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[Chukhopops]

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.

Like what? I can’t think of any example of third party this year doing this?

 

[Bumblebeetuna]

Like what? I can’t think of any example of third party this year doing this?

I can’t either but they probably do exist. To be fair the exclusives they tend to get on GamePass are all A/AA games, so it’s easier to forget about them. Maybe High on Life was the last one?

 

[Ozriel]

For their first-party games?

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

Why would they be losing money in retail?

Take Forza Horizon 5 for example. They’ve sold millions on Steam alone. Sold quite a decent amount on console too.
Why then would anyone put all the dev costs on GamePass?

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

Zero? Those aren’t counted as ‘losses’ unless you write off the value.
It’s like saying you’ve lost money when you buy a house.

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.

Lies of P, Wo Long, Atomic Heart, Monster Hunter Rise, Persona 5 Tactica, Payday 3 among others. All 3rd party games that landed on GamePass day one, with exact same day release on other platforms. Zero delays.

You really should not speak confidently on matters you clearly don’t understand.

 

[Crispy Gamer]

Financially viable doesn't mean profitable it just means the service is making enough to sustain itself long-term I'm sure ABK helped with that it's easy to conflate the two but in the business world it matters.

 

[Chukhopops]

I can’t either but they probably do exist. To be fair the exclusives they tend to get on GamePass are all A/AA games, so it’s easier to forget about them. Maybe High on Life was the last one?

I guess this was the last one as I can’t see any example from this year.

Wo Long, Atomic Heart, LAD:Gaiden, Tactica, Rise etc were all multiplat. It’s clearly not part of the GP strategy at this point.

 

[cireza]

profitable?

Yes. Profitable = makes them money. Read OP.

 

[Unknown Soldier]

Microsoft's problem has long been that they equate spending money with success

 

[DForce]

Why would they be losing money in retail?

Take Forza Horizon 5 for example. They’ve sold millions on Steam alone. Sold quite a decent amount on console too.
Why then would anyone put all the dev costs on GamePass?

Whenever a Game Pass game struggles on the sales charts, the response is, "Well, it's on Game Pass."

Halo Infinite's single-player didn't sell well via retail.
Starfield's legs are terrible for a triple-A game.

Do you not realize that if they spend 150m-300m on a game then it has to make its money back, right?

If they only make half of that in retail, then how do you think they're going to recover the rest?

 

[DrFigs]

Yes. Profitable = makes them money. Read OP.

nah

 

[cireza]

nah

You smart.gif

 

[Mowcno]

I guess this was the last one as I can’t see any example from this year.

Wo Long, Atomic Heart, LAD:Gaiden, Tactica, Rise etc were all multiplat. It’s clearly not part of the GP strategy at this point.

Stalker 2 and Ark 2 are both supposed to be gamepass day one and timed exclusive. Though both have been delayed to heck.

 

[GHG]

You smart.gif

Phil appreciates you.

 

[DForce]

Yes. Profitable = makes them money. Read OP.

The term used was financially viable.

If it's profitable then how profitable is it? The fact that the leaked documents showed that they wanted to hit a specific target in the future means it's likely not profitable enough.

They can't continue to acquire publishers and see little growth in game pass subscriptions.

 

[Negotiator101]

“financially viable” interesting wording

 

[ShaiKhulud1989]

People are still selling GP revenue as net profit. Sigh.

 

[Negotiator101]

The term used was financially viable.

If it's profitable then how profitable is it? The fact that the leaked documents showed that they wanted to hit a specific target in the future means it's likely not profitable enough.

They can't continue to acquire publishers and see little growth in game pass subscriptions.

capable of working successfully; feasible.
"the proposed investment was economically viable"

So you understand better what "Viable" actually means

 

[Vlodril]

All he has to do is give some actual numbers but nope..

 

[adamsapple]

You've got to be joking.

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

The Game Pass effect, new IP shadow dropped without prior marketing, lots of people got their hands on via game pass, word of mouth, profit, high critical regard, multiple nomination in end-of-year awards.

The term used was financially viable.

If it's profitable then how profitable is it? The fact that the leaked documents showed that they wanted to hit a specific target in the future means it's likely not profitable enough.

They can't continue to acquire publishers and see little growth in game pass subscriptions.

It wasn't leaked documents, it was his FTC deposition.

also wanting to hit higher goals in 2030 doesn't mean it can't be profitable now.

what a bizarre set of thing to correlate.

Phil appreciates you.

and we appreciate Phil

 

[Chukhopops]

Stalker 2 and Ark 2 are both supposed to be gamepass day one and timed exclusive. Though both have been delayed to heck.

That’s true although they’re basically old deals at this point.

It’s clear third party timed exclusives aren’t a big priority for GP and even Xbox as a whole now that they bring more first party games to it. One less thing to endlessly complain about!

 

[ShadyAcshuns]

You gotta admit, MS's game division is fucking stupid. If they're gonna spend a bil per year to try to beat PlayStation, they're doing it wrong. IF they were smart they'd sell Series X consoles at a major loss to gain ground against Sony, like sell consoles for $199.

 

[adamsapple]

I guess this was the last one as I can’t see any example from this year.

Wo Long, Atomic Heart, LAD:Gaiden, Tactica, Rise etc were all multiplat. It’s clearly not part of the GP strategy at this point.

I'll play the devils advocate.

Lamplighters League is the only name I can come up with that launched on GP day 1 and was an Xbox console exclusive (it did launch on PC and devs are saying there's plans for a PS version later).

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

Dunno, but I don't see how that's on Game Pass's revenue or profitability.

 

[Ozriel]

Whenever a Game Pass game struggles on the sales charts, the response is, "Well, it's on Game Pass."

Console charts. These games also are on sale on PC, and sales there are dampened much less heavily by GP than on console.

Halo Infinite's single-player didn't sell well via retail.
Starfield's legs are terrible for a triple-A game.

Do you not realize that if they spend 150m-300m on a game then it has to make its money back, right?

At worst, if retail performance doesn’t completely cover the cost of development, you’d put only a portion of the cost on GP.

Again, the idea that the full dev costs of every AAA game has to be placed on GP isn’t really logical at all.

Stalker 2 and Ark 2 are both supposed to be gamepass day one and timed exclusive. Though both have been delayed to heck.

Timed exclusivity has been a thing with or without GP.

 

[Moses85]

 

[Mowcno]

Timed exclusivity has been a thing with or without GP.

Yes it has.

 

[DForce]

capable of working successfully; feasible.
"the proposed investment was economically viable"

So you understand better what "Viable" actually means

I know what it means but you clearly don't get it.

If a subscription service generates 6b in revenue but only makes 1 million in profit, then that is financially sustainable/viable. They can maintain this for years. Just because it's viable doesn't mean its highly profitable.

We have seen Phil Spencer speak about growth on Game Pass so I don't know why many Xbox guys choose to ignore it.

 

[tmlDan]

capable of working successfully; feasible.
"the proposed investment was economically viable"

So you understand better what "Viable" actually means

Key word "capable" not currently successful.

That's kinda the point

 

[DForce]

It wasn't leaked documents, it was his FTC deposition.

also wanting to hit higher goals in 2030 doesn't mean it can't be profitable now.

what a bizarre set of thing to correlate.

It's simple.

They're likely not generating enough profit and that's why they want to see more growth. You guys call Game Pass a success based on how many players played the game, but whenever someone asks for profit or Game Pass subscribers, you guys say it doesn't matter.

These things are very important.

There's a reason why Phil Spencer wanted to see growth because they're likely not making a lot of profit and they would have probably made more if they sold games in retail without Game Pass.

 

[Mowcno]

I know what it means but you clearly don't get it.

If a subscription service generates 6b in revenue but only makes 1 million in profit, then that is financially sustainable/viable. They can maintain this for years. Just because it's viable doesn't mean its highly profitable.

We have seen Phil Spencer speak about growth on Game Pass so I don't know why many Xbox guys choose to ignore it.

Yes. The question has never been if gamepass can be viable or profitable. The question should always be: Is it MORE profitable than just selling their games at $70. Are the profits of GP higher than the profits they lose from their games, and third party games, selling substantially less. That's always been the big question mark surrounding the gamepass strategy. Would they make more profit if their games weren't day one on gamepass?

Gamepass being profitable and gamepass being bad for their profits can both be simultaneously true.

MS don't report Xbox profits because reasons, so... ?

 

[DForce]

At worst, if retail performance doesn’t completely cover the cost of development, you’d put only a portion of the cost on GP.

Again, the idea that the full dev costs of every AAA game has to be placed on GP isn’t really logical at all.

This isn't about the full cost, but they need to recover that portion through Game Pass and that's the point.

 

[adamsapple]

It's simple.

They're likely not generating enough profit and that's why they want to see more growth. You guys call Game Pass a success based on how many players played the game, but whenever someone asks for profit or Game Pass subscribers, you guys say it doesn't matter.

These things are very important.

I think you're conflating a few things here. We would all like to know exactly what the official tally for game pass is at this point, we know from independent auditors that it's roughly 41.7 million but an official count would be nice.

This isn't about the full cost, but they need to recover that portion through Game Pass and that's the point.

I think they do that fairly easily, using Starfield as an example, the game set a record for highest number of new subscribers on its release date.

Again, I would like to know what the official tally is right now just as much as the next person.

You can imagine this rate will substantially increase with more Activision content and especially games like CoD and Diablo coming to the service.

 

[Ozriel]

You gotta admit, MS's game division is fucking stupid. If they're gonna spend a bil per year to try to beat PlayStation, they're doing it wrong. IF they were smart they'd sell Series X consoles at a major loss to gain ground against Sony, like sell consoles for $199.

There’s a certain irony in you calling them stupid in the same breath you advocate for a strategy where they’d incure billions in losses on hardware annually, cripple their GamePass subscription and cripple any plans for XCloud.

they aren’t spending $1bn a year to ‘beat Sony’. They’re spending that on content to make their subscription service - available on PC and via cloud - more compelling to consumers. Everyone spends on content. Netflix, Amazon, Apple…and yes, even Sony.

 

[Ozriel]

This isn't about the full cost, but they need to recover that portion through Game Pass and that's the point.

So based on the ballpark revenues we know today, do you imagine GP falls apart when you take out $1bn and slam on, say, a few hundred million dollars for first party?

Prior to this thread, many here estimated the payout to third parties to be significantly higher.

 

[ShadyAcshuns]

There’s a certain irony in you calling them stupid in the same breath you advocate for a strategy where they’d incure billions in losses on hardware annually, cripple their GamePass subscription and cripple any plans for XCloud.

they aren’t spending $1bn a year to ‘beat Sony’. They’re spending that on content to make their subscription service - available on PC and via cloud - more compelling to consumers. Everyone spends on content. Netflix, Amazon, Apple…and yes, even Sony.

Didn't MS or Phil recently say their goal was to put PlayStation out of business? If that's true, the method I suggested is the only way they could do that. I know, losing or spending a billion per year is a dumb idea any way you look at it.

 

[DForce]

Yes. The question has never been if gamepass can be viable or profitable. The question should always be: Is it MORE profitable than just selling their games at $70. Are the profits of GP higher than the profits they lose from their games, and third party games, selling substantially less. That's always been the big question mark surrounding the gamepass strategy. Would they make more profit if their games weren't day one on gamepass?

MS don't report Xbox profits because reasons, so... ?

That's why Phil wanted to see more growth. Sure, you can generate 5 million more subscribers and lose that boost within the next few months but that chance how much profit that was lost in retail. That's almost like selling a game in retail for like $10 shortly after its release.

 

[Ozriel]

Didn't MS or Phil recently say their goal was to put PlayStation out of business?

Nope.

If that's true, the method I suggested is the only way they could do that. I know, losing or spending a billion per year is a dumb idea any way you look at it.

Is it also a dumb idea for Apple to spend billions on content for Apple TV +? Or for Amazon to do the same for Prime Video?

 

[Unknown Soldier]

Didn't MS or Phil recently say their goal was to put PlayStation out of business? If that's true, the method I suggested is the only way they could do that. I know, losing or spending a billion per year is a dumb idea any way you look at it.

Yeah, those leaked emails from the FTC trial for the ABK acquisition revealed among other things they wanted to try and buy Nintendo and destroy Sony lol

 

[DForce]

I think you're conflating a few things here. We would all like to know exactly what the official tally for game pass is at this point, we know from independent auditors that it's roughly 41.7 million but an official count would be nice.



I think they do that fairly easily, using Starfield as an example, the game set a record for highest number of new subscribers on its release date.

Again, I would like to know what the official tally is right now just as much as the next person.

You can imagine this rate will substantially increase with more Activision content and especially games like CoD and Diablo coming to the service.

Even after Phil made this statement?

And yes, it has grown a bit when Starfield was released, but considering the last two major games that were released on GP were Halo Infinite and Forza Horizon 5, then the growth may have not been that big.


I don't expect major growth from COD or Diablo next year (unless a new COD drops) since the game has been released for months now.

 

[Ozriel]

Yes. The question has never been if gamepass can be viable or profitable. The question should always be: Is it MORE profitable than just selling their games at $70. Are the profits of GP higher than the profits they lose from their games, and third party games, selling substantially less. That's always been the big question mark surrounding the gamepass strategy. Would they make more profit if their games weren't day one on gamepass?

There’s no way to carry out that experiment, is there? unless you believe in the multiverse.

Their goal is to generate an enduring profit stream from gaming subscriptions, capturing revenue from well outside the console base. As long as they’re meaningfully profitable, Microsoft will be perfectly fine.

Not the first time they’ve converted from retail to subscription. We know how successful Microsoft 365 has been.

 

[adamsapple]

Didn't MS or Phil recently say their goal was to put PlayStation out of business? If that's true, the method I suggested is the only way they could do that. I know, losing or spending a billion per year is a dumb idea any way you look at it.

They made about 4 billion in revenue in FY22 from sheer subs.

 

[Negotiator101]

I know what it means but you clearly don't get it.

If a subscription service generates 6b in revenue but only makes 1 million in profit, then that is financially sustainable/viable. They can maintain this for years. Just because it's viable doesn't mean its highly profitable.

We have seen Phil Spencer speak about growth on Game Pass so I don't know why many Xbox guys choose to ignore it.

Oh I get it, what you're doing is interpreting what Spencer is saying and putting a negative spin on it. Any business is looking for growth that's how it works, so saying that is not some big revelation.

When a word in this case viable stirs up conspiracy theories here at Gaf I just find you guys hilarious. The consensus here is that Xbox are going out of business, GamePass is failing and Spencer is crap at is job yada yada yada.

Let's clear things up, Xbox ain't going anywhere, GamePass is successful and Spencer has been promoted, understand that!

 

[ShadyAcshuns]

They made about 4 billion in revenue in FY22 from sheer subs.

I know, and I'm just throwing things out for discussion purposes based on those leaked email plans of theirs. Of course selling consoles at a huge loss would never happen.

 

[DForce]

Oh I get it, what you're doing is interpreting what Spencer is saying and putting a negative spin on it. Any business is looking for growth that's how it works, so saying that is not some big revelation.

When a word in this case viable stirs up conspiracy theories here at Gaf I just find you guys hilarious. The consensus here is that Xbox are going out of business, GamePass is failing and Spencer is crap at is job yada yada yada.

Let's clear things up, Xbox ain't going anywhere, GamePass is successful and Spencer has been promoted, understand that!

You don't.

Notice how you never addressed Phil Spencer's email about growth by 2027?

Yes, all businesses look for growth, but how many businesses set a date where projects are to be met before they consider leaving?

These are not conspiracy theories, this is looking at the evidence before us, most of which you choose to ignore.

So tell me, why did Phil look at the numbers and say they must grow by 2027? Do you care to explain how a lack of growth can cause them to reconsider the gaming business?

 

[Kerotan]

They have a profitable Subscription Service, well done.

He didn't say profitable.

 

[Clintizzle]

Hello. Just checking in to say that I don't give a shit if a trillion dollar company has a profitable service.

 

[geary]

You don't.

Notice how you never addressed Phil Spencer's email about growth by 2027?

Yes, all businesses look for growth, but how many businesses set a date where projects are to be met before they consider leaving?

These are not conspiracy theories, this is looking at the evidence before us, most of which you choose to ignore.

So tell me, why did Phil look at the numbers and say they must grow by 2027? Do you care to explain how a lack of growth can cause them to reconsider the gaming business?

Are you serious? Real question? Do you even had any contact with a finance planning and performance dept in corporate? This is a financial business case 101….Is ludacris to even question if a company targets a ROI.

 

[HeWhoWalks]

Nope.

Not recently (2019), but yes, Microsoft did say they were in a unique position to spend Sony out of business. Most likely what he meant.

It was a good enough time ago though.

 

[DForce]

Are you serious? Real question? Do you even had any contact with a finance planning and performance dept in corporate? This is a financial business case 101….Is ludacris to even question if a company targets a ROI.

It's a serious question because people think they can continue to miss projects over and over again and still be satisfied with the results.

They're not slightly missing the projections, they're missing by a lot.

 

[DryvBy]

They even spent near $100 billion for games to hit GamePass but people believe it's profitable lol.

If it were profitable, we wouldn't have a 2027 date.

 

[Mr.ODST]

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.

I dont think you get that Xbox is an ecosystem not just a console, i have tons of friends who sub to Gamepass PC and even general public who do, just because a console isnt selling well doesnt mean anything to a company making an ecosystem

 

[MacReady13]

Fucking spare me. If they were making that much PROFIT (which they aren't) then both Sony and Nintendo would follow that exact same path. Microsoft spew so much shit it isn't funny.