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[adamsapple]

Ok so the MS accounting principles are:

• all revenues -> allocate this to GamePass

I don't think that's the case at all, Dring is just saying that Dev cost doesn't come under GP, which I think makes perfect sense. The game(s) are available on premium sales, often on multiple platforms.

 

[viveks86]

Dev costs are recouped other ways, not just GP.

If you're going to add entire development cost of games under GP, even though they are recouping costs by other means, we might as well add the entire revenue stream of Call of Duty under Game Pass, even though it's getting most of it elsewhere.

Right? It'd only be fair if we do it that way.

You shouldn't add entire development cost, but you should at least add the cost minus all other means used to recoup, if you are keen to understand true profitability. So if you really want to know if Gamepass worked for Avowed, then $75M - net revenue from MTX, direct sales etc. should be factored in.

Not factoring it at all is fine from an accounting perspective, as long as it is accounted for elsewhere, but you can't jump to any meaningful conclusions at that point. "Gamepass is profitable" at that point is just spin and gives no real insight.

 

[HeisenbergFX4]

We will never know the truth, this bottom line if GP is profitable or not is as elusive as a certain list that just vanished

 

[Jigsaah]

Dev costs are recouped other ways, not just GP.

If you're going to add entire development cost of games under GP, even though they are recouping costs by other means, we might as well add the entire revenue stream of Call of Duty under Game Pass, even though it's getting most of it elsewhere.

Right? It'd only be fair if we do it that way.

Yea I guess this is another angle that deserves a closer look. But take into consideration a game like South of Midnight. No microtransactions...no expansions or DLC I know of. Sure there were probably SOME sales of the game, but I doubt it was enough to recoup the cost. If they are looping all studios into one, I mean I guess COD alone may put a huge dent in things especially when considering PS5 and Steam sales/microtransactions. I guess my question at this point is...at what point does Xbox stop leaning on games like COD as a crutch? Ideally, you'd want all studios pulling their own weight, or at least making smart bets on new IP that may or may not pan out here and there. Just thinking out loud here...but then you have games like the Oblivion remake that definitely held its own. That would get looped in as well.

I suppose it could be possible Xbox is doing okay right now...at least from a revenue and profit...but it's far from optimal. Sorry I'm just rambling now. I'll shuttup.

 

[adamsapple]

We will never know the truth, this bottom line if GP is profitable or not is as elusive as a certain list that just vanished

We need to find who went to Mattrick-island.

 

[Baemono]

We will never know the truth, this bottom line if GP is profitable or not is as elusive as a certain list that just vanished

Two questions to find the answer:
- does GP inclusion helps substantial GP growth ?
- does GP inclusion still results in high sales numbers ?

If both answers are no, then it's not

 

[Baemono]

We need to find who went to Mattrick-island.

They are listed in Xbox's P&L accounts

 

[Bernardougf]

That's not a clarification. It's just being pressured to 180* your statement.

He didn't 180. The statement still remains. The statement was paraphrasing "GP profitability dosen account for first party dev costs" .. he didn't change that, he sprinkled some bullshit about first party sales differential and speculation about microtransactions and other shit ***possibly*** recouping devps costs

He obviously received some pressure/wrist slap and went from:

"Ms gamepass profitability dosent include first party dev cost"
To
"Why would GP profitability include first party dev costs duuuuh"

....

Well at least it was enough for the never ending shills that continue to support their beloved company decisions straight to oblivion.

 

[Ultralow35]

Boy people deep hatred for Xbox allows people to fall for clickbait and not data And this dude does it to people all the time and people run with it and talking like it's gospel

 

[Bernardougf]

[

Boy people deep hatred for Xbox allows people to fall for clickbait and not data And this dude does it to people all the time and people run with it and talking like it's gospel

Lol the only hard data avaible is xbox telling "is profitable trust us" and if they dont want or feel the need to be clear.. welp its their problem. Journalists exists exactly for this, scoops of unknown information. They can always deny and open their books.. but they wont... and anyone with a clear not shill brain knows why.

 

[LordCBH]

Here's a graph of Gamepass growth:

 

[calico]

"So yes, dev costs/spend does not come under Game Pass P&L. Because obviously dev costs can also be recouped via microtransactions, premium sales, DLC etc..."

This is genius. What they should do is not allocate the cost to Game Pass because it can be recouped via retail etc., and not allocate the cost to retail etc. because it can be recouped via Game Pass. This way the development cost vanishes and both channels are super profitable.

 

[Bernardougf]

Here's a graph of Gamepass growth:

The metric is:

Ms is closing studios, firing people and going full on third party and closed box oem pc.

Im sure GP is reaaaally profitable.

 

[tr1p1ex]

all bs. Gamepass is subsidized.

The word profit can mean anything they want it to mean. Wall Street does this daily.

And even if you play goldilocks and believe they use real net profit ...making much less $$$ than selling games for ~$70 still isn't sustainable.

 

[Bojanglez]

It seems as originally was intended, full price sales on other platforms subsidise the first party Gamepass content, then subs cover the third party.

This is where putting Gamepass on everything (streaming especially) comes in, because if they convert too many existing people that buy games to subscribers, the model may not work as those games become less subsidized, but growing via genuinely new gamers may not impact that.

It is sustainable in this scenario, but shows why they had to start putting everything on every platform otherwise they'd be screwed.

This puts a lot of pressure on their games to sell, hence them doubling down on their big franchises.

Will be interesting to see how it pans out, especially if subscriptions stagnate and/or one or two big franchises don't deliver.

 

[Bernardougf]

It seems as originally was intended, full price sales on other platforms subsidise the first party Gamepass content, then subs cover the third party.

This is where putting Gamepass on everything (streaming especially) comes in, because if they convert too many existing people that buy games to subscribers, the model may not work as those games become less subsidized, but growing via genuinely new gamers may not impact that.

It is sustainable in this scenario, but shows why they had to start putting everything on every platform otherwise they'd be screwed.

This puts a lot of pressure on their games to sell, hence them doubling down on their big franchises.

Will be interesting to see how it pans out, especially if subscriptions stagnate and/or one or two big franchises don't deliver.

Full priced sales on what platforms ? Ms just went third party.. reaaaal recently with a handfull of games... you mean PC ? There's GP there too.

 

[HeisenbergFX4]

The metric is:

Ms is closing studios, firing people and going full on third party and closed box oem pc.

Im sure GP is reaaaally profitable.

Yes because GP was meant to support shitty games and failing hardware sales

Not sure if posts like these are trolling or people actually believe this

Like I said earlier Sony closed 2 or 3 studios in the last year, canceled games they were working even closing one after it launched and just announced a game they published going to Xbox

Guess PS+ didn't support all that stuff

 

[Baemono]

 

[DrFigs]

They also said it was profitable last year before raising the price of gamepass and restricting the content available on consoles right? Does that sound like something you would do if it was profitable? Sorry none of this is believable if you think about it for more than a second.

 

[Bernardougf]

Yes because GP was meant to support shitty games and failing hardware sales

Not sure if posts like these are trolling or people actually believe this

Like I said earlier Sony closed 2 or 3 studios in the last year, canceled games they were working even closing one after it launched and just announced a game they published going to Xbox

Guess PS+ didn't support all that stuff

Yes I believe if GP was fully profitable and an ample sustainable product things would be very different.. you may believe what you want but SonyToo is a pathetic argument

 

[semiconscious]

I don't think dev cost is included in his tweet, only lost revenue...

yep. & that's the game pass accounting 'secret sauce', right there...

 

[Bojanglez]

Full priced sales on what platforms ? Ms just went third party.. reaaaal recently with a handfull of games... you mean PC ? There's GP there too.

Yeah full price games on Steam (and now PS and Nintendo)

 

[Heisenberg007]

So, nothing changed.

That's the same premise that started it all. When they say "Game Pass" is profitable, they do not include any first-party dev costs, even though Game Pass hosts those games and negatively affect their sales and ROI.

 

[ChorizoPicozo]

Let's get retarded in here


c'mon Phil, just announce the price hike and keep this party going!!!

 

[HeisenbergFX4]

Yes I believe if GP was fully profitable and an ample sustainable product things would be very different.. you may believe what you want but SonyToo is a pathetic argument

Its not a Sony too argument

It was meant to show how braindead it is to think GP profit margins or lack there of caused Xbox to be in its current state

Years of mismanagement and producing bad games has led to these layoffs

But you guys can continue with your console warrior stuff

 

[Heisenberg007]

If you're going to add entire development cost of games under GP, even though they are recouping costs by other means, we might as well add the entire revenue stream of Call of Duty under Game Pass, even though it's getting most of it elsewhere.

Right? It'd only be fair if we do it that way.

This is a very stupid argument by you.

First, nobody is saying that the entire development cost of games should be added to GP. Show me one person who is arguing that?

Second, just because those games can recoup (part) of the costs elsewhere, Game Pass cannibalization of sales are not to be accounted for?

If a game like Assassin's Creed can potentially recover some of its costs through in-game transactions (MTX), should we not measure how many copies it sold and for how much against the development cost of the game?

What a weird, weird argument.

 

[cireza]

Thank you so much Christopher Dring for clarifying your stance on Game Pass.

 

[Ultralow35]

[
Lol the only hard data avaible is xbox telling "is profitable trust us" and if they dont want or feel the need to be clear.. welp its their problem. Journalists exists exactly for this, scoops of unknown information. They can always deny and open their books.. but they wont... and anyone with a clear not shill brain knows why.

Microsoft telling people it profitable is gospel because that's against the Law for them to miss lead investors

 

[adamsapple]

This is a very stupid argument by you.

First, nobody is saying that the entire development cost of games should be added to GP. Show me one person who is arguing that?

Second, just because those games can recoup (part) of the costs elsewhere, Game Pass cannibalization of sales are not to be accounted for?

Don't take my word for it, straight from the horse's mouth.

ut regardless to all that. sources have reached out to tell me that even when you include lost revenue associated with first-party party games (not just unit sales, but microtransactions), Game Pass is still profitable. So… that's great!

If anyone has issues with Dring's reporting, he can be reached via social media for more clarifications.

 

[DrFigs]

Microsoft telling people it profitable is gospel because that's against the Law for them to miss lead investors

We don't know how they're defining profit. And if it's not in their financial reports, no one can verify their numbers.

 

[cormack12]

Read the other tweet, didn't understand it.
Read this tweet, it made it worse.

From what I can make out, someone is racist though

 

[cormack12]

 

[ChorizoPicozo]

This is a very stupid argument by you.

shocking!

 

[mckmas8808]

Not trying to convince anyone of anything, people can believe whatever they like, its human nature to do so

I'm actually kinda surprised by you in this thread. It's obvious that you are smart as a tac and you clearly understand how this market works. So, why speak so vaguely on this topic? This convo shouldn't be able what's human nature. We are trying to get down to the bottom of is GamePass profitable or not. Now we don't have the obvious numbers, but we can come to some simply assumptions based on what Chris Dring stated yesterday and today.

1. Why would MS "NOT" inform their shareholders of the GamePass subscribers numbers quarterly or at least annually if it was profitable and going so well? This is standard practice for most companies doing subscriptions like this.
2. Why would Phil say in court during the FTC trial he testified that Xbox might exit the gaming business if it failed to reach 100 million Xbox Game Pass subscribers by fiscal year 2027.
3. How can any 1st party developer be in the positive, if all of the dev cost expenses are thrown on them, but most of the revenue generated (in the sense of "Number of Players that play each game") is expected to be credited to GamePass?

 

[LordCBH]

The last few days summarized:

 

[ByWatterson]

 

[mckmas8808]

Don't take my word for it, straight from the horse's mouth.




If anyone has issues with Dring's reporting, he can be reached via social media for more clarifications.

I wasn't saying 100% of dev costs have to be attributed to GamePass. And yesterday I literally said part of the dev costs need to be added to the GP ledgers, if you want honest accounting. Or at least an honest discussion.

 

[ChorizoPicozo]

I'm actually kinda surprised by you in this thread. It's obvious that you are smart as a tac and you clearly understand how this market works. So, why speak so vaguely on this topic? This convo shouldn't be able what's human nature. We are trying to get down to the bottom of is GamePass profitable or not. Now we don't have the obvious numbers, but we can come to some simply assumptions based on what Chris Dring stated yesterday and today.

1. Why would MS "NOT" inform their shareholders of the GamePass subscribers numbers quarterly or at least annually if it was profitable and going so well? This is standard practice for most companies doing subscriptions like this.
2. Why would Phil say in court during the FTC trial he testified that Xbox might exit the gaming business if it failed to reach 100 million Xbox Game Pass subscribers by fiscal year 2027.
3. How can any 1st party developer be in the positive, if all of the dev cost expenses are thrown on them, but most of the revenue generated (in the sense of "Number of Players that play each game") is expected to be credited to GamePass?

one word: Tango. ( adamsapple , yes.. again)

I don't know how a studio gets shut down after releasing a breakout hit by all key metrics… it doesn't make any fucking sense.

Grubb implied the game underperformed. (i bet the source was at Bethesda and they were talking about sales)

the fact of the matter at this point is not even if GP is profitable or not. but the fact that Xbox needs to obfuscate the numbers to make GP work on paper....a complete shit show

 

[adamsapple]

one word: Tango. ( adamsapple , yes.. again)

Yes.

 

[viveks86]

Its not a Sony too argument

It was meant to show how braindead it is to think GP profit margins or lack there of caused Xbox to be in its current state

Years of mismanagement and producing bad games has led to these layoffs

But you guys can continue with your console warrior stuff

The truth is somewhere in between though, where both issues are contributing factors. Additionally, the multiple acquisitions at their bloated valuations could be a big reason for the layoffs across the board too.

Given their method of accounting, there is no way to know. So everyone here is guessing with our own confirmation biases at play.

 

[Ultralow35]

We don't know how they're defining profit. And if it's not in their financial reports, no one can verify their numbers.

I can tell you that the Xbox division is only a small part of the overall profit which is why I'm so confused why people care so much about about it you can't go buy Xbox shares you buy Microsoft shares

 

[Bernardougf]

Its not a Sony too argument

It was meant to show how braindead it is to think GP profit margins or lack there of caused Xbox to be in its current state

Years of mismanagement and producing bad games has led to these layoffs

But you guys can continue with your console warrior stuff

No ... GP has everything to do ... its unprofitable, its unsustainable, it makes players dont want to buy games, it changes development priorities it creates a vicious cicle that on top of all shitty decisions brought us here. GP is a huge cause of everything thats happening now.

But your Sonytoo point about Sony is right just misguided... Sony made a real recent fuck up with their gaas initiative and it brought huge consequences to their first party lineup, it didn't affect business directly because they are coasting of ps4 success and Ms fuck up... but they lost a lot of money and as you pointed had to close studios and make their best online lineup game multiplat

And was you that brought Sony to a Microsoft thread.. the only warrior here should be considered you.

Edit: its really incredible having to argue that the almost decade long major leading program of a hardware/software company not being profitable is a big part of their current situation. Twilight zone.

 

[Bernardougf]

Yeah full price games on Steam (and now PS and Nintendo)

LoL so steam sales outside of gamepass pc .. and a handfull of recent games third party should make years and years of GP profitable... mmOkay

 

[PropellerEar]

Profitable?
100% not

This thread reads like a support group for victims of gaslighting.
Stop with the denial, accept the truth.

 

[mckmas8808]

The truth is somewhere in between though, where both issues are contributing factors. Additionally, the multiple acquisitions at their bloated valuations could be a big reason for the layoffs across the board too.

Given their method of accounting, there is no way to know. So everyone here is guessing with our own confirmation biases at play.

At this point it's not about confirmation bias. Microsoft are reacting to business realities. It's not a confirmation bias to believe Gamepass isn't working for Microsoft at this point. I'm so confused as to why many people (maybe not you) choose to ignore what Phil Spencer said in Federal Court, on the stand to a lawyer and a judge.

Why is darn near everyone ignoring that?

I can tell you that the Xbox division is only a small part of the overall profit which is why I'm so confused why people care so much about about it you can't go buy Xbox shares you buy Microsoft shares

Some of us care about the business that our favorite hobby is in. I also care about the business of the NFL and NBA. And also the business of Disney and the music industry in general. It's normal to care about that you love.

 

[Bernardougf]

Microsoft telling people it profitable is gospel because that's against the Law for them to miss lead investors

Gospel ??? Ooohh my... lol ...

 

[viveks86]

At this point it's not about confirmation bias. Microsoft are reacting to business realities. It's not a confirmation bias to believe Gamepass isn't working for Microsoft at this point. I'm so confused as to why many people (maybe not you) choose to ignore what Phil Spencer said in Federal Court, on the stand to a lawyer and a judge.

I think we can agree that it isn't working for Microsoft and is cannibalizing sales. But is that what is leading to studio closures and canceled projects? That's where I think how much we like or hate Gamepass is going to color our speculation i.e. confirmation bias.

Take Forza Motorsport for instance. Assuming the rumors are true, did Gamepass kill it? Or just the fact that they simply couldn't capture an audience like Horizon did? How much of it has to do with their future PC/Console hybrid strategy, where other PC sims would be competing for the same mindshare that FM was already hemorrhaging? However unlikely, imagine if Polyphony released GT8 on PC and that becomes playable on their console/PC hybrid? Could it effectively end FM, given its current state? May be FM just doesn't align with their hardware strategy anymore.

I'm just saying there are many factors at play and to what extent Gamepass contributes to it, given the limited info we have, will be speculative in nature.

 

[poppabk]

You shouldn't add entire development cost, but you should at least add the cost minus all other means used to recoup, if you are keen to understand true profitability. So if you really want to know if Gamepass worked for Avowed, then $75M - net revenue from MTX, direct sales etc. should be factored in.

Not factoring it at all is fine from an accounting perspective, as long as it is accounted for elsewhere, but you can't jump to any meaningful conclusions at that point. "Gamepass is profitable" at that point is just spin and gives no real insight.

But what about something like CoD which likely covers dev costs and profits just from Playstation and PC sales. Do you add that extra profit to gamepass?

 

[mckmas8808]

I think we can agree that it isn't working for Microsoft and is cannibalizing sales. But is that what is leading to studio closures and canceled projects? That's where I think how much we like or hate Gamepass is going to color our speculation i.e. confirmation bias.

Take Forza Motorsport for instance. Assuming the rumors are true, did Gamepass kill it? Or just the fact that they simply couldn't capture an audience like Horizon did? How much of it has to do with their future PC/Console hybrid strategy, where other PC sims would be competing for the same mindshare that FM was already hemorrhaging? However unlikely, imagine if Polyphony released GT8 on PC and that becomes playable on their console/PC hybrid? Could it effectively end FM, given its current state? May be FM just doesn't align with their hardware strategy anymore.

I'm just saying there are many factors at play and to what extent Gamepass contributes to it, given the limited info we have, will be speculative in nature.

No, I don't think it's the main reason. But it's part of many reasons. This is where HeisenbergFX4 is correct. MS has had plenty of issues and they don't start or stop at GP.


But we know for a fact that many major video game execs have said having your game on a subscription service like GamePass day one isn't good for their products. That much we know for sure, because they've been public about it.

 

[mckmas8808]

But what about something like CoD which likely covers dev costs and profits just from Playstation and PC sales. Do you add that extra profit to gamepass?

Did CoD add to the overall subscription numbers for GamePass? If so that revenue should be added to the GP ledgers. And if a person buys MTX and DLC for that game while on GP, then add that revenue to GP too.