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[Fuz]

-Mobile controlled by Google and Apple. Mobile is imperative for MS business. Break up the duopoly.

Awful news for Windows future.

 

[jroc74]

He's lying to look better for regulators, or he's not, and Xbox is an even bigger money sink than thought.

Pick one

Whatever it is, its not a good look.

 

[Fuz]

-"optional" and "choice" are the words he used in the interview a LOT ................nothing is definite to him

Not to him, to you.

 

[MikeM]

Wait...WHAT?

But I thought GamePass was profitable?

Why do they need to RAISE THE PRICE if this is the case? Legions of people told me to trust Phil at his every word.

Just goes to show you I WAS RIGHT on the spinning Phil was doing with respect to GamePass profitability excluding the cost of game development.

It can be profitable but with thin margins.

Shareholders want ever increasing margins. If GP expenses are flat, then increase the revenue side to drive more profit.

 

[I Master l]

"*Microsoft subsidize $100-$200 on the series s/x consoles (this is why they take a 30% cut on consoles, but not on pc, as pcs sell for profit)"

Uh....this is huge, lol.

Where are the BOM leaks like the last 2 generation had...

I dont think Series consoles cost 100-200$ more to manufacture compared to their MSRP, This could include shipping, Retail cut, R&D....etc

 

[Mr Moose]

I wonder how much those SSDs inside the Series consoles cost for them

 

[Chukhopops]

Wait...WHAT?

But I thought GamePass was profitable?

Why do they need to RAISE THE PRICE if this is the case? Legions of people told me to trust Phil at his every word.

Just goes to show you I WAS RIGHT on the spinning Phil was doing with respect to GamePass profitability excluding the cost of game development.

You think Sony was in the red when they raised the price of their games and consoles?

 

[adamsapple]

I never said SOLELY. You just can't read and created a false argument. The bottom line is that Game Development SHOULD be a factor in evaluating GamePass profitability.

-Buying video games is far larger than Game Pass for Xbox.

Their bigger model is the standard retail game sales, game pass accounts for roughly ~15% of their total revenue. It's great and will increase but it is not the sole or primary means of game distribution so supplanting development cost on game pass revenue still doesn't make sense.

 

[jroc74]

I dont think Series consoles cost 100-200$ more to manufacture compared to their MSRP, This could include shipping, Retail cut, R&D....etc

That's why it would be nice if we could get another BOM breakdown, leak like the last two generations.

 

[MidGenRefresh]

Wait...WHAT?

But I thought GamePass was profitable?

Why do they need to RAISE THE PRICE if this is the case? Legions of people told me to trust Phil at his every word.

Just goes to show you I WAS RIGHT on the spinning Phil was doing with respect to GamePass profitability excluding the cost of game development.

This post is so stupid. Thanks for a laugh.

 

[mansoor1980]

Not to him, to you.

i only deal in absolutes

 

[Paperclip Killa]

Something has to be wrong.

XBox has $100 - $200 loss on each console sold as of last week.
Sony announced $499 PS5 was profitable back in Aug 2021.

This doesn't seem right.

Sony raised the price of the P55 awhile ago, that profit was for a very short time. Even so, Microsoft has more expensive tech in it than the PS5.

 

[James Sawyer Ford]

This post is so stupid. Thanks for a laugh.

The only thing stupid is claiming GamePass is profitable without taking into account some portion of ongoing Dev Costs. Read between the lines, even Phil is basically admitting as such with his comments in this interview.

 

[reksveks]

But I thought GamePass was profitable?

Companies raises prices for multiple reason s.

Apple made record profits and raised prices on services and hardware because they want to maintain their profit margins.

The fact that this needs to be explained is worrying.

 

[reksveks]

Honestly though, if MS is really going to pivot and go against Apple and Google good luck to them.

Clearly MS are betting on the DMA or the OAMA. Not sure if they should be.

 

[iamvin22]

Something has to be wrong.

XBox has $100 - $200 loss on each console sold as of last week.
Sony announced $499 PS5 was profitable back in Aug 2021.

This doesn't seem right.

Sony did some pretty sharp hardware changes already. Heatsink is a lot smaller, ssd slot changed. They've been making cuts to their console. We haven't heard of anything from Ms end.

 

[SlimySnake]

Wait...WHAT?

But I thought GamePass was profitable?

Why do they need to RAISE THE PRICE if this is the case? Legions of people told me to trust Phil at his every word.

Just goes to show you I WAS RIGHT on the spinning Phil was doing with respect to GamePass profitability excluding the cost of game development.

I wouldn't trust anything he says at this point. He said he's taking a $200 loss on the xsx which is nonsense 2 years after launch.

Sony said they are breaking even this year. The 20 tflops 6800xt which was selling for $1,000-1,200 is now down to just $550. That's 2x more power for the same price as a ps5. Chip prices are down across the board. .

 

[fermcr]

Taking notes:

-Spencer says regulatory scrutiny has been fair and honest. Discussions around acquisition this size is warranted.
-COD will remain on other platforms including PS and Switch and many different screens.
-ABK deal is really about mobile.
-Call of Duty will continue to ship on PlayStation "as long as that makes sense....tech is always in transition".
-Asked why future games such as Elder Scrolls will be exclusive to Game Pass. Avoided the question and started talking about "new exclusive franchises" and Call of Duty being like Minecraft.
-Mobile controlled by Google and Apple. Mobile is imperative for MS business. Break up the duopoly.
-Consoles being sold at a loss justified 30% fee for games sold there versus phones which are sold at a profit.
-Apple throwing out Fornite from iPhone shows the power of the largest company in mobile.
-Fortnite available on iOS via MS browser. MS not able to monetize Android app.
-Cloud is an option rather than the only way to play such as with Stadia.
-20 million have tried xCloud.
-Re: Keystone. Pivoted to Samsung TV streaming app. Steaming device like Keystone is years away.
-Supply chain has improved, especially for XSS. Ample supply. XSX will have supply issues in certain markets. Problem is much as demand as supply.
-Cost of creating games has gone up. Talks up Game Pass. Will have to raise prices on certain things. Not this holiday.
-Game Pass "incredible growth on PC". 130-140% YOY growth on PC. Console growth slowed. "Reached everybody on console who wants to subscribe" at some point.
-Doesn't expect Game Pass to pass 15% of revenue.
-F2P is the largest gaming business model.
-Buying video games is far larger than Game Pass for Xbox.
-Game Pass is just a customer choice.
-Metaverse is a poorly built video game
-Metaverse looks like a meeting room. Basically, Spencer is describing Metaverse as inherently soulless.
-Metaverse is in early stages. Will evolve.
-Metaverse will not take off if VR device required.
-Metaverse is software led versus hardware led
-NFTs. Understands the gamer backlash. There are some benefits. DLC doesn't transfer to other platforms, for example. Digital economy should be more open. Remains to be seen if NFT is the enabler of that.
-Skillset of mobile developer is different from video game developer. Key aspect of ABK acquisition.

last two questions were just fluff. /end

Thanks for the notes. Took 1-2 min to read them... saved 30min from the video. Have a beer on me.

 

[Fuz]

i only deal in absolutes

Not "you" "you". His audience.

 

[reksveks]

I wouldn't trust anything he says at this point. He said he's taking a $200 loss on the xsx which is nonsense 2 years after launch.

I think he isn't talking BoM and Shipping costs as well, I think they are included R&D. Think it's just justification for the 30% xbox console cut.

 

[anthony2690]

Didn't watch it (sorry OP, aint got time for that, otherwise how can I drive-by? )

Just on the above point - pretty surprising since I would've thought getting Xbox and not getting Game Pass makes no sense (assuming someone already decided to go Xbox for some specific game).

I'm a game pass subscriber but I imagine games I buy, they get a straight 30% cut from (they do nothing but host the game on their platform)

Or if I buy a game they publish they get the entire cut (minus what retailers take for hard copies)

So I can imagine cod has sold millions on Xbox, but they haven't had to pay dev costs or anything. (But they get a 30% cut still, same with fortnite MTX etc)

I can imagine the payout from this stuff is quite generous.

 

[SportsFan581]

if MS is really going to pivot and go against Apple and Google good luck to them.

That might be the dream, but it wouldn't necessarily be a requirement to find success. They could easily still make games available for the existing stores and give up the royalty just like other developers.

 

[James Sawyer Ford]

-Buying video games is far larger than Game Pass for Xbox.

Their bigger model is the standard retail game sales, game pass accounts for roughly ~15% of their total revenue. It's great and will increase but it is not the sole or primary means of game distribution so supplanting development cost on game pass revenue still doesn't make sense.

Who cares that it's 15% of TOTAL revenue? Subtract out the hardware component of Revenue and it's a much larger percent.

 

[mansoor1980]

Not "you" "you". His audience.

now i get it

 

[Goalus]

He's lying to look better for regulators, or he's not, and Xbox is an even bigger money sink than thought.

Pick one

Stick to LOL reactions.
That's what you're good at.

 

[N0S]

That woman gives me the creeps

 

[Ezekiel_]

Seems like a lot of intentional downplaying around Gamepass like suggested by their legal team.

It won't go over 15% revenues, already saturated on consoles, just a choice, prices will go up, hardware sold at 100$-200$ loss (and yet Series S is getting discounted with a game included while it's already the cheapest console on the market).
COD like Minecraft, f2p is the future, Activision deal is now not to provide exclusives to Gamepass but to get King and break the Apple/Google duopoly

Basically he's painting the business like some kind of failure with the importance of Gamepass being marginal at best.
Most of this is fake, it's because they know that regulators are investigating on them trying to create a dominant position with gaming subscription services and they want to paint an other picture while diverging attention to the mobile business.

It's a downplaying PR tour.

 

[bitbydeath]

Can someone teach this kid, how business works? There is no infinite deal in business.

A deal being required was his point.
Requiring a deal shows it is all temporary.

 

[light2x]

We can't believe a single word out his month.

We already know he offered a deal for 3 years extension. The fact that he has to offer a deal of any kind proves their intention.

Anyone with a brain knows how business works. Unfortunately you don't.

 

[Thirty7ven]

Taking notes:


-Call of Duty will continue to ship on PlayStation "as long as that makes sense....tech is always in transition".
-Asked why future games such as Elder Scrolls will be exclusive to Game Pass. Avoided the question and started talking about "new exclusive franchises" and Call of Duty being like Minecraft.

Keeps talking both sides of his mouth basically, just a car salesman.

Downplaying Gamepass is a new strategy though.