiled in controversy for the way they implemented microtransactions...so they doubled down with the latest entry going full live service with a shitty showing. Insanity.
 
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mckmas8808 said:
So should Netflix not include the cost of making their movies and TV shows next? They should include the entire thing in my opinion. But if someone smarter wanted to use some percentage of game cost, that'll be cool too. But to use 0% of the game cost is INSANE!!! LOL!

How many unique "players" actually bought Indiana Jones vs. played it on GamePass Ultimate? Take that percentage and subtract it from the "game cost". That'll be better than acting like it cost $0 to put games like Avowed, Indiana Jones, and Oblivion: Remaster on GamePass day one.



And yet most in the gaming media let them get away with it and STILL are! Shout out to Chris Dring here for actually doing some real reporting. Geez.....it's like most in the gaming media just want free swag or something.
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They dont give any details in there actual financials. Don't think they have stated it is profitable in their financial data because they don't have to because gaming is a miniscule part of their business.
Likewise how much does Netflix release about its gaming business? Not a whole lot - they are rumored to have spent at least a billion dollars. Is it profitable? Doubtful but how would you tell? Is Amazon's gaming initiative profitable? Again doubtful, but again how would you tell?
 
Novel idea:

A) Add up all of your costs.

B) Add up all of your revenue.

Subtract A from B.

If it's positive you're on the right track, if it's negative you've got some work to do.
 
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MS/XB is taking a beating this week.

Beat Up Black Eye GIF by South Park



A lot of this stuff has been known by most and ignored by others. Layoffs have happened and will continue. What changed? Is it that BS is getting so deep that even supporters are starting to see through it? Business as usual next week?
 
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So let's play along with Microsoft's accounting here. If the 1st party dev costs don't count against GP, then it must count against the studios themselves. So when a studio spends $200m to make a AAA game, but it only sells a million copies because most ppl just play it on GP, then obviously it's going to look like the studio underperformed and lost a ton of money. This is not only bad for the morale of the team, but in some cases, it's also leading to teams getting shut down.
 
Topher said:
So someone at Xbox is providing this information now after all this time? Nothing fishy about this at all. lol
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I didn't even feel like mentioning it but I thought the exact same thing. Chris Dring just magically got and released this info now? I guess there is a possibility that people within Xbox have had enough and are releasing more info.
 
mayham2199 said:
I didn't even feel like mentioning it but I thought the exact same thing. Chris Dring just magically got and released this info now? I guess there is a possibility that people within Xbox have had enough and are releasing more info.
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More like people that were formerly within Xbox.
 
Topher said:
So someone at Xbox is providing this information now after all this time? Nothing fishy about this at all. lol
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When I call insurance companies a lot of time the answers I will get depends entirely on which employee answers the phone.

I'm not even sure the people running them know the actual answers to some of my questions.

Microsoft is exactly like this I'm assuming.

So you are likely correct but also gamepass probably isn't profitable. Both things can be true. Dring didn't lie but also even if the people at MS think they know something, they probably don't really know it. That's the neat part. No one does.
 
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Topher said:
So someone at Xbox is providing this information now after all this time? Nothing fishy about this at all. lol
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Less loyalty to the company where apparently it doesn't matter how well you do...you can still get the axe. I think it makes perfect sense. Fuck em.
 
The Dring guy seems confused here. Fictional lost revenue(expected sales if a title would not be on gamepass) is not the same as not including the costs of of making first party titles.
 
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thicc_girls_are_teh_best said:
So basically what some of us have been saying since 2022: Game Pass isn't profitable.

Never mind they admitted this in court to the FTC when they said it cannibalized game sales.

But, let the denialists and shills find a way to spin this. They always manage to.
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Bobby Kotick said it himself, he wouldn't put COD on gamepass because it devalutes the series, which means money lost:

"Kotick said that he would not put a new Call of Duty game on a subscription service at launch, that he wouldn't even consider it. He believes the model has a negative impact on the finances of games, and made a comparison to the fact that most streaming services in the entertainment industry are losing money."

www.forbes.com

Bobby Kotick Says He Wouldn’t Put ‘Call Of Duty’ On Xbox Game Pass Or Other Services

One interesting exchange was when Kotick was questioned about Call of Duty and subscription services. Early on, Sony alleged that publishers “hated Game Pass,” but it appears leaning into that idea, true or not, may be part of a play to get this deal approved.
www.forbes.com www.forbes.com

We all knew this long ago, what some people thought, myself included, was that pushing gamepass so hard with all the biggest yearly 3P games thanks to "MS infinite money chest" would make it the defacto platform, pushing aside competition as these wouldn't be able to sustain the level of costs, then when MS ruled over the ashes, they could do whatever they want with the prices and the library of games
 
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dorkimoe said:
While y'all are getting worked up. Clair obscure never would have sold what it did without gamepass word of mouth
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lol WTF are you talking about? Everyone was watching Clair after the first reveal. Then it got the highest scores ever. None of that had anything to do with GP and would have happened anyways.
 
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Anyone with a brain knew this already. Fanboys and corporate shills want us to believe otherwise because Phil told them so. The same Phil that lies and shuts down studios after telling them he loves their work and progress.
 
mayham2199 said:
I didn't even feel like mentioning it but I thought the exact same thing. Chris Dring just magically got and released this info now? I guess there is a possibility that people within Xbox have had enough and are releasing more info.
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Astray said:
That's the other thing I'm noticing.

Years of caginess and they just give it out?
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Banjo64 said:
Might be someone in accounting who got their P45 last week.
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Jigsaah said:
Less loyalty to the company where apparently it doesn't matter how well you do...you can still get the axe. I think it makes perfect sense. Fuck em.
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Could be pissed off employees who are sick of seeing their coworkers laid off and all the other bullshit. Could also be this is strategically released as part of larger changes to come. If word gets out that MS is losing money on Game Pass then I can see Xbox leadership seeing this as lessoning the blow of jacking up prices, removing day one games, etc. Guessing, but sounds like the kind of shit MS would do.

Zacfoldor said:
When I call insurance companies a lot of time the answers I will get depends entirely on which employee answers the phone.

I'm not even sure the people running them know the actual answers to some of my questions.

Microsoft is exactly like this I'm assuming.

So you are likely correct but also gamepass probably isn't profitable. Both things can be true. Dring didn't lie but also even if the people at MS think they know something, they probably don't really know it. That's the neat part. No one does.
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Eh....if it were that simple then this is information that would have gotten out a long time ago. The timing here is not coincidental to who picked the phone.
 
meech said:
The Dring guy seems confused here. Fictional lost revenue(expected sales if a title would not be on gamepass) is not the same as not including the costs of of making first party titles.
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You seem confused. That was his first statement. Then he said he went back for clarification and they told him none of the first party cost are included.
 
dorkimoe said:
While y'all are getting worked up. Clair obscure never would have sold what it did without gamepass word of mouth
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You the only one getting worked up here cuz the bootlicking don't taste good anymore since microsoft getting exposed.

Trying to spread some semblance of positive news by talking about clair obscur when it has nothing to do with this topic lmfao.
 
meech said:
The Dring guy seems confused here. Fictional lost revenue(expected sales if a title would not be on gamepass) is not the same as not including the costs of of making first party titles.
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How do you know the lost revenue is "fictional"? And I believe what is being talked about here is called "opportunity cost".
 
If you're not including first party costs then of course it's profitable. 1st party costs I'm sure are partially included. They also sell it on the Xbox store, on Steam, and now on PS5 so they have to include multiple revenue sources outside of GP to cover the full budget of a 1st party game and assess its profitability.

I think this guy got a really incomplete comment if they're saying that absolutely no GP funds are used to cover 1st party. That's obviously not true. Doesn't even really make sense if you think about it for 10 seconds. They're probably doing exactly what the guy replying to Dring said; some kind of formula based on allocating a value to downloads / players and seeing how it fits into the monthly revenue they get. I think the stuff they detailed in court is probably more reliable than a random comment to Dring.
 
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Topher said:
Could be pissed off employees who are sick of seeing their coworkers laid off and all the other bullshit. Could also be this is strategically released as part of larger changes to come. If word gets out that MS is losing money on Game Pass then I can see Xbox leadership seeing this as lessoning the blow of jacking up prices, removing day one games, etc. Guessing, but sounds like the kind of shit MS would do.
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When he says "Xbox told me" he is definitively referring to comment he received from a MS press officer in his capacity as a journalist.
 
diffusionx said:
"if we don't include our costs, we make a ton of money"

this feels fraudulent
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And it's probably illegal. But, this is America, and MS have their claws hooked into the government & military, so nothing will likely happen to them.

Astray said:
This isn't even creative accounting, it's borderline-fraudulent accounting.. Just fucking throwing out basic costs from the calculations wtf? Should the Azure team start excluding cost of electricity next?

Just fucking lmao at the ineptitude of the Xbox team, how the fuck do you exclude first party sales cannibalization from this calculation then decide "well actually we need more first party asap"?
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It's them straight up lying to shareholders through obfuscation. However, Xbox meant nothing to most of them until the ABK purchase, and the ramifications of that purchase are the only reasons MS are finally coming clean about the failure of Game Pass.

damidu said:
yeah their dream was "a race to the bottom" with sony and nintendo with this unsustainable shit, where they can outspend them
unfortunately they tried to pull that shit in an industry, where they have smallest mind and market share.
plus gamepass was never going to be the disruptor they dreamed of, because game subscription doesnt make sense outside the tiny bubble of "ultra hardcore"
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Well I'm worried about Sony walking into another trap, but that's a different topic.

Thankfully an industry like gaming is still creativity-driven, it has to by nature of being entertainment. So that tactic of "race to the bottom" would never work without first killing the entire market.

Which at that point, hurts Microsoft's own money given the near $90 billion they've spent in acquiring publishers & studios alone. And they may be a shitty company, but they can't be evil to the point of nuking an entire market out of spite.

At least, I haven't seen them do anything like that yet.
 
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