MachineGames latest financial report came out recently, and they're not very profitable.
- Thread starter Sebastian1295
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Windle Poons
Made a crappy phPBB forum once ... once.
I wish I had 2.6 million after I'd paid everyone.
semiconscious
Member
vaibhavpisal
Member
Imagine 2 million profit even after putting their games on gamepass.
Felessan
Member
It's 15k per employee - nothing to be envious about.
Not a good numbers but not too bad either, they just relatively small and seems cheaper that some other guys.
Only if it sells above expectation.
And if game and backcatalog continue to sell above amortization of costs - they will be profitable in the future too.
They are paid for this too
vaibhavpisal
Member
How much?
Seems like fairly challenging environment within MS.
Studios certainly are not coasting simply cause they have gamepass safety net.
Unknown Soldier
Member
MachineGames is owned by the $4 trillion company Microsoft, and unlike most of the Xbox/MS Gaming division companies, they are turning a profit
They'll be just fine lol
They'll be just fine lol
Felessan
Member
Probably at the average rate MS pay to 3rd party. Otherwise it would be a pain to deal with tax authorities.
Killjoy-NL
Member
The question is, will Nadella be happy with these results?
If I were him, I'd cut them loose. The brand is declining anyway.
Maybe they could be replaced by AI?
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Heisenberg007
Gold Journalism
A few points to note:
P.S. Also the operating expenses are for only 12 months. But Indiana Jones took more than 12 months to create. I think the most important information here is the operating expenses figure. Multiply that by 5-6 years, and you'll have a rough but close idea of how many copies their games need to sell for breakeven.
- Accounting for subsidiaries is a bit different, so this may not provide the full picture or context.
- Having said that, this is for FY 2024 if I'm not wrong? In that case - assuming there is no important info in Zenimax books - this would not look good. Because Indiana Jones released in 2024, and the profitability and margins are miniscule. What would happen in 2025 and 2026 or 2027 when they wouldn't release any new games. The profit for Indiana Jones should have been enough to cover them for the next few years, at least until the next game releases (which once again generates enough profits to coast them for the next 5-6 years, so on and so forth).
P.S. Also the operating expenses are for only 12 months. But Indiana Jones took more than 12 months to create. I think the most important information here is the operating expenses figure. Multiply that by 5-6 years, and you'll have a rough but close idea of how many copies their games need to sell for breakeven.
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Baemono
Member
Exactly. People reporting this kind of stuff don't work in finance so they don't really see the bigger picture.
Unfortunatecookie
Member
For a brand new IP, you're probably right.
For Indiana Jones, you're probably looking at the end of it at MachineGames. Unless the PS5 version and the DLC do magical numbers, RIP Indy.
Ulysses 31
Member
Heisenberg007
Gold Journalism
It is only for a 12-month period.
So you're looking at only 1 year of operating expenses, the bulk of the revenue from Indiana Jones games sales (pre-order and launch sales), and still only a $2 million profit.
Again, the $2 million profit is only for this 12-month period, in which the game launched.
The operating expenses will remain roughly the same for 2026, 2027, etc. But the revenue will obviously decrease in those years without a game launch.
So you can see how these numbers are likely very bad.
1) They released Indiana Jones on the PS5 in 2025
2) They're releasing paid DLC for Indiana Jones in 2025.
3) What's your source on the claim that they have no planned games for release between now and 2027, given that we know they're working on multiple unannounced projects?
They seem to be surviving just fine.
The question is, will Nadella be happy with these results?
If I were him, I'd cut them loose. The brand is declining anyway.
Maybe they could be replaced by AI?
2/10 for effort.
Source for your point that it made $0 on PS5?
Ashamam
Member
You must know given recent and not so recent events this particular comment has the strong potential to age like milk yes?
Killjoy-NL
Member
Kinda like how much effort it takes for Nadella to cut into the Xbox division.
What is it with some of you that you guys just can't seem to accept the reality of the state of Xbox?
Mindblowingly dense...
blastprocessor
The Amiga Brotherhood
The gamepass effect? Win over Sony at all costs?
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xrnzaaas
Member
No one knows the exact excel numbers, it's all guessing (more or less). I still think it's fair to say that Indy game wasn't such a sales hit as they were hoping, especially with the large budget covering both the production and licensing costs (for both the franchise and Harrison Ford).
Heisenberg007
Gold Journalism
They don't have anything announced, do they?
What's YOUR source that they're releasing stuff between now and 2027?
Read, bro.
The 'reality of the state of Xbox' is that MachineGames should be closed down and everyone replaced with AI?
They don't have anything announced, do they?
What's YOUR source that they're releasing stuff between now and 2027?
I can't say if they're releasing anything for 2027. Which is why I'm not making that claim with certainty like you are.
Read, bro.
The game was not up for preorders on PS5 in 2024. The platform where you lot frequently claim the bulk of the audience resides.
Read?
Killjoy-NL
Member
I never said anything about what should happen.
Edit:
Though I did say that I personally would cut them loose.
Which doesn't necessarily mean closing them down entirely.
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OmegaSupreme
advanced basic bitch
Imagine thinking this is something you thought this was a good idea to say.
MS seems to have taken an axe to struggling studios or projects. Notable that there were no reported layoffs at Machine Games.
But yeah, those crazies at MS can't be trusted after what they did to Tango. Though it's generally harder for MS to lay devs off in the EU
Shubh_C63
Member
With giant corporations it's never just about Profit. It is about Profit Profit Profit !!!
Killjoy-NL
Member
Funny. You get mad at me for pointing out that MS seems to be ready to cut studios off if they feel it's in their interest.
Felessan
Member
Depreciation of asset for Indiana will largely take place in first year, reducing expenses in following years.
There are quite a big misunderstanding of how accounting work, especially those who report under IFRS (and Sweden mostly do), and articles on news sites are oversimplified:
- Salaries spent on development game are capitalized costs and goes against asset (game being developed).
- the moment game released all future salaries spent on immediate support (i.e. bug fixing and free updates, not dlc) are recognized immediately as expenses
- the moment game released asset associated with it start to amortize (gradually write down value) at some predetermined speed that reflect it future potential to generate cashflows - like 50% in first year, 30% in second year etc. This speed should reflect reality (though some exceptions may be like US allowed immediate 100% RnD amortization)
- Cash from sales go against amortization, offsetting it, and if the game generate more cash that was spent relatively to amortization curve - game is profitable, if it's less - game is at loss
So it's really hard to say whether company will be profitable 2nd year or not based on 1st year result - it depends on how much support cost will be and how high backcatalog sales will be compared to assumed amortization curve.
Heisenberg007
Gold Journalism
So why dispute my statement then? They currently don't have anything announced as of yet, so we will assume they don't have anything coming. Once they announce a new game is coming, that'll change.
So are you saying that PS5 revenue (even after the timed-exclusivity period) will be much higher than Xbox sales + PC sales + Game Pass revenue?The game was not up for preorders on PS5 in 2024. The platform where you lot frequently claim the bulk of the audience resides.
Read?
So are you saying that PS5 revenue (even after the timed-exclusivity period) will be much higher than Xbox sales + PC sales + Game Pass revenue?
Isn't the common refrain here that Xbox gamers don't buy games?
There's also a premium $35 expansion that is not included in GamePass, releasing in September.
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deriks
4-Time GIF/Meme God
So the new thing to bitch about is having a "small profit"?!
I can see a conversation between Machine Games with Actvision
- I can only afford a three bedroom beach house
- oh, I feel sad for you. A jacuzzis in one of the fifth rooms broke. It's horrible. I mean, I didn't even reach the bathroom, but still
I can see a conversation between Machine Games with Actvision
- I can only afford a three bedroom beach house
- oh, I feel sad for you. A jacuzzis in one of the fifth rooms broke. It's horrible. I mean, I didn't even reach the bathroom, but still
intheinbetween
Member
Profit - 26.07 million SEK ($2.679 million)
And people still making a drama scene out of this, lol
And people still making a drama scene out of this, lol
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Kacho
Member
Unknown Soldier
Member
What do you think was the budget for Indiana Jones and the great circle? Do you think $2.6M is going to sustain them until their next game? Somebody has to eat that cost.
The 'reality of the state of Xbox' is that MachineGames should be closed down and everyone replaced with AI?
Well, you're talking to someone who's been announcing for almost two years that Ninja Theory's closure would be announced next Wednesday, and who claimed to have no doubt that MachineGames, Compulsion, DoubleFine, and Obsidian would be wiped out without a doubt yesterday... Funny how he never has the same sense or drive to predict Sony's numerous studio closures...
The reality is that the reasons why MS is closing XBOX studios are anything but logical. There's isnt a common criteria. Which makes predicting the Next Studio closure little more than a lottery.
Killjoy-NL
Member
Never said anything remotely close to this.
In fact, I always rooted for NT (even under MS) and I've pre-ordered the PS5 edition of Hellblade 2.
So, there's that.
Would be wiped out? Or could be on the chopping block?
All I said with certainty was that their games would flop, which they did.
I never said Sony was wrong for closing any of their studios.
As a matter of fact, I've always said those closures made perfect sense.
There is one simple logical reason:
The Xbox brand is dying.
At this point, they're lucky MS has deep pockets and doesn't just close down shop entirely.
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vaibhavpisal
Member
Square Enix posted loss in years they released their big games. FF16 and Rebirth. What's going to happen to them in the future?
