Well this is relatively big news.
Personally, I'm very uneasy with single companies owning more and more of the popular gaming space.
but under what terms is GamePass profitable, and how does that impact the rest of Xbox.
Simple example (and not saying this is true)
GamePass brings in $100. The costs directly associated with GamePass are $80. GamePass is profitable. Check.
Studio makes a game for $60. Studio makes $20 from game sales. Studio makes $30 from GamePass payments.
Studio has lost $10.
GamePass is profitable but the structure on which GP is built (the games) is not. Again, I'm not saying that is 100% the case, but it what I would love to know. We also don't know what costs are beign attributed to GamePass when it is called profitable. Certainly not the aquisitions (and they shouldn't be) but are all the costs associated with bring a game to game pass? Even when talking about the contracts with 3rd parties - attributed to GamePass or do MS as the parent take that cost elsewhere.
I'd be really interested to (and will never) know the full details.
GamePass is profitable. Again, I think you underestimate how lucrative subscription models are.
Every single publisher would love to have every single customer on subscription. It is the dream. There is a lot more money to be made this way.
Are we really going for a Nintendo/Sony = good, Microsoft = bad argument?
These are corporations. All have and would abuse market power.
It's not the same though is it.
Naughty Dog had a prior history on 16 bit and Amiga, but their first real success was Crash Bandicoot which might never have seen the light of day if Sony didn't support and publish it. They worked exclusively with Sony for the best part of a decade after that, before being brought in as an internal studio.
Psygnosis were purchased by Sony before the first Playstation even launched - they had to start somewhere. Psygnosis had been around for a fair few years releasing games for the Amiga primarily, with Lemmings being the only really well known one but Psygnosis only published that and the developers at DMA design remained independent and weren't part of the acquisition. All of Psygnosis biggest brands, from Wipeout to Colony Wars, were created under the wing of Sony.
Insomniac worked exclusively with Sony for the vast majority of their 20+ year existence. Their biggest successes were Spiderman, Spyro the Dragon and Ratchet & Clank, all of which were released thanks to support and publishing from Sony, all of which got support for sequels, and in the case of Spiderman was an IP Sony owned and entrusted Insomniac with. By the time Sony acquired them in 2019 they had a huge catalog of Sony published Playstation games under their belt, along with one or two multiplatform games which didn't do well and one Xbox exclusive, Sunset Overdrive which was moderately successful but never received support for a sequel from MS.
Bend Studio have never released a game for a console other than Playstation, and only had a few fairly small time games under their belt before their first major success in Syphon filter which, to continue the running trend from Naughty Dog and Insomniac, was published by Sony and developed with their support, before Sony went on to later acquire the studio.
Activision Blizzar and Bethesda are publishers who have been making games for decades across multiple platforms and have never had any specific partnership with Microsoft or worked in conjunction with Microsoft to create a franchise with them. Microsoft have bought them in order to remove their games from competing platforms.
Surely you can see the difference? The studios you mentioned all built their most major brands with help from Sony. The games they made, from Crash to Ratchet to Wipeout, all might never have existed in the first place without Sony's support and funding. Microsoft on the other hand are just paying to get existing third party games that they had nothing to do with taken off other platforms.
I've said no different.
The original point of the conversation: Poster says it is inevitable that games will leave GP (for licence reasons) and not be playable in any fashion
Second point of the conversation: Second Poster says only third party titles leave GP and are purchasable elsewhere.
Third point of the conversation: I say first party titles have left GP (for licence reasons) but these games were still playable by people who owned them - so the fear a game would leave GP and be unplayable (for everyone) is as yet unfounded. I also made the point that titles on GP can also still be purchased.
The reasons for Forza leaving do not counter any point I made. The knowledge that Forza would leave and will leave in the future does not counter any point I have made.
It's already on mobile officially. You can play it on any android based set top box if you sideload but yeah only a matter of time before it's on those officially too.
When you are using an "XXXX as a service" model, you accept items are going to be in and out of the library. It's the same as DVD/Blu rays against Netflix/Prime/ AN media streamer. You've the option to own it, by purchasing it. But when leasing it, you can't claim that ownership.
Not MS, no. GamePass.
GamePass is the main driver of this conversation - when talking about games being exclusive on Xbox, where GP is going to be a huge chunk of the revenue stream for any games.
It could certainly be the case that MS don't care at all about profits in the gaming space and the 78billion (and growing) costs will be made up by other parts of the business. In which case, fine, make everything exclusive. But if MS gaming, or the individual studios are to remain or become profitable, I don't see GamePass revenues being able to hold that up mostly on its own.
Mod note: Keep it civil please.
I think your reading skills need more attention than my sentence structure.
I am sceptical of that info from Phil.
GP itself might be profitable on paper - but you would also have to take into account the status of the various first party studios. If they start making loses because the payments they get from GP in lieu of titles sold are less than it costs to run the studio, then simply saying GP is profitable is missing a large part of the conversation. I'd be very interested to know the full outlook of MS Gaming in this respect, cause you can't just take GP on its own.
Ok. That sentence was a lot to unpack. Maybe use commas, sentence breaks, etc.
Do I think Microsoft will be quick to match or beat Netflix's 1.4 billion profit? Is that what you're asking me?
No it doesn't.
I SAID EXACTLY THAT.
I was not arguing that games are disappearing from GP and being rendered unplayable.
I was actually arguing against that point - by stating that even while first party titles had left GP (for reasons stated) they were still playable (and downloadable) by people who already owned them. And I had also already said that even first party titles on GP can be purchased through the store, same as third party titles.
Yes, as I said in the intial comment, big money.
From that big money they have to fund the original MS studios. The purchased Bethesda studios. the purchased AB studios. and potentially look to claw back the 78billion they have just spent. Netflix had sub revenues of 7.5 billion, with a profit of 1.4 billion in 2021. Do you think MS will be quick to match or even beat those numbers? Even matching those profits you are talking 50 years to break even on the purchases. Maybe they will outstrip Netflix, and also the reality is AB seemed to be hugely profitable themselves - so even a huge dent in their revenues (through not selling on PS) will still keep them hugely profitable and more than self-sustaining as an entire entity. They seem to have had costs of 3 billion or so vs revenue of about 9billion, CoD and Overwatch aren't making huge dents on those numbers themselves I suppose.
Even if they have no intention of breaking even on the purchases I have to imagine the sheer numbers involved now have to force at least a conversation on exclusiveity for the most popular multi-player titles under their ownership.
Gamepass's plans I'm sure is not just to be playable on Xbox and PC. MS will be looking to extend it to mobile and set top boxes, anything that can stream really.
Even more importantly than profit though is share price and even if they don't make a profit streaming services are a big thing and will send share prices through the roof. It's also why metaverse is being mentioned so much. It has jack **** to do with metaverse but the execs are saying to get the dumb dumb investors on board and send the stock up more. I'm just waiting for a NFT announcement.
Phil Spencer already confirmed last year that Game Pass as it was then is already making a profit.
So these numbers and profits are just going to grow in the future.
I'm amazed that many people here think that Xbox/Microsoft don't know hat they are doing or would pursue a loss making model.
Yes that's my point Retr0gamer. 😉
I was being tongue in cheek.
But everyone knows Forza gets removed 3 or 4 years after release.
If you are a Game Pass customer and you think you'll want to play a 3 or 4 year old Forza game you are free to buy it at any point, for a discount, and you'll then be guaranteed access to it even after it's removed.
This is true for any game. If you want to completely own it you can do so, and at a discounted price.
Again, other than the now gutted Japan studio and Santa Monica, all of Sony's studios have been acquisitions of third parties.
But your point ignores that you can just buy the game if you want permanent access.
Fine. Ignore the topic of the conversation that was being had and the point that had been made of only third party titles being removed and the initial comment being fear of games being removed from GP for licensing reasons and not playable in any way anymore.
To be fair, Microsoft tend to give a decent discount to games leaving Game Pass so that you can own them outright.
I don't agree Sony competition lead to GP. This came from Nadella and his Cloud first business model. Xbox had to shift to Cloud first or be shut down. All internally without any credit going to Sony.
Turns out as always, gaming is the forefront of technology and this was not only an easy conversion but really was going there anyway.
This is going to be the same when GP is old news and we're all talking about the Metaverse. It's already started in gaming. My kids first concert was a Marshmellow concert in Fortnite. So it's very easy for a company like Microsoft to put gaming at the forefront of their cloud business. 70 bill, absolutely worth it.
It doesn't apply to Game Pass because you don't own the game. As far as I'm aware Forza is the only first party game that gets removed and that's because they sign a 5-10 year license with the car manufacturers and once that's up then they can't sell that game anymore.
Can you still buy Gran Turismo 6 on PS3 digitally? I think the more recent one is only out 4 or 5 years so probably no licensing issues yet.
Anyway, you'll get notice that a game is to be removed in X amount of days. If you want to own the game and continue to play then you can buy it at a discount.
"You underestimate how much money is made from subscription services."
People complain they cant afford houses and at the same time they dont realise how subscription based internet businesses rocketed their revenues in last few years.
"Surely if you pay 10 bucks a month is not big deal" thinking - and suddenly we have billions spent in no time...
Gamepass can't be making a profit currently, not to offset or fund the recent purchases. 25m Gamepass players worldwide, say an average of 15 quid per month, 12 months a year is 4.5bn quid per year. Even accounting for money earned from those games through mtxs, dlcs, battlepasses etc, the cost of putting so many games on Gamepass, it's almost certainly running at a loss currently. But they have the Microsoft money behind them to cover it, and the long term goal is to have Gamepass on as many devices as possible and more subscriptions, so it'll eventually profit.
I am almost certain ( not 100% but nearly there) that MS have far better economists crunching the numbers than we can even consider. To say its not sustainable or the maths doesnt add up is bizarre. They know what and why they are making these purchases. I am sure they have a fairly robust plan for what is achievable at 10%, 20%, 30% + success rate of the plan and thats why this is happening.
They dont really care for the same BS little fan wars that console owners do, all they want is subscribers to gamepass and the real answer is kids, look at how big epic is due to fortnite initially and what they have gone on to since. If the kids can only play COD on gamepass then gamepass wins for now, MS just need to make sure they have the next big fad.
It's not massively dissimilar to free to play models, just without the reliance on huge volumes of micro transactions.
Look at EA for example. EA would love if every single one of their customers signed up to EA Play or EA Play Pro instead of buying games individually. It would be better for them.
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