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

Oh damn... as a consumer, I must deeply analyze every subscription I enter to think about how it will affect the mega-corp's profits. I don't want to hurt them so maybe I'll unsub to save them.
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damn, this shit exploded on twitter..... how the fuck is Phill Spencer going to appear in public now?

very interesting.
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.
 
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.
 
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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.
*Pays developers for their games*



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
 
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.
 
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.

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.
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.

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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They could have lied today too just like they did for years.

Why did they stop? Your conjecture is as good as mine.
Because they just fired a bunch of first party developers and cancelled games so they want it to look neccesary.
 
you don't spend any money in the gaming industry?
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.
 
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?
Oh My God Wow GIF by reactionseditor
 
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?
Oh My God Wow GIF by reactionseditor

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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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

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?
 
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?
Oh My God Wow GIF by reactionseditor

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.
 
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.
 
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.
Xbox isn't profitable
 
But wouldn't the shareholders figure this out someday? What's the plan after that?
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.
 
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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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.



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.
You might be on to something. Game Pass price increase is coming in the next 6 months. This might be the foundation for that.
 
Not sure how anyone can trust their creative accounting. Prolific with these companies.

Microsoft and Phil are the king's of spin trying to fool the masses with their double talk. The idea of gamepass was utopia and that was the problem.
 
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.

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.
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?
 
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?
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.

 
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!
 
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.
 
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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.
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.
 
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.
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.
 
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