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Former Xbox exec says he’s ‘scared’ of Game Pass’s potential impact (VGC)

oldergamer

Member
Napster, iPod, mp3 players and smartphones were market disruptions to the music industry. Even more so the spotify picking up the pieces.
 

Daytonabot

Member
Modern gaming has been heading the wrong direction since before Game Pass. I've come to peace with the fact that my interest will come to an end and that I will then have more time for my backlog of better games.
 

Three

Member
Ingham leaves out the fact that that same global recorded music industry had shrunk by 73% between 2001 and 2011. Interestingly streaming has saved the record industry - but not physical media and record stores. The resurgence of vinyl has only slowed down the decline. A substantial section of the recoded music revenues in the past went to the retail business, now those profits go to record labels and streaming services. Tens of thousands (or even hundreds of thousands) of jobs gone.

We had the internet, Napster, torrents, cheap mp3 players and all these other technology taking off in the early 2000s and music sales were in decline. Itunes helped in making a legitimate business out of that technology and it saw a small bounce but didn't recover. Streaming definitely helped revenue but it killed digital and physical sales pretty much. You can see digital sales were on the rise with the iTunes store then slowly died with Spotify and Apple Music.

I'm not concerned about revenue for the industry because as I see it the consumer spends more without realising it with subscriptions. I doubt a lot of people listening to music were buying an album every month but with streaming they pay just slightly less than that every single month directly out of their bank accounts without even seeking out music.

What I'm more concerned about is what it means for the art based on monetisation. For streaming we might be seeing that in song length declining every year because songs are monitised per play by Spotify and Apple Music. You get more money with an album with ten 2min songs than you do five 4min ones.

There are a few key differences in games but the same applies in games.
Monetisation of subscriptions defining what's being made. We are already seeing that with MTXs (mostly for long playtime MP games) and shorter lower budget games when it comes to SP.
 

reksveks

Member
Ingham leaves out the fact that that same global recorded music industry had shrunk by 73% between 2001 and 2011. Interestingly streaming has saved the record industry - but not physical media and record stores. The resurgence of vinyl has only slowed down the decline. A substantial section of the recoded music revenues in the past went to the retail business, now those profits go to record labels and streaming services. Tens of thousands (or even hundreds of thousands) of jobs gone.
Jobs go all the time sadly not sure it's massively relevant otherwise we should also be calling out digital storefronts and online retailers.
 

adamsapple

Gold Member
It’s been one of the GP prophecies since 2017 and like the other ones it never happened so far.

It's funny how often it gets brought up with literally not a single example in the last 5 years to go by.

It's the worry about what may happen at an arbitrary time in the future that probably keeps some folks awake at night.

Cry me a river and fatten that game pass up baby.

dance GIF


Street Fighter Yes GIF
 
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IFireflyl

Gold Member
This is exactly my concern with Game Pass. Excellent for consumers, but potentially devastating for the industry. The problem is determining how royalties work and who gets what piece of the pie. I don't see this as a lasting idea just because I don't see $15/month being able to be split properly between Microsoft and every developer that made the games the gamer paying the $15 plays that month. If I play four different games in June how is my $15 properly distributed to Microsoft (who you know is taking the largest cut) and the four different developers?

And, of course, this assumes that everyone is paying full price for Game Pass, and they aren't. I have three years of Game Pass Ultimate and paid like $150 total for it. That's less than $5/month that Microsoft got from me for Game Pass, which means that's an even tougher split between Microsoft and multiple developers whose games I played in a given month.

Either way, I am skeptical of the long-term success. I completely agree that this is a huge consumer benefit, but I also agree that there is a high-risk for a negative impact on the industry itself.

P.S. Piracy didn't cut the music industry in half. That is a patently false claim.
 

reksveks

Member
This is exactly my concern with Game Pass. Excellent for consumers, but potentially devastating for the industry. The problem is determining how royalties work and who gets what piece of the pie. I don't see this as a lasting idea just because I don't see $15/month being able to be split properly between Microsoft and every developer that made the games the gamer paying the $15 plays that month. If I play four different games in June how is my $15 properly distributed to Microsoft (who you know is taking the largest cut) and the four different developers?


P.S. Piracy didn't cut the music industry in half. That is a patently false claim.

You know that's not how it works in terms of the revenue split?

Also your source for the revenue decrease due to piracy or other factors?
 

soulbait

Member
The issue with streaming is the record companies did not create it, so the money generated is not going to them directly for new artists. Spotify gets to keep a chunk of the subscription money.

However, GamePass is more in line with HBO Max or a Dinsey+, where the studios own the service, so the subscription fees go directly back to the content creators to create more content. There is less money drop off. If you look at music, the overall revenue has grown in the business, but the creators/publishers get less of the pie. For GamePass, MS studios gets the money directly to put back into their creations. The smaller studios/games get a larger audience exposure who will try out their games. It seems like this will work better in the long run versus what happened with music, but that does not mean it does not have its risks or concerns.

Movies are still being put into theaters first (post COVID of course) because they generate more revenue that way. Why eliminate a revenue stream if it already exists. Same could be argued with gaming, which is why we are seeing two different approaches with MS and Sony. MS wants to lead in this space, so they are going all in. Sony, who has had more successes than MS when it comes to first-party games and console adoption, is still being reserved and depending on the first sales revenue stream. Both can actually work.
 

DarkMage619

Member
I'm referring to Gamepass affecting the way their AAA games like games being split up or more games having monetization. We'll have to see if it changes things as far as the budgets
MS had games with monetization before Game pass though. Pretty sure Sony does too and they don't have Game pass at all. What is your evidence Game pass is the cause?
 

8BiTw0LF

Gold Member
The GamePass route will result in a "SpotiFlex"-like situation, were people get obsessed of (day 1) games coming to the platform, cause they don't want to buy games - like in the good ol' days.

Taking a look at the top played artists on Spotify and the most watched movies and shows on Netflix, gives a very good picture of what we have in store for a 100% sub-based future.

I HAVE CONCERNS!
 

DaGwaphics

Gold Member
I do wonder if Microsoft will adopt Sony's path of not releasing their games immediately, would that not be a better way to sustain the service?

Would probably be a hard pill to swallow. GP seems to be doing great, I don't see why they'd change it.
 

dcmk7

Member
MS had games with monetization before Game pass though. Pretty sure Sony does too and they don't have Game pass at all. What is your evidence Game pass is the cause?
You haven't read what you've quoted. They didn't say this..they said:

We'll have to see if it changes things as far as the budgets.
Stop being so defensive.
 
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reksveks

Member
Games like Perfect Dark or Gears having their campaign split up into parts would be bad, that's what I mean
If done badly yes, but it is not a new thing and isn't a thing that's only applicable to GP games or a platform with GP on it.

I quite liked Tell Tale games and did like Tell Me Why so I am not too bothered.
 
Taking a look at the top played artists on Spotify and the most watched movies and shows on Netflix, gives a very good picture of what we have in store for a 100% sub-based future.

I HAVE CONCERNS!
The games industry has been like this already for the past decade and more. COD and Fortnite constitutes the majority of playtime across all devices.
 

IFireflyl

Gold Member
You know that's not how it works in terms of the revenue split?

I'm aware that's not how the revenue split works. The problem is that we don't know how the revenue split works, but using common sense we can see that the current price of Game Pass per subscriber isn't going to be as good for the industry versus not having a subscription model.

Also your source for the revenue decrease due to piracy or other factors?

What is your source that revenue decrease was due to piracy other than RIAA said it was so? There is no definitive study that links piracy to a notable decrease in sales. It's not on my to provide proof of a non-issue. It's on the people making the claims that there IS proof to provide the proper studies. But there are none. This is exactly what CD Projekt Red proved with the Witcher 3 which they intentionally released without DRM and it went on to be their best selling Witcher game.
 
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8BiTw0LF

Gold Member
The games industry has been like this already for the past decade and more. COD and Fortnite constitutes the majority of playtime across all devices.
Luckily we still have games like Elden Ring topping the charts - I don't think that would be the case in a 100% sub-based future - unless it's filled with microtransactions.
 

Leyasu

Gold Member
This is exactly my concern with Game Pass. Excellent for consumers, but potentially devastating for the industry. The problem is determining how royalties work and who gets what piece of the pie. I don't see this as a lasting idea just because I don't see $15/month being able to be split properly between Microsoft and every developer that made the games the gamer paying the $15 plays that month. If I play four different games in June how is my $15 properly distributed to Microsoft (who you know is taking the largest cut) and the four different developers?

And, of course, this assumes that everyone is paying full price for Game Pass, and they aren't. I have three years of Game Pass Ultimate and paid like $150 total for it. That's less than $5/month that Microsoft got from me for Game Pass, which means that's an even tougher split between Microsoft and multiple developers whose games I played in a given month.

Either way, I am skeptical of the long-term success. I completely agree that this is a huge consumer benefit, but I also agree that there is a high-risk for a negative impact on the industry itself.

P.S. Piracy didn't cut the music industry in half. That is a patently false claim.
It's not a split though imo. Microsoft pay the publisher/devs a set fee for limited time rental license of their game/s.

I really doubt that they are paying a per download fee. They negotiate a price and that is it. If it was a bad deal, then nonody would be accepting it. They are not holding guns to peoples heads
 

Leyasu

Gold Member
If the subscription service was cannibalizing a titles sales then I guess there is an argument that it would be an issue.
No, because the fee for putting the game on the service would have been negotiated before it dropped. I would imagine that pubs or devs would estimate the lost sales of day one releases and add that to their fee.

Unless we now think that everyone is stupid?!
 

DarkMage619

Member
Any questions against MS is concerned trolling in their eyes. Tote the line or else, is the fanboys only edict.
It is considered concern trolling because the loudest complainers aren't even customers of the service or owners of the platform. It is a service. If you don't like the service don't subscribe. If enough people don't sub it will end and those complainers will find their happiness. Just sit back and watch it fail if it is so bad. Concerns for the actual customers rings quite hollow.
 

adamsapple

Gold Member
I'd say with "Season" content and how MCC for PC was released piecemeal in timeline chronological order every 3 months it already is happening.

MCC for PC was done single game at a time cause they were actively porting each game with improvements between releases. They were maintaining very active development blogs. If they had waited to get them all ready before releasing, that would have been a year or two more after they originally started.
 
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reksveks

Member
What is your source that revenue decrease was due to piracy other than RIAA said it was so? There is no definitive study that links piracy to a notable decrease in sales. It's not on my to provide proof of a non-issue. It's on the people making the claims that there IS proof to provide the proper studies. But there are none. This is exactly what CD Projekt Red proved with the Witcher 3 which they intentionally released without DRM and it went on to be their best selling Witcher game.
Do you agree that the global music revenue numbers were correct though? Your contention is the cause of the revenue split? Just so I get your position correct firstly.

I'm aware that's not how the revenue split works. The problem is that we don't know how the revenue split works, but using common sense we can see that the current price of Game Pass per subscriber isn't going to be as good for the industry versus not having a subscription model.

Why did you then use the assumption that it's a per time/download revenue model that comes purely from the 15$ a month or what not.

The problem is determining how royalties work and who gets what piece of the pie. I don't see this as a lasting idea just because I don't see $15/month being able to be split properly between Microsoft and every developer that made the games the gamer paying the $15 plays that month. If I play four different games in June how is my $15 properly distributed to Microsoft (who you know is taking the largest cut) and the four different developers?

As others have mentioned it's sometimes a per download model, sometimes an upfront fee, sometimes based on engagement and sometimes a combination. Its fundamentally is just arbitrage that MS is doing. Also you guy seems to have the assumption that the pool of money that MS is committing to getting content onto GP has to come out of the GP subscription revenue stream; where it really doesn't and imo; it won't.

For example. Xbox says GP increases MAU by 20% Xbox predicts that that 20% increased users buy 50% as much DLC/Fortnite Bucks/Fifa Points as their current audience. Xbox now has 10% more revenue from DLC etc as well as the GP subscription fees from those 20%. Thats the maths that Xbox is playing with. It might be a shitty margin for them but ehh, not my issue.
 
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Luckily we still have games like Elden Ring topping the charts - I don't think that would be the case in a 100% sub-based future - unless it's filled with microtransactions.
You're acting like Elden Ring came out of nowhere and won gamer hearts overnight. Elden Ring is an iterative formula that started it's roots with Demon Souls back in 2009.
 

Bitmap Frogs

Mr. Community
Ingham leaves out the fact that that same global recorded music industry had shrunk by 73% between 2001 and 2011. Interestingly streaming has saved the record industry - but not physical media and record stores. The resurgence of vinyl has only slowed down the decline. A substantial section of the recoded music revenues in the past went to the retail business, now those profits go to record labels and streaming services. Tens of thousands (or even hundreds of thousands) of jobs gone.


That graph is BS.

All that lost revenue came from pirates downloading mp3 instead of buying their music.

Spotify got them paying again, hence the recovery - but that recovery hides the fact most of that 25B ain't going to the music industry, whereas now that revenue is mostly used to rent and maintain the required infrastucture to run spotify and other services.
 

8BiTw0LF

Gold Member
They are not holding guns to peoples heads
No, they just buy studios and can adjust budgets depending on subscription sales, downloads etc. This is how Spotify and Netflix works.

You're acting like Elden Ring came out of nowhere and won gamer hearts overnight. Elden Ring is an iterative formula that started it's roots with Demon Souls back in 2009.
I know. But do you think Microsoft or Sony could pay the same amount Bandai made from sales of Elden Ring?
 

Swift_Star

Gold Member
But the music industry adapted. New artists make nearly all of their money with touring. Not the way it used to be but they adapted. This industry will need to adapt as well. For better or worse.
How will gaming adapt? Musicians can tour, movies are released on theaters and those avenues are where they make most of their revenues.
Games Make money by sales and MTX.
My bet is that budgets will be reduced and MTX are going to become more and more predatory.
 

BeardGawd

Gold Member
Games like Perfect Dark or Gears having their campaign split up into parts would be bad, that's what I mean
I don't really understand this take.
Was FF7 Remake badly received?

Do people not watch tv shows?

I personally would love episodic games. To each their own.
 

dcmk7

Member
It is considered concern trolling because the loudest complainers aren't even customers of the service or owners of the platform. It is a service. If you don't like the service don't subscribe. If enough people don't sub it will end and those complainers will find their happiness. Just sit back and watch it fail if it is so bad. Concerns for the actual customers rings quite hollow
Jeez man, it's literally quotes from a former Xbox executive about how he fears the industry could potentially go with the subscription models.

Not that the industry will 100% go to shit in the near future.

Your desperation to label any MS discussion that you disagree with as concern trolling is totally transparent and is antagonising in itself.
 
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IntentionalPun

Ask me about my wife's perfect butthole
Spotify got them paying again, hence the recovery - but that recovery hides the fact most of that 25B ain't going to the music industry, whereas now that revenue is mostly used to rent and maintain the required infrastucture to run spotify and other services.

Not true; Spotify gives just over half of their revenue to the industry.

Really not much different than selling CDs. There's a lot less for the industry to manage as they literally just have to upload a few files to release an album.

The real question is.. why are we/Ed Fries babbling about a completely different industry?

The comparison between music/movies/whatever and gaming is so flawed.
 
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Swift_Star

Gold Member
If that is the case the developer simply won't put a game on Game Pass again. Problem solved.
That’s what most of the AAA have been doing. GP for them is where they dump their games after the majority of the sales have run their course and I’m betting it’ll be the same with PS+.
“Failed” games also get a second chance at these services, like GoTG
I don’t think we’ll see games like resident evil launching day one in any service whatsoever. They don’t need it.
 
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dcmk7

Member
If that is the case the developer simply won't put a game on Game Pass again. Problem solved.

No, because the fee for putting the game on the service would have been negotiated before it dropped. I would imagine that pubs or devs would estimate the lost sales of day one releases and add that to their fee.

Unless we now think that everyone is stupid?!
Totally agree in those scenarios.
 

Klayzer

Member
It is considered concern trolling because the loudest complainers aren't even customers of the service or owners of the platform. It is a service. If you don't like the service don't subscribe. If enough people don't sub it will end and those complainers will find their happiness. Just sit back and watch it fail if it is so bad. Concerns for the actual customers rings quite hollow.
Thanks. Customers and potential customers will comment on the service as they please. Im pretty sure you have given your opinions on things you don't own or subscribe to. Pass on the gatekeeping.
 

Chukhopops

Member
It's funny how often it gets brought up with literally not a single example in the last 5 years to go by.

It's the worry about what may happen at an arbitrary time in the future that probably keeps some folks awake at night.
To be honest it wasn’t entirely bullshit: there has been ONE episodic game and ONE first-party early access game in 5 years.

It was just 98% bullshit.
 
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