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Game pass developer payment "clarified"

DaGwaphics

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Each batch is sold for a set price to the retailer, so any discounts from there come out of their end.

I worked at GS for a minute way back, and that wasn't the way it worked at that time. Especially if a system or game is expected to do very well but doesn't. You will absolutely get the opportunity to price correct those without losses in most cases. Typically adjustments are made on future invoices, since you will deal with these same publishers/manufacturers continually. Not doing this would cause stores to handicap your next release in an abundance of caution.
 
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ReBurn

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There's no way AAA games nowadays cost $100m on the high-end. Epic said Gears of War 4 would have cost $100m and that's an old game now. Halo, Starfield, next Gears will cost a lot more than that.
All I know is that Jim Ryan very recently said it costs $100M+ to bring a new IP to market. That's not all development cost. The marketing and promotion overhead involved can cost as much as 75% of the game's development budget. Existing IP's from established franchises don't cost as much to bring to market because it's not as hard to convince people to buy them.
 

Hezekiah

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I worked at GS for a minute way back, and that wasn't the way it worked at that time. Especially if a system or game is expected to do very well but doesn't. You will absolutely get the opportunity to price correct those without losses in most cases. Typically adjustments are made on future invoices, since you will deal with these same publishers/manufacturers continually. Not doing this would cause stores to handicap your next release in an abundance of caution.
Well it's up to the retailer to order what it thinks it can sell. 30% goes to the-platform holder, more I understand if it's sold digitally. In any case with a game like Spiderman it sold 13m in less than a year.
All I know is that Jim Ryan very recently said it costs $100M+ to bring a new IP to market. That's not all development cost. The marketing and promotion overhead involved can cost as much as 75% of the game's development budget. Existing IP's from established franchises don't cost as much to bring to market because it's not as hard to convince people to buy them.
Shawn Layden put it at $80m - $150m on average for a AAA gamee and I believe this is without marketing. Even in that interview Ryan says "They cost more than $100m dollars to make these days", can't see anything about marketing. You can imagine how much something like Halo is costing, five years andncounting of development time.

.
 
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Brofist

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Yeah agreed. Gamepass is such a horrible proposition. Imagine paying $15 a month to play Gears 6, Forza Horizon 5, Forza Motorsport Next, Fable, Perfect Dark Reboot, Elder Scrolls 6, DOOM next, Wolfenstein Next, Starfield, Halo Infinite, and big 3rd party titles Day 1 and not having to spend $60 to $70 per title. What a rip off.. they should be ashamed.

Absolutely horrible value. Microsoft is a joke and should end the console business immediately. They are running out of money and are on verge of bankruptcy.

I hate it. I'd rather pay $70 a game to ensure the health of my beloved favorite company, because I know in the end they'll reward me heavily for being such a brand loyalist.
 

rnlval

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GamePass is the first step on the way to monopolize the industry in 10 years.
And during this first step it needs to be a great value with little censorship or other bullshit towards devs n audience.

It is not gonna be like that always so everyone needs to enjoy it while it is like that.
Censorship needs to be consistent with Hollywood's 50 Shades of Grey or HBO's Games of Thrones.
 

Tmack

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I mean, it's currently doing $150 million per month in revenue.


They dont make that. You have to take into account the incremental revenue it generates, since if wasnt for gamepass a lot of that money whould be going to xbox gold anyways.
 

ReBurn

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They dont make that. You have to take into account the incremental revenue it generates, since if wasnt for gamepass a lot of that money whould be going to xbox gold anyways.
Not all game pass revenue is from ultimate. There is are less expensive tiers for console and PC that don't include gold. Presumably some of that revenue is from one of these tiers.
 

DaGwaphics

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I hate it. I'd rather pay $70 a game to ensure the health of my beloved favorite company, because I know in the end they'll reward me heavily for being such a brand loyalist.

I'm not personally concerned whether or not MS goes bankrupt giving me access to games, or Epic either. If they fold I'll just move on, I'm not nearly loyal enough, I guess. :messenger_grinning_squinting:
 
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Vae_Victis

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"Multi-million company"? Friend, you need to understand Microsoft's size. They're a trillion dollar company. They've made bad business decisions that have cost hundreds of billions of dollars and just shrugged their shoulders like it was nothing. They have an unfathomable amount of money. But what's really important about Microsoft isn't how rich they are - it's how long they've been as rich as they are. They've been in the list of wealthiest companies in the world for nearly fourty years. You don't go four decades at the top on luck. You do it because you consistently employ smart people who can look at a prospect and say "this has a good return on investment", and have those people be right a hell of a lot more than they are wrong. Is Gamepass a guaranteed success? Not at all. But, is there anything about Gamepass that makes me think it'll fail? Nope.
Microsoft's flexibility in their deals, as outlined in the OP, is one of the reasons I believe they'll succeed with Gamepass. They're at 15 million subscribers before next-gen launched. They've already confirmed their current model is fully sustainable, and they haven't even started releasing their newest acquisitions on to the service. Stadia was DOA. EA Play never gained traction. Their closest competitor in this same space has around 2 million subscribers. Microsoft is on to something here; the disruption is already being felt. That's a good sign that they're not going to fail.
The "they have money, they must know what they are doing and in any case it will all be good because money" arguments are a bit naive, and they reek of arguments from authority. Don't forget this is the same Microsoft who ended up with the RROD with the Xbox 360, and the same Microsoft who went for the "mandatory Kinect+TV TV TV+no used games" pitch for Xbox One until they had literally already burned most of the good will of their fanbase, which alone costed them half their market share to PS4 after Xbox 360 and PS3 finished pretty much with a draw.

They were a trillion dollar company back then too, and "they have money" didn't make it any better when they took very bad and very dumb decisions which resulted in a world of hurt for them, Xbox players or both. At some point you can literally become too big to fail, which doesn't mean that you can do no wrong, but rather usually the opposite: that you can make mistakes that would wipe out a smaller company, and you can afford to not even learn from them. Titanic companies make insane amounts of money by the sheer virtue of having money, usually through stuff like finance, aggressive/malicious monopolization of market sectors, and outright patent trolling.


That aside, I think the question we should all ask in regards to Game Pass is not whether it works out for Microsoft in the long run, but for customers. Lootboxes are a boon for gaming companies, they "work out" like a marvel for EA and the likes, yet I don't think many people would be willing to praise them around the gaming community.

The point is, if the math doesn't seem to add up, the first question you ask should be "where's the catch?", or rather "when is the catch coming?". Models that bank on locking the user inside an ecosystem in some way usually go: 1) make the sweetest deal possible, even if it costs you money, to lure people in 2) lock in as many people as possible by making it a habit/unavoidable/a sunk cost fallacy to use your service 3) tilt the product/price balance up to the new breaking point you created to make back your money and more.

If you were good in points 1 and 2 the service will be successful, but it DOESN'T automatically mean it will be a win in the long run for the customers too. Point 3 is what Apple does when they sell you a $1,000 TV stand, Disney asks you to have a subscription AND to pay more on top of it to watch Mulan, or Microsoft itself when every new release of Office does the same as the last one (and is arguably worse than some FREE software) but costs more and more to license.


All of this is to say: since in Microsoft's intentions Game Pass needs you to depend on it for your games, the current price/content you see now is probably not meant to last, only to attract customers. Of course everyone will do what they want with their money, but if someone thinks this is "the future", be mindful of what future you are actually building for yourselves.
 
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Yoboman

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Seems like a good deal for small devs, but what are the implications if a game has a Rocket League like success and is doing massive numbers. Are the devs still just locked to the cost of development?
 

pasterpl

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Yea it makes sense. I just don't see developers being ok with their product being essentially a free bundle in a streaming service when it's $60 elsewhere.

I guess it's similar to a blu-ray being $25 but also being available on Disney+.... but even the movies get theatrical release periods...

look at steam sales of games like flight simulator or sea of thieves, these were still very successful on steam at full retail price even with gamepass versions available at the same time, people who want to own a game still can purchase every single one, and steam sales shows that releasing a game on gp doesn’t mean that your sales will suffer, from what we have heard it is actually other way around, for big AAA games I can see gamepass being a marketing opportunity for which they are actually being paid, if it is a new release you increase your reach as ms will push your game, if it is older aaa title, gp is a great “refresher” and allow your game to re-gain some momentum.
 

IDKFA

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Why do you think so? The same fears as with Netflix destroying the Hollywood blockbuster model?

Netflix was never going to kill the big budget Hollywood blockbuster. Netflix wouldn't have the budget to make a few films a year like End Game or a Star Wars movie. Those films cost hundreds of millions to make, but always make their money back in cinema ticket sales.

Third party games almost work the same way if we're talking about Gamepass. Game gets released to buy on day one, then after a certain amount of time, the game may find it's way onto Gamepass for a limited time.

I'd be interested to see how Gamepass pans out in the future. Microsoft will be putting Bethesda games on Gamepass, including ESVI and Starfield, plus all other first party titles like Forza, Halo, Fable and the new IPs they have in the works. Each game isn't cheap to make. What do you think the cost is of all their first party output currently in development now? Gotta be a few billion. The new Halo alone has a budget of over 500 million USD! That's more than a Hollywood blockbuster film! A lot more!

When these games drop, I'm thinking that Microsoft will change their Gamepass plan to be more like Netflix, but not in a way that we all think.

A vast majority of Netflix originals can only be watched by signing up to Netflix. Netflix then release new, original content on a regular basis to keep people signed up for life. I think for Microsoft to really turn Gamepass into a profit making money spinner, then they need to go down this route.

Make all their first party games Gamepass exclusives. Make it so the only way you can access ESVI or the new Fable is by paying for Gamepass. Remove the option to buy the game outright.

Add more MTX into their games. Seems unpopular to us, but companies like EA and Activision are making billions a year just from MTX alone. Microsoft would be stupid not to add this into all of their first party games.

If they do this, then they can really be called the Netflix of gaming and make money. It's not my preferred option. I would rather they didn't take this route, but I'm not the one pumping billions into game development, buying studios and trying to please shareholders.
 
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silentstorm

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Seems like a good deal for small devs, but what are the implications if a game has a Rocket League like success and is doing massive numbers. Are the devs still just locked to the cost of development?
People can still buy the games, although with discounts in some cases, in case they really like the game, want to support the devs and want to own the game...that being said, most people will just move on to other games and not really buy the game.

Maybe if it leaves Game Pass and people still want to play it.
 

Chukhopops

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Add more MTX into their games. Seems unpopular to us, but companies like EA and Activision are making billions a year just from MTX alone. Microsoft would be stupid not to add this into all of their first party games.

If they do this, then they can really be called the Netflix of gaming and make money. It's not my preferred option. I would rather they didn't take this route, but I'm not the one pumping billions into game development, buying studios and trying to please shareholders.
Halo 5, Gears 5, FH4 etc all have MTX, but it’s done in a way that you can still play without it and not feel gimped or inferior. So it will happen of course but I don’t have a problem with it.
 

hemo memo

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That’s really smart for them because big devs shouldn’t be equal to a small studio. It should be pushed more on PS+ and we should see more Bugsnax type deals and not old games. I mean day 1 release on Gamepass is a crazy value.
 

Leyasu

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So the developers/publishers that put their games in Game Pass are actually paid ? MIND BLOWN.

As long as MS are willing to take the risk, that's a great opportunity for the developer to secure their development.
I don’t think that it will last forever though for 3rd parties and indies. Once they have all their studios organized and pumping out games, I can see them slowing down their investments outside of their studios.

We will see
 

12Dannu123

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The economics works well for MS because they have size scale to make this profitable. It's why Game Pass is on Mobile, PC and Consoles and coming soon to TVs and web, Instagram and Facebook Gaming. Making their service available anywhere will increase the base to make a profit. MS also provides incentives for companies to pre install/Promote Game Pass.

Sony doesn't have that luxury as they aren't a big player beyond cameras and consoles and they don't provide an incentive for companies to push PSNow.

It's why PSNow has been struggling to gain traction.
 
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IDKFA

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Halo 5, Gears 5, FH4 etc all have MTX, but it’s done in a way that you can still play without it and not feel gimped or inferior. So it will happen of course but I don’t have a problem with it.

For now sure, but if Microsoft went down the route of locking games to Gamepass, then I'd expect many more MTX in games. That combined with making people pay for Gamepass to access the strong, first party lineup and Microsoft will have a sure fire money spinner on their hands. It won't work for all games, but if I was in charge I'd be looking at putting some very addictive game mechanics in games to get people to also buy as many MTX as possible.

Again, I'm not knocking the idea. It will of course be beneficial financially for MS to head down this route, but I can understand why it would be unpopular with some.
 
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Tmack

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When Microsoft can throw 7.5 bn at bethessa like it were pocket money, then i think they will be fine with game pass as well.

Incentives aint about money.

When i mean incentives i mean devs won`t have incentives to make actual good games. Wait and see.
 
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Tmack

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Sony doesn't have that luxury as they aren't a big player beyond cameras and consoles and they don't provide an incentive for companies to push PSNow.

It's why PSNow has been struggling to gain traction.

Sony doesnt have to. If they had they would be putting their money into that.
 

The_Mike

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Incentives aint about money.

When i mean incentives i mean devs won`t have incentives to make actual good games. Wait and see.

Why don't they? Microsoft can see which games gets played. If no one plays it then contract will probably be removed.

By the way, how come it's a good thing when Sony pays for the production of a game and it makes the quality top norch, but when Microsoft does it then there's incentive to make quality games.

Just curios. You make it sound like Microsoft really wants to have bad games.
 
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Counterpoint: First party titles are never cycled off.

Counter-counterpoint: Where the hell are the new first party games for Series X?
Who wants to pay 15$ a month to play Gears 5 forever?.. I mean the game is worth 20$ by now... Same for all the 1st party titles.

The pricing model kind of works in the client's favor IF AND ONLY IF you give the games full AAA retail value ALL the time (even the old-ish indies). Think about it, how many games will you have bought with the same amount of money after 5 to 7 years? and you pick the ones you want to play, not some "curator" that could take away your favorite games at any time.

and there is nothing to say that first party titles will never be rotated out of existence due to some licensing deal or whatever marketing caprice.
 

QuantumZebra

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There's no way AAA games nowadays cost $100m on the high-end. Epic said Gears of War 4 would have cost $100m and that's an old game now. Halo, Starfield, next Gears will cost a lot more than that.
Yea I'd estimate a franchise flagship to be right around $100m and a new launch with a ton of promo (like Death Stranding) to be higher, in the $150ish range.
 

QuantumZebra

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Netflix was never going to kill the big budget Hollywood blockbuster. Netflix wouldn't have the budget to make a few films a year like End Game or a Star Wars movie. Those films cost hundreds of millions to make, but always make their money back in cinema ticket sales.

Third party games almost work the same way if we're talking about Gamepass. Game gets released to buy on day one, then after a certain amount of time, the game may find it's way onto Gamepass for a limited time.

I'd be interested to see how Gamepass pans out in the future. Microsoft will be putting Bethesda games on Gamepass, including ESVI and Starfield, plus all other first party titles like Forza, Halo, Fable and the new IPs they have in the works. Each game isn't cheap to make. What do you think the cost is of all their first party output currently in development now? Gotta be a few billion. The new Halo alone has a budget of over 500 million USD! That's more than a Hollywood blockbuster film! A lot more!

When these games drop, I'm thinking that Microsoft will change their Gamepass plan to be more like Netflix, but not in a way that we all think.

A vast majority of Netflix originals can only be watched by signing up to Netflix. Netflix then release new, original content on a regular basis to keep people signed up for life. I think for Microsoft to really turn Gamepass into a profit making money spinner, then they need to go down this route.

Make all their first party games Gamepass exclusives. Make it so the only way you can access ESVI or the new Fable is by paying for Gamepass. Remove the option to buy the game outright.

Add more MTX into their games. Seems unpopular to us, but companies like EA and Activision are making billions a year just from MTX alone. Microsoft would be stupid not to add this into all of their first party games.

If they do this, then they can really be called the Netflix of gaming and make money. It's not my preferred option. I would rather they didn't take this route, but I'm not the one pumping billions into game development, buying studios and trying to please shareholders.

MS is kinda already doing this - Forza Horizon 4 has *tons* of shit you can buy. You could almost consider it P2W since some of the cars are the best in their class.

I agree it could keep the model afloat if they implement it across the board. Maybe push out a few F2P MTX games.
 
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ZehDon

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The "they have money, they must know what they are doing and in any case it will all be good because money" arguments are a bit naive, and they reek of arguments from authority. Don't forget this is the same Microsoft who ended up with the RROD with the Xbox 360, and the same Microsoft who went for the "mandatory Kinect+TV TV TV+no used games" pitch for Xbox One until they had literally already burned most of the good will of their fanbase, which alone costed them half their market share to PS4 after Xbox 360 and PS3 finished pretty much with a draw.

They were a trillion dollar company back then too, and "they have money" didn't make it any better when they took very bad and very dumb decisions which resulted in a world of hurt for them, Xbox players or both. At some point you can literally become too big to fail, which doesn't mean that you can do no wrong, but rather usually the opposite: that you can make mistakes that would wipe out a smaller company, and you can afford to not even learn from them. Titanic companies make insane amounts of money by the sheer virtue of having money, usually through stuff like finance, aggressive/malicious monopolization of market sectors, and outright patent trolling.


That aside, I think the question we should all ask in regards to Game Pass is not whether it works out for Microsoft in the long run, but for customers. Lootboxes are a boon for gaming companies, they "work out" like a marvel for EA and the likes, yet I don't think many people would be willing to praise them around the gaming community.

The point is, if the math doesn't seem to add up, the first question you ask should be "where's the catch?", or rather "when is the catch coming?". Models that bank on locking the user inside an ecosystem in some way usually go: 1) make the sweetest deal possible, even if it costs you money, to lure people in 2) lock in as many people as possible by making it a habit/unavoidable/a sunk cost fallacy to use your service 3) tilt the product/price balance up to the new breaking point you created to make back your money and more.

If you were good in points 1 and 2 the service will be successful, but it DOESN'T automatically mean it will be a win in the long run for the customers too. Point 3 is what Apple does when they sell you a $1,000 TV stand, Disney asks you to have a subscription AND to pay more on top of it to watch Mulan, or Microsoft itself when every new release of Office does the same as the last one (and is arguably worse than some FREE software) but costs more and more to license.


All of this is to say: since in Microsoft's intentions Game Pass needs you to depend on it for your games, the current price/content you see now is probably not meant to last, only to attract customers. Of course everyone will do what they want with their money, but if someone thinks this is "the future", be mindful of what future you are actually building for yourselves.
I think my favourite part of this post, of which variations are posted several times whenever Gamepass is mentioned, is just how scatter shot it always is. Not one point made well, but rather, a dozen little shots all fired off in the hopes that one might find a target.
"Money doesn't mean Microsoft can't fail!"
"Experience doesn't mean Microsoft can't make a mistake!"
"Gamepass is micro-transaction dependent".
"Gamepass isn't long-term sustainable."
"Gamepass isn't a good deal for players".
"Gamepass means no more AAA games!"
"Microsoft is just waiting to raise the price".
"Microsoft are trying to steal the games industry".
All rolled out in vague half-sentences and paragraphs, all said with complete earnest, and yet, each having nothing in the way of credible evidence, logic, or thought processes behind them. It reeks of "old man yells at cloud".

No, experience doesn't mean Microsoft can't make a mistake. However, any one or anything returning consistently good results across a long time frame affords us some base expectations that, unless something drastic has changed, the expected good results will continue. This is why we presume the sun will rise tomorrow, and aren't surprised when it does. Microsoft has been profitable for 40 years. I don't think Gamepass is going to change that.
No, money doesn't mean Microsoft can't fail. However, Microsoft's profitability retention, even through Balmer's stagnation and lack of foresight, afford us the expectation that Microsoft has a long-term profitability plan for Gamepass, as they do with all of their new ventures. According to Phil Spencer, Gamepass is both profitable and sustainable right now, and there's no price increase in the foreseeable future. Being that it's illegal for a publicly traded company to lie about its profitability, I'll go with Spencer's statements rather than your... whatever.
No, Gamepass is not micro-transaction dependent. The monthly subscription cost supersedes the necessity of micro-transactions in every game. This has been discussed before. Please note: this does not mean that games will not have micro-transactions, only that Gamepass does not include additional incentives with which to add them.
Yes, Gamepass is long term sustainable. As mentioned above, it's already sustainable right now.
Yes, Gamepass is a good deal for players. With no lock-in contracts, if something changes with Gamepass, I simply un-subscribe. I can purchase every game included in Gamepass, all offered with a discount while they're present on Gamepass. If I chose to subscribe, I have access to hundreds of terrific games - any I am notified in advance of any titles leaving the service. Why should I not enjoy the offering today on the basis that some years from now, Gamepass might have a price increase or might change?
No, Gamepass doesn't mean no more AAA games. Based on Microsoft's acquisition of Zenimax, and their building of what they've described as the first AAAA studio, it would seem the opposite is true.
No, Microsoft aren't just waiting to raise the price. As mentioned above, one isn't on the table anytime soon. However, I want you to bookmark my post for this next bit: when Microsoft raises the price of Gamepass to match inflation, adding a dollar or two to the price point in 2022, I believe people such as yourself will begin the "See! I fucking TOLD you so!" posts without a shred if irony. Mark. My. Words.
No, Microsoft aren't trying to steal the games industry. They're trying to disrupt it. Like Netflix did. Like Redbox did. Like eBay did.

Lastly, your "BeWaRe!!!" Dickens-esque wailings of slippery-slope doom is laughably out of touch. If I can still purchase the games on Gamepass - which I have, I might add - and I can cancel Gamepass at any time, and Gamepass is optional, and Gamepass is inexpensive... what exactly is it that we're being "mindful" of, friend? That gaming will be transformed into a nightmare world of easily accessibly games on an optional subscription service across multiple devices?
 

Vae_Victis

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"Money doesn't mean Microsoft can't fail!"

No, experience doesn't mean Microsoft can't make a mistake. However, any one or anything returning consistently good results across a long time frame affords us some base expectations that, unless something drastic has changed, the expected good results will continue. This is why we presume the sun will rise tomorrow, and aren't surprised when it does. Microsoft has been profitable for 40 years. I don't think Gamepass is going to change that.
The first part of my comment was a direct reply to the "they have money so trust the plan" part of your comment, because it is an asinine mindset to have in any possible way you can look at it. Call it "scatter shot" if you want, but if I disagree with what you say for two different reasons that require two different answers, I'm going to puth them both in my reply.

Talking about GamePass specifically, I don't care if they are "profitable", as I thought I made more than clear in the second half of my post. That's not the point. Why you would care in these terms, apart a from purely academic discourse, is beyond me. Do you work for them? Do you own stocks?

I'm not doubting that they know how to make money from customers one way or another, I'm doubting that the scenario you are imagining for the future is what will actually take place.

"Experience doesn't mean Microsoft can't make a mistake!"

No, money doesn't mean Microsoft can't fail. However, Microsoft's profitability retention, even through Balmer's stagnation and lack of foresight, afford us the expectation that Microsoft has a long-term profitability plan for Gamepass, as they do with all of their new ventures. According to Phil Spencer, Gamepass is both profitable and sustainable right now, and there's no price increase in the foreseeable future. Being that it's illegal for a publicly traded company to lie about its profitability, I'll go with Spencer's statements rather than your... whatever.
I don't know where that was said and in what terms, so I can't really comment on the merit of it.

I also don't know if it's part of the US law that a publicly traded company can never lie about profitability, but it's pretty well known that a lot of companies will lie or "bend the truth" even in their earning reports, so I doubt anyone would ever think to try to hold Phil Spencer accountable for a throwaway line said during an interview with some B-tier gaming magazine or influencer. The fact he by his own nature tends to "bend the truth" a lot whenever he opens his mouth doesn't make me feel particularly more trusting of any promise or boast he makes, though.

"Gamepass is micro-transaction dependent".

No, Gamepass is not micro-transaction dependent. The monthly subscription cost supersedes the necessity of micro-transactions in every game. This has been discussed before. Please note: this does not mean that games will not have micro-transactions, only that Gamepass does not include additional incentives with which to add them.
I didn't even say any of this, so I don't know what you're talking about. I only mentioned lootboxes to emphasize how in general "company makes money out of it" doesn't automatically equate to "I want it for my games".

"Gamepass isn't long-term sustainable."

Yes, Gamepass is long term sustainable. As mentioned above, it's already sustainable right now.
If we take the current snapshot of the GamePass situation, the math just doesn't add up. You don't finance the development of dozens of exclusive games only to give them away at a fraction of their potential RRP, unless you either have zero trust that those games would be able to sell on their own merit, or you accept the "lost" money in the transaction as an investment and plan to make it back later somehow.

Which brings us back to the fact that what you and Micrsofot call "sustainable" are not necessarily the same thing. You are looking at a snapshot of what is going on today and say "yes, THIS exact thing as it exists right works perfectly, it is great for everybody and therefore it will never change". Microsoft doesn't think that way, because this is a kind of reasoning that doesn't even make sense for what would be a long term plan. Whenever anything is brought up at a meeting, at some point the question will be "OK, so how does this make us make more money than investing the same resources in some other way?"

The goal is not for GamePass to pay for itself and stay afloat, the goal is for GamePass to make more money than not having GamePass and investing that money in some other way. Every business decision is meant to MAXIMIZE its returns, not "exist without costing us money". So EVEN if we assume that right now and without ever changing GamePass would be paying for itself (which I strongly doubt), that would not be reason enough for Microsoft to take a risk of this kind. It means that, in the end, in some way or another that I can't exactly predict (but I can kinda guess, *cough* lower development budgets over time *cough* price increases), they calculated that when all is said and done this will make them more money than not having it.

What I'm trying to make you understand is that if option A and option B exist, and a company like Microsoft is going with option B, it's because they decided that option B makes them more money than option A. That money is not going to will itself into existence because their benevolent actions created positive karma in the universe, it's going to come from the people subscribed to the thing, in one way or another, because it can literally come from nowhere else. It will either be them giving Microsoft more money for the same product, them giving Microsoft the same money for less product, or a combination of the two.

"Gamepass isn't a good deal for players".

Yes, Gamepass is a good deal for players. With no lock-in contracts, if something changes with Gamepass, I simply un-subscribe. I can purchase every game included in Gamepass, all offered with a discount while they're present on Gamepass. If I chose to subscribe, I have access to hundreds of terrific games - any I am notified in advance of any titles leaving the service. Why should I not enjoy the offering today on the basis that some years from now, Gamepass might have a price increase or might change?
If you look at it today, see what it offers and at what price and decide it's a good deal for you, then by all means go for it. I'm not being sarcastic, it will for a lot of people.

I'm not saying "don't subscribe to GamePass today because it might get worse one day". I'm saying "stop believing in fairy tales, because it will get worse one day, or they wouldn't be even bothering".

"Gamepass means no more AAA games!"

No, Gamepass doesn't mean no more AAA games. Based on Microsoft's acquisition of Zenimax, and their building of what they've described as the first AAAA studio, it would seem the opposite is true.
Another thing I didn't even say, so have fun discussing with yourself I guess.

That said, the fact that some productions at Microsoft Studios will be scaled down is not exactly a tinfoil hat conspiracy theory. It's not necessarely I bad thing, mind you; but you seem to think it would be, apparently...?

"Microsoft is just waiting to raise the price".

No, Microsoft aren't just waiting to raise the price. As mentioned above, one isn't on the table anytime soon. However, I want you to bookmark my post for this next bit: when Microsoft raises the price of Gamepass to match inflation, adding a dollar or two to the price point in 2022, I believe people such as yourself will begin the "See! I fucking TOLD you so!" posts without a shred if irony. Mark. My. Words.
Oh, you sweet, sweet summer child.

The price will be (and is) at any time precisely as much as they think they can get away with without losing too many people as a negative consequence, in terms of what those same people could still have paid in the future if they had not left. Calculating those prices are people with specialized economics curricula and years of experience in using marketing predictive algorithms. People who are paid a lot of money to figure out what course is the one, over a span of 5, 10, 20 years, that will make Microsoft the most money in the end.

You think the price won't be raised "any time soon" why, exactly? Because customers would riot and opt-out of the service en masse? In this case you give most people way too much credit. Because Microsoft wants to make games all over the world happy and is more than willing to leave millions of $ on the table for the Kumbayas? If that's why, I don't know what to tell you, I hope your private mental world is one worth living in, because reality sure is not as kind.

"Microsoft are trying to steal the games industry".

No, Microsoft aren't trying to steal the games industry. They're trying to disrupt it. Like Netflix did. Like Redbox did. Like eBay did.
I never said they are trying to "steal the games industry", first because "steal" implies a component of malice or illegality that is out of place in a discussion about business strategies and market shares, and second because the strive to do better than somebody else is by definition how our economic model works. You either make more money than somebody else, or who made more money than you will buy you and make you make more money for them. Again, I don't know if you're just parroting what somebody else said even if it's completely irrelevant to what I said, or you really have this naive and simplistic vision of reality yourself.

Of course Microsoft are trying to disrupt the gaming maket, they'll do what they want to do and it will have the effects that it will have. The thing is, you assume and proselytize a hell of a lot of good will, good intentions, puppies and rainbows on the part of Microsoft, where there are none to be found if you just analyze the situation with a pinch of logic and a grip on reality.
 

ZehDon

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Jun 13, 2013
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The first part of my comment was a direct reply to the "they have money so trust the plan" part of your comment, because it is an asinine mindset to have in any possible way you can look at it...
I actually never said "they have money trust the plan". I've outlined what I said twice now, and you continue to reduce it to something I never said in order to hand-wave it away. If you want to discuss this, I'm quite happy to, but let's do this honestly, shall we?

I also don't know if it's part of the US law that a publicly traded company can never lie about profitability, but it's pretty well known that a lot of companies will lie or "bend the truth" even in their earning reports, so I doubt anyone would ever think to try to hold Phil Spencer accountable for a throwaway line said during an interview with some B-tier gaming magazine or influencer. The fact he by his own nature tends to "bend the truth" a lot whenever he opens his mouth doesn't make me feel particularly more trusting of any promise or boast he makes, though.
So, despite it being illegal to lie about their profitability, and Gamepass already being profitable, you believe they're lying about their profitability, and although you apparently don't care about their profitability, them not being profitable means that Gamepass is bad. Ok then, I'll address this further below.

Talking about GamePass specifically, I don't care if they are "profitable", as I thought I made more than clear in the second half of my post...
...
... If we take the current snapshot of the GamePass situation, the math just doesn't add up. You don't finance the development of dozens of exclusive games only to give them away at a fraction of their potential RRP, unless you either have zero trust that those games would be able to sell on their own merit, or you accept the "lost" money in the transaction as an investment and plan to make it back later somehow....
...
... The goal is not for GamePass to pay for itself and stay afloat, the goal is for GamePass to make more money than not having GamePass and investing that money in some other way...
So, you don't care if they're "profitable"... but the entire basis of your hesitation on the service is based around the assumption that they're not, and cannot be, profitable, and that them not being profitable is a bad thing because corporation exist to be profitable, which means they'll need to make changes to Gamepass in order for it to become profitable. Despite them already being profitable. Do you see why this doesn't work? Your fear is that the service will change to become profitable... when it's already profitable.

So EVEN if we assume that right now and without ever changing GamePass would be paying for itself (which I strongly doubt), that would not be reason enough for Microsoft to take a risk of this kind...
Actually, it's extremely simple, and I'm surprised you haven't come to this conclusion yourself, given that you've actually put a lot of effort into your reply. It's simple: Microsoft lost. Sony took Microsoft to task last generation. Without the necessary hardware units, Microsoft simply wasn't able to generate as much licencing revenue from third party titles as they had in the Xbox 360 era. They make money from the third party software sold on their platform; less Xboxes, means less software sales, means less licencing revenue. Then there's Xbox Live sales, etc., that adds on top of this for DLC and other digital purchases. This caused Xbox as a whole to contract, leading to a lack of new investment in the brand, creating a negative-feedback cycle. "Xbox doesn't make more money, so we don't spend more money on Xbox, so Xbox doesn't have new things to sell to make more money".

Gamepass allows Microsoft to separate their platform revenue from hardware sales. They don't need you to buy Xbox hardware to make money off of you, they just need you to subscribe to Gamepass. If the Series X doesn't sell as many units as the PlayStation 5, it's significantly less important because Gamepass is now the driver, and the Series X is just an access point. PC - and mobile devices, via xCloud - are other access points, giving Microsoft a huge amount of potential customers, independent of their hardware sales.

What Microsoft are banking on is that its easier to convince 100 people to part with $15.00 than it is to convince 15 people to part with $100.00. And once you get 100, it's easier to grow that organically to 1000 with the same service than it is to grow 15 to 1000. So far, with 15 million subscribers and zero next-gen launch day games, it seems Microsoft's gamble is correct. It's now a matter of economies of scale.

The price will be (and is) at any time precisely as much as they think they can get away with without losing too many people as a negative consequence, in terms of what those same people could still have paid in the future if they had not left. Calculating those prices are people with specialized economics curricula and years of experience in using marketing predictive algorithms. People who are paid a lot of money to figure out what course is the one, over a span of 5, 10, 20 years, that will make Microsoft the most money in the end.
Congratulations - you've used the point I made in my previous post, which you reduced to "they have money trust the plan". Microsoft will use its four decades of profitability experience to enable it to charge what the market allows it to - this includes other subscription services, like Netflix, Disney+, and Prime, all of which Microsoft have said are their direct competitors. So far, the ceiling is $15 a month. I don't expect that to rise for some time because the market simply won't allow it to.

The thing is, you assume and proselytize a hell of a lot of good will, good intentions, puppies and rainbows on the part of Microsoft, where there are none to be found if you just analyze the situation with a pinch of logic and a grip on reality.
Quite the opposite, actually. You assume: Microsoft are lying illegally about their profits, Microsoft intend to extort their services as soon as we're not looking, and Microsoft are looking to rip off as many as they can get away, all of which informs your opinion that "Gamepass is not a good deal". On the contrast, the one and only assumption that I've made is: Microsoft's Gamepass service will operate tomorrow as it operates today.
As such, you're negative skepticism is unfounded, contradictory, and ultimately quite baseless - unless you make the negative assumptions you've made. And, on the contrast, my positivism is quite well founded on the current reality of Gamepass. It would need to change before I would lose a positive outlook - which is a fair position to take on anything, frankly.
 

whattheduck

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Sep 17, 2020
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Before the recent price hike, game pass was ridiculously good value. It was essentially the equivalent of buying one triple A game for a whole year's worth of extra games.

It still has its value though... The last 3 games I've played and finished have all been from game pass, and their normal combined retail value already exceeds a 6 month sub to the service. So it's hard to complain too much.
 

Tmack

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Sep 23, 2020
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All I know is that Jim Ryan very recently said it costs $100M+ to bring a new IP to market. That's not all development cost. The marketing and promotion overhead involved can cost as much as 75% of the game's development budget. Existing IP's from established franchises don't cost as much to bring to market because it's not as hard to convince people to buy them.

"Marketing and promotion" is a very broad term and encompass a lot of things, including "retail incentives" (ie discounts) to stores push sales of a given game which isnt exactly cost as most people think of costs.

Those are direct costs, you only incur on them because you actually sold a game. For comparison it isnt like you spent 40kk on a superbowl add for a shit game and get no return.
 

Kagey K

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Dec 18, 2013
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I gotta say if I’m a dev who isn’t sure how his game is going to sell I’ll take the option where they fully fund the game and I can still release it on other systems, if that fails I’ll take the fully funded timed exclusive route.

Seems like a win win for some indie devs and takes a bunch of risk and weight off their shoulders.

Yet everyone hates it.

Its such a double standard, everyone cries buy the game, support the devs.

Yet when MS pays all their bills for them, they are hurting The industry by not supporting devs.
 
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anothertech

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Oct 1, 2014
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Enjoy the hell out of it while it lasts.

His answers tbh do not inspire confidence in sustainability. But good on them for pushing the service forward. Only good things have come from gamepass imo.
 

Warablo

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May 15, 2013
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Everyone screaming doom and gloom meanwhile devs are saying Game pass made their game sales increase 300%.