It's funny. My local car wash place now has a subscription service. $15 per month. So even small business are going the services model.
Microsoft though, yes, they are basically a services company and they literally dont care about sales. Azure, 365, Office, windows. Everything seems to be services based, and it has made them a trillion dollar company, but a lot of that has to do with them having a monopoly in those areas. Subscriptions to businesses is one thing, entertainment is something completely different. Adding subscribers is hard and they are finding that out right now. Even Netflix with its 200 million subscribers reported slow growth and they were crucified for it. Peleton saw a boom during covid but now they went from a $50 billion to a $9 billion company on the verge of being bought out. They also modeled their business around monthly subs on top of a big expensive hardware.
And even with its 200 million subscribers, Netflix only posts revenues of around $25 billion. Their investment is $19 billion a year. They had to spend $19 billion in content just to retain those 200 million subs and only added a few million more. Sony made $25 billion just selling playstations.
Services in this the entertainment space are a cool idea, but as Sony showed with Spiderman, if you put out a good product worth going to the movies for, people will literally risk their lives in the middle of the biggest outbreak to go see it. The movie passed Avatar at the box office while the Matrix flopped with just $34 million total. This is the same franchise that once set the record for highest R rated 3 day total of $91 million.
Phil is proud of reaching 20 million people with Forza and Halo, but 20 million F2P users or 20 million gamepass subs at $10 a pop only gets you $200 million. 20 million at $60 gets you $1.2 billion or COD money.