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Forbes: Microsoft’s Plans For Bethesda On Xbox Series X Seem More Clear Now
- Thread starter Craig of War
- Start date
TheGreatWhiteShark
Member
I think my gifs will continue to be relevant for a much longer time than I originally thought when making them
oh-well
oh-well
DaleinCalgary
Member
And what are the expenses for the year you are subtracting from those numbers.
Include salaries of all the studios, fixed costs on buildings etc, internet and server costs., paying other studios with games on gamepass for people downloading their games.
and start with an expense of 7.5 billion
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Clear
CliffyB's Cock Holster
There's positives and negatives for either approach to be fair, so its always going to be "dealer's choice".
Honest truth is, they can afford to do whatever they want, but as of this present time saying nothing definitive is unquestionably the smart play for them. Let people assume what they want, and make a final decision once the new gen has gotten underway and they have a sense of how fast uptake is.
Bryank75
Banned
After they have everyone on Xbox (40M) joined up, where do they get more people?
Also this doesn't consider the price of content... I pointed out in a post that to fund 30 studios to make games is about 5 billion, then they need other 3rd parties to provide other content plus loads of other expenses.
Wizz-Art
Member
I was waiting the cat to lash out but he didn't so what's wrong with it? Too much salt!?
ComputerBlue
Member
Whenever there's a Forbes article you just know it's Paul Tassi, is he the only games journalist there? lol
MarkMe2525
Member
This won't be a battle that just MS is facing, this will be also be a threat to Sony. MS is doing the only thing they can do to stay ahead of it. I also don't believe MS is stretching themselves to thin, they aren't Sega. I think Nintendo is going to find themselves watching from the sidelines eating popcorn.
The $1 argument is only a short term one and won't be applicable in the future when these AAA games start rolling out.
I'm not trying to be dismissive of what your saying but I don't think any concern is necessary. MS sure don't seem concerned.
DarkMage619
$MSFT
You might not have known this but all Game Pass games can be purchased. Game Pass does not prevent you from buying a game so Game Pass does not need to sustain development alone.
Hawking Radiation
Member
Good points made and agree and No sorry my comment was not meant to come across as concern like i'm trying to troll.
I'm just genuinely curious of how MS will play this but another user made an excellent point in that the business here is a service type model and not hardware based like Nintendo and Sony.
I just hope GamePass can grow and be that Netflix of gaming. I'd rather have MS be ahead of the curve as a trusted brand running such a service than Amazon and Google.
TheGreatWhiteShark
Member
cats may become ...petrified like this, when they've got their eyes set on a bethesd...eee on a pigeon
Bryank75
Banned
For now.
TheGreatWhiteShark
Member
So you think microsoft will ...forbid buying of games, in order to keep you on their subscription?
I mean, this is some serious outer-galactic reaching here
Wizz-Art
Member
Jesus, you're not implying that the only way to play these games is through a Game Pass subscription are you, because that would be FUD.
Bryank75
Banned
I just think the subscription and xcloud is what they see as their future. Not necessarily as a games store.So you think microsoft will ...forbid buying of games, in order to keep you on their subscription?
I mean, this is some serious outer-galactic reaching here
VAL0R
Banned
MS is already at 15 million subs and rising fast. When they get to 25 million in a year or so, I'd guess, it will take about 2 years for GamePass subscription revenue alone to pay for the Bethesda deal. Assuming that the average sub at that time pays $12.50/month [half PC @ $10.00, half Ultimate @ $15.00 - for argument's sake]. At those numbers, Game Pass sub revenue is 3 billion 750 million/year. Multiplied by 2 = 7 billion 500 million.
Edit:
The extreme discounts won't last forever. Soon most will be paying full price after month 1.
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ZehDon
Gold Member
I disagree. When you break down the problems that Amazon and Google pose, and then the problems that Sony and Nintendo pose, there is an enormous overlap between both sets of problems for Microsoft. Buying up big ticket and heavy hitting exclusives is a "two birds with one stone" problem: Microsoft keeps these off of Amazon and Google's services, while getting to use them in the fight against Sony and Nintendo. The same thinking applies to EA Play on Gamepass Ultimate: if EA goes in on Stadia or Luna, Microsoft's already got them on Gamepass, so it's not a victory for Luna or Stadia, and it bolsters Gamepass enormously for the fight against Sony or Nintendo. Microsoft have played their limited hand intelligently.
When Nintendo consolidated its handheld approach and home console approach into the Switch, it was a smart unifying of its companies resources. Their handheld and consoles became one and the same. I expected it to fail, but obviously I was wrong - Nintendo understood their market, and their appeal. What Microsoft have done with Gamepass and xCloud is a similar line of thought of unification. Gamepass and xCloud are basically one and the same at this point. The more Microsoft add to Gamepass, the better they can fight the console war, while simultaneously bolstering their fight against any other streaming service. It all rows in the same direction. I think it's a smart approach. Will it pay off? Well, we're gonna find out, I guess.
StreetsofBeige
Gold Member
That even excludes games sales and 30% marketplace cuts.
No matter if the gaming division makes profit or not, makes no different to MS any time soon.
If they cared that much about profit margins for Xbox, they wouldn't be letting gamers do $1 for 3-year Game Pass top ups and buying Bethesda for $7.5 billion.
That's the difference between MS and Sony. MS' other divisions all make $10 billion profit each, then can spare the Xbox division some money and not blink. I don't think Xbox has been very profitable at all in its 20 years yet it's still here more aggressive than ever. It's almost like MS is just doing Xbox for fun.
Sony's bread and butter is gaming. Half their divisions barely do anything and their profits are literally a small fraction of MS. The PS division is a profit generator and they can't give up too much money away, especially to that money sinking TV division which at one time lost around $10 billion in 10 years. Basically sapped Sony's profits from other divisions for years. How a TV division can be so bad at a time when everyone was loading up on HD TVs is a total mystery.
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Clear
CliffyB's Cock Holster
The objective reality is that buying-in other people's properties for day#1 on GamePass is going to get fucking expensive next gen. And the bigger their market-share the worse it gets because the supplier will want compensating for even more potential lost revenue.
The thing about GamePass is that unlike Netflix, its always going to be dependent on blockbuster properties to draw and retain subscribers. Most people watch a far greater variety of movie and TV shows annually, than they do playing games. So they can't really get by on a broad raft of stuff that caters to minority interests when a lot of casuals just play Fortnite, or FIFA, or CoD or whatever is their regular thing.
I've been thinking for a bit now that the reason MS forked out $7.5b for Zenimax is because they realized they absolutely have to, not that they particularly wanted to. I kinda wonder if Nadella realized going into this how insanely expensive this strategy would turn out to be?
Because the simple truth is, any success is entirely hypothetical at this point.
PlayStaytion
Member
He is a good guy.
StreetsofBeige
Gold Member
Easy.
You do the Sony strategy which everyone says which is: more exclusives = more gamers.
Or maybe MS will release ES6 on PS5 4 years later like Horizon on PC. That brainer strategy where you tease PC gamers with a game and they buy into a console.
Same thing. Tease PS gamers with ES6 and Starfield and bring them to Xbox.
Bryank75
Banned
Without discounts and without content refreshing at a good rate, I suspect growth to slow significantly.
What is the point at which someone has played all they want to?
Redlancet
Banned
their biggest game its minecraft
btw in two years we will see how the hardware numbers are,people who says the games will be or not bill be DONT KNOW SHIT,time will tell
TheGreatWhiteShark
Member
FunkMiller
Gold Member
The rather large and unspoken about elephant in the room here is whether Bethesda can manufacture the games that would justify Msft’s outlay. If they can return to their old ways, and produce great single player experiences, then the buy out is worth it... but if they continue with the absolute shit they’ve been producing recently, I doubt Amazon, Sony or anyone else will be too worried about the exclusivity.
DarkMage619
$MSFT
If only MS would consider snagging a major publisher perhaps to ensure a steady stream of content for Game Pass... Shame they never thought of that.
Warnen
Don't pass gaas, it is your Destiny!
What besides Fallout 76 is the shit they have been producing recently? Youngbloods?
TeKtheSanE
Member
I don't understand this argument. I know many people will disagree with this including myself. To be ignorant to the fact that Zenimax has some legendary and high rated IPs and many people enjoy their games is ridiculous.
Wizz-Art
Member
I will also remind everyone that this is a marathon and not a sprint. That 7.5 billion dollars investment is a lot of money for many other companies but not for Microsoft that is always valued as the number 1 or 2 richest companies in the world and has 120 billion + in cash on hand after the buy.
They can play a long game and Game Pass is undeniably the best deal in gaming, 15 million people already know that and that number will continue to rise with an huge acquisation like ZeniMax a steady stream of first party games day one on the service will be guaranteed. ROI will not be important for the forseeable future, subscribers are.
They can play a long game and Game Pass is undeniably the best deal in gaming, 15 million people already know that and that number will continue to rise with an huge acquisation like ZeniMax a steady stream of first party games day one on the service will be guaranteed. ROI will not be important for the forseeable future, subscribers are.
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Redlancet
Banned
and yet the sales on the past two years abismal,almost all their games bombed,if that doesnt tell you something...i dont know what to say
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TeKtheSanE
Member
Yet Sony still found it prudent to seek timed exclusives for 2 of their next gen titles.
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Wizz-Art
Member
Can you show any receipts? I know about Fall Out '76 in the beginning but other then that?
The same as they are for 15 million subs...
Scotty W
Gold Member
Imagine being able to write for Forbes and not understanding how comparatives work.
Microsoft’s Plans For Bethesda On Xbox Series X Seem More Clear Now
I always try to admit when I’m wrong and in this case, I am pre-emptively admitting that I am probably going to be wrong about an initial position I took when Microsoft first announce that it acquired Bethesda for $7.5 billion.www.forbes.com
"My immediate reaction was that Microsoft probably wouldn’t make Bethesda games Xbox exclusive going forward. Why? A few reasons:
- They’d still make a killing as a publisher selling dozens of millions of copies of future Bethesda games on PlayStation.
- They still boast a big advantage offering them for “free” as part of Game Pass while Sony would charge $60-70 at launch.
- Phil Spencer has previously spoken about disliking exclusives and the whole “us versus Sony” console war concept, and they want to expand gaming across multiple platforms.
- They paid $2.5 billion for Minecraft, and did not end up restricting that game from being on PlayStation.
And yet, the more I think about this and the more information comes out, the more I believe that yeah, Microsoft probably is going to make most, if not all future Bethesda games Xbox/PC/Game Pass/xCloud exclusive.
Next, you don’t really spend $7.5 billion on a publisher just to only put their games on Game Pass and not make them fully exclusive. If they wanted to do that kind of deal, they probably could have without purchasing Bethesda outright. There were rumblings before this that Microsoft was looking to buy Bungie, but instead of doing that (for $1-2 billion or whatever that might have cost) they managed to land a Game Pass deal where future content (at least old expansions and Beyond Light) is launching on Game Pass. So why would an outright purchase of an entire company (literally the biggest developer acquisition in gaming history) have the same type of Game Pass launch idea without exclusivity?
Also this week, Amazon announced its new Luna cloud gaming service that is going to offer things like publisher specific channels, for instance an Ubisoft subscription through Luna that gets you X amount of Ubisoft games for one fee. So with this purchase, Microsoft isn’t just fighting against Sony, they’re pre-emptively doing battle with the likes of Google and Amazon and these rival cloud services. Now that Microsoft owns Bethesda, there is a roughly zero percent chance that you would ever see a “Bethesda channel” on Luna, as Microsoft will keep that just for Game Pass and xCloud. They’ve already done a deal with EA Access too, which should keep that out of reach for Amazon. They’re starving out future competition before they really even become competition.
Finally, I just have really never believed Microsoft when they talk about how there’s no real rivalry between them and Sony and no console war and that’s all dumb and pointless. While the fanboy flame wars may indeed be dumb and pointless, Microsoft is still fundamentally a business, and they want Xbox to be the global leader in gaming. One the biggest things working against Xbox when stacked up against rivals like Nintendo and Sony? A lack of exclusives. And you really don’t buy yourself an immediately solution for that problem for $7.5 billion and not take advantage of it.
Clear has one syllable so we add er and than. You need to have 2 syllables or more to use more as a comparative.
Knitted Knight
Banned
They're slowly jacking up the prices. It has always been a bait and switch process in the making. They took Xbox Live 1 year sub off the market to slowly transition Gold whales into Gamepass Ultimate (not to mention the $1 upgrade path). They need those bumps in subscription membership to create the marketing bandwagon effect - otherwise their whole strategy crumbles, cause the console side is in shambles. But just like Netflix has a cap so does Gamepass, and it ain't going o be anwhere near close to that. MS will sooner rather than later hit that cap as this gen phases out. The walled gardens around them are too strong - both on console and PC, and even on Mobile with Apple. At least Neflix can't hide their loses to their investors, and the billions deep in debt that they're in to keep those subs. We'll never get the truth from MS with regards to numbers when it comes to this... how many active subs (not lifetime), average subscription length, splits on console, mobile and PC etc. We can only make educated guesses based on news or, if and when they pull the plug - at least not on Nadella's reign.
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Bryank75
Banned
One hundred percent, the obfuscation makes it hard to see whats going on but if things were good they wouldn't need to hide anything.
Xbox division always talked big numbers, like MS... billions, instead of millions. But they will never achieve that and even 100 million has been a milestone they never achieved.
They have a lot to prove.
Redlancet
Banned
to be honest i still dont know what they were thinking,deathloop looks subpar and the arkan games bombed with passion so no financial sense at all
Gavon West
Spread's Cheeks for Intrusive Ads
Did I mention Microsoft makes upwards of $140 million.......A DAY???
Knitted Knight
Banned
Ohh we can see what's going on..... getting whales to "voluntarily" hop on Gamepass Ultimate in the absence of 1 year Xbox Live Gold subs, to avoid getting bad press of Ultimate becoming an online multiplayer and free-to-play paywall. Comcast is having a good laugh somewhere...
Anyone that's ever seen and analyzed a business balance sheet, and has at least superficial knowledge of Netflix's business model and their financials has an idea of what's going on. Business journalists don't continue posing questions to Nadella, Balmer (previously), even old OG Gates on whether MS will pull the plug or spin off Xbox continually for no reason... nor does everyone buy MS BS on why they've structured the divisions financials in a such a way that we have no idea how much that division has lost or made in profit for MS. It was purposefully done that way to stave off investor pressure to axe that division. Not a good look to compare to the competition dollar for dollar.
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Gavon West
Spread's Cheeks for Intrusive Ads
Believe me, they arent looking for a ROI on this. This was an investment that they'll make back by this time next year. Again, this is a long game play. They arent in a rush to make the $7 billion back. All this is to push Gamepass. In the long term, they'll make much more than they would by putting games on Sony's machine.
Maxwell House
Member
Game Pass subscriptions aren’t limited to Xbox owners. PC gamers are increasingly buying Game Pass. XCloud will soon be available on not just android but also on PC, Mac, iOS, Chrome sticks, smart TVs, etc. basically everywhere. Once Series X server blades replace the One S blades in XCloud servers (which should happen early 2021), XCloud streaming will be very good and robust, able to stream in 4K.
MS can sell Gamepass subscriptions to anyone with a web browser or phone. No need to be a console owner. This opens Game Pass to billions of potential customers. Game Pass subscriptions can realistically surpass 100M in 5+years.
MS can sell Gamepass subscriptions to anyone with a web browser or phone. No need to be a console owner. This opens Game Pass to billions of potential customers. Game Pass subscriptions can realistically surpass 100M in 5+years.
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DaleinCalgary
Member
Oh I doubt that, more people downloading is more costs and payment to 3rd parties.
Maxwell House
Member
That isn’t smart. There is much more value in making the games Xbox/PC exclusive. Having must have titles like Elder Scrolls or Starfield available on all consoles completely devalues their worth to an ecosystem. There isn’t any real draw for those titles since you can just buy them on PS5 or Switch. If MS wants to increase Game Pass subscribers, that is how you do it, keep those heavy hitters Xbox/PC exclusive.
The value they add by being Xbox/PC exclusive is much higher than any money from potential sales on PS5/Switch. Also, if Bethesda did publish their titles on PS5 or Switch, Sony and Nintendo would each get 30% cut of the revenue for those titles. Why would MS want to help Sony and Nintendo make more money?
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Gavon West
Spread's Cheeks for Intrusive Ads
All of this up here^^
Wizz-Art
Member
It seems like it. I don't pretend to be as smart as the Xbox higher ups who chose to make such an acquisation but looking from outside it's definitely to strengthen their first party output which will also be on Game Pass day one as a big incentive to subscribe. To sell subscriptions on console and PC you'll need exclusivity like this.
Many folks who were PS only this gen are going to make the switch to Xbox Series X/S next gen or buy one if they don't own a capable PC. When buying a XSX you also secured yourselves of having the best versions of third party games so that's a plus in itself and you can buy a PS5 which can act like an exclusives machine if you like their output.
In the end I see Microsoft making more acquisations when they see a significant uptick in subscribers after the ZeniMax acquisation. I like that Nadella/Spencer aren't shy about that and that they're all in on the inevitable future of gaming where Game Pass and Xcloud will have a prominent place and have the biggest market share. It's nice to have a foothold on emerging things like gaming subscriptions and game streaming, it's been a long time since they had that. They were always too soon or too late with stuff, now they're right in the mix since it's inception and ahead of Stadia and Luna.
12Dannu123
Member
Microsoft is a 1.6 Trillion company, they are capable to multi-task, the Xbox ecosystem is a unified platform. Sony...not so much, all their platforms were fragmented and resulted in Sony ditching them.
Gavon West
Spread's Cheeks for Intrusive Ads
Exactly. Out of every major player Microsoft is the only mega corp that has:
* Decades of experience in the games industry w/console
* Legacy of games dating back to the OG fat
* Successful subscription service
* Healthy business relationships across the industry
* 25 game studios
* Azure servers.
This gives them the edge across the board, hands down. This is exactly why they bought Bethesda with more on the way. They want to lead the industry and starve out Google and Amazon before they get going. Sony taking a blow from Bethesda going to Xbox is just aftermath.
12Dannu123
Member
Who though, Sony doesn't seem to be going down that path, they simply can't sustain the losses made to get to a big userbase for their subscription.