GHG
Member
It would be worrying for them if somehow Github wasn't profitable.
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Game Pass is not profitable yet - Tom Warren
- Thread starter Rolla
- Start date
It would be worrying for them if somehow Github wasn't profitable.
MastaKiiLA
Member
There will be a recurring subscription number that provides them with enough quarterly revenue to break even on continued investments in infrastructure, games development, and exclusivity agreements. What that number is, no one can honestly tell you.
Think about Netflix, and how they were bleeding money for years to build their catalog. If developing AAA games (to make the service appealing) runs as much as a blockbuster Hollywood movie, and GP invariably reduces individual game sales of those titles, then it could be a money loser for some time. I think what MS is really banking on is expanding GP to other devices beyond the Xbox ecosystem. I don't think there is any hope of them getting positive ROI on the Series consoles alone (just my spitballing). However, there are a ton of PC and mobile gamers out there, and I think that's what they're banking on tapping into. Then their userbase can grow massively, and they can meet or exceed the break even point for revenue.
It's a gamble, but let's face it, it's worth them trying something different. The Xbox division seems to have the blessing of the parent company, so they can roll the dice on this. I think Bethesda has to become if not a hit factory, then at least a strong production line, able to churn out a lot of games each year. They have a bunch of studios now for this very purpose. Probably a lot of GaaS games to assist with that, as episodic/seasonal content is easier to keep flowing regularly than new titles.
I'm intrigued by the business model, even if it's not suited for me.
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Stuart360
Member
I think its more to do with word of mouth, 'hey i played this game on Gamepass the other day man, it was awesome. You should buy it'.
A few Indie devs have talked about this before.
As for Gamepass itself, you have to speculate to accumilate. Its always been the way with these subscription services.
It doesn't. what does matter is how they begin to turn a profit. Does it mean price increase? Does it mean less content after the marketing blitz and subscriber growth, does it mean games will be full of MTXs? Personally I think we are already starting to see some of this.Why do it matter to me as a user if it’s profitable or not
nowhat
Member
Well not anymore at least as Microsoft bought the company quite a while back.
Rossco EZ
Member
i agree with enough monthly subs they can but that exact number is hard to judge because we don’t know every games budget or 3rd party deal etc, also we shouldn’t assume every person keeps there subscription running for the whole year or even pays full price, the same as i wouldn’t say every gpu sub is done on the 1$ upgrade thing.
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nowhat
Member
...there's an XXX version?
GeorgPrime
Banned
I'm guessing that the money they're paying out to get games into the service is steep or when XBOX says GP subs they're including everyone who joined up irrespective of whether they're still/recurring subs. I thought that at 23 million they'd be seeing major profits. I guess not...
Sony already said thata a Game Pass model is not financially possible for them, i already expected this myself.
Skifi28
Member
It is. Just not for Microsoft apparently, at least not yet.
DrumNBassDanTTV
Member
reinking
Gold Member
I believe we will have that answer in this console generation. Even MS is not going to continue to funnel money into a pit of they cannot see a return.
If MS is generating income on the backend and can push that narrative then I believe Game Pass will be a success. I do not believe the console/PC market is going to be enough to sustain the business model. MS is having to sink too much money into it to get the titles and if the titles start drying up people are going to jump ship. We can dream about the billions of phone users who are going to jump on the streaming bandwagon and sign up for xCloud but I do not believe that is going to be the case. Especially at $15 a month.
I am going to ride the train as long as it has the value it is today.
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NeilH1982
Banned
The Epic games lawsuit showed us that games can be had for literal pennies per user. I was really shocked how little Epic paid for many of those games. I wouldn't be surprised if cost to MS on some of these games is the same. Sure some deals like Capcom were in the millions but most of them will be 1 or 2 million or less
Kagoshima_Luke
Gold Member
The question is, when does The Best Deal In Gaming become just a pretty solid deal? i.e. when is the price hike coming?
James Sawyer Ford
Member
Microsoft has never made money on gaming cumulatively.
just one big money sink subsidized by windows. What’s the end goal? Run Sony out of business so we can live in a $30/month GamePass world of mid-tier games for free?
just one big money sink subsidized by windows. What’s the end goal? Run Sony out of business so we can live in a $30/month GamePass world of mid-tier games for free?
OmegaSupreme
advanced basic bitch
Everyone knows this.
ToadMan
Member
You’re still parroting this ... Netflix has never made a profit.
Just go look at free cash flow. COViD has bumped the books because they have been unable to produce content - without new content their subscriptions start to slide.
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Tripolygon
Banned
Makes sense.
Blond
Banned
345 million.
Netflix One Question: Is It Losing Money Or Making Money?
Netflix stock has emerged a star performer through the coronavirus pandemic, rising by ~25% year-to-date, as people consume more content while being confined to their homes. The company added close to 16 million subscribers over the first quarter, handily beating its guidance of about 7 million...
www.forbes.com
Netflix has 200 million people paying between 10-20 dollars a month and it’s burning through money.
Microsoft is spending tons of money to just get content on the service not combined with what they’re paying developers for play time and just keeping those servers running.
One drive, Office 365, Azure, etc are all profitable on a daily basis. It’s obvious Phil is trying to adopt that model to gaming but someone’s 25kb word files across the planet backed up on various servers are going to be easier to maintain and deliver than a 50gb game being delivered to 10 million people around the world. It’ll be Interesting to see what happens in the future but I fully expect one of two things to happen here: either gamepass gets a reasonable price increase or it’s dumped. And Phil’s too ballsdeep in this idea to let Microsoft dump it
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Heisenberg007
Gold Journalism
And water is wet.
Every rational person knows that Gamepass doesn't make any profit.
Every rational person knows that Gamepass doesn't make any profit.
Chukhopops
Member
Do you really believe this? That a platform that takes 30% of all MTX, game sales, v-bucks, shark cards and whatever you want to call it happening in the Xbox ecosystem is losing money overall? Just trying to assess the level of discourse here.
GP is a loss leader to get people to use the Xbox ecosystem when they spend money basically.
Mitsuda Maniac
Member
Of course it isn't profitable yet. This is like how Epic is overspending for free games just to get more EGS accounts opened. What this probably means though is that Game Pass is currently at its greatest value right now and that once MS gets a grip on the market both gamers and developers will feel the squeeze as they move towards a profit based model. Increased monthly charges for Regular and Ultimate and probably locking a lot more features behind Ultimate is what gamers should expect.
Magnific0giganticus
Banned
And to all of you of who shower it with praises while subscribing for $1 a month, $30 a Year and whatever it is you pay (less than it should be for a whole year, either $120 or $180 for Ultimate), keep laughing it up and enjoying yourselves, you have a big helping hand on the shovel, burying your beloved service.
EverydayBeast
thinks Halo Infinite is a new graphical benchmark
We’ll find out if Game Pass is “Worth it” gamers just want to game, and get mad when they try to ruin Xbox Live.
megreotsugua
Banned
Uncle Phil has sold the idea to mother Microsoft that he can sell a subscription of AAA games to casuals for $10-$15 a month.
Like with the Xbone where they tried to target the casual market and expected to sell 2 billion units of xbone, uncle Phil is once again going after the casual market of 2 billion believing that they will subscribe for $10-$15 for games they don't care about.
I know it sounds like a joke. But it's their real plan and they still believe it will work.
Magnific0giganticus
Banned
Lol what? No. Make up the difference of a sale? That's crazy. They pay publishers up front, one and done. Consider those games that are downloaded a million times, pay for all them "to make up a lost sale"? That would not only bankrupt GP it could also bankrupt Microsoft as a whole. Seriously, it would be like throwing away money faster than COVID19 spreading.
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A.Romero
Member
That's different. Epic pays for the game, then measures how many new users signed up because of that release. They divide the cost of the game among the amount of users they gained. Thing is user count means nothing if they are not buying anything (like myself). Let's say that by getting all games they are offering within a year, Epic spends $20 USD on me. If I never buy anything, that money doesn't return to them. They are taking a huge gamble.
On topic:
Of course gamepass is not profitable, that's why is such a good deal for us. It's going to be a while. Some people doing math with the service really have no idea what it takes to provide a service like that. It's not just about paying games, there is a lot of other costs involved like marketing, infrastructure, people, etc. Profit is a very elusive thing in this business. If anyone can pull this off is Microsoft.
thebigmanjosh
Member
I don’t see this happening. It’s already proven to be a commercially successful concept and Im sure they’re planning on this being the future of the Xbox brand.
Not profitable does not mean not successful.
Malcolm9
Member
Isn't it on a game by game basis and not always one and done?
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StreetsofBeige
Gold Member
I've never said NF has never made profit.
NF has been making profit since the 2000s, and their big spike in profit started in 2017.
Stuart360
Member
Why?, do you get shares in Gamepass when you sign up for Gamepass or something?
Mitsuda Maniac
Member
The more money they lose, the less value we get to see in the service going forward. Eventually they got to extract more money from the customers or stop offering so many games.
ToTTenTranz
Banned
I'm shocked, I tell you.
Shocked.
Shocked.
Need a bigger cup.I already hear the defenders coming.
Serious question, did any one really think it was profitable right now?
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BootsLoader
Banned
This is strange….I see a price increase down the line.
Stuart360
Member
I'm sure Microsoft already knows this, as you have to 'speculate to accumilate' with subscription services, especially the first few years.
At the end of the day, its all guess work, as Microsoft dont reveal statistics. We dont know how much they are paying for these games, and after seeing what Epic were paying, its probably a lot less than we thought. And we dont know how many of the 23mil subs are paying full price, how many did the $1 Live trick, etc.
What we DO know is that Gamepass is growing by 3+mil every quarter, which is pretty ridiculous growth really, and surely must be bigger growth than even Microsoft expected.
Imo anyway.
jshackles
Gentlemen, we can rebuild it. We have the capability to make the world's first enhanced store. Steam will be that store. Better than it was before.
I could really care less if Microsoft makes money from Game Pass - as long as it continues to be a good value for me (personally) then I'll continue to subscribe.
Besides, there are a lot of factors at play here. Of course they're not making money if you take into account they acquired Bethesda for many billions of dollars. While of course that will bring value to their company in other ways, it's hard to deny that the only direct benefit it's provided them (so far) is that all the Elder Scrolls / Fallout / Wolfenstein / Doom / Dishonored games are on Game Pass.
Besides, there are a lot of factors at play here. Of course they're not making money if you take into account they acquired Bethesda for many billions of dollars. While of course that will bring value to their company in other ways, it's hard to deny that the only direct benefit it's provided them (so far) is that all the Elder Scrolls / Fallout / Wolfenstein / Doom / Dishonored games are on Game Pass.