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[jakinov]

You're still parroting this ... Netflix has never made a profit.

Just go look at free cash flow. COViD has bumped the books because they have been unable to produce content - without new content their subscriptions start to slide.

Netflix has definitely made a profit and have been for a long time. Free cash flow is not how profit is measured at least not using GAAP. Netflix made $1.7 billion in profit in just the last 4 months. The concerns of Netflix's cash flow is that they would have to keep borrowing indefinitely in order to keep up with the content that they want to procure/produce (which they said they don't need to do anymore). But throughout the whole time that they've been borrowing money the money earned minus expenses left them with billions in the bank every year. Which is why they are sitting on billions in cash. Netflix could have stopped spending and easily had positive cash flow, but they wanted to grow fast and hard because of the increase in competition and ambition so they just borrowed billions of dollars to do it faster.

I like to use the analogy of a real-estate company that buys a million dollar property every year. The rent for each property they do own can net them thousands of dollars in cash after mortgage payments, taxes, maintenance, etc. But just because they are spending a million dollars every year to buy a house using debt. Doesn't mean they aren't making a profit. That money they make after paying their expenses is the profit. They can stop borrowing money if they wanted to but they want to grow the profit. It's not a perfect analogy because things like the debt works differently, and buying houses isn't the same as buying content; however, in both cases both companies are left with assets, and reliable profits coming added to the bank.

 

[Kumomeme]

That's true though.

not really. in the end its all about budget and stuff. there those who think that these bussiness model would magically translate, affect and made development game goes innovative, bombastic nintendo level of creativity, breaking barrier etc something could never ever achieved if they use traditional model despite how money the budget or who made it is.



in the end game did end up on both model. steam, epic store, etc and gamepass.

 

[Men_in_Boxes]

not really. in the end its all about budget and stuff. there those who think that these bussiness model would magically translate, affect and made development game goes innovative, bombastic nintendo level of creativity, breaking barrier etc something could never ever achieved if they use traditional model despite how money the budget or who made it is.



in the end game did end up on both model. steam, epic store, etc and gamepass.

GamePass is new. It's effects will be felt over the next 5-10 years, not the last 2.

 

[Kumomeme]

GamePass is new. It's effects will be felt over the next 5-10 years, not the last 2.

i know that. we in growth period. it is makesense if they didnt have any profit yet. currently ms investing their money for future where everything should pay off. but here i talk about certain people claim that the bussiness model would turn game design output in a way, better than traditional model could never ever achieve.

 

[Zeroing]

GamePass is new. It's effects will be felt over the next 5-10 years, not the last 2.

Gamepass is not new, most are only hearing about it now because of the marking push and the high AAA games the service got recently..

Also publicity and making big tittles available there do cost money. And it's sending a wrong message to people. That big tittles will be there right away. It's not economical feasible in the long run. But depends on how faith MS has in the service and how much they are willing to support it.

 

[Men_in_Boxes]

Gamepass is not new, most are only hearing about it now because of the marking push and the high AAA games the service got recently..

Also publicity and making big tittles available there do cost money. And it's sending a wrong message to people. That big tittles will be there right away. It's not economical feasible in the long run. But depends on how faith MS has in the service and how much they are willing to support it.

Mid 2017. Just getting started.

 

[megreotsugua]

Gosh, Microsoft will never survive this!

Microsoft will survive. They have sold off Mixer, stopped Windows Mobile, sold Nokia, sold off business and stopped operation for those that don't give them profit. That's how they survive and keep the profit margin high for their investors.

 

[Schmick]

Do we fully understand exactly what it is users of Gamepass really want from it? Because i think a lot of people here at NeoGaf don't. Certainly i'm seeing assumptions that blockbusters are what is going to sell this service. When actually i don't think this is entirely true.

Only yesterday, the developers of Descenders have announced that since they released the game to Gamepass they have had 4 million people play the game either through GP for console, GP for PC and xCloud. As a result they have decided to continue offering the game on GP and this is despite the game still being available on Steam (which by the way is scoring overwhelmingly positive reviews there).

This is only cements my feelings towards a service like Gamepass that it is good for developers who decide to use it. I dont know why there are Gaffers who want to down play it. This argument that Gamepass will be a haven for mediocre games does not fly with me. Sure there will be some but it wouldn't be the majority of what makes up the GP library. Gamepass is an opportunity for developers to produce new fresh and original games because of the guaranteed income being on Gamepass will bring. Not to mention its an opportunity for gamers to try something new fresh and original. And this is what we want right!? Fresh and original games that are actually played. Of course we do.

I think blockbuster are important to GP but equally the smaller games and medium ones are to... because they are clearly drawing in the the gamers.

 

[Hezekiah]

I agree with these points. You can give me 1000 A and AA games each month for $1, but that has no value on me if I just want to play Ratchet and Clank or Returnal, or, god forbid, the latest COD that month. We all have limited time each day, I want to spend my very limited time with stuff I really want to play. Or the very best games out there. 99.9% of games aren't on Gamepass, so it's unlikely anything on there is these select titles I'm willing to waste my precious time on.

Precisely. For me and my friends the bottleneck is time, not money. I can afford any games I want, and I only want to play games that fully interest me. I don't want to play games 'because they're there'.

At the moment it's cheap so worth it to people who don't buy many games. But yeah, a price hike is coming, or the third-party catalogue will be significantly reduced.

 

[Dabaus]

What is $15 x 23 million? That's your budget monthly from just Gamepass, with zero deficit spending, and without counting any other revenue streams. The more the sub count goes up, the more money they get. Their sub count could easily double by the end of the gen if they manage some big exclusives.

Gamepass ultimate is 15 bucks a month. Im sure most of these subs are split between the dollar a month promotions or the regular 10 dollars a month.

 

[Nobody_Important]

It doesn't need to be profitable in order to do what Microsoft needs it to do.


The whole point of gamepass is to provide the user with such inescapable value that they either make the switch or even just make an upgrade in order to take full effect of the pass itself. If they suddenly have access to a dozen games they wanna play, but don't have the hardware to do it then now they have a dozen more reasons to upgrade to the next best Xbox console or to upgrade their PC. Which digs them deeper into Microsoft's pocket.



And it's working. I'm a lifelong PlayStation/PC user who has generally disliked the Xbox controller and the way it feels in my hand, but even I have been checking prices lately for upgrades because of how good of a value the Gamepass is.

 

[megreotsugua]

Only yesterday, the developers of Descenders have announced that since they released the game to Gamepass they have had 4 million people play the game either through GP for console, GP for PC and xCloud. As a result they have decided to continue offering the game on GP and this is despite the game still being available on Steam (which by the way is scoring overwhelmingly positive reviews there).

This is only cements my feelings towards a service like Gamepass that it is good for developers who decide to use it.

I can get on with this despite not liking Gamepass model. It's really helpful for devs who doesn't have much visibility to have guaranteed audience. This is how Rocket League became so popular. That game was instantly noticed when it came out of PS+. The devs of Bugsnax were also saying they benefitted from their game's inclusion in PS+.

Right now, PS+ is releasing AA games on it day 1 but I think Sony could do more. I would like Sony to increase PS+ Collection. Perhaps combine it with PSNow and call it PS+ Premium or something.

But what I what them to do is to:
1. Not release their AAA first party games on it day one. - The games has to stand on their own and be an event of themselves. This will ensure the quality and no predatory MTX.
2. Not remove the 1 year sub plan of $60. Maybe just increase the price for the PS+ Premium a little bit, but it should remain low-priced.
3. Focus on AA games from third parties. Fill the the PS+ Collection with them. Release those games day 1 on the service.

If MS will transform gamepass to how I described above, I will have no qualms in supporting them. But right now, I don't like what their doing to the games industry. Gaming will be ruined if gamer's let Microsoft win with their current model of gamepass, because for sure Sony will follow suit with their AAA games releasing day 1. And for all we know, AAA games will become episodic shit full of microtransactions. Please no.

 

[DarkMage619]

I can get on with this despite not liking Gamepass model. It's really helpful for devs who doesn't have much visibility to have guaranteed audience. This is how Rocket League became so popular. That game was instantly noticed when it came out of PS+. The devs of Bugsnax were also saying they benefitted from their game's inclusion in PS+.

Right now, PS+ is releasing AA games on it day 1 but I think Sony could do more. I would like Sony to increase PS+ Collection. Perhaps combine it with PSNow and call it PS+ Premium or something.

But what I what them to do is to:
1. Not release their AAA first party games on it day one. - The games has to stand on their own and be an event of themselves. This will ensure the quality and no predatory MTX.
2. Not remove the 1 year sub plan of $60. Maybe just increase the price for the PS+ Premium a little bit, but it should remain low-priced.
3. Focus on AA games from third parties. Fill the the PS+ Collection with them. Release those games day 1 on the service.

If MS will transform gamepass to how I described above, I will have no qualms in supporting them. But right now, I don't like what their doing to the games industry. Gaming will be ruined if gamer's let Microsoft win with their current model of gamepass, because for sure Sony will follow suit with their AAA games releasing day 1. And for all we know, AAA games will become episodic shit full of microtransactions. Please no.

Can you point to any evidence this is happening with Game pass? How many episodic games full of microtranactions release on Game pass now?

 

[Tams]

Microsoft will survive. They have sold off Mixer, stopped Windows Mobile, sold Nokia, sold off business and stopped operation for those that don't give them profit. That's how they survive and keep the profit margin high for their investors.

They never owned Nokia. Just the Nokia teams that their mole Elop had made unprofitable and the right to use the Nokia name on smartphones and 'dumbphones' (the latter of which they quickly sold).

The actually profitable parts of Nokia after Elop had had his way remained, well, independently Nokia.

 

[Avian_Grubber]

It definitely is for me, saved loads

 

[Banjo64]

Can you point to any evidence this is happening with Game pass? How many episodic games full of microtranactions release on Game pass now?

Can't wait to see all the MTX pumped in to Starfield, TES 6, Fallout 5, Doom 3, Indiana Jones, Psychonauts 2, Avowed, Fable, Perfect Dark and Hellblade 2.

I mean, Xbox own Bathesda now so surely Deathloop and Ghostwire will be pumped full of MTX, just like Minecraft Dungeons was.

Just the other day I was browsing through all the skins I can buy in Ori and the pay to win weapons like the Tactical Shotgun. Oh wait that was The Last of Us.

 

[DarkMage619]

Can't wait to see all the MTX pumped in to Starfield, TES 6, Fallout 5, Doom 3, Indiana Jones, Psychonauts 2, Avowed, Fable, Perfect Dark and Hellblade 2.

I mean, Xbox own Bathesda now so surely Deathloop and Ghostwire will be pumped full of MTX, just like Minecraft Dungeons was.

Just the other day I was browsing through all the skins I can buy in Ori and the pay to win weapons like the Tactical Shotgun. Oh wait that was The Last of Us.

It's almost like people are just inventing things knock Game pass for. Why not just simply say you hate good value and prefer to pay top dollar for your games. The debate ends right there.

 

[Shmunter]

It doesn't need to be profitable in order to do what Microsoft needs it to do.


The whole point of gamepass is to provide the user with such inescapable value that they either make the switch or even just make an upgrade in order to take full effect of the pass itself. If they suddenly have access to a dozen games they wanna play, but don't have the hardware to do it then now they have a dozen more reasons to upgrade to the next best Xbox console or to upgrade their PC. Which digs them deeper into Microsoft's pocket.



And it's working. I'm a lifelong PlayStation/PC user who has generally disliked the Xbox controller and the way it feels in my hand, but even I have been checking prices lately for upgrades because of how good of a value the Gamepass is.

Don't you have a backlog longer than your arm on ps by now tho? I have so many from ps+, deal purchases, physical copies that paying a fee to add more to the pile is not even a mild consideration.

 

[Nobody_Important]

Don't you have a backlog longer than your arm on ps by now tho? I have so many from ps+, deal purchases, physical copies that paying a fee to add more to the pile is not even a mild consideration.

To be honest I haven't played my PlayStation regularly in months. Most of my gaming has been on my PC.

 

[Schmick]

Can't wait to see all the MTX pumped in to Starfield, TES 6, Fallout 5, Doom 3, Indiana Jones, Psychonauts 2, Avowed, Fable, Perfect Dark and Hellblade 2.

I mean, Xbox own Bathesda now so surely Deathloop and Ghostwire will be pumped full of MTX, just like Minecraft Dungeons was.

Just the other day I was browsing through all the skins I can buy in Ori and the pay to win weapons like the Tactical Shotgun. Oh wait that was The Last of Us.

I have no problem with MTX used correctly. Sea of Thieves I think is a perfect example of MTX that doesn't interfere with the base mechanics of the game and if that is how MS in to use MTX then I'm fine with that.

 

[Schmick]

Don't you have a backlog longer than your arm on ps by now tho? I have so many from ps+, deal purchases, physical copies that paying a fee to add more to the pile is not even a mild consideration.

I had a huge backlog of games before I even had GP. But GP has been amazing for MP with my friends. No longer is there an issue with who owns what, who is willing to spend money on that etc etc. With GP we have the same library of games. It beens amazing in that respect.

 

[DonkeyKong]

It doesn't need to be profitable in order to do what Microsoft needs it to do.


The whole point of gamepass is to provide the user with such inescapable value that they either make the switch or even just make an upgrade in order to take full effect of the pass itself. If they suddenly have access to a dozen games they wanna play, but don't have the hardware to do it then now they have a dozen more reasons to upgrade to the next best Xbox console or to upgrade their PC. Which digs them deeper into Microsoft's pocket.



And it's working. I'm a lifelong PlayStation/PC user who has generally disliked the Xbox controller and the way it feels in my hand, but even I have been checking prices lately for upgrades because of how good of a value the Gamepass is.

Spot on, game pass is such good value it's kept me on Xbox this gen. I'd love to own a PS5 and play the PS5 exclusives but I know the Xbox would get 90% of my time because of game pass.

 

[megreotsugua]

But GP has been amazing for MP with my friends. No longer is there an issue with who owns what, who is willing to spend money on that etc etc. With GP we have the same library of games. It beens amazing in that respect.

I can get behind this. Multiplayer games on a subscription Day one.

Sony should do this too. PS+ Premium (or whatever you wanna call it) with day one multiplayer games and AA games.

Instead of following the free-to-play route on MP games. Follow the GP route of sub-to-play on MP games.

Yeah I can get behind this. I have long been saying Sony should do AA and MP games day 1 release.

I could imagine scenarios where Ghost of Tsushima 2 will retail at $70 while the MP aspect releases day 1 on PS+ Premium. God of War Ragnarok and Spider-man for $70 each while their multiplayer are sub-to-play on PS+ Premium.

 

[Dodkrake]

What I'm saying is this: AS A CONSUMER, if you're presented a choice where you pay US$70 or €80 for a game that you'll only play once, OR pay just US$1 / €1 for it on the same release date, play it and be done with it...

would you still pay US$70 / €80 for that same game? knowing you'll only play it once?

I, for a fact wouldn't pay that much money (US$70/€80) for a game I'd only play once, if I'm offered the cheaper choice.

I would, and I do. I bought the last of us part II two times, because I wanted to own two different steelbook editions. Please don't state your opinions as everyones opinions.

 

[reinking]

Gosh, Microsoft will never survive this!

That is not the question Alan. The question is will Game Pass be the long-term solution to put Microsoft in position to be the industry leader in gaming.?

 

[Arsic]

Nothing X Box does is profitable. At some point it'll either all get shut down, sold out, or it will be massively reworked to be a game pass only thing Microsoft does.

I could absolutely see shutting down console division, axing a ton of these acquisitions , and just providing it as a service on as many devices as possible.

Xbox will either make or break because of game pass.

 

[DarkMage619]

Nothing X Box does is profitable. At some point it'll either all get shut down, sold out, or it will be massively reworked to be a game pass only thing Microsoft does.

I could absolutely see shutting down console division, axing a ton of these acquisitions , and just providing it as a service on as many devices as possible.

Xbox will either make or break because of game pass.

20 years in the game and people still predicting MS' exit from the console space. Maybe in the next 20 years people will accept they have just as much right to be in this space as any other game maker.

 

[Redlight]

If MS will transform gamepass to how I described above, I will have no qualms in supporting them. But right now, I don't like what their doing to the games industry. Gaming will be ruined if gamer's let Microsoft win with their current model of gamepass, because for sure Sony will follow suit with their AAA games releasing day 1. And for all we know, AAA games will become episodic shit full of microtransactions. Please no.

So, to get your support, Microsoft have to make Gamepass worse?

Solid strategy.

 

[SportsFan581]

I have no problem with MTX used correctly. Sea of Thieves I think is a perfect example of MTX that doesn't interfere with the base mechanics of the game and if that is how MS in to use MTX then I'm fine with that.

Agreed, if it's all additive things and nothing that gives an advantage in a competitive game, who cares. If a racing game has a library of custom paintjobs in the virtual store, that hurts no one.

 

[vaibhavpisal]

Gosh, Microsoft will never survive this!

Nothing X Box does is profitable.

Xbox will either make or break because of game pass.

It will make it. With 23 million subscribers gamepass is very definition of 'too big to fail'

 

[Alan Wake]

That is not the question Alan. The question is will Game Pass be the long-term solution to put Microsoft in position to be the industry leader in gaming.?

People seem genuinely concerned about Microsoft's profits, though. Spencer laughed about this in an interview a while back. "We're fine. Let us worry about that." 23 million subscribers and counting is a good start. GP has been around since 2017, but it feels like it just recently started to pick up momentum. I don't know how many subs they need to hit square even, Greenberg's been open with the fact that they're over-delivering to get people in right now. I think they'll be fine long-term. Xbox will never beat PlayStation, but they can have a very profitable business alongside their competitors and indeed be market leaders in some aspects.

 

[Alan Wake]

Microsoft will survive. They have sold off Mixer, stopped Windows Mobile, sold Nokia, sold off business and stopped operation for those that don't give them profit. That's how they survive and keep the profit margin high for their investors.

I heard they make some money on something called Windows and Office too.

 

[Heisenberg007]

It will make it. With 23 million subscribers gamepass is very definition of 'too big to fail'

But it's hardly 10% of where they need to be in order to make it work.

 

[vaibhavpisal]

But it's hardly 10% of where they need to be in order to make it work.

You want it to reach 230millon?

I hope it does reach there, at which point MS will drop monthly subscription to $1 per month permanently.

Paving the way for 8 billion subscribers across the planet.

I love this plan.

 

[Heisenberg007]

You want it to reach 230millon?

I hope it does reach there, at which point MS will drop monthly subscription to $1 per month permanently.

Paving the way for 8 billion subscribers across the planet.

I love this plan.

On earlier pages, I did a bit of a rough calculation. Assuming they want Gamepass to be their primary driver of revenue (which everyone believes is the case), they will need to generate roughly $40 billion per year from Gamepass. $40 billion revenue will need roughly 220 million subscribers paying at full $15 per month subscription fees (no discounts).

 

[Jemm]

Assuming they want Gamepass to be their primary driver of revenue (which everyone believes is the case),

Phil has said that it is not the goal (though who knows about future). Anyway, why would they close additional income channels?

Phil Spencer: "Our motivation is not to turn everybody into a subscriber"

During an episode of the Dropped Frames podcast, released yesterday, Xbox head Phil Spencer discussed Game Pass' busine…

www.gamesindustry.biz

"It's not like I've got a crystal ball and I can tell somebody what GamePass is going to look like in five years. What I can say is that our motivation is not to turn everybody into a subscriber. We think it's an option for people. We're not pulling our games out of retail. In fact, we've expanded. We put them on Steam. We have some games in the [Epic Games Store]. We are out there to give more options to go buy our games. We obviously support free-to-play games, which don't have a big role today in Game Pass."

 

[Heisenberg007]

Phil has said that it is not the goal (though who knows about future). Anyway, why would they close additional income channels?

Phil Spencer: "Our motivation is not to turn everybody into a subscriber"

During an episode of the Dropped Frames podcast, released yesterday, Xbox head Phil Spencer discussed Game Pass' busine…

www.gamesindustry.biz

They won't. They will just become less pronounced automatically.

For example, there are 10 Xbox users: 2 are GP subscribers, 8 buy games from the retail market. If a few years later, 9 of those 10 become GP subscribers, only 1 would be buying at retail units, and 9 of them would be playing the game on Gamepass -- thus minimizing the retail sales source of revenue.

It'll just be a byproduct of this strategy and Gamepass growth.

 

[SportsFan581]

You want it to reach 230millon?

I hope it does reach there, at which point MS will drop monthly subscription to $1 per month permanently.

Paving the way for 8 billion subscribers across the planet.

I love this plan.

Nah, with 230m subs at $10 a month ($27b a year) they just buyout all the major publishers and as the publisher of all publishers they basically are gaming. The sky is the limit. LOL

I don't think the Sony fans have thought this through.

 

[Zeroing]

Nah, with 230m subs at $10 a month ($27b a year) they just buyout all the major publishers and as the publisher of all publishers they basically are gaming. The sky is the limit. LOL

I don't think the Sony fans have thought this through.

You're funny

 

[megreotsugua]

I heard they make some money on something called Windows and Office too.

And yet it didn't stop them from trimming businesses that are not profitable. You want me to enumerate?

 

[SportsFan581]

You're funny

Hey it's true though. If you look at all the largest publishers and their total GAAP revenue you have:

EA: 5.5b
Sega: 4b
Activision: 10b
UBI is in Euro so I won't put it here, LOL.

And so on. People don't realize how big that $27b number would be for a publishing house, and that would be before MTX and DLC. LOL

 

[Zeroing]

Hey it's true though. If you look at all the largest publishers and their total GAAP revenue you have:

EA: 5.5b
Sega: 4b
Activision: 10b
UBI is in Euro so I won't put it here, LOL.

And so on. People don't realize how big that $27b number would be for a publishing house, and that would be before MTX and DLC. LOL

I just want games….

 

[vaibhavpisal]

On earlier pages, I did a bit of a rough calculation. Assuming they want Gamepass to be their primary driver of revenue (which everyone believes is the case), they will need to generate roughly $40 billion per year from Gamepass. $40 billion revenue will need roughly 220 million subscribers paying at full $15 per month subscription fees (no discounts).

1. MS does not share data that shows profitability.
2. MS does not even share a plan -- a target # of subscribers -- that shows what numbers they need to hit to become profitable.
3. MS wants to emulate Netflix, but Netflix only earns small profits if they scale down content production. Otherwise, their growth has slowed down and their cost per subscriber has increased considerably. Their debts are also out of hand. They are also leaking cash flows. So MS's inspiration isn't doing that hot either, and they have ~200 million subscribers. MS has ~20 million subscribers.
4. No gaming subscription in the history of the gaming industry surpassed 50 million subscribers. If MS does, it will be a record.
5. But even at 80 million subscribers, Gamepass will return roughly $13 billion to MS. PlayStation operating expenditures are roughly $20 billion. This shows that $13 billion isn't going to be enough, and that's not even including the xCloud server costs -- which would be huge.
6. But Xbox also has 2x more studios and more employees than PlayStation, so their game dev costs and employee expenditures will also be more than PS. So that $20 billion would likely look like $30-$40 billion.
7. To cover the expenditure of $40 billion, Microsoft will need 220 million subscribers. Yes, there will be other revenue sources but there will also be other expenditures.

It's really not that hard to put 2 and 2 together.

Edit: Some more context:

• At $40 billion -- ignoring other revenues and other expenditures -- MS would still be breaking even, not making any profit. For comparison, Sony hit ~$3.5 billion profit last year and will easily surpass $4 billion in profits this year.
• $40 billion may seem excessive but that's the cost of scaling aggressively. And MS has already incurred these expenses with all those studios and game development. But their revenue sources haven't scaled up.
• Other revenues mean game sales, MTX, sales %.
• Other expenses mean loss on hardware sales, xCloud server costs, Gamepass deals, partnerships, second-party game development, timed exclusivity, etc.

If 40billion figure would be true, Xbox would be making a solid loss currently.

Xbox division is profitable even in gamepass early days and provisions to get it way cheaper than what it's worth.

Profitability will only improve in future with more subscribers and as MS removes ways to get it cheap.

 

[Jokerevo]

Won't be profitable until gamepass becomes available on PS and Nintendo....

 

[Heisenberg007]

If 40billion figure would be true, Xbox would be making a solid loss currently.

Xbox division is profitable even in gamepass early days and provisions to get it way cheaper than what it's worth.

Profitability will only improve in future with more subscribers and as MS removes ways to get it cheap.

The important point about this calculation is that Xbox would have only just started incurring these costs, i.e., after the acquisition of Bethesda. They didn't incur this cost in the past, because they weren't producing all those games before; they are doing it this year. Their studios also grew tremendously only in the last ~12-15 months. They will gradually ramp up the cost, but eventually, it will settle down (in 2-3 years) to be around that $35-$40 billion mark -- unless they scale down content development costs, e.g., produce more AA content.

In other words, they were perfectly fine with $10-$15 billion revenue in the past, but that won't be the case going forward because of how aggressively they have scaled up.

 

[Old Empire.]

What do people care? If gamepass closed down.

The downside is a return to same model that Sony presently use. I prefer the gamepass model, a failure not going to be as earth shattering as some people think here. They will still need content to sell consoles either way. Enjoy the benefits now and have worries later when something actually materializes for real.

 

[Old Empire.]

Arent most of the hardcore Xbox gamers still on that GamePass $1 deal that last 3 years?
GamePass make since for small indie devs for a guaranteed revenue stream, but it makes no financial sense for AAA games. Which easily cost over $100 million to develop each, while at the same time paying every game dev on the service for each download.

No i pay 12.99 Euros a month. I had a 1 Euro ultimate deal for just three months.

 

[Alan Wake]

And yet it didn't stop them from trimming businesses that are not profitable. You want me to enumerate?

Of course. Losing money long term is not something any company is interested in.

 

[vaibhavpisal]

The important point about this calculation is that Xbox would have only just started incurring these costs, i.e., after the acquisition of Bethesda. They didn't incur this cost in the past, because they weren't producing all those games before; they are doing it this year. Their studios also grew tremendously only in the last ~12-15 months. They will gradually ramp up the cost, but eventually, it will settle down (in 2-3 years) to be around that $35-$40 billion mark -- unless they scale down content development costs, e.g., produce more AA content.

In other words, they were perfectly fine with $10-$15 billion revenue in the past, but that won't be the case going forward because of how aggressively they have scaled up.

Time will tell. If xbox division gets into severe loss then I would be concerned.

Doubt that would happen. Its a well managed company that made solid profit since X360 years.

 

[Heisenberg007]

What do people care? If gamepass closed down.

The downside is a return to same model that Sony presently use. I prefer the gamepass model, a failure not going to be as earth shattering as some people think here. They will still need content to sell consoles either way. Enjoy the benefits now and have worries later when something actually materializes for real.

I think Gamepass will make a big splash either way: good or bad for MS (because of how big of a focus it has become for MS and Xbox).

If Gamepass succeeds and exceeds expectations and current plans, Xbox will easily become the biggest gaming division in the world (maybe a bit behind Tencent perhaps). But if it doesn't succeed, iit will have a huge negative impact on Xbox. I think even the existence of Xbox as a MS division will be in jeopardy after that.

Their previous model didn't work, which is why Gamepass was created. After spending roughly $20 billion dollars in it, if it doesn't pay off, the division may even be killed.

I know my comment is the perfect example of "doom-and-gloom" lol but I just don't think Gamepass will wither off that easily. It will be a big deal either in its success or in its failure.