Chris Dring - I asked[Xbox] for clarification on the "Game Pass is profitable" claim, and was told no first party costs are included.
- Thread starter jm89
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ChorizoPicozo
Member
oh boy
1, 2, 3, 3.1, 95, 98, me, xp, vista, 7,8, 10, 11Funny mathematics from Microsoft!
1 360 1 x
story checks out
Sooner
Member
He's been reluctant to appear much ever since he was a shell of himself when Redfall released.
Prior to that, he ate up the limelight and had his cocky grin constantly.
ChorizoPicozo
Member
lol with rehearsed interviews and planted audience of course.
ZehDon
Member
Well, that explains how Phil was able to claim it's profitable publicly, which, in the US, is a crime for a publicly traded company to do if it's not true. It would seem Microsoft is using it's creative accounting practices, likely to use Xbox's losses to offset its taxable dues elsewhere.
Given that Xbox's first party sales have collapsed thanks to Game Pass, I would expect the strategy is to sell its titles on other platforms as a way to subsidise the losses of Game Pass on its own platforms. The higher the price on PlayStation, for example, the more attractive Game Pass becomes. However, Phil has stated the strategy is to get Game Pass onto every platform - which I would presume includes PlayStation and Nintendo - which would then cannibalise those sales, too. If they're not profitable at 35 million subscribers, I'm curious what their breakeven point actually is.
Given that Xbox's first party sales have collapsed thanks to Game Pass, I would expect the strategy is to sell its titles on other platforms as a way to subsidise the losses of Game Pass on its own platforms. The higher the price on PlayStation, for example, the more attractive Game Pass becomes. However, Phil has stated the strategy is to get Game Pass onto every platform - which I would presume includes PlayStation and Nintendo - which would then cannibalise those sales, too. If they're not profitable at 35 million subscribers, I'm curious what their breakeven point actually is.
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Bernardougf
Member
Looking by this angle... CONCORD was also profitable
Antwix
Member
you don't spend any money in the gaming industry?
ChorizoPicozo
Member
Also, charging more for games to make Game Pass "more attractive" makes things even worse: it requires Game Pass revenue to be even higher in order to... drum roll, please... pay developers. 3M players reached at $70 vs $80 for example. Sorry but xbox is even more fucked than Bonnie Blue
TheDarkPhantom
Member
Has the Xbox Defense Force appeared yet?
(skims through thread)
Always and without fail, well done, you're very much a part of Xbox's demise
Already posted in the other thread, some of us have been talking about this for years and have the receipts to back it up, others are suddenly pretending they knew now that the jig is up lol.
(skims through thread)
Always and without fail, well done, you're very much a part of Xbox's demise
Already posted in the other thread, some of us have been talking about this for years and have the receipts to back it up, others are suddenly pretending they knew now that the jig is up lol.
SneakersSO
Gold Member
lol I appreciate it but not sure why - Dring put a bow on it.
There is a much larger narrative that should be discussed surrounding this, about how anyone in tech journalism, yes that includes anyone who considers themselves a games journalist or blogger, has repeatedly allowed many folks in the tech sector off the hook, all to protect their access, which basically means everyone in tech media out here in the West, and taken loads of their reported figures at face value. This has been a long time coming. Microsoft has been playing 3-card monty with their reported figures for decades, not even just with Xbox.
On the one hand, Microsoft is notorious in digital media for employing some of the biggest astroturfing groups out there. Not unique to them btw, but MS definitely uses it more pervasively than some of the other tech giants. Which is why I seldom engage folks who are going to bat for a company to this degree.Has the Xbox Defense Force appeared yet?
(skims through thread)
Always and without fail, well done, you're very much a part of Xbox's demise
Already posted in the other thread, some of us have been talking about this for years and have the receipts to back it up, others are suddenly pretending they knew now that the jig is up lol.
I have also told fans on here in the past - Game Pass is an absolute steal and consumers should be abusing Microsoft's generosity, and I say that having believed for a long time that Game Pass has been long term harming developers who are releasing into the Xbox ecosystem, and the studios who have been working under Microsoft. Still, its up to consumers to take advantage of whatever deals they can. Given how much higher the cost of core-gaming is nowadays, Game Pass on both PC and Console should be in the 80m-100m user range, and Xbox should be a bonafide marketplace leader. It really takes such a tremendously weak leadership team to not be able to capitalize on basically giving away money to grow a userbase.
To your point, you're absolutely spot-on - if there are folks who are genuinely fans of Xbox and hate how things are going, do know that your blind support for them in the face of their missteps have insulated them from entering a position that would have them even consider the changes that they need to make in order get Xbox back to a place where folks love, which judging by talking with any one I know who still loves Xbox, all seem to be the first half of the 360 lifecycle.
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poppabk
Cheeks Spread for Digital Only Future
Because they just fired a bunch of first party developers and cancelled games so they want it to look neccesary.
Bernardougf
Member
Buddy every money you spend goes to a corporation to do something with it ... if you are happy giving money for the biggest (unsustainable) trojan horse ever created in this industry, more power to you.
Some of us new from the start what championing and supporting this shitty product would bring... luckily it only brought MS doom it could have been much worse.
EverydayBeast
ChatGPT 0.001
Everyone complained Xbox one wasn't "game first" than in 2017 Microsoft drops GAME PASS which supports gamers and now gamers care about developer profits first?
Topher
Identifies as young
Everyone complained Xbox one wasn't "game first" than in 2017 Microsoft drops GAME PASS which supports gamers and now gamers care about developer profits first?
Eh....your AI is revising history. Folks complained that Xbox One didn't have games and they were right. Game Pass didn't fix that. Microsoft bought up a bunch of shit that is seemingly being dismantled because it isn't feasible within the subscription model. If Game Pass undergoes a bunch of not so consumer friendly changes then you'll find out why folks talk about profits in video games.
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ZehDon
Member
Was this supposed to be some kind of "gotcha"?
Do you think Game Pass isn't paying out money to developers, and Microsoft put games like E33 on there without paying for it? Really?
The Mad Draklor
Member
*Laughs in Steam CCU
TexMex
Member
Everyone complained Xbox one wasn't "game first" than in 2017 Microsoft drops GAME PASS which supports gamers and now gamers care about developer profits first?
I don't know why people pretend like this is the argument anyone is making. No fans are laying in bed at night hoping these companies make more money. But it is a tangential factor. People aren't concerned about profits themselves, but they want the ventures they enjoy to be profitable, so that they are sustainable.
DeltaPolarBear
Member
The key here is that we finally have proof that Gamepass is a loss-leader and always had been. And knowing that, what part of Xbox is actually profitable? The controller sales? Because Xbox release new controllers very consistently.
No wonder Xbox ended up the way it is. No wonder they need 100million subscribers as a target.
No wonder Xbox ended up the way it is. No wonder they need 100million subscribers as a target.
mayham2199
Member
Xbox isn't profitable
Heisenberg007
Gold Journalism
They would if they were operating Xbox as a separate division with its own P&L and CF statements. That's not the case.
Also, they don't breakdown Game Pass revenue and profits in their financial books. So none is the wiser.
That's only possible because of how gigantic Microsoft is - so many of their stupid crap can be hidden in the books and no one would even notice or care. But the Microsoft Executives know, which is why they are pulling the rug under Xbox's feet now.
nemiroff
Member
IIRC, a while ago we discussed numbers that showed that Xbox earned more money on in-game stores and DLC than game sales, because Game Pass created a wider audience, at least for some games. Anyone remember what I'm talking about, or did my brain just create a false memory?
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Heisenberg007
Gold Journalism
You might be on to something. Game Pass price increase is coming in the next 6 months. This might be the foundation for that.
ChorizoPicozo
Member
It's very interesting… Game Pass is literally the only good brand Xbox has. In fact, it's stronger than Xbox itself at this point. Also, and thanks to the context from SneakersSO, we know that Microsoft values its recurring revenue. Regardless of whether it's the usual price hike ($2) or something bigger (between $5 and $10), the discourse is going to be very negative.
Knowing this news from Dring, a $2 increase looks like a joke. The ship is sinking, and you're throwing out two life savers instead of a hundred; but even throwing a hundred wouldn't help when we know the layoffs are still coming and are unavoidable....Just imagine:
"Hey, in order to be a healthy and sustainable business, we need to increase Game Pass to $30." Then, 8 to 12 months later, Xbox gets hit with another 2,000 people laid off... just imagine a PR carnage worse than this one.
I think Xbox is now in existential danger and it's accelerating exponentially. If people start leaving the service at a higher rate, then what's the point of even having a gaming division in the first place?
Heisenberg007
Gold Journalism
Yep, you're correct. There is no end to this problem - unless the cut off the very thing that's the cause of goodwill (and the problem). GAME PASS.
And as a friendly reminder.
Plague Doctor
Member
I mean many people said this and were shushed out by the defense force.
Glad to see it confirmed.
Glad to see it confirmed.
Heisenberg007
Gold Journalism
Also, a timely reminder that this happened.
Phil ignored actual developers and pushed for a stupid business model that had 0 precedence of success in the gaming industry. And now he fires developers by the bulk just because "he needs to run a sustainable business!" What a terrible joke!
Phil ignored actual developers and pushed for a stupid business model that had 0 precedence of success in the gaming industry. And now he fires developers by the bulk just because "he needs to run a sustainable business!" What a terrible joke!
Pagusas
Elden Member
So when do they finally bite the bullet and get over their own sunk cost falecy?
My bet is within 24 months (honestly I think way sooner probably) we see them start putting intentional restrictions/unappealing rules into gamepass, like removing day 1 access or making the base versions of games heavily gimped compared to the deluxe versions that you have to pay more to access, or making "gamepass" versions of the games which are limited in some way vs the full priced versions.
My bet is within 24 months (honestly I think way sooner probably) we see them start putting intentional restrictions/unappealing rules into gamepass, like removing day 1 access or making the base versions of games heavily gimped compared to the deluxe versions that you have to pay more to access, or making "gamepass" versions of the games which are limited in some way vs the full priced versions.
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Heisenberg007
Gold Journalism
He is gonna do another marketing spin with those numbers, and the evangalizers will run with that narrative, and people will forget about this after a while.
Heisenberg007
Gold Journalism
They're cutting the legs right now, instead of the head of the hydra.
They'll keep cutting costs by laying off developers and shutting down in-dev games - as they've done for the last 18 months. But they can do that for only so long. There will come a time when there won't be any room for shutting down studios or projects.
They will bite the bullet and get out of this Game Pass stupidity at that point. It will take some time to reach that point because they still have a lot of people they can fire right now.
poppabk
Cheeks Spread for Digital Only Future
How would that help? Gamepass was the answer to the problem of what does the xbox offer over the PlayStation. They start killing gamepass then they still have all those staff remaining they have to pay and a dwindling revenue stream.