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Netflix stock down 40% after subscribers losses. What this means for Gamepass.

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SlimySnake

Member
Trigger warning: This might come across as bit of a blogpost, but I think the current Netflix predicament is something Microsoft will run into eventually with Gamepass.

Netflix, the king of streaming, just lost subscribers for the first time in 10 years. Stock went from $350 down to $220 at one point. Mind you, this is a service with 200 million subscribers and a revenue of $25 billion a year. And yet, everyone freaked out after they lost instead of gaining subscribers. As if stockholders are surprised that they were never going to stop gaining subscribers. There is always a cap. This is it for streaming. 200 million isnt enough?

This brings me to Microsoft, Gamepass and how a lot of people on this board believe that the future of gaming is subscriptions. Microsoft is at 25 million users right now. half of the number of consoles they sold last gen. What is the ceiling for Microsoft? 50 million? 100 million? Will they ever get there?

I highly doubt that they will ever get to 100 million. I think if they get to 50 million and stay there, that's a massive success. Console Gaming isnt as popular as tvs and movies. Disney has 100 million subscribers. HBO 50 million and Netflix 200 million. Combined other services and we are looking at maybe 400 million divided between 4-5 big players. For gaming, that slice of piece is even smaller. 200 million users per generation for MS and Sony. How many of those will subscribe to gamepass especially if MS can only sell 100 of those 200 million consoles.

I have come around on Gamepass but I dont think its sustainable in ways people think. They will hit a ceiling in a few years. If not earlier. It will be a good alternative service, but people will pay good money to buy AAA games just like how they paid to go watch Spiderman and Batman. I just dont see it being the FUTURE of gaming. Future of gaming will be games, not services.
 

Kdad

Gold Member
Did Netflix buy up historic libraries of IP and content ... or just license them....thus the push out of the gate for MS to buy up large chunks of IP (and SONY and Tencent and EPIC etc)...
 

DarkMage619

Member
As long as Game pass remains OPTIONAL service that people can either use or not this isn't an issue. It also offers features Netflix never did like the ability to purchase all titles on the service for a discount. Game pass will be fine.
 
Xbox as a whole is not even Microsoft's cash cow. Completely different context here... It is also pretty obvious that eventually the number of new subscribers will slow down (as it would happen with any other sub service).

Btw, it is almost like the regular Joe found today how the stock market works... A lot of the losses you are pointing are just a reflex of speculation. Chill out a little and wait a few weeks to have a better idea.
 
Who knew losing 700,000 customers all at one time when you stopped doing business in an entire country (Russia) would be bad for fundamentals?

What a complete waste of internet space. This is top tier shit post concern trolling and is the absolute worst that this shit site has to offer.

Netflix also got piled onto by short sellers trying to make a buck on the way down. How the fuck will that happen to Gamepass?
 
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StreetsofBeige

Gold Member
Big difference between NF and gaming subs is that NF is 100% sub only and has a million competing services. NF's revenue comes purely from monthly sub fees.

If GP or PS Now fail and they cut the service, gamers can always go back to buying games the traditional way.

Also GP is backed by MS. A company that makes $60 billion per year profit and hasnt cared one bit on Xbox in 20 years even if it loses money here and there.
 

Hobbygaming

has been asked to post in 'Grounded' mode.
Netflix is expecting to lose another 2 million subscribers too

People that just multiply the cost and quote how much money GP will make, don't consider other factors like the cost of getting the content on the service, potential lower software sales, and will the content be good enough to retain enough subscribers
 
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I dont think subscription gaming will ever get to the sub count of streaming tv. I dont even think it will halfway get there, 50-60 million seems to be the ceiling.

Its probably why sony decided to try and get more per sub versus substantially trying to increase numbers. Think they are playing it smart by letting microsoft take the lead investment wise.

Netflix was king but im sure hbo, amazon, disney and apple are finding streaming far more profitable and sustainable with their business models. They do high quality stuff, less quantity, and stretch it out longer (weekly).
 
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Shmunter

Gold Member
Big difference between NF and gaming subs is that NF is 100% sub only and has a million competing services. NF's revenue comes purely from monthly sub fees.

If GP or PS Now fail and they cut the service, gamers can always go back to buying games the traditional way.

Also GP is backed by MS. A company that makes $60 billion per year profit and hasnt cared one bit on Xbox in 20 years even if it loses money here and there.
Netflix syndicates shows to tv stations around the world. Likely also dvd box sales
 

Katajx

Member
I think Netflix is losing subscribers because it’s competition keeps getting better and the streaming market is starting to feel saturated to me.

A lot of providers have started their own services and trying to keep their content locked to their platform.

Netflix was best before all of that content became fragmented and then it seems like they offer less interesting content that I am interested in and keep raising the prices.
 

kyliethicc

Member
 
Trigger warning: This might come across as bit of a blogpost, but I think the current Netflix predicament is something Microsoft will run into eventually with Gamepass.

Netflix, the king of streaming, just lost subscribers for the first time in 10 years. Stock went from $350 down to $220 at one point. Mind you, this is a service with 200 million subscribers and a revenue of $25 billion a year. And yet, everyone freaked out after they lost instead of gaining subscribers. As if stockholders are surprised that they were never going to stop gaining subscribers. There is always a cap. This is it for streaming. 200 million isnt enough?

This brings me to Microsoft, Gamepass and how a lot of people on this board believe that the future of gaming is subscriptions. Microsoft is at 25 million users right now. half of the number of consoles they sold last gen. What is the ceiling for Microsoft? 50 million? 100 million? Will they ever get there?

I highly doubt that they will ever get to 100 million. I think if they get to 50 million and stay there, that's a massive success. Console Gaming isnt as popular as tvs and movies. Disney has 100 million subscribers. HBO 50 million and Netflix 200 million. Combined other services and we are looking at maybe 400 million divided between 4-5 big players. For gaming, that slice of piece is even smaller. 200 million users per generation for MS and Sony. How many of those will subscribe to gamepass especially if MS can only sell 100 of those 200 million consoles.

I have come around on Gamepass but I dont think its sustainable in ways people think. They will hit a ceiling in a few years. If not earlier. It will be a good alternative service, but people will pay good money to buy AAA games just like how they paid to go watch Spiderman and Batman. I just dont see it being the FUTURE of gaming. Future of gaming will be games, not services.
Netflix losing subs is more a function of competition than anything else. Just count the number of new streaming services are available now? Seems like almost every studio wants to have their own streaming service. When the market becomes so fragmented and content is divided more and more, obviously the share available for one single provider will become less. That's normal.

What will be more pertinent to look at the overall growth of the streaming market. The growth is quite strong still (despite some slowdown due to end of covid). Streaming model is quite popular.

Gamepass is still unchallenged in the game streaming market I believe. Until more comparable services pop up, it will still have very good growth potential.
 

reinking

Member
The only correlation between Netflix and GamePass is an obvious one. You cannot remain in growth mode forever. I believe Xbox is prepared to handle that as GamePass matures. Netflix is not.

Netflix's biggest problem is they forgot their roots and they became the man they used to fight against. They focused on shareholders instead of customers and started making boneheaded moves trying to protect their growth for too long. Instead of renewing popular series with current subscribers they felt the need to invest someplace else looking for more. Netflix isn't going anywhere but I said a few years ago they would lose their grip (and lead) on the market. I used to love Netflix but now they are not even on my year-round subscription list.
 

SlimySnake

Member
I dont think subscription gaming will ever get to the sub count of streaming tv. I dont even think it will halfway get there, 50-60 million seems to be the ceiling.

Its probably why sony decided to try and get more per sub versus substantially trying to increase numbers. Think they are playing it smart by letting microsoft take the lead investment wise.

Netflix was king but im sure hbo and apple are finding streaming far more profitably and sustainable with their business models. They do high quality stuff, less quantity, and stretch it out longer (weekly).
Netflix made $25 billion in revenue in 2020. Their most profitable year yet. PlayStation also posted $25 million in revenue through their profits were just over $3 billion compared to $6 billion for Netflix. It is possible to get revenues that high without having a gamepass competitor.
 

M16

Member
this isnt a video streaming service. who the fuck is gonna compete with gamepass in the gaming space? not many, if anyone at all.
 

Hobbygaming

has been asked to post in 'Grounded' mode.
Let's play a game called who knows better.

Microsoft who pays millions of dollars for analysts, statistics, lawyers, consultants.

Or

NeoGAF commenters who spend millions of dollars on fedora hats and Cheeze-Its.
Mixer, Kinect 2, Zune

Just pointing out that no one is immune to mistakes or failures no matter how many suits with degrees are at the big business table
 

BennyBlanco

aka IMurRIVAL69
this isnt a video streaming service. who the fuck is gonna compete with gamepass in the gaming space? not many, if anyone at all.

they already absorbed EA's sub service and now they are entering some kind of deal with ubisoft too. The only 2 publishers to try their hand at a sub service as far as i know.

only thing that will kill gamepass momentum is when they inevitably up the price. 9.99 is fair.
 

Menzies

Member
What is the ceiling for Microsoft? 50 million? 100 million? Will they ever get there?
Over what time period? I think they're in for a lot more growth as technology improves and emerges into new markets. Over a long enough window they might get north of 60 million.

I think some view GamePass as *the* strategy for Microsoft, whereas Microsoft themselves really only view it as a slice of the overall strategy.

I've used the analogy about the special reduced item in the supermarket before. I believe GamePass is the special, it's what hooks you into their ecosystem and as long as it pays for itself, they're happy as all the digital storefront and retail sales are gravy on top.
 
Netflix is a dying Breed with its Price rises, and they'll eventually prevent Password sharing within the household or different locations.
 

ManaByte

Gold Member
I think Netflix is losing subscribers because it’s competition keeps getting better and the streaming market is starting to feel saturated to me.

A lot of providers have started their own services and trying to keep their content locked to their platform.

Netflix was best before all of that content became fragmented and then it seems like they offer less interesting content that I am interested in and keep raising the prices.

And at $20 a month they're more expensive than HBO.
 
Of course there is a subscriber cap. Gamepass isn't going to bring in millions and millions of new gamers all of a sudden. Its targeting the same audience that has always been there, which are console and pc gamers and at the moment 25m subscribers is a small portion of that. Theres alot of room for growth yet.
 
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Topher

Gold Member
this isnt a video streaming service. who the fuck is gonna compete with gamepass in the gaming space? not many, if anyone at all.

Plenty if there were more interest in subscriptions in the gaming space, but so far there just isn't. Game Pass is the most popular service in gaming, but we are still talking about 25 million subs of the hundreds of millions of gamers who have access to it. As it is, Game Pass is still primarily comprised of Xbox console gamers. There is a lot more room for competition than you realize, I think. There just doesn't seem to be this massive number of gamers clamoring for subscriptions in gaming.
 
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Prettty sure netflix is by far the most expensive also, its 20 dollars.

I dont mind keeping disney, hulu, apple, etc. going because its 6-7 dollars but 20 dollars a month and you really start to notice when you aren’t really using it much

I just watched The Batman on HBO Max, meanwhile you have reality tv shows like 5 different version of The Circle or Ex on The Beach trending on the front page of netflix, the value of netflix has dwindled greatly, and if they think about cutting off password sharing its looking at a very grim future
 
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Yoda

Member
I think GP is a growth play (streaming portion). MS needs to convince investors that it'll (eventually) turn non-gamers into gamers as it'll remove the hardware/investment barrier to entry. This conversion can be ppl from non-traditional gamer demographics or ppl too poor to afford a console. I think the latter group is currently not in play due to poor internet infrastructure/predatory cell data-plans, but perhaps that situation improves within a decade. The former is a really easy sell: "See all these people playing skinned casinos on their phone? Lets get them on our subscription service instead by offering higher quality content"... This point will keep Wall St invested for at least a few more years, even w/o any explosive sub growth.
 

Menzies

Member
Plenty if there were more interest in subscriptions in the gaming space, but so far there just isn't. Game Pass is the most popular service in gaming, but we are still talking about 25 million subs of the hundreds of millions of gamers who have access to it. As it is, Game Pass is still primarily comprised of Xbox console gamers. There is a lot more room for competition than you realize, I think. There just doesn't seem to be this massive number of gamers clamoring for subscriptions in gaming.
That might be a bit premature to say? It took Netflix what 11 years to get to 25 million subs? I'm not saying that GamePass will achieve the same results, but it needs time in the marketplace. A couple of big acquisitions might impact things.

 

ChorizoPicozo

Gold Member
I know there is this camp that gets super triggered with the existence of Game Pass, usually using dumb arguments against it. And the other camp using arguments equally dumb to say that only MS can do it.

The issue here (outside of how can impact game design) is the fact the these kind of services are insatiable beast; people are always thirsty for new content and paradoxically, tend to gravitate to the same shit over and over again.

So, GP is clearly in a growing state (of acquiring subscribers) but this growth has to be constant 'at perpetuity' (obviously this is not possible) So, they can change the metrics of growth/success (MAU, Money, Engagement, Retention, etc)

At the end of the day we have one constant:

"New Shit, New and GREAT content at a constant pace".

This fact is going to be the The Pain in the Ass for MS (and everyone trying to do the same) even with Acti/Blizz acquisition.

So, MS (or any other company) is/are going to have a hard time growing to such levels of numbers of subscribers.

But for the pleasure of some and the disgrace of others. GaaS/MTX's and now in-game Ads. (Just like mobile) gaming will continue to make da money baby. With or without services like game pass.
 

Ezekiel_

Member
In my opinion, game subscription services make business sense for catalog/legacy games, or GaaS-type/FTP games.

In my view, the true "value" of a subscription service doesn't reside in the content, per se. What they offer is convenience. That's what they are selling. They know people are lazy, so they offer a monthly fee for a large rotating catalog.

If someone isn't buying your game day one, or even severely discounted a couple years down the road, then maybe putting it in a subscription service with hundreds of other similar games might be enough enticement.


If y'all may indulge me for a bit of doom and gloom : I think the real endgame for all this race for IPs and content, is to eventually paywall all of it, even the legacy stuff. Basically the real end of ownership. In 10-20 years, who knows if they'll still "sell" movies, TV shows or games? These mega corporations will want either someone be subscribed to their service to access the content, or ask a fee per viewing. They will crack down on piracy by making everything cloud-based. Feeling nostalgic for a game of XYZ? Too bad, your digital license is void, you have to go through us.


But I digress. I'm with you OP. Even at 220 million subscribers, they still want more. It's never enough. They cancel shows left and right as soon as it doesn't meet their "engagement targets". Low quality content is added to pad out the catalog. If they can get someone to subscribe and fucking watch "Is it cake?" or "Sexy Beast", they sure as hell will be laughing to the bank. They will find ways to extract the most dollars from consumers, like ads/MTX/DLC/Increase sub price/Paid early access/Premium editions/episodic content/exclusive content for subscribers, etc.
 
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Amiga

Member
Netflix is only flix on the net. subs are everything to them.
MS is multi-division and GP is a small venture to them, they have multiple revenue sources. and the main goal of GP is market disruption of the competition, profitability is a bonus if they achieve it.
 

ChorizoPicozo

Gold Member
Netflix is only flix on the net. subs are everything to them.
MS is multi-division and GP is a small venture to them, they have multiple revenue sources. and the main goal of GP is market disruption of the competition, profitability is a bonus if they achieve it.
But that is not the point
 

Topher

Gold Member
That might be a bit premature to say? It took Netflix what 11 years to get to 25 million subs? I'm not saying that GamePass will achieve the same results, but it needs time in the marketplace. A couple of big acquisitions might impact things.


Yes, but Netflix also had to wait for technology to catch up as they slowly transitioned from being primarily a DVD mail service. Smart TVs and overall functionality for bringing streaming to TVs wasn't a common thing for many of those years. That is not the case for Xbox and PC gamers and yet the numbers are not exactly skyrocketing.

The point I was making though is that if/when subscriptions become a major factor in video games there is plenty of room for other services to jump in. Game Pass, obviously, is in a good position if that happens.
 
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I know there is this camp that gets super triggered with the existence of Game Pass, usually using dumb arguments against it. And the other camp using arguments equally dumb to say that only MS can do it.

The issue here (outside of how can impact game design) is the fact the these kind of services are insatiable beast; people are always thirsty for new content and paradoxically, tend to gravitate to the same shit over and over again.

So, GP is clearly in a growing state (of acquiring subscribers) but this growth has to be constant 'at perpetuity' (obviously this is not possible) So, they can change the metrics of growth/success (MAU, Money, Engagement, Retention, etc)

At the end of the day we have one constant:

"New Shit, New and GREAT content at a constant pace".

This fact is going to be the The Pain in the Ass for MS (and everyone trying to do the same) even with Acti/Blizz acquisition.

So, MS (or any other company) is/are going to have a hard time growing to such levels of numbers of subscribers.

But for the pleasure of some and the disgrace of others. GaaS/MTX's and now in-game Ads. (Just like mobile) gaming will continue to make da money baby. With or without services like game pass.

You actually touched on the real issue in my eyes, its the constant WANT for new content. We even see it without the service, the way major 100+ hour games just came out but people are already squirming in their seats for the next dopamine hits of news and acquisitions, and big game announcements and…etc

I feel like once a game comes out its already dead. The most hype parts about gaming for a lot of people is the build up before release and the discussions, same with movies and music.

The rapid fire approach to releasing more and more games for such a low cost is only going to lead to games becoming even more devalued. Then you factor in the other stuff, F2P, MTX, NFT, Ad’s….then you just have far lesser quality stuff coming out because the companies are making more money appealing to the fast food gaming crowd.

I hope if this actually does become a reality that it mimics video streaming where there are the lesser services that continue to invest big budgets into big polished games still like hbo max, disney plus, and Apple TV+ are doing
 
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