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[Fess]

The service is good and thats all that matters to me and should be all that matters to anyone who doesnt have shares in MSFT. Even if you do have shares you should be happy from the boost this earnings call did to their share price.

The boost wasn't as high as I hoped, when the dust settled after the trumpet had gone off it stopped at 2% up for the week. I was planning to sell and buy a game but nope.

 

[Ozriel]

I don't. I'm pointing out what the typical MS fanboy answer is when asked what gamepass profit looks like.
Reading stuff like this literally to try to look clever is another defensive action fanboys do.

You think it makes sense to ask fellow forum users to detail profit numbers at granular levels of detail that MS themselves have not released?

 

[Ozriel]

'They didn't shut it down so we can infer that it is profitable' is a leap. The decisions on what to cut will also consider the future, not only what is happening right now.

Ah, but we're not considering these things in isolation. You'd add it to the fact that we've been told multiple times by a VP at Microsoft that GP is profitable, the fact that there are zero credible rumors or leaks that the service is unprofitable and Bloomberg's reporting of third party content costs being significantly lower than the annual revenue cited.

I would think Microsoft is always subsidising some parts of its business which are not profitable but which they believe will be down the line.

True. But that's usually heavily focused on ventures they consider truly transformative like Azure and AI.

 

[Fess]

I don't. I'm pointing out what the typical MS fanboy answer is when asked what gamepass profit looks like.
Reading stuff like this literally to try to look clever is another defensive action fanboys do.

Just a guess from another basement dweller, I would assume that they use the money earned for new investments, so even if they got lots of money from GP subs you wouldn't see any big numbers on the bottom line unless they would just stop investing to build some Nintendo warchest.

 

[CircleOfFire]

If it makes things better for both us consumers and the games industry itself (less closures etc), then I'm all for it. But releasing one vanity statistic is not really helping anything at all.

 

[S0ULZB0URNE]

It will be optional, the pro was just the test run.

Multiple skus will be available.

 

[BlackTron]

How do you know its a lapse for Sony? Where is the evidence to prove otherwise?

Also, MS has changed up their entire business strategy in the last 5 years. They've literally pivoted in industry shaking ways into a third party and it seems to be working very well for them.

I haven't seen the future, I've only seen the past where Sony makes mistakes, someone in the company pays for it and they pivot, even if it takes an entire gen to learn from their error. Example, $599 PS3. Microsoft has been screwing up time and again just to push out another obfuscated excuse and fire another department that they just acquired.

How is Microsoft's pivot to a third party industry shaking? The same games selling on PS, only with a MS studios label? Did they do anything amazing with this opportunity? The deal should never have happened. The only change is that now these studios are subject to Phil's illustrious leadership (hey let's make Hexen into Doom) and and thereby doubly at risk of being terminated.

 

[drganon]

And the word "profit" was nowhere in sight...

 

[Ozriel]

And the word "profit" was nowhere in sight...

Plenty of salt in sight, that's for sure.

 

[jm89]

And the word "profit" was nowhere in sight...

It's profitable if you don't include the most expensive costs to make the content

 

[calico]

Ah, but we're not considering these things in isolation.

Sure, and we've already been considering the other things in this thread (the reliance on 'almost' milestones, a range of Game Pass costs being hand-waved, Microsoft's reported creative accounting re Game Pass making their statements about profitability of the service unreliable, Microsoft's desire to be able to describe Game Pass as profitable making their statements about profitability unreliable etc).

You brought up this additional element (we can infer it is profitable because they didn't shut it down) so I addressed the leap of logic this specific argument relies upon.

I think you already demonstrated awareness of this yourself when you referred to 'closing down studios that can't deliver'. 'Can't deliver', not 'are not delivering'. The implication -a correct one imo- of this choice of words being that they shut them down not only because of a current inability to deliver, but because of an expectation that this inability will continue.

Microsoft may well not have shut them down if they were losing money now but they were expecting them to come good later, and there are probably studios which avoided the chop because they fall into this category. Game Pass may also fall into this category, which is why we can't infer that it is currently profitable from it not being shut down. Game Pass not being shut down doesn't inform us either way.

If they are committed to a handheld and new console coming within the next couple of years, my expectation is they see how that plays out before deciding what to do with Game Pass. If they are DOA, it's hard to see a future for Game Pass.

 

[adamsapple]

You think it makes sense to ask fellow forum users to detail profit numbers at granular levels of detail that MS themselves have not released?

My man really said:


Reading stuff makes you look like a fanboy.

It's profitable if you don't include the most expensive costs to make the content

 

[A.Romero]

The issue is that Netflix was verifiably profitable, while the proof for Game Pass being profitable is solely hearsay. Everyone should be suspicious of this claim when Microsoft hides specific revenue and expenses from the public, from the SEC, and from its own shareholders. If Game Pass were actually profitable they would absolutely be showing the numbers, just like the do for Azure, LinkedIn, and Office 365.

Well, it's a bit different because Netflix wasn't proven back then while Microsoft is overall one of the biggest companies in the world.

Shareholders seem to be fine with that as the stock price has been going up. They could sell and make some profit already if they thought Microsoft was playing dirty.

It's reported that gamepass is about 15% of the gaming revenue so they are well diversified, I wouldn't be concerned if I were them.

 

[poppabk]

The issue is that Netflix was verifiably profitable, while the proof for Game Pass being profitable is solely hearsay. Everyone should be suspicious of this claim when Microsoft hides specific revenue and expenses from the public, from the SEC, and from its own shareholders. If Game Pass were actually profitable they would absolutely be showing the numbers, just like the do for Azure, LinkedIn, and Office 365.

Netflix wasn't profitable in the 'we made more money than we spent' way though for a long time. It was profitable in the accounting sense.
Gamepass is profitable in the accounting sense given what we have been told. Whether that means they are making more money than they bring in is unknown.

 

[jm89]

My man really said:


Reading stuff makes you look like a fanboy.

 

[adamsapple]

Yes, why would dev cost come solely under Game Pass, unlike Netflix, GP is not the only revenue stream Xbox has.

Glad we agree that forcing in games' entire dev budgets under GP revenue is dumb

 

[yurinka]

5 billion divided by 34 million is actually about $150 each. so, on average, a bit over a year of game pass core?...

To be precise he said NEARLY 5 billion. So it can be 4.9, 4.6 or even 4 or 3.9. Not 5B.

revenue isnt profit.

I guess its a massive loss

Yep. It's massively losing money. Which explains why Nadella that's on a crazy cost cutting exercise to raise more cash for AI has not only left the service up, but is happy to talk up revenue in an investors briefing.

We know they spent almost $100B in gaming acquisitions, we know they put day one their games that cost hundreds of millions, there losing hundreds of millions of game sales, and we know that pay many millions to 3rd parties to put their games there.

The cost of generating these nearly 5B is off the charts, as business it's a disaster of loses, and as a business model is a cancer for the industry designed to destroy the other platform holders and many game publishers and dev studios (and failed hard at doing so).

What could they realistically do to get to 100 million subscribers by 2030

Realistically? Nothing.

Above Activision Blizzard King there was only Tencent and Sony left, and their governments doesn't allow to sell these strategical tech companies to foreigners, in the same way the USA goverment wouldn't allow to sell Google/Alphabet, Meta, Microsoft, Apple and/or Amazon to Chinese or Russian people.

Maybe could try (pretty likely already tried it) to acquire EA+Take 2+Epic(Tencent and Sony combined may have almost, almost half of the company)+Valve+try to convince Tencent to sell them Riot. But they don't seem to want to sell, and particularly to MS. Even if they would want, could have issues with regulators after ABK.

Looking at the impact that ABK had in GP, let's say MS manages to acquire one or two of these companies. The impact would be smaller than the ABK one, so wouldn't reach 100M at all.

But well, this is in consoles+PC. In mobile maybe they could include some really great content for the King games, CoD Mobile and Minecraft worth more than the GP sub, destroying the money CoD, King and Minecraft nowadays make in mobile, as they have been doing with their games sales on Xbox in order to trying to move that revenue to GP.

By doing so, they'd get more subbers, potentially above 70M to reach the 100M milestone. But at the cost of destroying a profitable business they have that also is one of their main revenue generators. After seeing their failure in console and PC I think they won't want to extend it to mobile.

I assume they will just take the L and assume that couldn't reach the 100M and will move on. Pretty likely to stop including games day one in GP (at least ouside GPU) to try to bump their game sales again and turn GP into a profitable business as PS Plus is.

 

[IFireflyl]

This isn't an 'issue'. It's an assumption on your part, and certainly flies in the face of multiple statements by MS execs and doesn't really jive with reality. The idea that An MS that's cutting losses in their business units (closing down studios that can't deliver, killing struggling projects, eliminating console hardware subsidy) would still keep funding a subscription service that loses money…that certainly doesn't make sense.

It absolutely makes sense when executive bonuses are intermingled with Game Pass performance. Satya Nadella's bonuses for Fiscal Year (FY) 2023 and 2024 hinged on "Xbox Content and Services" growth of 10%, and Game Pass is included in that. FY2025 increased this to 15%.

They've stopped disclosing GP subscriber numbers because of what they've already publicly acknowledged. Subscriber count growth has slowed significantly.

Microsoft does not specifically disclose profits from Azure or LinkedIn. I suppose that means they're also unprofitable ?

They specifically disclose revenue and market segment numbers so profit can be estimated with relative accuracy. Game Pass doesn't disclose any specific revenue or market segment information.

Well, it's a bit different because Netflix wasn't proven back then while Microsoft is overall one of the biggest companies in the world.

Shareholders seem to be fine with that as the stock price has been going up. They could sell and make some profit already if they thought Microsoft was playing dirty.

It's reported that gamepass is about 15% of the gaming revenue so they are well diversified, I wouldn't be concerned if I were them.

It's not different at all. One company gave specific revenue and expense data. The other company only provides cherry-picked metrics, and even then they aren't specific (e.g. "subscribers were almost X"). Again, Microsoft provides far less obfuscated data for their other services, such as Azure, LinkedIn, and Office 365.

Netflix wasn't profitable in the 'we made more money than we spent' way though for a long time. It was profitable in the accounting sense.
Gamepass is profitable in the accounting sense given what we have been told. Whether that means they are making more money than they bring in is unknown.

Netflix was profitable in 2003, which is what I said. That was the first year they made more money than they spent.

 

[jm89]

Yes, why would dev cost come solely under Game Pass, unlike Netflix, GP is not the only revenue stream Xbox has.

Glad we agree that forcing in games' entire dev budgets under GP revenue is dumb

You can take whatever costs out to make it profitable

 

[adamsapple]

You can take whatever costs out to make it profitable

Of course, costs that don't solely depend on GP don't have a place there anyway.

The key point is that factoring in lost revenue from 1P sales and the $1bn they spend annually for 3P deals, it's doing pretty good earning ~$5bn annual.

 

[Grildon Tundy]

Yeah, and their business model is better for me than it is for them.

In the past few months, I've played seven games on GP for a total of ~$25 dollars in subscription fees. $25 / 7 = $3.57

Back when there was a rental store around me, that would've been 7 x ~$8 = $56

And if I'd actually bought each of those 7 games, it'd be around 7 x ~$50 = $350


Then again, maybe this is all part of Microsoft's "Embrace Extend Extinguish" strategy to destroy rentals and new game sales.

 

[jm89]

Of course, costs that don't solely depend on GP don't have a place there anyway.

And that's the biggest costs that GP relies on. You can do whatever you want to take that cost away, but it won't give you a true reflection how profitable it is.

 

[Baemono]

The fact that you think 'market cap' = 'money available to spend' is also quite hilarious.

Indeed

 

[adamsapple]

And that's the biggest costs that GP relies on. You can do whatever you want to take that cost away, but it won't give you a true reflection how profitable it is.

Sure, but again, the argument that all 1P content dev costs must be included in GP's bracket just makes no sense. Those costs are earned back in direct sales, MTX and now even sales on other platforms for the most part. Dring, and his sources, have already repeated multiple times that even factoring in the revenue from the perceived lost sales, it's still profitable.

Again, I'll use the Netflix example since that seems to be the go-to. Netflix only has one revenue stream so it makes sense there, GP is only 15% of Xbox's total revenue stream, so there's no 1 : 1 comparison between these two business models so far. If there's a future point where games only come out on GP, then maybe.

 

[calico]

My man really said:


Reading stuff makes you look like a fanboy.

What you linked confirms what jm said

 

[jm89]

Sure, but again, the argument that all 1P content dev costs must be included in GP's bracket just makes no sense. Those costs are earned back in direct sales, MTX and now even sales on other platforms for the most part. Dring, and his sources, have already repeated multiple times that even factoring in the revenue from the perceived lost sales, it's still profitable.

Again, I'll use the Netflix example since that seems to be the go-to. Netflix only has one revenue stream so it makes sense there, GP is only 15% of Xbox's total revenue stream, so there's no 1 : 1 comparison between these two business models so far. If there's a future point where games only come out on GP, then maybe.

You've done a good job explaining how they do their accounting and how they can call it profitable without including their biggest costs

 

[Det]

This has since been clarified, and it makes zero sense to put the bulk of the budget of their games on GP. Their games get released simultaneously on console retail and Steam.

I'm going to open a car rental company, I don't need to count the expense of buying cars for rental in my "profit", I just need to open a car dealership too

 

[Det]

You've don't a good job explaining how they do their accounting and how they can call it profitable without including their biggest costs

It's easy, Netflix can ignore the expense of "Stranger Things," just release the Blu-ray and no one will buy it, and then rant all over the internet that it's "profitable for us."

 

[DenchDeckard]

I haven't seen the future, I've only seen the past where Sony makes mistakes, someone in the company pays for it and they pivot, even if it takes an entire gen to learn from their error. Example, $599 PS3. Microsoft has been screwing up time and again just to push out another obfuscated excuse and fire another department that they just acquired.

How is Microsoft's pivot to a third party industry shaking? The same games selling on PS, only with a MS studios label? Did they do anything amazing with this opportunity? The deal should never have happened. The only change is that now these studios are subject to Phil's illustrious leadership (hey let's make Hexen into Doom) and and thereby doubly at risk of being terminated.

This is not 20 years ago.

Im going to leave you to believe what execs sell you. As long as its sony you seem to believe they are going to fix every terrible leadership mistake they've made. Hulst is still there and they haven't done anything to prove their first party output is improving.

Lets see what happens but you seem like nothing would shake your faith in Sony no matter what the evidence shows.

Ms are making money and so are sony. They are both businesses out to make money. Simple as that.

 

[Det]

This is not 20 years ago.

Im going to leave you to believe what execs sell you. As long as its sony you seem to believe they are going to fix every terrible leadership mistake they've made. Hulst is still there and they haven't done anything to prove their first party output is improving.

Lets see what happens but you seem like nothing would shake your faith in Sony no matter what the evidence shows.

Ms are making money and so are sony. They are both businesses out to make money. Simple as that.

The GaaS fiasco has been resolved, Sony has canceled most of them, and studios are back to making quality games. It's a setback and a course correction.
Phill can't produce quality games that attract players and started saying that even if Starfield were 10/11, people wouldn't buy Xbox instead of PlayStation.

That's the difference between Playstation and Xbox.
And that's why the Xbox ending will be much better for the market.

People trust Playstation until proven otherwise.
People DON'T trust Xbox until proven otherwise.
Of course, this is in the real world with normal consumers, not the Xbox fanboys who campaign online trying to "balance" things out.

 

[poppabk]

I'm going to open a car rental company, I don't need to count the expense of buying cars for rental in my "profit", I just need to open a car dealership too

You wouldn't include the expense of the cars in determining profit - at least not directly.
Simplified example. Let's say you spend $100k on cars and expect them to last 5 years. You bring in $40k in your first year and have no other expenses. Your company made $20k in profit in your first year, but you are negative $60k in cash flow.

 

[DenchDeckard]

The GaaS fiasco has been resolved, Sony has canceled most of them, and studios are back to making quality games. It's a setback and a course correction.
Phill can't produce quality games that attract players and started saying that even if Starfield were 10/11, people wouldn't buy Xbox instead of PlayStation.

That's the difference between Playstation and Xbox.
And that's why the Xbox ending will be much better for the market.

People trust Playstation until proven otherwise.
People DON'T trust Xbox until proven otherwise.
Of course, this is in the real world with normal consumers, not the Xbox fanboys who campaign online trying to "balance" things out.

I love how you guys say this stuff. Microsoft has the top selling games on playstation yet you are here saying they cant make quality games that create sales or a playerbase.

Grounded 2 will get a good bunch of players. Ill place money that gears remastered sells well on playstation as well.

Take your head out of the sand and start living in the real world.

 

[Det]

I love how you guys say this stuff. Microsoft has the top selling games on playstation yet you are here saying they cant make quality games that create sales or a playerbase.

Grounded 2 will get a good bunch of players. Ill place money that gears remastered sells well on playstation as well.

Take your head out of the sand and start living in the real world.

Of course, Microsoft will use the profits from Playstation sales to support your free Game Pass.

You can't really argue with anyone who thinks Grounded 2 will sell on PlayStation.
A game that only exists to be Shovelware

Really, a defender of Xbox, GamePass, and all that MS bullshit lives in an alternate reality.

 

[BlackTron]

This is not 20 years ago.

Im going to leave you to believe what execs sell you. As long as its sony you seem to believe they are going to fix every terrible leadership mistake they've made. Hulst is still there and they haven't done anything to prove their first party output is improving.

Lets see what happens but you seem like nothing would shake your faith in Sony no matter what the evidence shows.

Ms are making money and so are sony. They are both businesses out to make money. Simple as that.

TBH after they unveiled PS5, I ran out and grabbed one of the last new PS4 Pro, a SSD, and a copy of Tsushima full price because I didn't want the 5 right away. I thought I would eventually get some future version of it, maybe with the VR, but ended up dabbling in Sony games on PC. I only really feel like I am missing Astro-Bot. Which I applaud them for gating...at least it's enough to feel a modicum of hype to get one.

I think XB and PS are both getting boringly samey to a PC, but they have very different ways of arriving there, MSFT's happen's to have more wrecking balls in it. Sony has the benefit of being the last normal console box standing and so will remain the default option no matter how many gens apart GTA gets or how many Horizon sequels there are.

 

[adamsapple]

You've done a good job explaining how they do their accounting and how they can call it profitable without including their biggest costs

I mean no ... but ok. We're probably not gonna see eye to eye on this so let's just leave it at 'agree to disagree'.

 

[DenchDeckard]

Of course, Microsoft will use the profits from Playstation sales to support your free Game Pass.

You can't really argue with anyone who thinks Grounded 2 will sell on PlayStation.
A game that only exists to be Shovelware

Really, a defender of Xbox, GamePass, and all that MS bullshit lives in an alternate reality.

Saying grounded 2 is shovelware shows how ignorant you are. Ill leave you too it. You're clueless.

 

[Ozriel]

To be precise he said NEARLY 5 billion. So it can be 4.9, 4.6 or even 4 or 3.9. Not 5B.

When someone says 'nearly $5bn' they're telling you that the nearest whole number is $5bn.

rounding up 4 or 3.9 to 5 is absolutely inane AND hilarious.

We know they spent almost $100B in gaming acquisitions, we know they put day one their games that cost hundreds of millions, there losing hundreds of millions of game sales, and we know that pay many millions to 3rd parties to put their games there.

The cost of generating these nearly 5B is off the charts, as business it's a disaster of loses, and as a business model is a cancer for the industry designed to destroy the other platform holders and many game publishers and dev studios (and failed hard at doing so).

Putting the cost of the gaming acquisitions on GP is harambe logic.
We also know from Chris Dring's MS sources that they include the cannibalization impact from GP in the GP economics, so you're completely wrong too.
We also know that 3rd party content costs are in the realm of $1bn yearly.

You've done a good job explaining how they do their accounting and how they can call it profitable without including their biggest costs

…but their biggest costs are included.

I'm going to open a car rental company, I don't need to count the expense of buying cars for rental in my "profit", I just need to open a car dealership too

Shitty analogy.
But If you still have a market that buys these cars at full price, why would you put the cost of acquiring the cars on the rental service?

It's easy, Netflix can ignore the expense of "Stranger Things," just release the Blu-ray and no one will buy it, and then rant all over the internet that it's "profitable for us."

'No one will buy it'

This is you pretending you didn't see the thread highlighting how well MS games are selling on PlayStation.
Their games are sold on Steam and PlayStation. Switch 2 soon.

 

[Ozriel]

Of course, Microsoft will use the profits from Playstation sales to support your free Game Pass.

'Free'

You can't really argue with anyone who thinks Grounded 2 will sell on PlayStation.
A game that only exists to be Shovelware

You gotta learn to be subtle with these things. This type of strident warring can only come from deep deprivation. My sympathies.

 

[adamsapple]

Saying grounded 2 is shovelware shows how ignorant you are. Ill leave you too it. You're clueless.

You gotta learn to be subtle with these things. This type of strident warring can only come from deep deprivation. My sympathies.

Don't feed the troll, guys.

He's already shown he's got no issues bs'ing with the "analysts say gamepass needs to break 50m users to break even" claim. He's probably an icon-er alt.

 

[Effigenius]

I think they're not sharing sub numbers anymore because of the growth saturation that Phil once mentioned. Subs are not growing at a good rate anymore, so they are focused on increasing ARPU - which is most likely up now.

It is still not complete data but cherry-picked by Microsoft for shareholders, so meh.

The number of subs is useless anyway. They have three different tiers and promo deals. Much better to just talk about the actual dollars. Profit of course is important also but it's hard to gauge with GP. How much of a first party games cost do you push over to GP?

 

[Ar¢tos]

The number of subs is useless anyway. They have three different tiers and promo deals. Much better to just talk about the actual dollars. Profit of course is important also but it's hard to gauge with GP. How much of a first party games cost do you push over to GP?

You can consider each game download a lost full price sale and calculate from that in relation to the development and marketing cost.

 

[calico]

'Even if we deduct lost first party sales.' -Ok, and if you convince yourself that Game Pass isn't hurting sales at all then the number to deduct is zero. This 'lost sales' number is entirely within their discretion to make up as they see fit.

'First party games have their own P&L.' -Can't have it both ways. If NONE of the L for those games is being assigned to Game Pass -which is what that sounds like to me- then they should also be estimating how much of the GP revenue is due to those games being on the service, subtracting that from the GP revenue and assigning it to the 'First party games P&L' instead. Are they doing that before announcing GP revenue? No chance imo, and even if they are the estimate is again within their discretion to make up as they see fit.

When I see marketing for 'Xbox Game Pass', are they assigning any of that to GP, or counting it entirely as an Xbox expense?

It is very easy to see how GP expenses can be shifted around elsewhere if the goal is to be able to declare GP to be profitable, and they would sooner eat shit than announce GP is not profitable. When they state it is profitable, it should be read with a massive asterisk after it.

 

[adamsapple]

When I see marketing for 'Xbox Game Pass', are they assigning any of that to GP, or counting it entirely as an Xbox expense?

They're both one and the same, Game Pass is part of Xbox and accounts for around 15% of the total revenue per Spencer last year.

If you really want to assign a number, I guess you can assign that same 15%.

But, again, Game Pass is not the only means for those 1P games to recoup costs, they do that through direct sales and MTX so saying that all of, let's say, Outer Worlds 2's budget as a Game Pass expense .. it makes no sense, cause that game will sell at retail on Xbox/PC/PS5 along with being on GP.

I hope that makes sense what I'm trying to say.

 

[Ozriel]

You can consider each game download a lost full price sale and calculate from that in relation to the development and marketing cost.

Lmao. That's harambe economics at its worst.

No, you cannot consider each game download a 'lost full price sale'.

'Even if we deduct lost first party sales.' -Ok, and if you convince yourself that Game Pass isn't hurting sales at all then the number to deduct is zero. This 'lost sales' number is entirely within their discretion to make up as they see fit.

'First party games have their own P&L.' -Can't have it both ways. If NONE of the L for those games is being assigned to Game Pass -which is what that sounds like to me- then they should also be estimating how much of the GP revenue is due to those games being on the service, subtracting that from the GP revenue and assigning it to the 'First party games P&L' instead. Are they doing that before announcing GP revenue? No chance imo, and even if they are the estimate is again within their discretion to make up as they see fit.

Didn't Chris Dring confirm that there's some impact from cannibalization captured in the P&L calculations for Gamepass?

When I see marketing for 'Xbox Game Pass', are they assigning any of that to GP, or counting it entirely as an Xbox expense?

Marketing for Xbox GamePass is most probably considered in the profitability calculations for the service.

Again, there's a massive difference between the approx $5bn revenue and the $1bn spent on 3rd party content. There's still nearly $4bn worth of revenue to put against expenses.

It is very easy to see how GP expenses can be shifted around elsewhere if the goal is to be able to declare GP to be profitable, and they would sooner eat shit than announce GP is not profitable. When they state it is profitable, it should be read with a massive asterisk after it.

Ok, so if we agree that MS is happy to declare GP profitable internally and externally, and the consumers are fine with the service…why is there so much bleating here about it? or the multiple proclamations that it'll collapse soon?

The corporation is happy. The consumers seem happy. I guess it's a win-win for everyone aside from a specific group?

 

[IntentionalPun]

Merging all of Xbox Live into it will do that for you.

Reminds me of stories of their record revenue each time they bought a company lol

 

[adamsapple]

Lmao. That's harambe economics at its worst.

No, you cannot consider each game download a 'lost full price sale'.

Assign each download as a full price revenue loss.

But don't assign each download as a unit sale and post "but what about units sold" in GP topics.

 

[Ozriel]

 

[Ar¢tos]

Assign each download as a full price revenue loss.

But don't assign each download as a unit sale and post "but what about units sold" in GP topics.

Why would anyone ask about game units sales?
2 sales of a 15$ are not the same as 2 sales of a 70$ game.
That's why people ask of the forbidden "P" word...

 

[IFireflyl]

This is not 20 years ago.

Im going to leave you to believe what execs sell you. As long as its sony you seem to believe they are going to fix every terrible leadership mistake they've made. Hulst is still there and they haven't done anything to prove their first party output is improving.

Lets see what happens but you seem like nothing would shake your faith in Sony no matter what the evidence shows.

Ms are making money and so are sony. They are both businesses out to make money. Simple as that.

Also you:

I do find it interesting that everyone believes current clown shoe Sony management around messaging on pc ports yet no one believes ms when they say they are looking at games on a case by case basis and will port games that "make sense"

Both lying corporations with hardcore fans that believe everything that is fed to them.

My advice is don't trust any of them.

 

[calico]

They're both one and the same, Game Pass is part of Xbox and accounts for around 15% of the total revenue per Spencer last year.

If you really want to assign a number, I guess you can assign that same 15%.

But, again, Game Pass is not the only means for those 1P games to recoup costs, they do that through direct sales and MTX so saying that all of, let's say, Outer Worlds 2's budget as a Game Pass expense .. it makes no sense, cause that game will sell at retail on Xbox/PC/PS5 along with being on GP.

I hope that makes sense what I'm trying to say.

They can't be treated as one and the same if we are trying to work out if Game Pass specifically is profitable. We could assign any %; Microsoft could assign 0% if the goal is to find GP to be profitable.

All of the game budget shouldn't be assigned to GP, I agree, but anywhere from 0% to 100% is at their discretion, which will vary depending on whether they are trying to impartially assess it or trying to arrive at a desired conclusion.

If when asked about it, their response is 'First party games have their own P&L' (rather than something along the lines of 'Yes, we assign a weighted % of the development cost as a Game Pass expense') I take that to mean they are assigning none of the First Party L to Game Pass, but I'd bet they aren't deducting the part of the P which comes via GP subs from the GP revenue figure before announcing it.

Again, there's a massive difference between the approx $5bn revenue and the $1bn spent on 3rd party content. There's still nearly $4bn worth of revenue to put against expenses.

And those expenses are of an unknown amount. Even the proximity to $5bn is unknown because they are using some inane 'Almost only ten miles to London' milestone.

Ok, so if we agree that MS is happy to declare GP profitable internally and externally, and the consumers are fine with the service…why is there so much bleating here about it? or the multiple proclamations that it'll collapse soon?

The corporation is happy. The consumers seem happy. I guess it's a win-win for everyone aside from a specific group?

Discussion of the games industry is quite common here. Microsoft's ostensible happiness with the service is not a very useful indicator. I think the earliest you would hear Microsoft publicly admit it is failing is only after they make a decision to pull the plug on it.