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[Boglin]

Asset values can go up AND down. Ignoring the idea that your asset can decline in value can lead to faulty analysis and results. If Microsoft mismanages its subsidiaries, then it's very easy to see their values decline, just look at Disney and ask about the value of Marvel Entertainment today vs its value right after Endgame came out and smashed records.

Yup. And even ignoring that Microsoft paid more than market price for the shares due to the nature of the acquisition, just because Microsoft spent 70 billion on Activision doesn't mean it's equivalent to a straight balance transfer into an equivalent valued liquid investment. There has to be willing buyers.

I've read that Sony paid 100 million for Firewalk and if that's accurate then according to some people's logic it must mean that Sony is still sitting on what's equivalent to 100 million dollars.

 

[Setsuna Mudou]

lol I'm trying to be nice to the guy.

(The takes about how Xbox is down an 80bn hole are incorrect tho, the truth is more nuanced than that)

Yeah, I get it, of course it's more nuanced than that. Basically there's some incorrect perception that the 70B leave an immediate 70B hole in Microsoft's pocket. Of course that's not true, but on the other hand there are inherent costs that come with the asset (e.g. salaries, debt, etc) which do become Microsoft liabilities.

I was just taking the piss at the idea a videogame content youtuber would somehow have special knowledge on the topic, especially when he had such a one sided / damage control take

 

[MisterXDTV]

If you take away LIVE Gold subs , GamePass subs are actually DOWN!

Hilarious

 

[XXL]

Console sales:

* Lagging behind Xbox One: Comparing the sales of the Xbox Series X/S to the Xbox One might not be entirely fair, as different market conditions and consumer preferences can influence console adoption. Additionally, the Xbox Series X/S has shown promising sales figures, especially in recent quarters.

This is false.

As of Aug 2024 Xbox Series X/S has sold 28.3M.

Xbox Series X|S lags behind PS5 by more than 2x, with 28.3 million units sold life-to-date — Aldora | Game World Observer

It is no secret that Microsoft lags behind Sony in terms of console sales. But we now have some fresh data that puts these comparisons in a more perspective.

gameworldobserver.com

As of July 2023 Xbox Series X/S had sold 21M

Xbox Series X|S have sold a combined 21m units

The Xbox Series X|S have sold 21 million units according to recent sales figures, with combined sales including the Xbo…

www.gamesindustry.biz

So, they sold 7.3M consoles in the last 13 months worldwide.

In the same time the PS5 sold around 25M.

The PS5 looks to have outsold the Xbox by 5 to 1 in the last quarter in the US.

Analysts: PS5 Outsold Xbox Almost 5 To 1 This Past Quarter

While the larger generational trend estimates that PlayStation 5 is outselling Xbox Series X/S 2:1, similar to the last generation, that gap may appear to be widening

www.forbes.com

The Series X/S sales fallen off a cliff.

They'll be lucky to hit 40M if this trend continues and the gap between PS5 and Xbox seems to be growing substantially.

 

[ReBurn]

If you take away LIVE Gold subs , GamePass subs are actually DOWN!

Hilarious

But why would you take Gold numbers away? It's still a population that are paying recurring subscription revenue to Xbox, just under a different name. The combination of game pass and gold subscriptions would still be 34 million people paying Microsoft just as much money. In the context of a thread on Xbox revenue why is the distinction important?

 

[ChorizoPicozo]

But why would you take Gold numbers away? It's still a population that are paying recurring subscription revenue to Xbox, just under a different name. The combination of game pass and gold subscriptions would still be 34 million people paying Microsoft just as much money. In the context of a thread on Xbox revenue why is the distinction important?

so, if someone in core or standar upgrade to ultimate for CoD... that would be a new subscriber or the same, that would signify as growth or not?

 

[ReBurn]

so, if someone in core or standar upgrade to ultimate for CoD... that would be a new subscriber or the same, that would signify as growth or not?

I have no idea how Microsoft counts their subscribers. It probably wouldn't change the number of subscribers, but it would change the monthly revenue. I'd argue that the revenue increase is more impactful than subscriber count.

 

[XXL]

But why would you take Gold numbers away? It's still a population that are paying recurring subscription revenue to Xbox, just under a different name. The combination of game pass and gold subscriptions would still be 34 million people paying Microsoft just as much money. In the context of a thread on Xbox revenue why is the distinction important?

The numbers they announce aren't a consistent total throughout the year and this number they give is probably when its at its highest after a big new release.

A ton of people subscribe and unsubscribe to every streaming service all the time.

That I use Game Pass.

It's literally a wave. They could be at 28M right now and shoot up when COD launches then drop back down.

 

[ChorizoPicozo]

I have no idea how Microsoft counts their subscribers. It probably wouldn't change the number of subscribers, but it would change the monthly revenue. I'd argue that the revenue increase is more impactful than subscriber count.

MS is the one seeking subscriber growth. right now they are about 30-40 Million behind (based on the leaks)

 

[GoldenEye98]

The numbers they announce aren't a consistent total throughout the year and this number they give is probably when its at its highest after a big new release.

A ton of people subscribe and unsubscribe to every streaming service all the time.

That I use Game Pass.

It's literally a wave. They could be at 28M right now and shoot up when COD launches then drop back down.

The main hook with COD is the MP....not a get in get out play the campaign for a week and your done.

Nothing will upsell people to GamePass Ultimate better than COD imo.

 

[Madserb2023]

Revenue isn't the same as profit. Your revenue could triple and make a loss.

 

[ReBurn]

The numbers they announce aren't a consistent total throughout the year and this number they give is probably when its at its highest after a big new release.

A ton of people subscribe and unsubscribe to every streaming service all the time.

That I use Game Pass.

It's literally a wave. They could be at 28M right now and shoot up when COD launches then drop back down.

None of the players in the console space really announce subscriber numbers any more. Know why? Because the counts don't really matter. The number of total subscribers isn't the metric for success any more, especially when every subscription service has tiers at different prices. It's only useful for console warriors to use when arguing online.

Want to know another number that's becoming irrelevant? Number of consoles sold. It mattered more when the only way the big three could make money was by increasing their addressable market by selling more consoles. But now that first party players are embracing PC, mobile and cloud to expand their reach their earning potential isn't limited by their ability to get people to buy their hardware any more.

 

[ReBurn]

MS is the one seeking subscriber growth. right now they are about 30-40 Million behind (based on the leaks)

I don't know of any company that offers a subscription service that isn't interested in subscriber growth. Who said they weren't interested in subscriber growth?

 

[sharp weiner]

Stand on a chair. You are now taller.
Did you grow?f

 

[Nydius]

From the article;

The FTC leaks stated that, as of April 2022, they had 21.9 million Game Pass (excluding PC) subscribers and 11.7 million Xbox Live Gold. 33.6m subscribers.

Then they changed the game of Gold to Game Pass Core and claim they are seeing “growth” in Game Pass with 34m subs (including PC) in February 2024.

And people like you eat it up without a shred of critical thinking skills. There has been no growth in Game Pass for almost two years. Just a guy shuffling deck chairs as the Titanic sinks.

But I guess I can’t expect much from a guy who called Flight Sim “creative”.

Late edit: As for your snarky “how’s Astro Bot doing?” in another post, outside of COD, Astro Bot will sell more than anything Microsoft releases this year. That’s with Astro Bot being limited to a single platform. So it’s going well, thanks.

That’s really the entire crux of this thread, isn’t it? To remain relevant and sell products they had to buy COD and King. Microsoft Gaming Studios and Zenimax are anchors. Xbox might as well change their name to ABK because that’s who they are now.

 

[FIREKNIGHT2029]

Revenue is not profit. Buying out the biggest publisher in the world will of course increase your revenue. It doesn't mean you're making any net profits though.

 

[Woopah]

It's less than good because they never tell us what it is.

By that logic all of MS' segments have less than good profit, because none of them report segment-level profit either.


This isn't an Xbox-speciific thing. It's how Microsoft reports.

 

[ChorizoPicozo]

I don't know of any company that offers a subscription service that isn't interested in subscriber growth.

and that the point. MS has been obfuscating GP's growth

Who said they weren't interested in subscriber growth?

you are dismissing the numbers of subscribers and putting more weight on the revenue (but this is moving the goal post)

But why would you take Gold numbers away? It's still a population that are paying recurring subscription revenue to Xbox, just under a different name. The combination of game pass and gold subscriptions would still be 34 million people paying Microsoft just as much money. In the context of a thread on Xbox revenue why is the distinction important?

while the revenue is important, you still need to increase it.

either by price hikes or/and bringing more people to your services..... And that is the issue.

if someone is on GP core and upgrades to standar or ultimate is no where near as significant and impactful to a new brand subscriber to ultimate. especially when MS spent 80B to achieve growth

 

[MisterXDTV]

But why would you take Gold numbers away? It's still a population that are paying recurring subscription revenue to Xbox, just under a different name. The combination of game pass and gold subscriptions would still be 34 million people paying Microsoft just as much money. In the context of a thread on Xbox revenue why is the distinction important?

Are you serious?

GamePass was a product and Live Gold was a completely different product at a completely different price point

When they found out GamePass stopped growing, they CHANGED the name of LIVE Gold just to inflate the number of GamePass Subscribers

It's not really hard to understand how dishonest it is

 

[DenchDeckard]

Sony can tell you all about that subject

 

[Woopah]

None of the players in the console space really announce subscriber numbers any more. Know why? Because the counts don't really matter. The number of total subscribers isn't the metric for success any more, especially when every subscription service has tiers at different prices. It's only useful for console warriors to use when arguing online.

Want to know another number that's becoming irrelevant? Number of consoles sold. It mattered more when the only way the big three could make money was by increasing their addressable market by selling more consoles. But now that first party players are embracing PC, mobile and cloud to expand their reach their earning potential isn't limited by their ability to get people to buy their hardware any more.

Install base does mattet. They get a cut of every purchase made through their ecosystem. And they have to give a cut for every sale they make on other userbases.

Therefore the lower their console sales, the more limited their earning potential.

 

[NEbeast]

Step 1: Buy two massive third party publishers.
Step 2: Pretend like you're now the reason why they're making so much money.
Step 3: Profit.
Bonus points for getting your fanboys to cheer consolidation and pretend it's a good thing.

 

[Topher]

But why would you take Gold numbers away? It's still a population that are paying recurring subscription revenue to Xbox, just under a different name. The combination of game pass and gold subscriptions would still be 34 million people paying Microsoft just as much money. In the context of a thread on Xbox revenue why is the distinction important?

Because if we are going to analyze "growth" then XLG boosting "Game Pass" numbers needs to be accounted for.

 

[XXL]

None of the players in the console space really announce subscriber numbers any more. Know why? Because the counts don't really matter. The number of total subscribers isn't the metric for success any more

Xbox just took away Day 1 Game Pass games from Game Pass Standard.

Because counts matter.

It's also why they're putting their games on PS5.

Because counts matter.

Want to know another number that's becoming irrelevant? Number of consoles sold.

I know I've heard this argument before.

Hordes of people were going around saying console sales don't matter anymore.

How did that turn out for them?

 

[Chukhopops]

The revenue is up due to the purchase of Activision automatically giving them more business. Profit is way down as a result though.

Next year there won’t be a revenue bump unless they ancquire another publisher, revenue may actually drop.

How is profit way down when they purchased a massively profitable company? They just rolled the operating costs and revenue of ABK into theirs so unless you think ABK was losing money (lmao) then their profit only went up - and that’s before you factor in consolidation layoffs. I don’t think you’re thinking this through.

Well of course you would hope revenue is up, Activision makes much more money than Xbox.

?

ABK made 8bn revenue in their last recorded full year activity when MS made 15bn. If you mean profit then the only recorded numbers for either are comparable.

Crazy how people just invent numbers in their head.

 

[Topher]

?

ABK made 8bn revenue in their last recorded full year activity when MS made 15bn. If you mean profit then the only recorded numbers for either are comparable.

Crazy how people just invent numbers in their head.

He said ABK makes more money than Xbox, not Microsoft as a whole.

 

[ReBurn]

Because if we are going to analyze "growth" then XLG boosting "Game Pass" numbers needs to be accounted for.

it depends on what growth means. If growth is mainly quantified by change subscriber numbers then subscriber count is important. If growth is quantified by change in revenue then the subscriber count alone is less important, especially when there are multiple offerings at different prices under a single banner. If your overall revenue increases as prices increase, or as people move across tiers, that's the more important metric. I have to believe that since these companies have de-emphasized subscriber counts that it's not the metric that matters the most.

Are you serious?

GamePass was a product and Live Gold was a completely different product at a completely different price point

When they found out GamePass stopped growing, they CHANGED the name of LIVE Gold just to inflate the number of GamePass Subscribers

It's not really hard to understand how dishonest it is

It's not dishonest at all. That's just silly. Rebranding a product is common and Microsoft was clear in what they were doing. Xbox Live Gold and Game Pass are two subscription products that offered the same things: access to online play and access to games. It didn't make any sense to keep them separate any more than it would have made sense for Sony to keep the PS Plus service they offered for years separate from the Extra and Premium tiers. Was it dishonest for Sony to change the product they offered for years to PS Plus Essential and combine its subscribers with those who signed up for Extra and Premium?

 

[sainraja]

My best guess is the acquisition didn’t give Xbox or Gamepass the huge boost they expected and Nadella just said enough is enough.

...expecting [the purchases] to give Xbox/Gamepass a boost immediately after acquiring them seems a bit short-sighed. It's 2024 and they just acquired them in 2023 right?
There is more going on on surely but it is still too early to say one way or the other.

 

[Topher]

it depends on what growth means. If growth is mainly quantified by change subscriber numbers then subscriber count is important. If growth is quantified by change in revenue then the subscriber count alone is less important, especially when there are multiple offerings at different prices under a single banner. If your overall revenue increases as prices increase, or as people move across tiers, that's the more important metric. I have to believe that since these companies have de-emphasized subscriber counts that it's not the metric that matters the most.

When Microsoft is bragging about 34 million subscribers then that is not not de-emphasizing subscriber counts.

 

[MisterXDTV]

It's not dishonest at all. That's just silly. Rebranding a product is common and Microsoft was clear in what they were doing. Xbox Live Gold and Game Pass are two subscription products that offered the same things: access to online play and access to games. It didn't make any sense to keep them separate any more than it would have made sense for Sony to keep the PS Plus service they offered for years separate from the Extra and Premium tiers. Was it dishonest for Sony to change the product they offered for years to PS Plus Essential and combine its subscribers with those who signed up for Extra and Premium?

So it's just a pure coincidence that GamePass growth stopped and they felt the need to rebrand a completely different product to make it LOOK like it was the same of GamePass

 

[ReBurn]

I know I've heard this argument before.

Hordes of people were going around saying console sales don't matter anymore.

How did that turn out for them?

I never said console sales don't matter. I said they're less important than they used to be. That's not the same thing.

But since you brought it up, please provide examples for how "things turned out for" people who said console sales don't matter. Are they homeless living on the street? Or did retarded console warriors just say mean things to them on Twitter?

 

[ReBurn]

So it's just a pure coincidence that GamePass growth stopped and they felt the need to rebrand a completely different product to make it LOOK like it was the same of GamePass

It would be difficult to know whether game pass growth stopped or not because that information isn't really public any more. If someone moved from a lower tier to a higher tier did game pass grow? Or does it only grow when more people subscribe?

 

[Ozriel]

If you take away LIVE Gold subs , GamePass subs are actually DOWN!

Hilarious

We’ve pivoted from “GamePass is killing Xbox” to “slow GP growth is bad for Xbox”?

 

[Chukhopops]

He said ABK makes more money than Xbox, not Microsoft as a whole.

Yeah I understood and that’s also factually wrong (if he means revenue) or impossible to determine with certainty (if he means profit).

 

[MisterXDTV]

We’ve pivoted from “GamePass is killing Xbox” to “slow GP growth is bad for Xbox”?

Everything they did in the last 10 years killed Xbox, no need to pivot at this point

The next step is going full third-party like EA and Ubisoft

 

[Sony]

I laughed at this part.

Why? Surely you aren't arguing that Sony's first party has been more diverse this gen in a meaningful way...?

 

[Topher]

Yeah I understood and that’s also factually wrong (if he means revenue) or impossible to determine with certainty (if he means profit).

How is that "factually wrong"?

"Despite the poor Xbox hardware revenue, gaming revenue at Microsoft is up 44 percent overall, helped again by the additional Activision Blizzard revenue. In fact, that revenue added 48 points, so overall gaming revenue at Microsoft would have been down 4 percent if the company hadn’t acquired Activision Blizzard."

Microsoft’s cloud revenues rule again in Q4, as Surface continues to dip

Office and cloud are strong for Microsoft’s revenues.

www.theverge.com

 

[Chukhopops]

How is that "factually wrong"?

"Despite the poor Xbox hardware revenue, gaming revenue at Microsoft is up 44 percent overall, helped again by the additional Activision Blizzard revenue. In fact, that revenue added 48 points, so overall gaming revenue at Microsoft would have been down 4 percent if the company hadn’t acquired Activision Blizzard."

Microsoft’s cloud revenues rule again in Q4, as Surface continues to dip

Office and cloud are strong for Microsoft’s revenues.

www.theverge.com

What does that have to do with the statement:

Well of course you would hope revenue is up, Activision makes much more money than Xbox.

Activision recorded 8bn revenue in their last independent recorded year.
Xbox recorded 16bn revenue in 2022 before the acquisition.

Therefore the statement above is factually incorrect when it comes to revenue.

 

[Ozriel]

How is that "factually wrong"?

"Despite the poor Xbox hardware revenue, gaming revenue at Microsoft is up 44 percent overall, helped again by the additional Activision Blizzard revenue. In fact, that revenue added 48 points, so overall gaming revenue at Microsoft would have been down 4 percent if the company hadn’t acquired Activision Blizzard."

Microsoft’s cloud revenues rule again in Q4, as Surface continues to dip

Office and cloud are strong for Microsoft’s revenues.

www.theverge.com

…if adding X to Y increases Y by 48%

How exactly is X > Y?

 

[Topher]

What does that have to do with the statement:

Activision recorded 8bn revenue in their last independent recorded year.
Xbox recorded 16bn revenue in 2022 before the acquisition.

Therefore the statement above is factually incorrect when it comes to revenue.

Ah....I get what you are saying. Total revenue versus growth. Do we have current revenue numbers for either ABK or Xbox?

…if adding X to Y increases Y by 48%

How exactly is X > Y?

Yeah....as I said above growth vs totals.

 

[Chukhopops]

Ah....I get what you are saying. Total revenue versus growth. Do we have current revenue numbers for either ABK or Xbox?



Yeah....as I said above growth vs totals.

I don’t think we’re ever getting separate numbers for ABK ever again now that they’re rolled into the MS business. This will forever be in speculation territory from now on.

By the way I don’t deny the fact that MS would have been down 4% revenue in the last year without the ABK acquisition. But it’s not like MS invented external growth and the concept of rolling operating activities of acquired companies into your own. Bungie revenue will be rolled into Sony’s in the exact same way.

 

[poppabk]

How is that "factually wrong"?

"Despite the poor Xbox hardware revenue, gaming revenue at Microsoft is up 44 percent overall, helped again by the additional Activision Blizzard revenue. In fact, that revenue added 48 points, so overall gaming revenue at Microsoft would have been down 4 percent if the company hadn’t acquired Activision Blizzard."

Microsoft’s cloud revenues rule again in Q4, as Surface continues to dip

Office and cloud are strong for Microsoft’s revenues.

www.theverge.com

Being only 4 percent down when hardware nosedived means that they almost definitely saw growth in everything other than hardware. And as they were losing money on hardware revenue, they probably saw increased profits.
Xbox hardware is their achilles heal, they have to take huge losses to even get lackluster sales.

 

[Topher]

I don’t think we’re ever getting separate numbers for ABK ever again now that they’re rolled into the MS business. This will forever be in speculation territory from now on.

By the way I don’t deny the fact that MS would have been down 4% revenue in the last year without the ABK acquisition. But it’s not like MS invented external growth and the concept of rolling operating activities of acquired companies into your own. Bungie revenue will be rolled into Sony’s in the exact same way.

Yeah, I know. I just didn't realize we were talking about two different things.

Being only 4 percent down when hardware nosedived means that they almost definitely saw growth in everything other than hardware. And as they were losing money on hardware revenue, they probably saw increased profits.
Xbox hardware is their achilles heal, they have to take huge losses to even get lackluster sales.

More than likely. Double digit losses in hardware had to be made for somewhere.

 

[Astray]

We’ve pivoted from “GamePass is killing Xbox” to “slow GP growth is bad for Xbox”?

It's sort of both?

Gamepass (as it used to be) required sub count to be at a certain point to not only cover its costs, but to also cover the cannibalization costs from people not buying games and sticking to Gamepass games alone (major cost especially for big 1st party games like Starfield, Indiana Jones or COD that could easily cost between $60m-200m).

If they actually reached that spot, then they would have been considered "at scalepoint" and any new subs from there on out would be pure money coming in. They also face issues with retention (people would drop some money for a month's sub to play a certain game and save money rather than sticking around for the service itself)

Their problem is that they're not reaching that point and are missing it by a wide margin, and the cannibalization effects are hitting the main business branch of the Xbox ecosystem: Software royalties on 3P purchases/DLC and earnings from selling 1P games on Xbox.

So now they are tackling the issues head-on:

- They raised prices across the board and started slowly cutting promotional things like Ambassador programs that would give you free months or certain "loopholes" etc. This raises revenue at the cost of a drop in subs.

- They started restricting what tiers get day 1 games from them, and kept the Console tier restricted to new entrants to the service (Don't remember the name exactly and about to drive), this forces anyone who dips in and out to pay the full fat Ultimate sub, it also keeps some existing users who may have thought about leaving hooked because the pricing is still worthwhile (helps with retention).

Gamepass as it used to be from 2020-2023 was definitely not profitable IMHO, but they could be on to something with the current way it's been reconfigured.

 

[mayham2199]

Want to know another number that's becoming irrelevant? Number of consoles sold. It mattered more when the only way the big three could make money was by increasing their addressable market by selling more consoles. But now that first party players are embracing PC, mobile and cloud to expand their reach their earning potential.

It’s not becoming irrelevant that’s a massive exaggeration. That all got started once Xbox started failing which isn’t a coincidence. This whole gen started with emails from the Microsoft ceo and Phil Spencer both interested in console sales. Now you want me to believe they are becoming irrelevant now that they are losing badly?

 

[MisterXDTV]

It's sort of both?

Gamepass (as it used to be) required sub count to be at a certain point to not only cover its costs, but to also cover the cannibalization costs from people not buying games and sticking to Gamepass games alone (major cost especially for big 1st party games like Starfield, Indiana Jones or COD that could easily cost between $60m-200m).

If they actually reached that spot, then they would have been considered "at scalepoint" and any new subs from there on out would be pure money coming in. They also face issues with retention (people would drop some money for a month's sub to play a certain game and save money rather than sticking around for the service itself)

Their problem is that they're not reaching that point and are missing it by a wide margin, and the cannibalization effects are hitting the main business branch of the Xbox ecosystem: Software royalties on 3P purchases/DLC and earnings from selling 1P games on Xbox.

So now they are tackling the issues head-on:

- They raised prices across the board and started slowly cutting promotional things like Ambassador programs that would give you free months or certain "loopholes" etc. This raises revenue at the cost of a drop in subs.

- They started restricting what tiers get day 1 games from them, and kept the Console tier restricted to new entrants to the service (Don't remember the name exactly and about to drive), this forces anyone who dips in and out to pay the full fat Ultimate sub, it also keeps some existing users who may have thought about leaving hooked because the pricing is still worthwhile (helps with retention).

Gamepass as it used to be from 2020-2023 was definitely not profitable IMHO, but they could be on to something with the current way it's been reconfigured.

Of course. GamePass was supposed to grow so much that game sales would become irrelevant (that's what Xbots told us for years)

Now we find out that not only GamePass cannibalizes sales (like any sane person could have predicted) but it's not even growing NEARLY as much as it should, actually it's LOSING subscribers

So now they are in the worst possible scenario:

- No hardware sales
- No software sales
- The GamePass dream (AKA the Netflix of Gaming) already dead

 

[Ozriel]

Of course GamePass was supposed to grow so much that game sales would become irrelevant (that's what Xbots told us for years)

Now we find out that not only GamePass cannibalizes sales (like any sane person could have predicted) but it's not even growing NEARLY as much as it should, actually it's LOSING subscribers

So now they are in the worst possible scenario:

- No hardware sales
- No software sales
- The GamePass dream (AKA the Netflix of Gaming) already dead

…and in that scenario, people who drop out of GP should ideally turn to buying games the traditional way. Retail revenue rises.

The problem with your analysis is that you’re assuming a drop in GP subs, without a commensurate rise in traditional purchases.

 

[RetroGamingUK]

This is false.

As of Aug 2024 Xbox Series X/S has sold 28.3M.

Xbox Series X|S lags behind PS5 by more than 2x, with 28.3 million units sold life-to-date — Aldora | Game World Observer

It is no secret that Microsoft lags behind Sony in terms of console sales. But we now have some fresh data that puts these comparisons in a more perspective.

gameworldobserver.com

As of July 2023 Xbox Series X/S had sold 21M

Xbox Series X|S have sold a combined 21m units

The Xbox Series X|S have sold 21 million units according to recent sales figures, with combined sales including the Xbo…

www.gamesindustry.biz

So, they sold 7.3M consoles in the last 13 months worldwide.

In the same time the PS5 sold around 25M.

The PS5 looks to have outsold the Xbox by 5 to 1 in the last quarter in the US.

Analysts: PS5 Outsold Xbox Almost 5 To 1 This Past Quarter

While the larger generational trend estimates that PlayStation 5 is outselling Xbox Series X/S 2:1, similar to the last generation, that gap may appear to be widening

www.forbes.com

The Series X/S sales fallen off a cliff.

They'll be lucky to hit 40M if this trend continues and the gap between PS5 and Xbox seems to be growing substantially.

Globally 5:1 would seem like a disaster.

But 5:1 in America, I really don’t know what to say.

 

[Brucey]

It's sort of both?

Gamepass (as it used to be) required sub count to be at a certain point to not only cover its costs, but to also cover the cannibalization costs from people not buying games and sticking to Gamepass games alone (major cost especially for big 1st party games like Starfield, Indiana Jones or COD that could easily cost between $60m-200m).

If they actually reached that spot, then they would have been considered "at scalepoint" and any new subs from there on out would be pure money coming in. They also face issues with retention (people would drop some money for a month's sub to play a certain game and save money rather than sticking around for the service itself)

Their problem is that they're not reaching that point and are missing it by a wide margin, and the cannibalization effects are hitting the main business branch of the Xbox ecosystem: Software royalties on 3P purchases/DLC and earnings from selling 1P games on Xbox.

So now they are tackling the issues head-on:

- They raised prices across the board and started slowly cutting promotional things like Ambassador programs that would give you free months or certain "loopholes" etc. This raises revenue at the cost of a drop in subs.

- They started restricting what tiers get day 1 games from them, and kept the Console tier restricted to new entrants to the service (Don't remember the name exactly and about to drive), this forces anyone who dips in and out to pay the full fat Ultimate sub, it also keeps some existing users who may have thought about leaving hooked because the pricing is still worthwhile (helps with retention).

Gamepass as it used to be from 2020-2023 was definitely not profitable IMHO, but they could be on to something with the current way it's been reconfigured.

The thing is that as hardcore Xbox fans inevitably switch to PS5, PS5 Pro and PC, if they switch to PC they can drop in and out of gamepass at will, for $12 a month, versus the $20 a month it would cost on Xbox console with their additional tier machinations.

 

[Lord Malachite]

You're missing that revenue is not profit. Revenue is how much money a company takes in. It's a gross figure, not accounting for the expenses. Even many small business do a million or more in revenue every year, yet their profit is significantly under 100K.

You're also missing that Xbox still identifies itself as a first party platform holder. As far as that goes, they are completely in the toilet. Xbox hardware is languishing unsold and Xbox games are not selling on Xbox. The revenue on games is from PC and PlayStation and Switch.

There is a viable future for Xbox as a third party publisher. As a first party platform holder, they become increasingly less and less relevant with each passing month.