Phil Spencer: "Microsoft won’t stop selling [retail] games to promote Xbox Game Pass"

Chukhopops

Member
Everyone knew that from the beginning. MS isn’t going to stop selling games when they constantly have between 8 and 10 games in the top 100 revenue makers on Steam.

People who talk about launch sales are stuck in the past, take a game like FH5, it’s been in the top 100 for 65 consecutive weeks, basically non-stop since it launched and it will be like that until it’s no longer supported. Long tail sales are far more important than launch sales.
 

Topher

Gold Member
To be fair the entire industry, Sony included, was chomping at the bit to follow down that road.

Nowadays both consoles are largely bricks without internet access, and discs aren't worth a damn if a company decides to de-list the game anyway, see Babylon's Fall. It's only going to be a matter of time before the first company de-lists a single player game, and forces an update that will make the disc worthless.

At least back then MS was talking about a method of reselling digital content. 10 years later we got all the shit aspects of the Xbone DRM scheme with none of the benefits.

Microsoft was the only one proposing what they did. No one else even came close to that mess.

What you are attributing to discs is really about multiplayer servers. Not the same thing at all when it comes to single player.

I read those tales about Microsoft supposedly planning on allowing resales of digital content and I don't buy it. That was a corporate executive (forget his name) who was wagging his finger at gamers for not embracing Xbox One DRM. He was chiding gamers for screwing up their plans.
 
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Kagey K

Banned
If you buy a PS5 just buy ps+ Extra and wait for the game.

It's single player so it's not like you are going miss anything.

Waste of money to have it sit in your backlog and not be played.
 
Microsoft was the only one proposing what they did. No one else even came close to that mess.

What you are attributing to discs is really about multiplayer servers. Not the same thing at all when it comes to single player.

I read those tales about Microsoft supposedly planning on allowing resales of digital content and I don't buy it. That was a corporate executive (forget his name) who was wagging his finger at gamers for not embracing Xbox One DRM. He was chiding gamers for screwing up their plans.
You really think all the publishers who locked their multiplayer behind single-use codes during the PS360 days weren't fully on-board with MS's plans before the backlash? You think Sony doesn't want to kill the used game market along with everyone else?

There is nothing stopping publishers releasing an update that will invalidate any program you have on your console. I remember the days of Too Human being taken off shelves over legal issues. Now the plaintiff can simply sue the platform holders to remove your ability to launch the app, and do so at the kernel level. Otherwise never take your console online, ever.

We'll never know how the digital marketplace scheme MS announced would have worked out in the real world, but it was talked about in the Xbone announcement itself. I remember, I was there live back in 2013. It wasn't just some PR rehab.
 

Bernkastel

Ask me about my fanboy energy!
Well we know what's coming now.
Sounds like a warning to me.
at least give it ur all, like only release ur games on game pass exclusive, and see if u can attract a lot more subs
People who make this shit up for once need to explain the economics to me. Let me get this straight
  • Game Pass barely can't even wrap 10% of the entire catalog of the Xbox Store
  • The entire cartel believes Game Pass does not make any money and Microsoft is just throwing money at it
  • Microsoft takes 30% from all apps and DLC sold from their store
  • Because of this store, Xbox generates more revenue then the entirety of ActiBliz
  • Barely 30 million people have subscribed to Game Pass
  • The entire economy of certain live service games where they keep releasing new expansions and DLC over the years, and Microsoft takes 30% from all of that
Oh and you guys keep telling me that they will never get rid of Gold but somehow take away the ability to buy games? Game Pass as it is does not include DLC or expansion of their own games.
How many subscribers do you think Game Pass needs to wrap the rest 90% of the Xbox Store catalog and generate as much revenue as Xbox Store alone + Acti-Bliz? Kinda funny that you guys made up the exact same fantasy as XboxEra.
Of course they wont stop selling games. Over-inflating the buying prices to make gamepass seem more of a good deal is part of their strategy.
Validating your takes with templates like "Its part of their strategy", "It makes business sense", "The writing has been on the wall since 201X" and "Due to Game Pass", are also part of the strategy.
 

Topher

Gold Member
You really think all the publishers who locked their multiplayer behind single-use codes during the PS360 days weren't fully on-board with MS's plans before the backlash? You think Sony doesn't want to kill the used game market along with everyone else?

No, I'm saying they aren't stupid enough to try and actually do it. Certainly not in the idiotic fashion Don Mattrick tried to.

There is nothing stopping publishers releasing an update that will invalidate any program you have on your console. I remember the days of Too Human being taken off shelves over legal issues. Now the plaintiff can simply sue the platform holders to remove your ability to launch the app, and do so at the kernel level. Otherwise never take your console online, ever.

If a publisher wants to risk a class action lawsuit then that is up to them. See Sony's "Other OS" fiasco. Too Human was removed from the Xbox Live Marketplace five years after the game was launched. Has nothing to do with anything regarding discs.


We'll never know how the digital marketplace scheme MS announced would have worked out in the real world, but it was talked about in the Xbone announcement itself. I remember, I was there live back in 2013. It wasn't just some PR rehab.

No, the Xbox One announcement discussed some weird game sharing nonsense. Nothing was said about reselling digital content at all.
 
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zzill3

Banned
Did anyone ever say they were going to stop selling games? I don't think I've ever seen that mentioned anywhere, this almost seems like another one of those "Phil Spencer is on our side" kind of things when this was never even brought up before.

Honestly the rest of your post is implying that you think they don’t sell games as well.

Of course they will continue to sell games, unfortunately for them people aren't buying many of them when they do launch a new AAA game on GP (average about one every 18 months) most the games fall out of the NPD top ten the second month and often out of the top 20. This model isn't good for single player story driven games, it's fine if you want service based titles or MP focused games but when it comes to story based games they are going to have to try every way they can to work backend monetization into it, that or as Matt Booty said a long time ago focus mostly on "high end AA games"

Game pass alone might not be enough to sustain an epic single player game, but as you mentioned it’s not the only way that game makes money - it’s made through game sales as well. If people want to play the game, then they can on gamepass and by buying it. If a game is popular, available on gamepass, and drops off top 10 sales charts, you’d expect that to mean it’s being played on gamepass.

All gamepass does is replace the massive lump sum payment from initial retail sales with ongoing monthly income from gamepass. That’s sustainable for a single player game as much as a multiplayer one.
 

Panajev2001a

GAF's Pleasant Genius
That’s sustainable for a single player game as much as a multiplayer one.
Only if the game sells most of its potential outside of the service before being added to it. Else it will start to morph to deal with the fact that the game is moving to essentially, as far as the game providers see, a free to play economy (the effect of cratering game value for people is what people fear). MS is not going to throw sacks of money to all games forever and they are collecting a small fee per user they need to keep some and distribute part of it.

Do not think this interview is revealing any intent, Phil is addressing the fear some people have and doing it in a calm and apparently committal way (on the surface). That is it.
 
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Ozriel

Member
We all did

Is there any AAA game they released that hasn’t been on GP day one.

Did anyone ever say they were going to stop selling games? I don't think I've ever seen that mentioned anywhere, this almost seems like another one of those "Phil Spencer is on our side" kind of things when this was never even brought up before.

There’s been many posts in the past where people have claimed that MS end game is to ‘do away with game ownership’. We used to have vigorous debates with people claiming GP was ‘bad for the industry’.


unfortunately for them people aren't buying many of them when they do launch a new AAA game on GP (average about one every 18 months) most the games fall out of the NPD top ten the second month and often out of the top 20. This model isn't good for single player story driven games, it's fine if you want service based titles or MP focused games but when it comes to story based games they are going to have to try every way they can to work backend monetization into it, that or as Matt Booty said a long time ago focus mostly on "high end AA games"

And yet Forza Horizon 5 was in the top 20 full year NPD sales list, sold over a million copies per-launch and has sold millions on Steam alone. Sea of Thieves launched into GP and sold over 4 million on Steam alone.

Starfield is a single player RPG. It’ll launch on GP and still sell millions of copies at retail.

I think they’ll be fine. As Phil says, not everyone wants GP. There will always be those who want to buy retail. A sizable enough audience.
 
Not really. They tried to hamstring used games with DRM and that is what pissed people off.

I think the really big issue was you cant even borrow a game to someone without paying for a transfer fee.

Having games available digitally was something the PS3 and the 360 already did. No one had an issue with that.
 
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Fredrik

Gold Member
Is there any AAA game they released that hasn’t been on GP day one.
I never buy MS games and as far as I know I’ve played them all, so no? 🤷‍♂️

But they have early releases with special editions, so they get the day 1 money without officially delaying the GP release
jurassic park dinosaur GIF
 
He's been saying this since game pass launched. He's never changed his tune on this.

"Xbox is about options"

All that jazz
Difference is that was when they were just starting gamepass, they did not know if was going to succeed or not, now that it’s been a few years, growth has slowed to a crawl, seems like they are giving up on it and going in a different direction.
 

Skifi28

Member
Difference is that was when they were just starting gamepass, they did not know if was going to succeed or not, now that it’s been a few years, growth has slowed to a crawl, seems like they are giving up on it and going in a different direction.
I couldn't tell you how gamepass is doing financially, but MS success in gaming is tied to gamepass success. They are not abandoning it at any point. If anything, they're going all in.
 
Overall, good comments by Papa Phil. Choices are good. I hope they stick by it and don't eliminate retail games. Two things that stick out, however:

I really see it as a diversification of how people build their library of games
Very poor choice of words, considering you can't really "build your library of games" with a subscription service. Subs are literally the opposite of building your library of games.

That’s why you won’t see us making subscription-exclusive games
Does this mean that Kojima's Cloud game will sell at retail and be playable without Cloud or a GP subscription?
 
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Hugare

Member
COD wont be exclusive. It would sell like normal. It would just be like other typical day1 gamepass. Sell on other stores, and sub to gamepass.
Not doubting you, but where was it confirmed that it wont be exclusive to Xbox?

I remember Phil offering Sony a 10 years deal but Sony refusing, something like that

And I doubt that putting it on Game Pass would make it "sell like normal".
How many Xbox players today buy COD at launch? They would play it on Game Pass.

We dont have any numbers from sold copies for Gears 4-5 and Halo Infinite, for example, to give us an idea
 
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feynoob

Member
Not doubting you, but where was it confirmed that it wont be exclusive to Xbox?

I remember Phil offering Sony a 10 years deal but Sony refusing, something like that

And I doubt that putting it on Game Pass would make it "sell like normal".
How many Xbox players today buy COD at launch? They would play it on Game Pass.

We dont have any numbers from sold copies for Gears 4-5 and Halo Infinite, for example, to give us an idea
That the only way this deal would pass. COd won't be on exclusive.
MS also stated that financially, it doesn't make a sense to make it exclusive. Considering how much COD sells on all platforms.

This year alone, mw2 made $1b in 10 days.
 

zzill3

Banned
Not doubting you, but where was it confirmed that it wont be exclusive to Xbox?

I remember Phil offering Sony a 10 years deal but Sony refusing, something like that

And I doubt that putting it on Game Pass would make it "sell like normal".
How many Xbox players today buy COD at launch? They would play it on Game Pass.

We dont have any numbers from sold copies for Gears 4-5 and Halo Infinite, for example, to give us an idea

Until the deal goes through no one can say whether it will or won’t. It’s strongly expected that multiplatform COD will be one of the concessions regulators demand, but if it isn’t for some reason? MS won’t have to do anything. They probably will, because there’s an awful lot of money they’re leaving behind, but there’s nothing guaranteeing it.

It would sell less on xbox if it’s on game pass, no doubt, but the money is still going to MS, just over several monthly payments instead of upfront all at once.
 

Neofire

Member
Well most of the Xbox catalogue then including AAA titles dropping day 1 on the service.



I thought Xbox would be dropping all future AAA games on the service day 1. I'm that's incorrect let me know but that was my understanding.
Everyone knows MS is/has tried like hell for this to happen but there's companies that know this would be detrimental to the industry as q whole and are resisting it. If they weren't and MS got things their way all games would be coming day 1 to GP.
 
Current gamepass numbers cant afford those AAA games yet. First party and couple of AAA is enough as of now.
Currently gamepass generates around $3b. If it managed to hit 35m, it should be able to generate $4.2b-$4.5b. That is enough for couple more AAA games. a total of 10 AAA day1 3rd party games for that year (150m*10).

Incorrect. The CADE leaked numbers referenced $2.9 billion and that was for GamePass and Xbox Live Gold combined. Considering there are about 100 million Xbox Live accounts (according to Microsoft), most of which are Silver (the free tier), even assuming only 25% are Gold that would account for 25 million Gold subscribers. The average ARPU would be $60/year per sub but we can use Sony's own PS+ revenue reported for 2021 of $2.5 billion at 48 million subs to work out a typical ARPU of $52.08/year.

25 million * $52.08 = $1.302 billion in XBL Gold revenue, leaving at most $1.598 billion in annual GamePass revenue. Also we don't know where MS's sub numbers for GamePass are currently at, however I STRONGLY doubt they grew 10 million in one year when their peak growth year with 2 1P AAA releases, several 3P AA/AAA releases etc. was just 7 million. So how do you expect they grow by 3 million over that in a year with no major 1P releases at all and very few big 3P releases into the services outside of Plague Tale: Requiem?
 

feynoob

Member
Incorrect. The CADE leaked numbers referenced $2.9 billion and that was for GamePass and Xbox Live Gold combined. Considering there are about 100 million Xbox Live accounts (according to Microsoft), most of which are Silver (the free tier), even assuming only 25% are Gold that would account for 25 million Gold subscribers. The average ARPU would be $60/year per sub but we can use Sony's own PS+ revenue reported for 2021 of $2.5 billion at 48 million subs to work out a typical ARPU of $52.08/year.

25 million * $52.08 = $1.302 billion in XBL Gold revenue, leaving at most $1.598 billion in annual GamePass revenue. Also we don't know where MS's sub numbers for GamePass are currently at, however I STRONGLY doubt they grew 10 million in one year when their peak growth year with 2 1P AAA releases, several 3P AA/AAA releases etc. was just 7 million. So how do you expect they grow by 3 million over that in a year with no major 1P releases at all and very few big 3P releases into the services outside of Plague Tale: Requiem?
How did you reach that conclusion?
That was gamepass. There was no mention of xbox live gold.
 
How did you reach that conclusion?
That was gamepass. There was no mention of xbox live gold.

Uhm, did you actually read the document? xD. It listed "Xbox services", it did not specifically say GamePass.

That was on the document itself; content creators and journalists too quick or lazy to read the single page with the info or just took what others were saying, assumed it was 100% in reference to GamePass. It wasn't.
 

DaGwaphics

Member
Incorrect. The CADE leaked numbers referenced $2.9 billion and that was for GamePass and Xbox Live Gold combined. Considering there are about 100 million Xbox Live accounts (according to Microsoft), most of which are Silver (the free tier), even assuming only 25% are Gold that would account for 25 million Gold subscribers. The average ARPU would be $60/year per sub but we can use Sony's own PS+ revenue reported for 2021 of $2.5 billion at 48 million subs to work out a typical ARPU of $52.08/year.

25 million * $52.08 = $1.302 billion in XBL Gold revenue, leaving at most $1.598 billion in annual GamePass revenue. Also we don't know where MS's sub numbers for GamePass are currently at, however I STRONGLY doubt they grew 10 million in one year when their peak growth year with 2 1P AAA releases, several 3P AA/AAA releases etc. was just 7 million. So how do you expect they grow by 3 million over that in a year with no major 1P releases at all and very few big 3P releases into the services outside of Plague Tale: Requiem?

A lot of assumptions there. We don't have any idea how many Gold users have already moved to GPU. When you look at the PS user base of 115m users (using the PS4 number here, assuming a lot of crossover to PS5 - though the number wouldn't be perfect) and their total sub numbers, you see they are under 50% for paid online, hovering close to around 40%. Even if we say there are 60m Xbox ones, that would leave them at about 25m users paying for online, but a very strong percentage of that will be users that have already converted to GPU.
 

Chukhopops

Member
Uhm, did you actually read the document? xD. It listed "Xbox services", it did not specifically say GamePass.

That was on the document itself; content creators and journalists too quick or lazy to read the single page with the info or just took what others were saying, assumed it was 100% in reference to GamePass. It wasn't.
No it doesn’t. It says « multi-games services » at the top of the table and then « Microsoft »:

Also there’s no reason in this specific context for MS to actually inflate the numbers when all they want is to appear as small and harmless as possible to regulators.
 

DaGwaphics

Member
No it doesn’t. It says « multi-games services » at the top of the table and then « Microsoft »:

Also there’s no reason in this specific context for MS to actually inflate the numbers when all they want is to appear as small and harmless as possible to regulators.

They would have to be including Gold and PS+ essentials there or Sony would not have 40 to 50% share.
 

feynoob

Member
Uhm, did you actually read the document? xD. It listed "Xbox services", it did not specifically say GamePass.

That was on the document itself; content creators and journalists too quick or lazy to read the single page with the info or just took what others were saying, assumed it was 100% in reference to GamePass. It wasn't.
Unless I am blind here. There is no mention of xbox live gold here.


It also makes sense if we do the breakdown.
1$ promotional for new account won't be accounted. They will however after paying for the next regular month.
The average between gamepass pc, gamepass xbox and gamepass ultimate is $11.6. Multiply that by 18m-25m during that period. That means $2.5b to $3.48b. Since January there were new subs.
So this figure should fall between these 2 revenue, which makes sense.

Also that 3 year, 1$ conversion is only knowledgeable to forum people, or people who follow these stuff, which is less than 1m people. So there numbers doesn't chance the data that much.

The reason why promotional 1$ don't count, is because those users become regular users, which explains the service growth, instead of declining it.
 

SmokedMeat

Gamer™
I’m not saying it ever will replace buying games. But if it were to, it certainly wouldn’t be happening in the near future - and Phil isn’t going to talk about that being a possibility in 2022.
 
A lot of assumptions there. We don't have any idea how many Gold users have already moved to GPU. When you look at the PS user base of 115m users (using the PS4 number here, assuming a lot of crossover to PS5 - though the number wouldn't be perfect) and their total sub numbers, you see they are under 50% for paid online, hovering close to around 40%. Even if we say there are 60m Xbox ones, that would leave them at about 25m users paying for online, but a very strong percentage of that will be users that have already converted to GPU.

That's why I went with a 25% margin of XbL subs being Gold tier; 25% is just under 50% of total XBO install base, and definitely less than 50% of combined XBO & Series install base. At the time of last year when MS tried doubling Gold prices to make GamePass look like a better value, it would be safe to assume Gold subs were probably around the 25 million mark, this would've been in early 2021. I know there's a lot of talk about people who do the $1 conversion trick or the extreme stacking but that's just among the hardcore & enthusiasts. Most casuals on Xbox would have seen GP pricing as $120 or $180 and figure the $60 or even $40 they pay for Gold was more valuable to them.

Around later 2021 maybe that number would have dropped because that's when GamePass started getting some actual big releases into the service. However, it's questionable how much retention those releases have had post-release. Halo Infinite for example, has definitely lost a lot of players, including among the hardcore, so churn would be very high. Forza Horizon 5 has lost a fair amount as well; not because it's a bad game, but because it was more an extension of FH4 and a smaller game map-wise at that. Ports of PC games like Flight Simulator don't seem to have a lot of pull on console, and games like Outriders & Back4Blood came and went.

This year, they've had essentially no big releases at all 1P or 3P wise outside of Plague Tale: Requiem, which I would not consider a AAA-type game in terms of overall market appeal (which is mostly what I mean when it comes to saying if a game has big appeal or not, rather than meaning the quality of the game because the two things don't have to be the same). I'd expect there was heavy churn as a result. That's the risk model with subscription services in general: if you don't have enough regular big content, subs will lapse.

But back to Gold numbers, I'll be generous and say that maybe GamePass did draw in an additional 5 million Gold subs, so the peak by 2021 would've been around 20 million instead of 25 million. However again, with the lack of content and heavy churn, Gold numbers are probably sitting at around at least that mark right now. So you may get a higher peak for GamePass of $1.858 billion in revenue (not profit), but that's the highest it'd be. Also we're going off the leaked revenue figures of Xbox services as of 2021 or FY 2021 (IIRC); there's always a chance total Xbox services revenue stagnates or even has a slight drop for the new fiscal year. But that isn't worth speculating on right now.

Unless I am blind here. There is no mention of xbox live gold here.


It also makes sense if we do the breakdown.
1$ promotional for new account won't be accounted. They will however after paying for the next regular month.
The average between gamepass pc, gamepass xbox and gamepass ultimate is $11.6. Multiply that by 18m-25m during that period. That means $2.5b to $3.48b. Since January there were new subs.
So this figure should fall between these 2 revenue, which makes sense.

Also that 3 year, 1$ conversion is only knowledgeable to forum people, or people who follow these stuff, which is less than 1m people. So there numbers doesn't chance the data that much.

The reason why promotional 1$ don't count, is because those users become regular users, which explains the service growth, instead of declining it.

That chart is partially incorrect. Again, go read the actual leaked CADE document, not a graphic referencing the document's info.

I wish I had a screenshot of that page in question; paging yurinka yurinka hopefully they have it in their stash of charts & graphs.
 
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No it doesn’t. It says « multi-games services » at the top of the table and then « Microsoft »:

Also there’s no reason in this specific context for MS to actually inflate the numbers when all they want is to appear as small and harmless as possible to regulators.

I never said MS were inflating GP numbers. I said the $2.9 billion was not exclusively in relation to GamePass. This isn't the document I'm talking about (the one I'm thinking of was printed, not a digital graphic), but you're just backing up what I'm saying. "Multiple Game Subscription Services For Consoles" and then listing Microsoft's share, does not mean it's exclusively referring to GamePass.

That's been my point.

They would have to be including Gold and PS+ essentials there or Sony would not have 40 to 50% share.

Exactly. That's what I've been saying the whole time. feynoob feynoob was saying that GamePass makes $3 billion. He got that from a misinterpreted reading of the CADE documents. I was trying to tell them that the $2.9 billion was not exclusively in reference to GamePass.

I can understand people questioning how much of the $2.9 billion was for GamePass and how much was for other things like Xbox Live Gold, I just hope we can come to an understanding that the $2.9 billion is not exclusively in reference to GamePass.
 

You mean this chart?

At this point I'm not even sure anymore. All I know is it was on a printed page, probably in a courtroom, with a slight angle. The text was also in English.

I'll try seeing if I can find it but in any case I'm not disputing the $2.9 billion number whatsoever, just the idea it's solely referring to GamePass.
 

DaGwaphics

Member
But back to Gold numbers, I'll be generous and say that maybe GamePass did draw in an additional 5 million Gold subs, so the peak by 2021 would've been around 20 million instead of 25 million. However again, with the lack of content and heavy churn, Gold numbers are probably sitting at around at least that mark right now. So you may get a higher peak for GamePass of $1.858 billion in revenue (not profit), but that's the highest it'd be. Also we're going off the leaked revenue figures of Xbox services as of 2021 or FY 2021 (IIRC); there's always a chance total Xbox services revenue stagnates or even has a slight drop for the new fiscal year. But that isn't worth speculating on right now.

With the way GP pricing is structured there is no reason to maintain a gold subscription and subscribe to the base tier of GP. I think you are greatly underestimating the number of Gold users that have moved to GPU. The more successful GP gets the more it weakens the position of the traditional Gold subscription.

That's why I don't think it is outside the realm of possibility that MS could drop the paid online requirement entirely at some point, once the number of Gold users has declined to a low enough threshold. MS would likely increase the base price of GP to 15$ on console at that point and eliminate the "Ultimate" tier distinction. Or they could keep the Ultimate tier going but differentiate it via content instead of the online play inclusion.
 

feynoob

Member
At this point I'm not even sure anymore. All I know is it was on a printed page, probably in a courtroom, with a slight angle. The text was also in English.

I'll try seeing if I can find it but in any case I'm not disputing the $2.9 billion number whatsoever, just the idea it's solely referring to GamePass.
I guess it's a little bit confusing.

As far as we know, MS made gamepass it's own category. As of now, it generates 15% of entire xbox revenue. So xbox live gold isn't included with gamepass, unless it's ultimate sub.
 
I have game pass for PC and after a year or two, I have realized that I mostly use it for games I probably wouldn't play otherwise because the games I really want, I buy them
 
With the way GP pricing is structured there is no reason to maintain a gold subscription and subscribe to the base tier of GP. I think you are greatly underestimating the number of Gold users that have moved to GPU. The more successful GP gets the more it weakens the position of the traditional Gold subscription.

You are speaking to the way YOU see it, and how YOU value the two services comparatively. But the majority of actual customers are not going to see it that way, even within the ecosystem. They will see them as two separate services, with GP costing much more than what they can get for XBL Gold, and base their decision off of that.

If anything, you're vastly overestimating how many Gold subscribers are among the hardcore/core enthusiasts that would both known about the cheaper GamePass pricing options, stacking tricks, conversion tricks etc. and care enough to switch wholesale to GamePass away from Gold as a result. There's a reason MS wanted to double Gold's price out of nowhere last year.

That's why I don't think it is outside the realm of possibility that MS could drop the paid online requirement entirely at some point, once the number of Gold users has declined to a low enough threshold. MS would likely increase the base price of GP to 15$ on console at that point and eliminate the "Ultimate" tier distinction. Or they could keep the Ultimate tier going but differentiate it via content instead of the online play inclusion.

I don't see it happening that way. Getting rid of paid online? Eventually, yes. But I see them making MORE tiers for GamePass, not less. There's already rumor of a Family Plan, that's effectively another tier.

Right now IMO the way GamePass is structured is too flat. They'll want to better target higher-value content towards where more of the spending is actually happening, and that's considering how many games remain Day 1 inclusions into the service going forward. But we'll see.

I guess it's a little bit confusing.

As far as we know, MS made gamepass it's own category. As of now, it generates 15% of entire xbox revenue. So xbox live gold isn't included with gamepass, unless it's ultimate sub.

Even if GamePass exists as its own thing in their services department structurally, there's no reason to only specify GamePass on their end but then lump services like NSO & NSO+, or PS+ and PS Now, or even PS+ with PS+ Extra and Premium (considering PS+ Essentials is closer to XBL Gold model-wise than GamePass) unless it's to be intentionally misleading and rely on inconsistent metrics across different data sets in the same comparison.

There's no reason to assume the $2.9 billion figure does not include XBL Gold subscribers.
 
I'll never understand why people keep fearmongering that this is going to happen. It wouldn't make any financial sense to not allow people to buy the game outside of the service, the fact it's on the service Day 1 and (outside games with licensing issues like Forza) will be on the service forever. That's more than enough incentive for people to subscribe to Game Pass, the people on Xbox that are resisting or uninterested in Game Pass right now probably wouldn't become long term subscribers because one Xbox first party game was exclusive to Game Pass, at most they'd subscribe to play that game and then unsubscribe, so you'd just be losing most of their $60
 
Exactly. That's what I've been saying the whole time. feynoob feynoob was saying that GamePass makes $3 billion. He got that from a misinterpreted reading of the CADE documents. I was trying to tell them that the $2.9 billion was not exclusively in reference to GamePass.

I can understand people questioning how much of the $2.9 billion was for GamePass and how much was for other things like Xbox Live Gold, I just hope we can come to an understanding that the $2.9 billion is not exclusively in reference to GamePass.
Not a part of this conversation but wanted to mention 1 important bit that most people don't even talk about.

When recording revenue and expenses, it's a common accounting practice to record revenue at full price (which becomes part of the total revenue -- $2.9B in this case) even if a product is being offered at a discounted price. All the discount is then taken out as "discount expenses" when calculating operating profit (which Xbox doesn't share).

The $2.9B figure doesn't make sense because it amounts to an ARPU of $161 per year, which is absurdly high and is clearly unrealistic.

So, the more likely scenario here is that Xbox calculated all Gamepass revenue at $10 and $15 per month for every user (including the ones who used the $1 upgrade path or $3-for-3-months offers), which inflated the revenue to $2.9 billion.

This revenue will come down when discount expenses are deducted during the calculation of operating profit, but because XBox never shares operating income, we never get to that part.
 
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Sanepar

Member
Until they have competition. If Sony can't handle business in the future I'm sure their long term plan is only subscription and cloud.
 
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DaGwaphics

Member
You are speaking to the way YOU see it, and how YOU value the two services comparatively. But the majority of actual customers are not going to see it that way, even within the ecosystem. They will see them as two separate services, with GP costing much more than what they can get for XBL Gold, and base their decision off of that.

There really is no other way to look at it realistically. We know GP has at least 25m subscribers, likely more at this point. With a strong contingent of that being on console. But even is we put just 60% of those users on console we have 15m GP subscribers, there is going to be a lot of overlap there with the users that had been subscribed to Gold. They could keep gold and just add the base GP, but why when GPU costs no more than the two of those combined and you get EA Play and cloud access. I don't see a realistic scenario where GP growth hasn't eroded Gold subscriber numbers.

I also wouldn't consider the family plan as a new tier of service, it's just GPU for multiple accounts (that will likely erode Gold subscriptions even further). Creating a lot of content tiers is literally the worst thing they could do to the service IMO, everything about that is almost universally negative, IMO. Kills most of the network effects and would be very detrimental to the marketing of the service overall, limiting the growth potential considerably. Regardless of if the new tiers would be lower or higher in price. Far better to establish a base line and work with that, or at least no more than the two levels they have already. There's a reason why the music and TV streaming services don't use the content to distinguish tiers (outside of live TV offers) but instead use number of screens or ads/no ads to create the pricing levels. You sell the services more easily when show/movie/album/game ABC is simply on service XYZ, versus that same product being on the XYZ super ultimate elusive limited tier.
 
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peter42O

Member
There will be three ways to consume your games on consoles for this generation and for next generation -

1. Digital
2. Disc
3. Subscription

While I do see Disc dying out by 2035 or so, digital isn't going anywhere and subscription services will grow as like digital during the Xbox 360/PlayStation 3 would eventually take over, so will subscriptions because why pay all this extra money if you don't have to?
 

light2x

Member
If you aren't a fool with money, you would realize Game Pass' insane value.

But it need not mentioned, as the 30 million speak for themselves.
 

Sweden85

Member
They are probably struggling with getting enough sells of 3rd party games that isnt on gamepass. Sony is probably eating up more and more of that cake.
 
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