Kagey K
Banned
But it affects payroll taxes and other business grants (which affect revenue and taxation.)
You don't report money you don't collect.
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Xbox Game Pass generated $2.9b revenue in 2021
- Thread starter Banjo64
- Start date
You don't report money you don't collect.
Some people have lost their way sure, some people even believe that a model where people do not pay for games / value games cost less and less will keep producing the game variety and quality they grew accustomed to.
‘A model where people do not pay for games’
You think Gamepass subscribers pay in thought and prayers?
And thanks to MS expanded first party and the games in development already announced, I believe Xbox gamers know the quality should even be much better than before.
Kagey K
Banned
Most things are revenue based, not profit based when it comes to subsidies and grants.
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Badlucktroll
Member
I reupped for 2 years so that can add my $120 to their 2022 revenue.
Kagey K
Banned
I'm there too x2 I just reuuped me, but my kids run out at Xmas, so I guess I'll be doing the same for them.
Withalmost 3B they won't miss my 180.00
DenchDeckard
Moderated wildly
Maybe because the difference between profits and revenue would indicate health or a massive price hike (or just less and less of the “bangers” they like and more MTX / dopamine engagement maximisation match ones like on mobile… to target the users who think games should be free / have devalued games) once they move from investment mode to profit mode.
Some people have lost their way sure, some people even believe that a model where people do not pay for games / value games cost less and less will keep producing the game variety and quality they grew accustomed to
So all these dopamine max trash games you speak of are what I get to play this month, Grounded, Persona 5 Royale, Scorn and my second most anticipated game of the year.....Plagues Tale!!
Yeah, loads of microtransaction bullshit right there.
Chukhopops
Member
Some conclusions from the data:
- no more than 25% of subscribers can be on the $1 tier if you assume the data is between the time MS was at 18M subs and 25M subs. And that would be if the 75 other % were paying full price monthly and subbed all the time, which isn’t the case;
- Since there are 382 non-first party games on GP, to break even on the cost of those third party games being added MS can pay up to 7.59 M USD per game added per year. Most games are going to cost way less than that.
I think everyone can stop worrying and just enjoy at this point.
- no more than 25% of subscribers can be on the $1 tier if you assume the data is between the time MS was at 18M subs and 25M subs. And that would be if the 75 other % were paying full price monthly and subbed all the time, which isn’t the case;
- Since there are 382 non-first party games on GP, to break even on the cost of those third party games being added MS can pay up to 7.59 M USD per game added per year. Most games are going to cost way less than that.
I think everyone can stop worrying and just enjoy at this point.
Scorn will be crap. It doesn't even have a review embargo, and the game comes out in four days.
Persona is an old game. And even for it, I'm sure Microsoft paid a lot of money.
Only A Plague Tale remains.
You and your friends talk so much about subscription sustainability, but even shitty Saints Row didn't make it into Game Pass.
Even the fucking Gotham Knights won't get into the gamepass
They literally have to buy entire publishers to get AAA into their subscription.
DenchDeckard
Moderated wildly
SO those games are not valid because you dont think they are....Good on ya!
Enjoy, well...I don't know what you enjoy to be honest...if there is something you can't find to play on gamepass.
So show me an Xbox game that is at least close to Gow Ragnarok in terms of production.
You can not)
Kagey K
Banned
Gsmepass is 20% of revenue. It's not meant to be your entire gaming diet.
Imagine how much they could make I'd this games were on it though.
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Kagey K
Banned
I'd say Gears of War 5 is close, but they do different things, so
Tomeru
Member
Can you expand on the 2nd point please?
Chukhopops
Member
So we know based on games being removed that most 3rd party games added to GP are on a one year contract. If a game doesn’t leave after one year it’s because MS renews it (for example some popular indies have been on GP for years).
There have been a few exceptions with games being there six months (like RDR2) but those are the minority.
So MS needs to pay something each year for each of the 382 games which are not first party (since it wouldn’t make sense for MS to pay royalties on those).
To break even on the cost of those games, the base revenue of GP needs to be at least equal to the total cost paid to 3rd parties, so dividing the revenue by the number of third party games gives you the highest possible anount MS can pay per game per year at this point and that would be 7.59M USD.
Of course most games will probably cost much less than that and a select few will cost more. It’s still safe to say that if you only measure the cost of games being added and the revenue, there’s probably not much of a loss there for MS.
T0kenAussie
Neo Member
I checked my latest shareholder guidance and I think Microsoft will make enough profit imoMe waiting to see how much profit GP generated while watching the usual suspects pretend revenue is profit.
T0kenAussie
Neo Member
i dunno what this means but there’s one company out there reviving first party AA and unique experiences in many genres like sims / RTS that don’t usually see a big investment and there’s another that’s wringing the blood of the IP stone with multiple re releases and remasters at full priceSome people have lost their way sure, some people even believe that a model where people do not pay for games / value games cost less and less will keep producing the game variety and quality they grew accustomed to
Both are running subscription gaming services too weird
Haggard
Banned
the infrastructure, employees, first party game and service development and everything else surrounding such a massive project is ofc free of charge....
For the love of god stop that kindergarden math all of you.
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Tomeru
Member
Is this the case if there is/isnt profit?
Morrie’s wig shop
Member
It’s amazing, console warrior calls console warrior a console warrior….
fascinating
SaucyJack
Member
Me waiting to see how much profit GP generated while watching the usual suspects pretend revenue is profit.
Exactly this.
How much did it cost to provide the content to generate that $2.9 billion? And how much income has been foregone by not selling the games that are now part of the sub?
How much Xbox Live Gold revenue has been lost, or is now cannibalised in the Gamepass revenue? Must be in the ballpark of 1/3rd of that revenue number.
Chukhopops
Member
Good job missing the point entirely.
The argument in previous pages was about the cost of third party versus the revenue of GP. If you want to isolate GP as a revenue stream then you need to isolate the costs which are specific to GP - you can’t have it both ways.
Payment processing, bandwidth, servers etc are all mutualized for the gaming division. I suppose you could argue there are specific marketing costs for GP and Cloud gaming but that’s it.
If you want to add the cost of everything then you need to compare it to the total revenue of 16.2 bn.
azertydu91
Hard to Kill
Haggard
Banned
Bullshit. From start to finish....
That is not how accounting in real companies works.
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Chukhopops
Member
Wishing you a very good day then, since I doubt we’ll come to an agreement.
MarkMe2525
Gold Member
*Enron walks in the room
Haggard
Banned
There is nothing to discuss or agree to from your side. (project)accounting does not work that way, never has and never will. Your math and therefore your argumentation is base and pointless.
But this whole discussion seems to be more ideology than facts from all side anyways, so go on....
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SaucyJack
Member
That would be true if paying 3rd parties for games was the only cost of providing the service.
But it isn't. If you're going to properly consider profitability you're also going to have to factor in the majority of the operating costs of Xbox Game Studios for all the first party content which now has significantly diminished sales. You also have the costs of providing the cloud/network services, which is not free, and some proportion of the non-studio Xbox Division/Segment costs.
At this point I imagine they'll be happy to be even breaking even. It's a long-term play.
Chukhopops
Member
Thanks, I will!
Keep believing that all costs of the entire gaming division are considered GP costs if that helps you.
Why would you factor in the « majority » of XGS costs into the balance sheet of GP when it’s only a small part of the total revenue? That would only make sense if the only way to get those games was GP, which it is not.
Like I said you would only add specific costs like dedicated marketing expenses or Cloud gaming bandwidth / servers since those are specific to GP.
And of course you’d count those in the total costs, which you’d match against the total revenue of the division.
What's truly desperate is downplaying Game Pass' massive success and coming into a thread that debunks your shitty narrative to scream "bu-but where's the profits? Wheres the exclusives?!?" and then tell all the people who are thoroughly enjoying Game Pass that they're the desperate ones.
The crazy part is that Game Pass is doing so good and getting so much praise in what is most likely the last down year Xbox will have in a very long time, and it's making many of y'all visibly upset. I wonder what early 2023 will do to you guys when these massive games start dropping, the ABK deal closes and Family Game Pass launches. Gonna be a rough gen for some, it seems.
Bold faced lie, but not surprising coming from you. There's a metric ton of Playstation centric websites or content creators talking about these things, most noticeably as of late the GaaS focus and day/date PC games, many of which are adamantly against these things. From random no-name fanboys to PlayStation journalists like Moriarity. Jim Ryan is a massive talking point in PS circles, for better or worse.
Meanwhile, no Xbox fan is coming into Game Pass threads crying about "muh profits!" That's almost strictly derived from insecure rats downplaying Game Pass success, and there's hundreds of receipts for this one.
Nice try, though.
Oh, they're here. Just singing a different tune and moving dem goalposts.
Haggard
Banned
more bullshit from someone who`s obviously never worked in the industry nor has any idea how projects or divisions function on company level at all.
If controlling and accounting worked on such a primitive level like you believe they do we`d all be wearing potato sacks and begging for dimes.....
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Topher
Identifies as young
I don't think that is as unlikely as you do. First party this year is nearly non-existent. For those who are subscribing for first party games, it is a good year to save your money. You might be right though and I'm not certainly not saying you are wrong. I think pointing out the difference in output is certainly valid.
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For real
DenchDeckard
Moderated wildly
Frank Horrigan
Banned
A possibility indeed. I wouldn't bet the farm against it.
It's unlikely for sure. I would like to get the discussion out of the way now before MS post only 2.8 bil profit next year and we go through this whole discussion again.
Although, there are factors that could swing the number up - more consoles and more games leading to more subs, or factors that could swing the number down - world events such as energy crisis leading to black outs, or reduced energy, requiring people to find alternative hobbies. Or even another company creating a gamepass alternative like Disney (which is inevitable) that could pull subs away from gamepass.
Gun to my head, i would bet that subs and revenue/profit will increase over the next 12 months, but I wouldn't like to make the call either way
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adamsapple
Or is it just one of Phil's balls in my throat?
Truth be told, I think anyone in this topic arguing for either case is already enjoying the service and the content it puts out.
But it is also very nice to put a number to the amount of revenue the service generates. Makes the sustainability comments made last year seem in an even more positive light.
The entire service seems like it is sustainable in itself without needing to put strain on the rest of the Games and Services department that Xbox overlooks.
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Topher
Identifies as young
Yeah, there were. I read many a post where people multiplied $15 times 25 million and came up with numbers like this and pretended every dime went into Microsoft's coffers. I remember because I was there pointing out that money was redistributed to the publishers putting their games on the service. So you had those and then you had the every sub is $1 folks. The extremes. The truth, as usual, is somewhere in the middle.
edit: Found this post. Dude nearly nailed the revenue.
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Edgelord79
Gold Member
This isn’t profit. It’s revenue. They could absolutely be losing a bit of money on it. Nobody knows though, it’s all speculation.
I’m not sure it’s more about first party vs more about perceived value of games. So something like MLB The Show 2022 can’t be classed as ‘first party’ but it’s value enough to bring in or keep subscribers. Not to mention the fact that popular games like FH5 from late last year that remain live service to keep players engaged for months.
Additionally, it’s already well known that the Series S converts a lot of buyers into Gamepass. And it’s continued to sell well this year.
Even Sony’s statement to CADE acknowledges that they project the service continues to grow.
Of course we can’t know for certain, but It’s unlikely the subscriber count drops. Probably a slower pace of additions this year.
Topher
Identifies as young
Fair statements. Really hard to argue with any kind of certainty. But yeah, I'd say if the perceived value for most reaches beyond first party then the number of subs probably did not drop.
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I find this incredibly hard to believe. Even the most gung-Ho projections I’ve seen here have at least tried to come up with an average assumption for subscription (not everyone is GPU + percentage on $10 PC GP)…more often than not, the projection gets averaged at $10 per user.
But to be fair, there are a good number of crazies here so I can’t discount the possibility
The assumption that the bulk of XGS operating costs be placed on Gamepass seems to be the primitive one…
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Topher
Identifies as young
I'm not saying there were many but I can recall having that discussion on at least one occasion. Can't remember who it was. But yes that is an outlier. You are right that most who tried to do the numbers did not assume every sub was $15. I edited my post above using one such example. The result is nearly exactly what was reported, around $3 billion.
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Haggard
Banned
No one ever said that. You could try reading what you comment on first.....
Hard concept I guess.
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Dick Jones
Gold Member
How does sales made affect payroll tax? Payroll taxes are based off how much you pay employees only. What business grants would MS be looking for relating to their Gamepass business.
Corporation Tax is tax on profits. I dont understand what you are trying to state with the last part. The discount allowed is an expense that brings down the net sales number, that is then taxed. You do record your total sales and you expense the discount you give. That's accounting.
I was in the thread when the announcement came that PSVR2 wasn’t going to be backwards compatible with PSVR games. Literally everyone who came in to express their unhappiness with that twist was labeled a ‘hater’.
I think the unfortunate proliferation of console warring here has nearly killed all tolerance for even good faith criticism.
ReBurn
Gold Member
They're posting. They've just moved on to "ok, but how much profit?"
adamsapple
Or is it just one of Phil's balls in my throat?
The missions change, they always do.
SportsFan581
Member
You realize they still sell games normally right?
Haggard
Banned
You realize that subscribers don`t have to buy the game to play it, right?