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[Thick Thighs Save Lives]

I probably can't do the compare and contrast that well, since I wasn't in the rooms at Activision when they were making some of the decisions about what to focus on. I can speak to us. It goes back to some of our language on Game Pass in the very beginning. We have a service that is financially viable, meaning it makes money, in Game Pass. We've put a lot of money into the market, over a billion dollars a year supporting third-party games coming into Game Pass.

"We have no plans to bring Xbox Game Pass to PlayStation or Nintendo." Xbox CEO Phil Spencer on console hardware, the future of Activision-Blizzard, and much more

In our exclusive interview with Microsoft Gaming CEO Phil Spencer, we got a glimpse of the future of Xbox, and Microsoft's evolving strategy going forward.

www.windowscentral.com

 

[pasterpl]

Yeah I can see this, even in 2023, lots of day 1 high quality titles this year.

 

[adamsapple]

For reference, they made $3.9 bn from subs in FY22.

 

[Punished Miku]

"We have a service that is financially viable, meaning it makes money, in Game Pass"
- Phil Spencer

Meanwhile, at NeoGAF:

 

[tmlDan]

Meanwhile, at NeoGAF:

“financially viable” interesting wording

 

[BobLeeSwagger]

For reference, they made $3.9 bn from subs in FY22.

Is that profit?

Wonder what the costs are for maintaining servers, developing first party games, etc.

I know it’s a different industry, but most streaming services aren’t making a profit because they’re spending a lot of productions, licenses to get other studio shows/movies on their services, and also upkeep to keep servers up.

 

[ChorizoPicozo]

and who Is it going, buddy?

 

[bender]

We don't pay for exclusives. /also Phil Spencer

 

[ChuckeRearmed]

For reference, they made $3.9 bn from subs in FY22.

With ABK they literally gain additional 3-4b in pure profits and 8b in revenue...

 

[Thirty7ven]

When you don’t account for dev costs and marketing and basically nothing else aside from third party cost of entry then yeah sure, financially viable.

 

[NickFire]

For reference, they made $3.9 bn from subs in FY22.

If all the numbers being floated are correct, it wouldn't be too far off to about 30% of revenue going to 3rd parties.

About the same percentage a Sony or Nintendo would take from anything sold on their store. Drop 3rd party, charge same price, and MS makes same amount net by selling GP on PSN. So obviously MS buys Sega on Wednesday.

 

[cireza]

They have a profitable Subscription Service, well done.

 

[rapid32.5]

Wouldn’t time exclusive deals like FFVII Remake make more sense to gain the audience and cheaper ?

 

[Punished Miku]

Wouldn’t time exclusive deals like FFVII Remake make more sense to gain the audience and cheaper ?

For PS, yes. For Xbox, absolutely not.

 

[Atrus]

People claiming that Gamepass is profitable are free to post the yearly net income from the venture.

 

[adamsapple]

They have a profitable Subscription Service, well done.

Yep, not sure why some like dumping a full games dev cost on game pass revenue. Those games sell at retail as well, they're not exclusively on game pass. Makes no sense to try and put all of their dev cost on the service.

 

[Ozriel]

We don't pay for exclusives. /also Phil Spencer

Did you even read the OP? What’s this got to do with exclusivity?

When you don’t account for dev costs and marketing and basically nothing else aside from third party cost of entry then yeah sure, financially viable.

Makes zero sense to put dev costs on GamePass for games that are also sold at retail for console and PC.

 

[FoxMcChief]

Thank you sir.

 

[geary]

People claiming that Gamepass is profitable are free to post the yearly net income from the venture.

I think is the other way around…If those claiming is bot profitable, to post the P&L…
At least some more and credible evidence than some napkin math…

 

[Punished Miku]

Now we just need PS+ number invested for 3rd party

 

[bender]

Did you even read the OP? What’s this got to do with exclusivity?

Use your brain and think about all the 3rd party games that launched day one on Game Pass and how much later they were available on other services. Almost like they were 3rd party exclusives. Nah, Phil doesn't believe in those.

 

[MisterXDTV]

Nobody spends Daddy's money like Phil.... Give him an award!

 

[adamsapple]

Use your brain and think about all the 3rd party games that launched day one on Game Pass and how much later they were available on other services. Almost like they were 3rd party exclusives. Nah, Phil doesn't believe in those.

Why are we counting sub services like platform exclusives? Remnant 2 launching on GP doesn't mean its not available to PS console players.

I don't agree with your analogy at all in this matter.

 

[bender]

Why are we counting sub services like platform exclusives? Remnant 2 launching on GP doesn't mean its not available to PS console players.

I don't agree with your analogy at all in this matter.

Who mentioned Remnant 2? That wouldn't be a good example as it launched on all platforms at the same time and later came to Game Pass.

 

[DForce]

Makes zero sense to put dev costs on GamePass for games that are also sold at retail for console and PC.

For their first-party games?

If they're losing money in retail, then they're going to have to recover it via Game Pass.

 

[Mownoc]

Over $1 billion paid a year to third parties gees, that's like a quarter of their subscription revenue gone already. Then factor in the loss of $70 purchases of both first party and their cut from third party titles being cannibalised...

No wonder they're increasing prices, cutting conversion rates and changing regional pricing this year.

 

[adamsapple]

Who mentioned Remnant 2? That wouldn't be a good example as it launched on all platforms at the same time and later came to Game Pass.

I'm just using it as a new example. Phil is talking about bringing games to game pass.

The majority of games on game pass are multi-platform releases that came to the service after their retail release. Those all also count in the 'spending to support games coming to game pass' Phil is talking about.

 

[Bumblebeetuna]

Oh look, Phil once again confirming GamePass is profitable. But I’m sure the armchair accountants here who have been predicting the exit of Xbox hardware for years and years know more than him.

 

[adamsapple]

The best part of a successful Game Pass is more games like Hi-Fi Rush.

That's a great thing and literally no one should have any issue with it.

Right?

 

[GHG]

When you don’t account for dev costs and marketing and basically nothing else aside from third party cost of entry then yeah sure, financially viable.

Meanwhile his CFO is scrambling.

The best part of a successful Game Pass is more games like Hi-Fi Rush.

That's a great thing and literally no one should have any issue with it.

Right?

You mean games that were deep in development before they purchased the publisher they were under? You mean games like Grounded that launched on to Steam early access?

What are you talking about?

 

[bender]

I'm just using it as a new example. Phil is talking about bringing games to game pass.

The majority of games on game pass are multi-platform releases that came to the service after their retail release. Those all also count in the 'spending to support games coming to game pass' Phil is talking about.

And I specifically said games that launch day one on Game Pass and are mysterious missing from other platforms all together until a later date. It's obvious that the help the support Phil is talking about comes with contract stipulations and there is nothing wrong with that, but saying you don't believe in paying for console exclusives is horseshit when you've just moved that bucket of money to Game Pass acquisitions.

 

[adamsapple]

And I specifically said games that launch day one on Game Pass and are mysterious missing from other platforms all together until a later date. It's obvious that the help the support Phil is talking about comes with contract stipulations and there is nothing wrong with that, but saying you don't believe in paying for console exclusives is horseshit when you've just moved that bucket of money to Game Pass acquisitions.

And I still disagree with you on this. Console exclusivity literally prevents other console userbases from playing that game. Getting a day 1 on game pass does not.

It's not the same thing at all.

Like a Dragon: Gaiden being on game pass on day 1 did not prevent people who wanted to, to order the physical copy of the game on Playstation from Play-Asia.

You mean games that were deep in development before they purchased the publisher they were under? You mean games like Grounded that launched on to Steam early access?

Yes, I mean the game whose creator himself believed a game pass launch would be the best thing for it and another which launched on early access on Steam and PC/Xbox game pass at the same time.

 

[bender]

And I still disagree with you on this. Console exclusivity literally prevents other console userbases from playing that game. Getting a day 1 on game pass does not.

It's not the same thing at all.

Like a Dragon: Gaiden being on game pass on day 1 did not prevent people who wanted to, to order the physical copy of the game on Playstation from Play-Asia.

And you are still wrong. I didn't say it was every day one title and listing one example doesn't negate the titles that have had timed exclusivity to the Xbox. Like a Drago is actually a smart use of those Game pass investment dollars as those title would have a good chance of missing the platform if Sega were not incentivized.

 

[OmegaSupreme]

Oh look, Phil once again confirming GamePass is profitable. But I’m sure the armchair accountants here who have been predicting the exit of Xbox hardware for years and years know more than him.

They still can't sell hardware. They were still on the chopping block after the disastrous Xbox one generation and guess what? They're doing even worse this gen.

 

[GHG]

Yes, I mean the game whose creator himself believed a game pass launch would be the best thing for it and another which launched on early access on Steam and PC/Xbox game pass at the same time.

So you really want to argue that absent of gamepass those games would not have existed?

 

[Punished Miku]

The best part of a successful Game Pass is more games like Hi-Fi Rush.

That's a great thing and literally no one should have any issue with it.

Right?

This man must be protected at all costs.

 

[Bumblebeetuna]

They still can't sell hardware. They were still on the chopping block after the disastrous Xbox one generation and guess what? They're doing even worse this gen.

It’s almost as if you don’t need to sell as much as the competition to make money or something. Weird.

 

[DForce]

Oh look, Phil once again confirming GamePass is profitable. But I’m sure the armchair accountants here who have been predicting the exit of Xbox hardware for years and years know more than him.

Was it armchair accountants or Phil Spencer's words via the FTC documents?

 

[OmegaSupreme]

It’s almost as if you don’t need to sell as much as the competition to make money or something. Weird.

You're right. They don't need to sell hardware at all to continue to survive. Just like many have been saying. So why bother? You can play gamepass on your phone or stream it through your tv. That's the future after all

 

[Metnut]

Maybe some of that money should’ve went to help out on Redfall and Starfield rather than buying a couple months on Gamepass for third party games.

 

[adamsapple]

They still can't sell hardware. They were still on the chopping block after the disastrous Xbox one generation and guess what? They're doing even worse this gen.

Not after, this was circa 2013, 14.

So you really want to argue that absent of gamepass those games would not have existed?

No. But they sure as heck wouldn't have the same kind of impact they did. Especially HiFi.

And you are still wrong. I didn't say it was every day one title and listing one example doesn't negate the titles that have had timed exclusivity to the Xbox. Like a Drago is actually a smart use of those Game pass investment dollars as those title would have a good chance of missing the platform if Sega were not incentivized.

You can potentially say that about every game.

I just can't agree with you on the 'we don't pay for exclusivity' thing being tied to game pass day 1 releases, especially for multi-platform games.

 

[DrFigs]

They have a profitable Subscription Service, well done.

profitable?

 

[James Sawyer Ford]

For reference, they made $3.9 bn from subs in FY22.

How much did they lose paying for all their studios they now own?

 

[Bumblebeetuna]

You're right. They don't need to sell hardware at all to continue to survive. Just like many have been saying. So why bother? You can play gamepass on your phone or stream it through your tv. That's the future after all

You can say this about any of the three console companies, they’d all be fine as third party. I guess they all just enjoy making all that money

 

[OmegaSupreme]

You can say this about any of the three console companies, they’d all be fine as third party. I guess they all just enjoy making all that money

Not at all. Ms has pushed the hardest for non native hardware. Nintendo hasn't at all. Ms is the only one struggling to sell hardware so they have no choice but to pivot. Enjoy playing the next halo on your phone.

 

[Bumblebeetuna]

Not at all. Ms has pushed the hardest for non native hardware. Nintendo hasn't at all. Ms is the only one struggling to sell hardware so they have no choice but to pivot. Enjoy playing the next halo on your phone.

Of course they have a choice. They can continue to make hardware and have their own ecosystem and make tons of money. How is this so hard

As for the last part, I am genuinely happy for you guys that reality hasn’t stripped you of your dreams. Warms the heart!

 

[GHG]

No. But they sure as heck wouldn't have the same kind of impact they did. Especially HiFi.

You've got to be joking.

The same Hi Fi Rush that you were celebrating in terms of its sales performance on PC?

 

[bender]

You can potentially say that about every game.

I just can't agree with you on the 'we don't pay for exclusivity' thing being tied to game pass day 1 releases, especially for multi-platform games.

The Game Pass strategy is two-fold: Since Xbox lacks the userbase and further software attach sales, invest in bigger titles to keep them on the platform. Invest in smaller titles to bring them day 1 on Game Pass and in return, require short exclusivity window. Neither is a bad approach but pretending you don't pay for exclusivity is horseshit and it's obvious they are trying to sway opinion about themselves and their competition.

 

[OmegaSupreme]

Of course they have a choice. They can continue to make hardware and have their own ecosystem and make tons of money. How is this so hard

As for the last part, I am genuinely happy for you guys that reality hasn’t stripped you of your dreams. Warms the heart!

Why would they continue to make hardware l? Have you not gotten the latest script about how streaming is the future?

 

[Bumblebeetuna]

Why would they continue to make hardware l? Have you not gotten the latest script about how streaming is the future?

It’s right there in the post you quoted, friend. Move your discord script out of the way so you can read it.