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[ProtoByte]

The fact that the analyst and financial class of this industry needed to be told this is insane to think about.

Who woulda thunk it? Flipping the economics of the games business on its head whilst spending in the high 10 figures to take on more teams to manage than any other publisher save Embracer at a company that couldn't hack it at 5 wasn't going to work out?? No.

For more than 6 years scores of idiots believed Spencer that gamepass somehow increased the sales of games. I mean, really, think about that.

 

[GHG]

Not really. This proves it is literally the best deal in gaming by far. Problem is not enough people signed up for it. And if they didn't want to sign up for it, they could just buy the game, since it's entirely optional. People didn't want to do that either, or buy the console. That's the real issue.

Back to blaming consumers again.

 

[TheTony316]

Gamepass cannibalizes sales???

 

[midnightAI]

.... And so did most people (except those at Microsoft it seems)

 

[Last Hearth]

Correct assessment minus the part about Microsoft needing to dig themselves out of 70B dollar hole.

It doesn't work like that. ABK is an asset not an expenditure.

Is more attention on the business to be profitable? Absolutely, but there is no 70B dollar hole.

In today’s interest rates of 5%, Microsoft could have put the $70 Billion in treasury bills and made around $3.5 billion in a year, so that’s the hole, unless AB is generating that amount in net profits a year, they are in a hole. Not to mention the US markets overall return on capital is actually much higher than 5%. More like mid teens. That means you have to return $10 Billion a year in profits to climb out of that hole.

 

[Chukhopops]

Because Xbox value was lower. Now with 70b, their value is higher and would demand more revenue.
Keep in mind that their release schedule was shit, and all of their games revenue combined was going to be less than COD yearly.

I don’t disagree with the fact that the ABK acquisition increased the scrutiny and expectations put on the Xbox division. In fact I agree it’s the main reason why they are so fucked right now.

I disagree with the idea that, 3 or 4 years ago, Xbox was a « rounding error » in MS revenue and the revenue of the division « wouldn’t have mattered » when it was around 10% of MS total.

 

[Punished Miku]

I would rather buy a copy of Hi-Fi Rush and Ghostwire Tokyo if it meant a sequel rather than subbing to Gamepass and have the IP's shelved and the studios closed.

People have always been free to buy the games. People wouldn't do that, or buy the console, or the sub. That's really the issue. It's not sub vs sales. It's pick either, and people passed on all of it.

 

[Lucifers Beard]

Yeah, this was always going to be the case and exactly why Game Pass and 'new games day one' doesn't work, at least in terms of AAA exclusives. There is absolutely no fucking way they are going to put CoD on Game Pass day one, Microsoft will blow a fuse when they see how much money they lose to it.

Whatever happens, Phil and Xbox are in seriously hot water.

 

[Red5]

People have always been free to buy the games. People wouldn't do that, or buy the console, or the sub. That's really the issue. It's not sub vs sales. It's pick either, and people passed on all of it.

And I don't blame people for wanting to save their money, I do blame Spencer, turning MS into the Netflix of games was his vision and he failed to deliver on it.

 

[TheThreadsThatBindUs]

Opinion - Game Pass is hurting day one software sales on Xbox could this push publishers & devs away from Xbox Scarlett or will they wait it out?

Right now Game Pass is hurting software sales on Xbox but if Microsoft is successful in creating the Netflix of gaming it could benefit games in the post physical media era when people are not willing to pay $60 for a download.

www.neogaf.com

Our very own self-styled prophet. Thy mouth speakest what thine eye hath seen.

 

[SkylineRKR]

Gamepass just isn't viable. First of all, Xbox itself isn't moving many units and while GP is available elsewhere too, the bulk associates it with Xbox and the lionshare of subs should be there.

Secondly, this would only work if everything is available on it. A lot of hotly anticipated software isn't on GP day one, yet its available on the console itself. The more games come out from these channels, the more it diminishes the value of GP. The service worked during the first, slow, years of the new generation impacted by the pandemic. But right now good luck trying to sell GP to households that already hold a dozen of other subs, not to mention having to buy games on top of it.

 

[MikeM]

Everyone and their mom know this was going to happen at some point. And everyone knows that GP kills sales of software. Whoever thought otherwise needs to be axed from Xbox.

 

[Gambit2483]

Lord Jesus, we've been saying for years that the GP model didn't make any sense and wasn't sustainable.

I was asking this very question 2 years ago

Is a Subscription Service Model Truly Sustainable in this Industry?

As I think more and more about Gamepass I find myself questioning if this system is truly sustainable moving forward, making enough money to continue such a service... As gaming technology advances, It is likely that game development costs will also increase, meaning the more subscriptions they...

www.neogaf.com

 

[Alebrije]

Gamepass is that 500 kg bomb that You throw to a Bilis Bug on Helldivers2 but after the great explotion You see the Bilis keep walking. So now You are left with your tiny weapon and the only chance You have to keep surviving is buying new bombs ( Bethesda, AB)...

 

[Puscifer]

I can offer them the perspective of a single gamer.

Back when you still needed a subscription to play PUBG, I would sub to Gamepass regularly. As soon as it went 100% Free to Play, I never subscribed to Gamepass again.

Maybe yank the single player games off of Gamepass and keep the multiplayer ones there. People get addicted to multiplayer and will pay for it for years.

They didn't launch those GAAS from single player studios for nothing. They're trying to keep people attached to Gamepass one way or another, even stuff like State of Decay is going full blown GAAS for the third title.

I haven't played my PS5 since Ragnarok, used it for 40 minutes for the stellar blade demo. But here's the thing, they got my money for Ragnarok and if it was on a sub it would've been a trial or "free" with my sub. The idea that I'm going to buy more games is laughable, I just won't. A movie or music? I could see that, you might not always have access to it on that service, you could own it forever and watch when you want or get that vinyl and take it for a spin.

Games? Collector's aren't a majority, people buy digital or trade in physical or resell. How many people truly even finish games let alone play then multiple times? I dropped Star field pretty quick and I assume lots of other people did as well, especially over Gamepass

 

[Solidus_T]

Phil spencer this gen

Yeah he's digging that grave for the studios they bought. He got awards and bonuses.

 

[Tiago Rodrigues]

Also, one thing i forgot to add to my previous post...i had a feeling than Horizon Forbidden West was a test subject for PS Plus. The fact it was the only AAA game added just one year after release, you can tell it got its legs cut by a large amount.

You always see games like TLOU2, Gran Turismo 7, GOW Ragnarok on the charts and coming back, but never Forbidden West. Why is that? Only one of these is on PS Plus.

It's pretty clear Sony realized with that one game they shouldn't pursue this. Imagine releasing day one AAA titles like that.

COD is the ONE franchise Xbox can't mess up. If somehow they manage to fuck that up, then i really don't see what they can do next. I have a feeling the game will not go to Gamepass day one tbh.

 

[Skifi28]

Like the guy clearly said and is being ignored, gamepass is fine if it meets its critical mass.
Not selling enough consoles makes it a lot harder. Like any product or service that fails to meet its goal, there is going to be problems.
Gamepass model isn't flawed, the lack of great games to drive subs is.

Phil's solution to hardware not selling is a software service that requires hardware to sell in order to be successful. Sounds brilliant If I'm honest.

 

[peish]

Lord Phil is like the robin hood of gaming, robbing from MS warchest and giving us Gamepass.
We continue to rob using MS Rewards. hehe

There is your difference between Kinnect Matrick and Gamepass Phil

 

[semiconscious]

But, all that wouldn't have mattered even 3 or 4 years ago because back then Xbox was basically a rounding error on Microsoft's books. The division made some money, but more importantly, it didn't cost that much and other parts of the business easily covered the gap. Then Xbox went on a buying spree and spent a lot of money on Bethesda, but orders of magnitude more on Activision. Now, the Eye of Sauron has turned, and Xbox is expected to start making that $70B back, or at least cut expenses to the bone (and then some) while they try.

everything you wanted to know about the current state of xbox but were afraid to ask...

 

[Punished Miku]

Lord Phil is like the robin hood of gaming, robbing from MS warchest and giving us Gamepass.
We continue to rob using MS Rewards. hehe

There is your difference between Kinnect Matrick and Gamepass Phil

Like Robin Hood but then the majority of the peasants that he gave to snubbed their nose at him for "devaluing food" and turned him in to the authorities.

 

[ulantan]

He tried to tell you

 

[NeroDaGod]

The main reason they even made these acquisitions was to block PlayStation and their gamers from having access to these IP’s. It backfired tremendously and hilariously and I could not be any happier about it. Only serves them and their fans who supported their anti-competitive initiatives right.

 

[Red5]

Phil's solution to hardware not selling is a software service that requires hardware to sell in order to be successful. Sounds brilliant If I'm honest.

His solution is to use other companies hardware as a vehicle for Gamepass, his primary goal right now is to get GP on PS, Appstore and Switch, obviously Sony, and Nintendo won't accept since it would eat through their software royalties, don't know how well Gamepass or Xcloud work on Appstore tho.

 

[feynoob]

I don’t disagree with the fact that the ABK acquisition increased the scrutiny and expectations put on the Xbox division. In fact I agree it’s the main reason why they are so fucked right now.

I disagree with the idea that, 3 or 4 years ago, Xbox was a « rounding error » in MS revenue and the revenue of the division « wouldn’t have mattered » when it was around 10% of MS total.

Xbox without abk is nothing to MS, because gamepass at that time was bringing money. Which offset some of their lower sales.

Bethesda 7.5b put heavy legs on gamepass. Which meant that game pass had to perform and gain more subs.

 

[Topher]

Lord Phil is like the robin hood of gaming, robbing from MS warchest and giving us Gamepass.
We continue to rob using MS Rewards. hehe

There is your difference between Kinnect Matrick and Gamepass Phil

Using "Kinnect Matrick" to boost "Gamepass Phil" is one hell of a weird flex.

 

[feynoob]

You're not getting free games on GP. You're paying a Blockbuster rental fee.

Better than paying 60$ for their games.

 

[Mibu no ookami]

In today’s interest rates of 5%, Microsoft could have put the $70 Billion in treasury bills and made around $3.5 billion in a year, so that’s the hole, unless AB is generating that amount in net profits a year, they are in a hole. Not to mention the US markets overall return on capital is actually much higher than 5%. More like mid teens. That means you have to return $10 Billion a year in profits to climb out of that hole.

When Microsoft sought to buy ABK, they had massive plans in mind.

They wanted to leverage games as part of a strategy to build an app store on iOS and Android that would almost certainly include their office suite of tools and eventually 3rd party applications.

If successful, this would have generated 10s of billions of dollars in revenue annually...

All they would need to do is pull their apps from the Apple App Store and the iOS app store in a post-regulatory environment and mandate that they be downloaded from their own mobile store.

All ABK games including Candy Crush
Linkedin
Microsoft Office Suite
Microsoft Teams

Offer 3rd parties more favorable pricing to show up in their app store, especially as exclusives.

It would have been their opportunity to reclaim Windows Mobile without even owning the OS.

 

[Clear]

Its pretty simple; they bet on continued explosive growth on Game Pass and it failed to materialize.

The only part that confuses me is their belief that this scenario was ever likely to materialize. As I've said in the past, best I can figure as to their thinking is that they viewed gaming as a singular expansive ocean of potential subscribers, when in my opinion its more like a huge archipelago with limited travel between major landmasses.

In simple terms, I've never believed there is a singular universal offer that's going to appeal more to gamers than the platform/market-specific leading storefronts do already. They aren't going to draw people away from their existing collections, be they on Steam, PSN or whatever.

And quite honestly I'm really doubtful that the whole "best-deal-in-gaming" angle was ever going to pay off. To my mind the people who want to try everything are those who were buying lots of games before, and for the rest of the audience it just accelerated a feeling of jadedness and low interest outside of the few titles that they really care about -and doubtless would have bought anyway.

 

[Mortisfacio]

Guy has pronouns in his name. Of course he's a complainer.

 

[Punished Miku]

Its pretty simple; they bet on continued explosive growth on Game Pass and it failed to materialize.

The only part that confuses me is their belief that this scenario was ever likely to materialize. As I've said in the past, best I can figure as to their thinking is that they viewed gaming as a singular expansive ocean of potential subscribers, when in my opinion its more like a huge archipelago with limited travel between major landmasses.

In simple terms, I've never believed there is a singular universal offer that's going to appeal more to gamers than the platform/market-specific leading storefronts do already. They aren't going to draw people away from their existing collections, be they on Steam, PSN or whatever.

And quite honestly I'm really doubtful that the whole "best-deal-in-gaming" angle was ever going to pay off. To my mind the people who want to try everything are those who were buying lots of games before, and for the rest of the audience it just accelerated a feeling of jadedness and low interest outside of the few titles that they really care about -and doubtless would have bought anyway.

Blue ocean was definitely real. Nintendo was trying to catch it with the Wii and DS and just barely bumped into it. Then smart phones blew it wide open. the prediction was correct, but Nintendo couldn't grab it. That mobile gamer didn't even exist until 2007. That was all new customers.

 

[Topher]

Guy has pronouns in his name. Of course he's a complainer.

 

[Mortisfacio]

Knew I didn't like this guy.

 

[mejin]

Where are those shithead to say "Link?", "prove it" or "I wanna see the receipts"?

 

[damidu]

lol nothing new that anyone with two functioning brain cells couldnt see years ago.

 

[majorgamer10]

I'm gonna need more prescription drugs the way things in gaming are going...

 

[ChorizoPicozo]

didn't read but I bet is no bueno

 

[VideoGameEnjoyer]

Also, one thing i forgot to add to my previous post...i had a feeling than Horizon Forbidden West was a test subject for PS Plus. The fact it was the only AAA game added just one year after release, you can tell it got its legs cut by a large amount.

You always see games like TLOU2, Gran Turismo 7, GOW Ragnarok on the charts and coming back, but never Forbidden West. Why is that? Only one of these is on PS Plus.

It's pretty clear Sony realized with that one game they shouldn't pursue this. Imagine releasing day one AAA titles like that.

COD is the ONE franchise Xbox can't mess up. If somehow they manage to fuck that up, then i really don't see what they can do next. I have a feeling the game will not go to Gamepass day one tbh.

It was fascinating to see them happily cannibalize their own games for over a decade seemingly without really considering the damage it was doing.

I remember when Ragnarok was launching and how that was a level of game Xbox simply did not/could not make anymore. And could NEVER launch game one on a subscription service. Why would Xbox ever make such a big, expensive, polished game, that just gets chucked onto the same service as everything else? How do games stand out? Especially when quality and polish is such a low priority.

We have to remember that all of this disastrous news is still coming with Xbox being treated with kid gloves. If Xbox just had a single exclusive game even up to the level of Ghost of Tsushima or Horizon it would be hailed as the golden goose of Xbox and the brand savior. That is not hyperbole, how fucking desperate are they for a well made, big single player game? The bar is not high, and they just continue to sink it lower. Starfield was the chance to show that these massive games could be Gamepass Day one and still feel like huge exclusive $70 games that other studios make. And nope, Starfield was rank with that Gamepass stink.

 

[Topher]

I'm gonna need more prescription drugs the way things in gaming are going...

Prepare yourself, GAF

 

[Mibu no ookami]

lol nothing new that anyone with two functioning brain cells couldnt see years ago.

You would get accused of console warring by calling out a broken model, but even Microsoft (former) employees are saying it. We have e-mails from the FTC case of Microsoft employees reaching out to Phil Spencer with their concerns relating to GamePass.

Many people even PS fanboys clamored for Sony and Jim Ryan to copy GamePass because it was this seismic shift in gaming.

Jim Ryan cleverly revamped PS+ without impacting B2P sales.

So many people claim Jim Ryan was a disaster but he was probably the most successful leader in PlayStation history since Ken Kutaragi. With Helldivers 2 and his GaaS push that was reviled by many core-gamers, he has set Sony up for long term profitability.

Jim Ryan will never get his flowers, but he walked out knowing that he had won.

 

[Mibu no ookami]

Also, one thing i forgot to add to my previous post...i had a feeling than Horizon Forbidden West was a test subject for PS Plus. The fact it was the only AAA game added just one year after release, you can tell it got its legs cut by a large amount.

You always see games like TLOU2, Gran Turismo 7, GOW Ragnarok on the charts and coming back, but never Forbidden West. Why is that? Only one of these is on PS Plus.

It's pretty clear Sony realized with that one game they shouldn't pursue this. Imagine releasing day one AAA titles like that.

COD is the ONE franchise Xbox can't mess up. If somehow they manage to fuck that up, then i really don't see what they can do next. I have a feeling the game will not go to Gamepass day one tbh.

You're absolutely correct.

I got HFW for free on PS+ and I've never played it. I didn't love the first game, though I enjoyed a lot of the gameplay the story fell flat with me as did the main character.

But it was definitely a test and it failed. Sony has been extremely reluctant to put their own content on PS+ at least early and at least when it came to PS+ essential.

I don't think Forbidden West would have had great legs anyways, but this certainly didn't help. Of all the major franchises, I think Horizon is Sony's weakest. Which is also probably why they weren't afraid to test things with it.

 

[ToadMan]

People have always been free to buy the games. People wouldn't do that, or buy the console, or the sub. That's really the issue. It's not sub vs sales. It's pick either, and people passed on all of it.

Because GP made the value of games coming to it zero.

Why buy it when the option and possibility exists to subscribe in future and play a game "for free"?

 

[Saber]

Might be the biggest and dumbest captain obvious moment in all history.

Like, how the fuck they gonna recoup the cost of big titles if they launch on the same fucking day on a service? How many times that have being said?
It's a type of question nobody (both internally and externally) wants to answer and is probably teached to their customers to not even ask questions just sub their services and spread the word.

 

[damidu]

You would get accused of console warring by calling out a broken model, but even Microsoft (former) employees are saying it. We have e-mails from the FTC case of Microsoft employees reaching out to Phil Spencer with their concerns relating to GamePass.

Many people even PS fanboys clamored for Sony and Jim Ryan to copy GamePass because it was this seismic shift in gaming.

Jim Ryan cleverly revamped PS+ without impacting B2P sales.

So many people claim Jim Ryan was a disaster but he was probably the most successful leader in PlayStation history since Ken Kutaragi. With Helldivers 2 and his GaaS push that was reviled by many core-gamers, he has set Sony up for long term profitability.

Jim Ryan will never get his flowers, but he walked out knowing that he had won.

lol yeah the rats were getting so defensive against any criticism of this obviously bonkers model, you got the feeling they internally knew how stupid it is.
somehow its best deal for gamers, best deal for devs, best deal for microsoft all at once. nobody loses lol.
standard pyramid scheme bullshit.

 

[Punished Miku]

Because GP made the value of games coming to it zero.

Why buy it when the option and possibility exists to subscribe in future and play a game "for free".

I subbed for 3 years and buy tons of games. Honestly I still think this is a cop out narrative. Subbing is fine and they get reliable money from it. The issue is really that a lot of console owners had zero interest in Xbox on any level, subbing or buying. They could buy the games just fine if they feel strongly about it but they just wanted to stick with PS, period. It's not sub vs sale. It's one or the other, you choose. People rejected all of it.

A lot of the people on here that endlessly trash Xbox customers for being cheapskates are the same ones that brag about spending $1 to play Hellblade and then cancelling. Like, if you feel strongly about shortchanging devs, then sub for 3 months and play several games. No one is stopping anyone from spending to their comfort level. The cheapskate comments always feel like projection. I spend a ton on this hobby and have all the consoles.

 

[Dick Jones]

The best scam in gaming.

 

[BennyBlanco]

I wonder how much of a shitstorm it would cause if they just discontinued gamepass

 

[Ass of Can Whooping]

Knew I didn't like this guy.

Assuming gender based on pronouns makes you a bigot, fyi

 

[nush]

If you have been following what a massive failure Disney+ has been you'll see Microsoft doing the same thing.

You will never be Netflix because you just don't get it all you saw was market share and profits and came in like fucking Mandingo swinging your cash filled cock around thinking you'll just waltz up and eat everybodys lunch for them. Now the pair of them (Msft, Dis) can't walk it back and are stuck in the sinkhole of their own digging.

Here's how you turn Gamepass around. Back catalogue only, exclusive (timed?) demo of new releases. It really is that easy except you've shot your load with promising day one new games, very fucking loudly.

 

[Topher]

I wonder how much of a shitstorm it would cause if they just discontinued gamepass

Think that would be one massive shitstorm. I think it would have to be phased out over time........and after some pretty high ranking resignations.