All hail the Rundle. Recurring revenue bundle
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Game Pass is not profitable yet - Tom Warren
- Thread starter Rolla
- Start date
All hail the Rundle. Recurring revenue bundle
Hezekiah
Banned
Kerotan
Member
I must have imagined the last of us and uncharted Multiplayer. I just also have imagined the ghost of tsushima Multiplayer that is better then anything MS currently offer. Gran turismo sport Multiplayer isn't real and the upcoming factions by naught dog is a hallucination.
Sony have no multiplayer games and no live service games, but you think they'd have 50-60m subscribers right now when the wait between their single player exclusives is over 8 months (Ratchet in June to Horizon in February 2022)?
But yes those little old single player games like spiderman and god of war that sells about the same number of units as GP has subs. Any of Sonys big first party single player games is more profitable then MS's entire GP venture. Let that sink in and wonder why Sony hasn't followed suit.
Banjo64
cumsessed
Magnific0giganticus
Banned
Also, it seems Deathloop doesn't count, neither does Kena, Nonody bought Guilty Gear Strive apparently. And it seems all the previous AAA games evaporate once a new one releases and people don't buy them and they stop making money, because we all know every single PS owner (old or new owner) only buy the latest game....
Magnific0giganticus
Banned
Thanks for saving the effort of looking up a gif to laugh at your post.
MiguelItUp
Member
Hey Tom, sure, whatever.
I honestly think it all depends on the developer that's involved in the long run. Regardless of what is said, it's a great service, and great option for those interested.
Is it a by all end all? By no means no, but it's a cool service to have for sure, especially for those instances where a number of titles appear on it that you were curious about. I'd imagine it'll just get better in time.
I honestly think it all depends on the developer that's involved in the long run. Regardless of what is said, it's a great service, and great option for those interested.
Is it a by all end all? By no means no, but it's a cool service to have for sure, especially for those instances where a number of titles appear on it that you were curious about. I'd imagine it'll just get better in time.
zaanan
Banned
Sorry if this has been discussed already, but it's a long-ass thread 
How many subs does this service need to be profitable? $1 trials aside, the plans are currently $10 or $15 per month. Using the $10 plan as a baseline, that's $120 per year per sub. I heard someone mention 50k, but that would only be $6 million per year, which seems way too low. Can someone estimate a realistic number that would generally be enough to account for the cost of running the service, as well as the average cost per year for making games to run on it, plus paying publishers for their games, etc?
How many subs does this service need to be profitable? $1 trials aside, the plans are currently $10 or $15 per month. Using the $10 plan as a baseline, that's $120 per year per sub. I heard someone mention 50k, but that would only be $6 million per year, which seems way too low. Can someone estimate a realistic number that would generally be enough to account for the cost of running the service, as well as the average cost per year for making games to run on it, plus paying publishers for their games, etc?
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Wizz-Art
Member
Sorry if this has been discussed already, but it's a long-ass thread
How many subs does this service need to be profitable? $1 trials aside, the plans are currently $10 or $15 per month. Using the $10 plan as a baseline, that's $120 per year per sub. I heard someone mention 50k, but that would only be $6 million per year, which seems way too low. Can someone estimate a realistic number that would generally be enough to account for the cost of running the service, as well as the average cost per year for making games to run on it, plus paying publishers for their games, etc?
The infrastructure it runs on is wholy owned by Microsoft themselves, it's just a small part of the Azure network when you take it in perspective. Any money Xbox is paying for it is just a symbolic amount because the money stays in the company.
People are starring themselves blind on the total amount of just the sub, but it generates money besides that. People are buying more games because of Game Pass, DLC and other purchases are also a thing.
And the big fault you're making is that you take 50K subs when the last reported number is talking about 20.000.000+.
Kerotan
Member
Isn't it crazy how MS offer a sub service with every first party title and a ton of 3rd party titles yet the service sells on par with just 1 top selling ps4 exclusive. If Sony or Nintendo ever hit that low they'd be out of business. Luckily for xbox MS has more money then they know what to do with it.
ReBurn
Gold Member
Kokoloko85
Member
Yeah thats what Jaffe says too.
Yeah its perfect for games like Psychonauts as long as they carry on getting the love
Negotiator101
Member
Armchair analyst's talking out of where the sun don't shine 
Nutella (Nadella) has already promised his full backing to the gaming division, 7 Billion purchase already and more to come. If that doesn't tell you Microsoft are sticking with GP then I don't know what does 
GP is not just Xbox you see, it's potentially every device on the market. That's where the big numbers will come from. The PS fanboys only see the small picture of the console under the TV, its not about that anymore boys/girls, tech has moved on.
Nutella (Nadella) has already promised his full backing to the gaming division, 7 Billion purchase already and more to come. If that doesn't tell you Microsoft are sticking with GP then I don't know what does GP is not just Xbox you see, it's potentially every device on the market. That's where the big numbers will come from. The PS fanboys only see the small picture of the console under the TV, its not about that anymore boys/girls, tech has moved on.
zaanan
Banned
Sorry, maybe you didn't understand the question. It is: "How many subs are realistically needed for the Gamepass service to be profitable?" Just looking for estimates/answers to that question, thanks.
PS: if you think that people, equipment, maintenance, rent, utilities, etc are just "symbolic amounts that stay inside the company," then not only does it make sense for you to have replied with a non-answer, it makes any number you may give immediately suspect.
Kokoloko85
Member
True forgot about all of those but they did build Halo, Fable, Gears and Forza, State of Decay etc. They've all been MS exclusives
But yeah MS is the one out of the three that buys IP and now publishers. Totally forgot about Rare too.
You don't see Playstation and Nintendo doing this and I think this means oragnic growth unlike what MS does
Magnific0giganticus
Banned
Sorry if this has been discussed already, but it's a long-ass thread
How many subs does this service need to be profitable? $1 trials aside, the plans are currently $10 or $15 per month. Using the $10 plan as a baseline, that's $120 per year per sub. I heard someone mention 50k, but that would only be $6 million per year, which seems way too low. Can someone estimate a realistic number that would generally be enough to account for the cost of running the service, as well as the average cost per year for making games to run on it, plus paying publishers for their games,
Well, we could take Netflix as example.
Netflix's Content Spending Is Sustainable, but Not Particularly Profitable Yet | The Motley Fool
"The early bird may catch the worm, but the second mouse gets the cheese."
www.fool.com
Netflix has 200 million active accounts. Their prices range from $8-$14 a month. Netflix is everywhere, they don't depend on mostly proprietary hardware to distribute its service and (particularly capable) PCs.
Netflix spends lot of money financing and producing TV shows and movies to keep its service competitve. Lots of more content than what's on GP at any given times (200+ titles). However, the cost of producing or partially financing a TV series, movie, documentary comes in all kinds of price ranges. An episode of Stranger Things comes around $12 million, and The Crown is the most expensive at $13. I don't know how many of those top tier shows they produce but they are certainly among the highest rated and bring in/keep lots of subscribers.
On the Game Pass side, pretty much every "AAA" game has a budget over $100 million, but that's over the spam of 3-4 years. Some other games have lower budgets and shorter development time. Xbox also makes deals with third party publishers to add their games to the service for a limited time. Some of those deals are more costly than others, especially if they release day and date on the service. Xbox now also have over 20 Studios which are on a payroll, but aside from the content they may be producing there are lots of expenses that add up on top of the development process. And then they also have an alliance with EA play, for which they must certainly pay some good money. And last but not least, the cost of maintaining and expanding their network capabilities, for the regular service, Xcloud, etc.
I'd say Xbox Game Pass needs no less than 100 million *real* subs (no $1-$5 bullshit) to be profitable on its own (on top of revenue and profit made from GaaS and DLC, etc). But as Xbox incurs in bigger expenses for bigger games the larger budgets offset the number of subs, so a larger base of subscribers is a must to achieve profitability.
Banjo64
cumsessed
I don't know why you are grouping Sony's first party sales with Nintendo's.
Nintendo completely dwarf Sony for first party sales.
Sony with one PS4 title estimated to be at 20m sales and only four over 10m.
Nintendo have two at over 30m, four at over 20m and five at over 10m (probably 7 now including Luigi's Mansion and Mario All Stars).
The Last of Us 2 hasn't even sold more than Super Mario Maker 2.
Not that any of this matters though, as having 20-30m monthly paying subscribers is much more preferable to having one 20m selling game a generation.
yurinka
Member
Let's see:
-Over 10B invested acquiring studios and IPs
-All their published games included in GamePass since day one including AAA games, which means less game sales
-Many millions more spent on getting 3rd party AAA and indie games for Gamepass day one
-Millions of GamePass subscribers using $1 deals or 3 months trials in promotions with Discord or other places
-Until now they got 20-30M subs, many of them not paying the full fee
So it obviously isn't profitable. To be profitable it should grow A LOT, and even more to recoup. It should be like 20 or 30 times bigger.
But obviously they'll need time to do it, when MS decided to make these huge ass investments were thinking in the long term. So it's normal to don't be profitable now.
Sony has over 50M subscribers (46.3M PS Plus subs as of June + 3.2M PS Now subs as of March). In addition to this 20M game they also have way more million seller and GOTY winners or candidate exclusives than Nintendo or Xbox. They also sell more hardware and way more games for their consoles (over 1600 million for PS4) than Nintendo or Xbox, mostly because multiplatform games sell more / make way more money on PS than in the other consoles.
This all results on the PlayStation division generating way more money than the MS and Nintendo ones. Which is more preferable than the specific sales of a few games or the amounts of users of a single service. Btw regarding users PSN has 104M MAU as of June.
And the comparision between TLOU2 and Mario Maker 2 doesn't make a lot of sense because we don't have full data to compare and one game was released about around a year ago, while the other was released around 2 years ago. Mario Maker 2 as of the end of March 2021 had sold 7.15M, this is in almost 2 years. Regarding TLOU2, not sure if we have more recent numbers, but it sold 4M in the first 3 days, so it's fair to assume that TLOU2 achieved these 7.15M way faster than Mario Maker 2.
Regarding the sales units of the Sony exclusives we don't know them because they rarely mention them.
-Over 10B invested acquiring studios and IPs
-All their published games included in GamePass since day one including AAA games, which means less game sales
-Many millions more spent on getting 3rd party AAA and indie games for Gamepass day one
-Millions of GamePass subscribers using $1 deals or 3 months trials in promotions with Discord or other places
-Until now they got 20-30M subs, many of them not paying the full fee
So it obviously isn't profitable. To be profitable it should grow A LOT, and even more to recoup. It should be like 20 or 30 times bigger.
But obviously they'll need time to do it, when MS decided to make these huge ass investments were thinking in the long term. So it's normal to don't be profitable now.
Sony has over 50M subscribers (46.3M PS Plus subs as of June + 3.2M PS Now subs as of March). In addition to this 20M game they also have way more million seller and GOTY winners or candidate exclusives than Nintendo or Xbox. They also sell more hardware and way more games for their consoles (over 1600 million for PS4) than Nintendo or Xbox, mostly because multiplatform games sell more / make way more money on PS than in the other consoles.
This all results on the PlayStation division generating way more money than the MS and Nintendo ones. Which is more preferable than the specific sales of a few games or the amounts of users of a single service. Btw regarding users PSN has 104M MAU as of June.
And the comparision between TLOU2 and Mario Maker 2 doesn't make a lot of sense because we don't have full data to compare and one game was released about around a year ago, while the other was released around 2 years ago. Mario Maker 2 as of the end of March 2021 had sold 7.15M, this is in almost 2 years. Regarding TLOU2, not sure if we have more recent numbers, but it sold 4M in the first 3 days, so it's fair to assume that TLOU2 achieved these 7.15M way faster than Mario Maker 2.
Regarding the sales units of the Sony exclusives we don't know them because they rarely mention them.
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Papacheeks
Banned
Like they are thinking 5-10 years in advance from my understanding.
Wizz-Art
Member
6.000.000 a year @ 50K subscribers would've been awful, but Game Pass has 20 million+ subscribers which means @ 10 a piece/month makes 2.400.000.000 a year so that's a whole different thing then the 6.000.000 a year you kept asking yourself.
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Magnific0giganticus
Banned
That really is an odd comparison. It doesn't make any sense either. If having 20-30 million subs doesn't return any profit at all, is not "more preferable" than anything. No profit one way and no profit another way is still no profit. If a 20 million dollar game alone (the apparently lopsided comparison you chose to make) during whole gen makes profit, it doesn't matter a service has 100 million subs and makes zero profit. It still is zero profit and a failure.
zaanan
Banned
You're getting warmer, but no- Halo, Fable, and Gears definitely were developed outside Microsoft and purchased afterwards. Think you're right about Forza tho, but not sure about SoD.
zaanan
Banned
I am asking how many would be needed, but you keep going on about this 50k thing. Didn't I say it sounded way too low when I posted it? I guess you are more interested in trolling than engaging in an honest discussion. Bye.
Magnific0giganticus
Banned
Game Pass has 18 million subscribers. Let MS come out and announce their own numbers.
Xbox Game Pass subscribers hit 18 million
Microsoft’s gaming subscription service is steadily growing.
www.theverge.com
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Wizz-Art
Member
Game Pass has 18 million subscribers. Let MS come out and announce their own numbers.
Xbox Game Pass subscribers hit 18 million
Microsoft’s gaming subscription service is steadily growing.
Aha, and numbers from january stay the same of course. Here is a report Xbox Game Pass Hits 23 Million Subscribers | Screen Rant so talking about 20 million+ is actually a quite conservative estimate.
Banjo64
cumsessed
So on the one hand we can only go by officially announced numbers however on the other hand you're completely happy to speculate about losses (of which Microsoft haven't confirmed any figures). Makes sense.Game Pass has 18 million subscribers. Let MS come out and announce their own numbers.
Xbox Game Pass subscribers hit 18 million
Microsoft’s gaming subscription service is steadily growing.
Wizz-Art
Member
You are the one who came with a wrong ass number to begin with and made the big mistake to ask yourself 6.000.000 feels wrong or something, but I simply corrected you and now you are crying that I'm the one that's trolling, seriously 50.000 subs you asked yourself.
Also when a company own services and another division inside the same company wants to use a tiny part of those services you really think they charge a premium for it?
Hezekiah
Banned
The last reported figure was 18m.
I swear people just pluck numbers out of thin air half the time
.
Magnific0giganticus
Banned
If Sony didn't report PS Plus Numbers regularly we'd be right to assume over 50 million subscribers. But the thing is, they report and that's not the case. In fact, their subs went down a few million. MS stays silent, why must I assume their numbers are up? When they report their own official numbers we'll know what they are with no "speculative estimates". If Sony reported sales numbers like MS reports some numbers here and there, we would think the PS4 has sold over 125 million units, but since they do report the numbers we know it hasn't. So conservative or whatever, 18 million is the official number.
Magnific0giganticus
Banned
Armchair analyst's talking out of where the sun don't shine
GP is not just Xbox you see, it's potentially every device on the market. That's where the big numbers will come from. The PS fanboys only see the small picture of the console under the TV, its not about that anymore boys/girls, tech has moved on.
What a dream, people playing hardcore games on the cloud on their phones. Where are all these people, I wonder? Millions and millions of them. In your dreams.
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Hezekiah
Banned
That's great and all, but the vast majority of subscribers continue to be on Xbox. Not PC, and certainly not on phones, tablets and smart TVs.Armchair analyst's talking out of where the sun don't shine
GP is not just Xbox you see, it's potentially every device on the market. That's where the big numbers will come from. The PS fanboys only see the small picture of the console under the TV, its not about that anymore boys/girls, tech has moved on.
But I guess this is the part where you tell me there will be a market shift, and soon I will be on the London underground and I'll see waves of people playing Halo Infinite via x-Cloud for £15+ a month. We shall see.
yurinka
Member
Yes, in fact I'd say 10 years or beyond than 5. I think that in 5 year they will be still reorganizing everything: from tweaking business model, to trying to find new growth strategies and tweaking the existing ones to adapting how their games are to maximize their business with gamepass (expect to see GaaS games where you only get a small portion with GP while many expansions or game modes are available as paid DLC of after some months or years and filled with MTX for cosmetics).
I see this happening in 20 years or so, once we have worldwide a 5G-like connection everywhere. And by everywhere I mean remote localitions in random remote villages of every tiny country. Which will take for a while since as of now even 4G coverage sucks, we'll need some different than the normal phone 4G/5G coverage stuff. And once streaming technology evolved enough, they grow their catalog enough and someone finds a proper business model appealing for both the platform holder, the players and the devs.
It will need many years, but I see it happening and going mainstream. Not only in phones but everywhere: tablets, consoles, tvs, computers and any device they may release with internet connection, a display and a controller/adaptor.
Yep, the 23M number is speculative. Sony reports PS Plus numbers regularly, in their most recent quarterly report they mentioned that as of the end of June PS Plus had 46.3M subs (up from 45M YoY, decrease QoQ could be due to going back to normal after the covid lockdown bubble, something seen in many companies and areas). They also reported in their most recent FY report that as the end of March PS Now had 3.2 subs, these are how they were at the end of March:
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SenjutsuSage
Banned
I see a mad dash to portray Game Pass as something for the poor or the cash strapped when I've always viewed it as the total opposite. I both buy games that I want that I can't get inside game pass while also subscribing to Game Pass to get an even bigger library of games and to guarantee that no matter what I never miss out on all the biggest first party releases.
Game Pass is gaming like it was back in the day when you just walked into a games store, saw the box art that most piqued your interest and you just picked it up. I get to try and play so many more games that I normally would never even touch while not scraping the bottom of the barrel because the heavy hitters are in game pass too.
Game Pass is gaming like it was back in the day when you just walked into a games store, saw the box art that most piqued your interest and you just picked it up. I get to try and play so many more games that I normally would never even touch while not scraping the bottom of the barrel because the heavy hitters are in game pass too.
Hezekiah
Banned
Actually Spiderman and God of War are estimated at around 20m.
And Uncharted 4 was last heard to be at 16m.
But 20m - 30m subscribers is absolutely not preferable when you have established analysts saying you need more than 50m to be sustainable. Especially when many said subscribers are paying a good deal less than full price for the subscription.
SF Kosmo
Banned
It's the nature of writing a narrative that challenges player perceptions that not everyone is going to like it.
Games are still kind of regarded as a "broad" art form, where everything is just supposed to be "fun" but that's changing a bit.
MrHydra933BR
Member
Only ponies care about the profitability of this service. Microsoft has so much money, it's like cents to them.
Magnific0giganticus
Banned
Speculate all you want. I showed you subs go up and come down. It happens to Plus, it happens to Netflix and every other sub service. So yeah, it makes sense to wait for official numbers on that regard. And hey there must be like 70 million Xbox One sold total, last I heard they hadn't reached 50 million (like 2 years ago) so sure their numbers didn't stay the same and of course can't go down! Lol 70 million Xbones, very conservative estimate. Let's put like 70+ million, looks nicer.
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Hezekiah
Banned
Windows Central
. Surprised Microsoft haven't been publicising this 5m increase within three months.
twilo99
Member
Those are over 70mg for sure ..
Magnific0giganticus
Banned
I don't see it happening before games evolve to some new form and technology allows for a new wave of control not dependable on the traditional console controller. In fact, traditional controllers must be replaced entirely before the whole play anywhere *hardcore games* becomes a very popular thing. Either that or Gamers games disappear and all that's left is mobile kind of shit games.
twilo99
Member
Of course they care.. otherwise they won't have all these monies you speak of.
They are probably giving it a "gratis" period for about another 3-4 years and if it doesn't at least break even, they will shut it down.
What's a ponie?
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Derktron
Banned
Interfectum
Member
The question is do hardcore gamers care about playing their games anywhere but their main entertainment center? Or... is big tech trying to solve a problem that doesn't exist? How are these game streaming services doing now in terms of usage and users? If xcloud isn't pulling in huge numbers now, what would change that? More streaming sticks and apps on TVs?Armchair analyst's talking out of where the sun don't shine
GP is not just Xbox you see, it's potentially every device on the market. That's where the big numbers will come from. The PS fanboys only see the small picture of the console under the TV, its not about that anymore boys/girls, tech has moved on.
Nutella will give his 'full backing' to the gaming division during its current user acquisition phase. If Game Pass doesn't bring the users to Azure that Phil has been promising, things can change really fast. Remember they are a trillion dollar company that can both throw tons of cash at a project AND shut it down just as fast.
yurinka
Member
Not sure if you are aware, but mobile gaming already has way more players and generates way more revenue than console gaming or PC gaming.
In addition to this, Sony/MS/Nintendo could release Wiimote-like controllers attachable to the side of any phone or tablet. And there are prototypes where smartphone displays morph their shape to have physical screen buttons in real time, they may be common in a few years. And way after that we'll have stuff like Neuralink where you'll be able to control games with your brain without needing any controller and very likely with a better input lag.
Hardcore are a small subset of the worldwide players. And console players an even smaller subset. The majority of players and gaming revenue is in mobile gaming, which means people prefer to play anywhere. This is why companies like MS, Sony or Nintendo invest on mobile gaming with mobile games or with streaming service: they want to get part of that mobile gaming revenue.
xCloud isn't pulling in because it isn't available in most countries, it performs worse than their competitors, which also means noticiably worse than playing locally, it's too expensive for many people and has a limited catalog of games. We're still in the early days of cloud gaming, like the other companies they'll need many years to keep polishing all these areas. And they knowing, but have to start with something to get a good postioning before Sony scales it up too fast and dominate it in the same way they dominate consoles.
Azure and similar cloud platforms from the competition host websites and apps with a way bigger userbase than Gamepass or Xcloud. They did put them there to reduce the costs of having it on an internal service, not because they want to have there more users. What they want is more revenue and profits, users are secondary.
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Hezekiah
Banned
Back in the day I remember SNES games going for £60 in the 90s.
Interfectum
Member
And those players have no need or desire to stream hardcore games to their devices. They have already chosen to play F2P mobile games. That's why they have a billion gamers on mobile. The games are stupid simple for the masses. Games like Last of Us, Gears of War, Fable, etc have not or will ever pull mobile gaming numbers even if they were perfectly streamed.
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Clear
CliffyB's Cock Holster
If the demand was really that great, why haven't these untapped millions of new users never bought an Xbox? I mean, its not like the hardware is prohibitively expensive!
I mean its also not like gaming isn't already available on all devices under the sun! I mean take smartphones for example, is GamePass supposed to depose games that are built expressly for mobile play? Bodging some touch-screen controls onto a console game isn't going to result in a better user experience than something designed with those constraints in mind? Not to mention all the complications that streaming adds...
Sorry, but I get the strong sense that when this idea was floated everyone in the room was so high on the dream of massive success that noone was willing to be "that guy" and point out that not all games are the same. Something like Angry Birds succeeded on mobile when it would have been forgotten in the blink-of-an-eye on PC or console.
And no, its not simply because mobile gamers had lower expectations or were willing to settle for less, its because it was a perfect fit for the sort of usage case typical of most smartphone owners.
This idea that GamePass (or any access-anywhere gaming service) is going to become an all-consuming monster that devours everything else is a fantasy. Its not going to work like that because games, distinct from movies and TV, by their interactive nature have far more variable demands on the users time and attention.
Passivity and activity are wholly different domains. And with games the active part is not entirely natural and intuitive, its something learned. Both directly through the experience of playing the thing, and indirectly via exposure over time to the standards and conventions of gaming as a culture.
The point being you need to know how to play in order to join any game, and that requires some effort and often an appropriate venue. With a passive entertainment this process is irrelevant, you can sit there and just absorb it.
The bottom line being if you want to game, you're likely to already have sufficient interest to buy a PC or a console. If you don't especially, then what is required is something that offers the least friction possible to access - and that, is a very specific sort of game. You can't just throw established forms and styles in and expect them to have the same appeal.
Derktron
Banned
Only morons care about these things, it fuels their neverending bullshit and it's not just Sony fanboys it goes for all of them. My argument is that if you do not have stocks with them and are not a direct investor then you should not give a fuck about it. I just don't understand why we talk about this. That is just my opinion now since this thread popped up again for some reason, I will say this if Microsoft thinks it's not profitable then you would automatically see many changes within Xbox due to this, also you would not see major games that sometimes come out for Xbox Day 1 there are many factors to prover otherwise, it's just that fanboys like to talk shit about Xbox due to the 2013 disaster. Xbox is free real estate for them it's all they ever fucking think about.
Interfectum
Member
This is a gaming forum... if you don't like people discussing the console gaming business then ignore the threads. The fuck else you wanna talk about on here?
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