viveks86
Member
Why would sales that are outside of Gamepass be added back to Gamepass? Playstation and PC sales have nothing to do with GP. Let me try to simplify, if a game costs $100 million to make and they made $30 million from Playstation and PC sales, then the studio has $70 million left to earn to break even. That $70 million will have to come from Gamepass. Otherwise, you aren't balancing your books. What's likely happening here is the $70 million is being treated as a loss for the game studio, while Gamepass walks away with whatever profit it makes from subs minus advertising/licensing.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?
Now in your example of CoD, let's say they made a billion dollars in Playstation and PC sales. That means the studio made $900 million in profit (assuming the same $100M dev cost). Not Gamepass. Everything Gamepass makes for that game would just be additional profit. Does that mean Gamepass was profitable for CoD? Yes. More notably, CoD could be profitable for Gamepass with increased subs. But is Gamepass profitable overall? We will need to apply this rule to all games developed in-house to determine that. The chances are, most other games are taking a hit, hence Phil's admission in the FTC case.
It's ok for accounting, but most of their game studios could be in the red and MS would essentially have to keep the gaming division up at a net loss. It doesn't make a dent because MS makes profits elsewhere (outside of gaming) to more than make up for it. But shareholders will allow that only for some time because it is equivalent to setting money on fire. If they can make even more money by simply axing/selling off the gaming division, they would. If CoD is the only one making money despite gamepass, then they will just keep Cod, kill gamepass and sell the rest. Hopefully that's not how this plays out, but it is one possible scenario if they don't get their heads out of their asses.
Eventually, something will give.
Last edited: