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[Grildon Tundy]

I disagree on this point:

"There's a lot of debates going on. Is Game Pass profitable? Is Game Pass not profitable? What does that mean? That's really not the right question to ask anyway,"

Profitability is the objective measure of success for a company.

What he should've said, but didn't, is: "Will it be profitable for Microsoft in the long term after they disrupt the industry by reducing incentives for developers to the point they no longer produce content that will drive consumers to Game Pass?"

 

[simpatico]

The fire rises brothers. Wait til they check the amortization schedule if they ever get a mortgage. No wonder you need an 8 year degree to figure out how the hell they got "5%" out of that delta between amount borrowed and total amount returned. If they had to advertise it plainly as "250%", with the same exact fucking amortization scheduled, just a different shorthand phrase, I think people would have gotten to where they are now 30 years ago.

 

[jm89]

You can do all kinds of financial jiggery-pokery for any sort of corporate service to make it look profitable if you wanted to. You take enough costs out and say that's off the balance sheet and, oh look, it's profitable now.

 

[zeroluck]

He is saying game dev is a mostly passion driven industry, nobody with any basic understanding of finance will want to get into game dev.

 

[Edgelord79]

Wage slave…. a tad hyperbolic.

 

[Sinfulgore]

Domestic Yearly Box Office

www.boxofficemojo.com

Box Office gross and buying movies are two completely different things. That link says nothing about whether people are buying movies or not.

I disagree on this point:

Profitability is the objective measure of success for a company.

What he should've said, but didn't, is: "Will it be profitable for Microsoft in the long term after they disrupt the industry by reducing incentives for developers to the point they no longer produce content that will drive consumers to Game Pass?"

Business is way more complex than this. For example, Twitch isn't profitable for Amazon, but that doesn't mean it's a failure. For large companies, the success of each division isn't determined solely by whether it's profitable or not.

 

[Bumblebeetuna]

Won't someone please think of the big AAA publishers who were all doing perfect and putting out incredibly valuable content before subscription services

 

[ChorizoPicozo]

This news is getting traction

Jez Corden cooking the spin

 

[ecosse_011172]

Box Office gross and buying movies are two completely different things. That link says nothing about whether people are buying movies or not.

Business is way more complex than this. For example, Twitch isn't profitable for Amazon, but that doesn't mean it's a failure. For large companies, the success of each division isn't determined solely by whether it's profitable or not.

2024 US home video revenue: streaming makes up nearly all viewing; physical media sales fall below $1 billion

A media industry group has released a report on 2024 US home video revenue. Streaming services dominate, while DVD/Blu-ray sales continue to plummet.

www.diversetechgeek.com

• Subscription streaming (SVOD): 91.3%
• Digital sales (EST/"electronic sell-thru"): 4.1%

 

[Grildon Tundy]

Business is way more complex than this. For example, Twitch isn't profitable for Amazon, but that doesn't mean it's a failure. For large companies, the success of each division isn't determined solely by whether it's profitable or not.

I agree with you. I said "Will it be profitable for Microsoft". The "it" wasn't explicitly referring to GP, and I didn't say "Microsoft as a whole", so I could see how it could be interpreted different ways.

 

[Dr Bass]

If it's bad for business then it's good for consumers.

Completely false. The fact this attitude exists out there is a total shame.

 

[Sinfulgore]

2024 US home video revenue: streaming makes up nearly all viewing; physical media sales fall below $1 billion

A media industry group has released a report on 2024 US home video revenue. Streaming services dominate, while DVD/Blu-ray sales continue to plummet.

www.diversetechgeek.com

• Subscription streaming (SVOD): 91.3%
• Digital sales (EST/"electronic sell-thru"): 4.1%

Obviously, subscriptions will bring in way more overall revenue. Amazon Prime has around 180 million subscribers in the US alone so that's around 25billion in subscription streaming revenue for one service. That link even shows that VOD alone brought in $1.6billion in revenue in 2024, that's a lot of people buying movies.

 

[poppabk]

"...pointing out that unlike music artists who can tour or sell merchandise, game developers have no extra revenue streams once a game ships."
Err what?

 

[ZehDon]

... is he talking about PS+ or Game Pass? PS+ is Sony's money maker. It pays for a lot.

In either case, the video game industry needs a shake up. USD$300m cinematic one-and-done games are no longer sustainable. Pooling everything together into a subscription service allows less profitable games to exist within the corporate mega-sphere, whereas in a purely sales or microtransaction driven industry, they'd get culled entirely in favour of a big GAAS push looking find the next MTX machine. The alternative is the complete collapse of the AAA market in a few years time, leaving only indies standing.... which now that I'm writing that out, doesn't even seem that bad, frankly.

 

[Sanepar]

Subscription is a cancer and a stupid model.

 

[Bumblebeetuna]

If it's bad for business then it's good for consumers.

That's the gist I have gotten any time an executive talks about subscription services. Basically this service makes it harder for them to release bare bones games at $70 or now $80 and then bend us over for DLC and MTX so suddenly it's a bad thing.

It's also low hanging fruit for them because they don't want to point the finger at the real culprit fucking up their profits, which is F2P titles. And they don't want to shit on F2P because they're all trying to catch lightning in a bottle with one themselves.

The executives all complain it makes it harder for them to sell their mostly shitty and overpriced games. And other gamers complain that it devalues games and yet those same gamers will bitch if a three month old title costs more than half price or if an indie game is more than $15. And any game that doesn't score 90+ is mid and better wait on a steep sale. Yes these are the gatekeepers of value.

 

[StreetsofBeige]

Shawn Layden complaining about gaming sub plans? Wasnt Sony the first one with free monthly PS+ games during PS3. And early in the PS4 era they got up and running PS Now years before GP.

If he's talking high budget day one content only, well Netflix is rocking. So does Spotify. Dominating sub plans services. And they are profitable too. EA also has sub plans where one option is EA Play Pro with day one games. They are doing fgreat too. They are killing it and their stock price is at all time highs at $180/share. Netflix and Spotify share prices are near all time highs.... maybe about 5% off.

Sometimes it works, sometimes it doesn't. UBI has a day one plan. Company has been in the shitter for years. Xbox is trending down despite GPU being the best plan out there for day one first party and pretty recent third party games too. I dont think Paramount and Disney+ subs make money (unless I'm wrong there).

Layden complaining about money and shutting down studios is a laugh. When he was an exec at Sony, they canned many well known studios like Zipper and Evolution, whose games sold millions of copies. And Sony still shut them down.

Take Titanfall as an example. Despite being an excellent game, it released at the same time as other major titles and struggled as a result. In cases like that, the studio might have been better off on a subscription platform where they could also earn additional income through microtransactions. As always, the truth is probably somewhere in the middle.

I dont think Titanfall 1 even had mtx. So that doesnt make sense.

If were talking T2, thats different. Regardless of whether it was sold on disc or sub plan would had made no difference because sandwiching it between BF1 and COD was the dumbest move ever. T2 was a sacrificial lamb EA used trying to get as many shooter fan sales as possible before COD hits because traditionally I think they'd done that for every BF game except one game.

They tried to knock out COD with a two game shooter combo. BF1 WWII game and T2 sci-fi game, where the COD game coming out that year was Infinite Warfare (a sci-fi shooter). If T2 was released at a totally different time slot, it would had had way more sales.

 

[Here]

Some sort of live service huh?

Truth is on the way.

 

[Buggy Loop]

You know what's worse? Pushing your devs to support GAAS shit

Retention metrics is the wage slave. They have to make the fucking skins and content for retention. It engulfs a studio, patch patch patch patch to eternity or you failed.

 

[vaibhavpisal]

Examples, Shawn Laydon.

GP is pretty old service. It should've had this effect by now.

Show me an xbox release recently that wasn't creative or inspired.

 

[Superkewl]

Did I miss something? Are devs no longer allowed to release games outside of subscription services?

 

[Punished Miku]

That's the gist I have gotten any time an executive talks about subscription services. Basically this service makes it harder for them to release bare bones games at $70 or now $80 and then bend us over for DLC and MTX so suddenly it's a bad thing.

It's also low hanging fruit for them because they don't want to point the finger at the real culprit fucking up their profits, which is F2P titles. And they don't want to shit on F2P because they're all trying to catch lightning in a bottle with one themselves.

The executives all complain it makes it harder for them to sell their mostly shitty and overpriced games. And other gamers complain that it devalues games and yet those same gamers will bitch if a three month old title costs more than half price or if an indie game is more than $15. And any game that doesn't score 90+ is mid and better wait on a steep sale. Yes these are the gatekeepers of value.

Nailed it

 

[Pimpbaa]

Like the most popular service is game pass, and that isn't exactly doing great. Pretty sure ps+ extra, ea play, and Ubisoft+ is doing worse. The real thing turning devs into wage slaves over the years has been shitty publishers (going far back as Atari).

 

[IAmRei]

not only big one, also smaller one
I told so since i heard GP years before
but lotta people only know goodside of NF model, not knowing that there is also darkside as well
same with everything which comes in subscription model

 

[tr1p1ex]

IT's garbage. The entire attraction was hey I can get this and that cheaper with the sub than buying individually. But that has been a mirage subsidized by MSFT.

 

[adamsapple]

Some sort of live service huh?

Truth is on the way.

 

[Barakov]

Some sort of live service huh?

Truth is on the way.

He may.....want to chill out for a while. Seems like he's on pretty thin ice.

 

[wolffy66]

A wage slave? So like a person who does work but is paid wages. And works voluntarily?

So basically a worker. Game devs have to work, for wages, gotcha.

 

[ReasonBeing]

I dont think Titanfall 1 even had mtx. So that doesnt make sense.

If were talking T2, thats different. Regardless of whether it was sold on disc or sub plan would had made no difference because sandwiching it between BF1 and COD was the dumbest move ever. T2 was a sacrificial lamb EA used trying to get as many shooter fan sales as possible before COD hits because traditionally I think they'd done that for every BF game except one game.

They tried to knock out COD with a two game shooter combo. BF1 WWII game and T2 sci-fi game, where the COD game coming out that year was Infinite Warfare (a sci-fi shooter). If T2 was released at a totally different time slot, it would had had way more sales.

It makes sense because I said that within the context of "maybe they would have been better off on a sub platform while earning additional revenue through MTX. " I was referring to Titanfall 2, I should have been more clear. I thought it would be obvious when describing their struggles due to being overshadowed by bigger games releasing near their drop date. My bad

 

[Shmunter]

Correct, without continual growth it fails for devs. The pie is only so finite. Not to say a console user base is not also a limiting factor, but the sub is a pie within a pie, constraining things further.

 

[Signalis]

How do you know he's right?

Because he's not wrong

 

[Hudo]

He's not wrong. But also: Subscription models are by their nature also a scam for consumers. There are no fair subscription models because subscriptions are fundamentally not fair.

 

[Panajev2001a]

Speaking to GamesIndustry.biz, Layden said he's not a fan of the "Netflix of gaming" approach when it comes to big-budget releases, claiming that putting these games on subscription services from day one is "bad for the business."

"I'm not a big supporter of the 'Netflix of gaming' idea," says Layden. "I think it is a danger. The problem with gaming is all we have is launch. That's it. No one wants to pay money to come into the studio and watch people code," he said, pointing out that unlike music artists who can tour or sell merchandise, game developers have no extra revenue streams once a game ships. "I mean, look what happened to music. In the popular mind, music costs nothing. Music should be free. Spotify, what is that? It's 15 bucks a month or something, but virtually no one buys music anymore."

Layden compared the situation to what happened in the music industry. With streaming services offering vast libraries for a low monthly fee, consumers quickly began to see music as something that should cost almost nothing. He fears the same could happen with games, especially when major AAA titles are given away as part of a subscription on release day.
While he acknowledged that smaller indie games could benefit from the visibility a subscription deal brings, Layden believes AAA games risk losing profitability and creative ambition if this becomes the norm.

"You can't unring the bell," he said about publishers committing to day-one subscription launches.

He also raised concerns about how these deals change the nature of game development itself. Under this model, studios often receive a flat fee from the platform holder instead of selling copies directly to players.

"They're not creating value, putting it in the marketplace, hoping it explodes, and profit sharing, and overages, and all that nice stuff. It's just, 'You pay me X dollars an hour, I built you a game, here, go put it on your servers,'" Layden explained. "I don't think it's really inspiring for game developers."

Really good summary of the situation and to be fair many other successful business leaders in the gaming community said the same and we have heard the leaks in the FTC trial as well as seen the effect on game sales on XSX|S overall.

 

[Denton]

He is right, but he also works for Tencent, which pushes F2P forever games, which are even worse.

But it is obvious that subs lower perceived value of games. That is the whole reason why I use gamepass, to pay less for games I don't care that much about. Those I do care about, I buy (but it is also rare that those games are in subs on day one).

 

[Insanemaelstrom]

I am not for(mainly) and against( alittle) this statement.

His statement makes sense in the way that if your game is great, more people generally tend to buy it, so you get improved sales and revenue. Which you can invest for future games, and the cycle continues.

For subscriptions, quality of the product doesn't matter, especially subscriptions that have reached the saturation point. You are not getting new subscribers, so your only purpose is to retain the subscribers you already have. To do so, especially with the development time, you would prefer multiple smaller budget titles over one bug budget one. Quantity becomes more important than quality( something we do actually see with MS).

So in that sense, his statement is right.

Where I disagree with him is that, unlike movies and music, games can have additional sources of revenue with dlcs, micro transactions, etc. So devs do have the option for that. But ofcourse it can't be done for every game and a lot of the time it still fails( Forza motorsport, halo infinite, etc). It also has the unfortunate side effects of games slowly becoming similar to free to play games( again forza motorsport is an example), launching with bare bones content and being supported through dlcs and mxts.


Personally, I am not too keen on subscriptions ( the games I am excited for, not being on any subscription, also helps a lot). But milage varies according to user.

 

[Cyberpunkd]

"There's a lot of debates going on. Is Game Pass profitable? Is Game Pass not profitable? What does that mean? That's really not the right question to ask anyway," he said.

"You can do all kinds of financial jiggery-pokery for any sort of corporate service to make it look profitable if you wanted to. You take enough costs out and say that's off the balance sheet and, oh look, it's profitable now. The real issue for me on things like Game Pass is, is it healthy for the developer?"

This is a guy that gets it and all the people that never worked corporate in their lives will argue with him. Everything he says in the above sentence it correct - you can twist financials, offload unprofitable BUs for some negative goodwill, etc. You can show whatever you want, history has enough examples of companies spreading perfectly healthy up to the moment they collapsed.

 

[vaibhavpisal]

For subscriptions, quality of the product doesn't matter, especially subscriptions that have reached the saturation point. You are not getting new subscribers, so your only purpose is to retain the subscribers you already have. To do so, especially with the development time, you would prefer multiple smaller budget titles over one bug budget one. Quantity becomes more important than quality( something we do actually see with MS).

Making theories like this is completely different to actually playing these games.

Point out games which were compromised. I have played all games MS released on GP this year. Quality is high. None of them are samey sequels.

Where I disagree with him is that, unlike movies and music, games can have additional sources of revenue with dlcs, micro transactions, etc. So devs do have the option for that. But ofcourse it can't be done for every game and a lot of the time it still fails( Forza motorsport, halo infinite, etc). It also has the unfortunate side effects of games slowly becoming similar to free to play games( again forza motorsport is an example), launching with bare bones content and being supported through dlcs and mxts.

Again, pretty oblivious to what's actually happening. Halo Infinite has enough content, (maps, game modes, weapons, forge) etc, its like 5 games worth of stuff to do.

 

[Cyberpunkd]

Where I disagree with him is that, unlike movies and music, games can have additional sources of revenue with dlcs, micro transactions, etc.

Movies can have limited edition home releases, 4K BD remasters, TV distribution rights worldwide, plenty of long tail monetization opportunities. Music is more tricky, but endless vinyl editions are also profitable (and cost almost nothing to produce).

 

[mdkirby]

The main point here in my opinion, and something I've held since games pass launched, is it destroys the value perception of games, reducing the perceived value almost to free. You've not had 15? Years of this. That's a whole generation of gamers who would have been future buyers, who will have got a gamespass sub for $100 bucks for their birthday or Christmas and never needed to actually buy any games, yet still had thousands to play including new major releases.

I'm old enough to have worked in the industry and when this happened to mobile with the launch of the iphone AppStore. It was a quick race to the bottom on pricing (prior to that simple little games like video poker cost £10-£15). Now fast forward however many decades, I can't imagine many of us here on Gaf have many kind words to say about the state of mobile gaming.

 

[ecosse_011172]

Obviously, subscriptions will bring in way more overall revenue. Amazon Prime has around 180 million subscribers in the US alone so that's around 25billion in subscription streaming revenue for one service. That link even shows that VOD alone brought in $1.6billion in revenue in 2024, that's a lot of people buying movies.

I'm not really sure what you are arguing, are you trying to say that it would be good for video games to go the same way where 4% of the money spent is on buying games?
4% of the total is not "a lot" whatever way you spin it.

 

[Killjoy-NL]

How do you know he's right?

We just have to look at the GamePass filler Xbox released this gen with games like Indiana, Avowed, SoM and Doom.

The proof is right there.

 

[ecosse_011172]

We just have to look at the GamePass filler Xbox released this gen with games like Indiana, Avowed, SoM and Doom.

The proof is right there.

The amount of cancellations and lay-offs as well as studio closures tell a different story to a few hand-picked good games.

 

[Killjoy-NL]

The amount of cancellations and lay-offs as well as studio closures tell a different story to a few hand-picked good games.

They tell the same story, as the titles I mentioned were mediocre filler that flopped back to back.

 

[ecosse_011172]

They tell the same story, as the titles I mentioned were mediocre filler that flopped back to back.

I think "mediocre filler" is unfair on Avowed and Indiana Jones and while SOM is mediocre, it's visuals, music etc. are fantastic, I'm really enjoying it.
Not sure how you measure "flopped" with Gamepass games anyway.
A million people played South of Midnight, apart from GaaS games I've no idea about the very idea of profitability on Gamepass games.

 

[Insanemaelstrom]

Making theories like this is completely different to actually playing these games.

Point out games which were compromised. I have played all games MS released on GP this year. Quality is high. None of them are samey sequels.


Again, pretty oblivious to what's actually happening. Halo Infinite has enough content, (maps, game modes, weapons, forge) etc, its like 5 games worth of stuff to do.

While I have not played every MS release, I still have played quite a lot of them.

FH5, if you want an example, is the exact same game as fh3 and fh4, with a new coat of paint. It is also considered by many to be the worst in the series.

FM, if you want another example, was extremely compromised on release. Not enough cars, not enough tracks, not enough content and basically being horrid in almost every aspect.

Halo infinite's biggest complain on release( for MP especially) was lack of content. Even the forge was added later and was not there at launch.

Anyone who isn't blind knows this. Especially anyone who has actually played games from MS over the years.

There have been some exceptions( like Ori or cuphead) but otherwise, most of MS games have ranged from mid to utterly shit in the past few years.

 

[IDKFA]

Shawn Layden complaining about gaming sub plans? Wasnt Sony the first one with free monthly PS+ games during PS3. And early in the PS4 era they got up and running PS Now years before GP.

If he's talking high budget day one content only, well Netflix is rocking. So does Spotify. Dominating sub plans services. And they are profitable too. EA also has sub plans where one option is EA Play Pro with day one games. They are doing fgreat too. They are killing it and their stock price is at all time highs at $180/share. Netflix and Spotify share prices are near all time highs.... maybe about 5% off.

Sometimes it works, sometimes it doesn't. UBI has a day one plan. Company has been in the shitter for years. Xbox is trending down despite GPU being the best plan out there for day one first party and pretty recent third party games too. I dont think Paramount and Disney+ subs make money (unless I'm wrong there).

Layden complaining about money and shutting down studios is a laugh. When he was an exec at Sony, they canned many well known studios like Zipper and Evolution, whose games sold millions of copies. And Sony still shut them down.


I dont think Titanfall 1 even had mtx. So that doesnt make sense.

If were talking T2, thats different. Regardless of whether it was sold on disc or sub plan would had made no difference because sandwiching it between BF1 and COD was the dumbest move ever. T2 was a sacrificial lamb EA used trying to get as many shooter fan sales as possible before COD hits because traditionally I think they'd done that for every BF game except one game.

They tried to knock out COD with a two game shooter combo. BF1 WWII game and T2 sci-fi game, where the COD game coming out that year was Infinite Warfare (a sci-fi shooter). If T2 was released at a totally different time slot, it would had had way more sales.

The saddest thing is, TF2 was miles better than COD or BF. It was probably the best FPS released that gen, both single player and multiplayer.

But because EA sent it out to die, we may now never get TF3.

Fuck EA.

 

[Roberts]

There have been some exceptions( like Ori or cuphead) but otherwise, most of MS games have ranged from mid to utterly shit in the past few years.

Usually I hear this sentiment from people who turns out haven't played the fucking games. Psychonauts 2 is one of the greatest platformers ever with writing that puts most games to shame, Grounded has the most creative, incredible open world probably ever and gameplay mechanics that are more varied than most games, Sea of Thieves updates, especially narrative ones, until recently have been tons of fun and experience unlike anything else on the market, Avowed is a fantastic action RPG, Age of Empire remakes/remasters were adapted to consoles brilliantly, South of Midnight and Hellblade 2 might not be for everyone and have flaws but as gaming experiences they were visceral audio-visual treats. Pentiment is a masterclass of writing and mood, As Dusk Falls was fun, Indiana Jones is way better than it had any right to be. Even Starfield is widely misunderstood and will most likely be re-evaluated in ten years or so. Oh, and FH5 is better than 2 and 4. And I am probably forgetting stuff.

 

[vaibhavpisal]

FH5, if you want an example, is the exact same game as fh3 and fh4, with a new coat of paint. It is also considered by many to be the worst in the series.

FM, if you want another example, was extremely compromised on release. Not enough cars, not enough tracks, not enough content and basically being horrid in almost every aspect.

FH5 is GAAS racer. Do you levy same complaint against GT7 or Mario Kart?

I have played enough FH5 to understand its appeal, not to mention, a ton of people play it regularly. Its a solid title if you are into driving games.

FM I didn't play, but I will take your word for it, it wasn't launched in best possible state probably.

Halo infinite's biggest complain on release( for MP especially) was lack of content. Even the forge was added later and was not there at launch.

You have no idea what you are talking about.

Its no 1 complaint from day 1 is live service model that 343 adapted to please both long term fans and regular players that like to grind battle passes etc.

I imagine you don't play many live service titles. Apex Legends has 1-2 maps with 1-2 modes active at a time that you can grind. And it feels good. Better than what Infinite presents.

There have been some exceptions( like Ori or cuphead) but otherwise, most of MS games have ranged from mid to utterly shit in the past few years.

Name those mid games, and utterly shit ones as well.

Unless you like to repeat this shit without giving it any thought like the poster above.

 

[DenchDeckard]

Release good games and ill buy em.

Acting like the only main problem with the industry is subscription services is tge perfect way to cover up all the other shit thats been happening.

 

[justiceiro]

"They're not creating value, putting it in the marketplace, hoping it explodes, and profit sharing, and overages, and all that nice stuff

Lmao, you said the quiet part out loud. Wouldn't be nicer to know how much you will get from the get go, instead of commiting millions to it? Who is willing to commit more risk, people that don't know how much they gonna get or people that do?