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[reksveks]

I think they'll be at 50 mil users by the end of 2023 tbh.

That would be require an averaged yearly growth of 44%, I am not 100% sure if that's ambitious or not.

Even 30% growth for the next two and half years equals 1.92:1 growth. And yes, I know that growth ain't linear.

PSNow has no 2021 data as far as I know.

Nope, we only seem to get that number annually. Do you have that in an excel sheet or something? I want to just create a single file with all of this kind of information.

 

[Hunnybun]

Yeah. However, it couldn't be for the same cost. For that kind of service they would need to increase the cost, but it would be worth it considering you'd have access to every game, plus with the added bonus that it would never leave the service.

You'd be looking at something like $100 a month yo make that viable, it defeats the whole point of the service.

Microsoft just needs to get more first party games on there. That will be the true test of the idea. And they obviously know that, hence all the acquisitions. But they're like a couple of years from those paying dividends, so they're kind of in limbo for a while yet.

The fundamental test of this strategy seems to boil down to a couple of things:

1. How willing are people to pay to have the option to play a bunch of games they'd never pay for individually? That's the appeal of something like Netflix, that wide choice that just simplifies people's options: I guess people don't really want to switch their tvs on each night and figure out what episodes of what shows they should watch for like $1 each, or whatever the underlying charge is. That volume of purchase decisions is perhaps just too much anxiety for people. So they just pay a sub upfront and decide between subsequent options freely. So there's that: it's a fundamentally different way of consuming games.

2. Loss aversion: how much can they take in just from people who don't get much value from the service failing to unsubscribe, due to FOMO or just straight laziness? I don't know the answer to this, but it's probably a lot. I probably pay about £50 a month to services more or less on that basis.

 

[Hitchyhero]

Approaching the stage at which people will suddenly realize the ceiling for this is a lot lower than they dreamed of. Price about to go upsies

Non Microsoft fanboys have been saying this since Gamepass started.

The good thing about these predictions is they have no specific date, so we could be 3,4,5 years into the future and you'd get "see I told you it would go up in price!!! Lol MS failz!!"

 

[mrmeh]

It's such a great service when you do the math I would have definitely bought FS2020, Psychonauts 2, FH5 and Halo, Humankind this year (I have also played many other games on Game Pass ultimate).

12 month ultimate I can get for £102 after a quick google, that's less than the cost of two games, it also gives you the means to try and discover games you may not have tried and bought. It's not only the best deal in gaming, its currently the best thing in gaming.

I hope my PlayStation friends get to experience a true equivalent to this on their favourite console.

 

[Ellery]

I expect it to go up significantly in the next 3 months. I know that I am going to sub for a month or two to play Halo Infinite and Forza and a lot of other PC people I know plan on doing the same

 

[Hitchyhero]

People don’t want to pay $15/month to month to play indies, decade old Halo games and simulate a 7 hour flight from JFK to Heathrow? I’m shocked!!

Talk about hyperbowl

Outriders
Back4blood
Psycohnauts
Age of Empires
Sea of Theives

And this Xmas, FH5 and a new halo. We know your a Sony diehard but you don't have to lie to make a point you don't like Xbox.

 

[Tiago Rodrigues]

I think there was one reason why Gamepass increased so much last year: Covid-19.
MS probably expected it to keep growing at that rate. I don't think Halo was the only reason why this happened.

But it was something that happened throughout the industry. PSPlus peaked during Covid as well.

 

[IDKFA]

You'd be looking at something like $100 a month yo make that viable, it defeats the whole point of the service.

Microsoft just needs to get more first party games on there. That will be the true test of the idea. And they obviously know that, hence all the acquisitions. But they're like a couple of years from those paying dividends, so they're kind of in limbo for a while yet.

The fundamental test of this strategy seems to boil down to a couple of things:

1. How willing are people to pay to have the option to play a bunch of games they'd never pay for individually? That's the appeal of something like Netflix, that wide choice that just simplifies people's options: I guess people don't really want to switch their tvs on each night and figure out what episodes of what shows they should watch for like $1 each, or whatever the underlying charge is. That volume of purchase decisions is perhaps just too much anxiety for people. So they just pay a sub upfront and decide between subsequent options freely. So there's that: it's a fundamentally different way of consuming games.

2. Loss aversion: how much can they take in just from people who don't get much value from the service failing to unsubscribe, due to FOMO or just straight laziness? I don't know the answer to this, but it's probably a lot. I probably pay about £50 a month to services more or less on that basis.

I'd be willing to pay at least £70 pm for that service. It means that I'd never have to pay for another single game again.

They could make it a second tier option. Like Gamepass premium or something.

 

[MrLove]

Mine expired. I like the service, but I've got too much in my backlog right now. I'll probably jump on the next $1 deal.

Create new Account. Problem solved. I'll never pay more

 

[Dream-Knife]

Good. Subscriptions should have never come to gaming.

It also doesn't make much sense unless you like a lot of the games added to it. 3-4 games I'd rather just buy and be out $200-240 no reoccurring fee than pay $120 a year.

 

[Ozriel]

37% growth Y-on-Y is quite fantastic by any metric. The real issue is probably MS set an over ambitious target probably based on COVID response and Halo Infinite Q4 2020 release.

lmao at those spinning this as some sort of terrible news for Microsoft.

 

[Ass of Can Whooping]

This'll probably be a common occurance until they really start pumping out those FP games. Haven't been subbed since I finished Psychonauts.

Also baffles me why they didn't tie Halo Infinite multiplayer to gamepass. The single player is only going to keep me subbed for a month.

 

[Hitchyhero]

The 37% growth was already achieved by giving away milions of subs for free and 1$ Xbox Gold conversion deals! So it's underwhelming

So many business illiterates here. First, the $1 deal gives you one month in most countries. The conversion trick would still give MS $150. But like any subscription service.... It's common to give out free months / cheaper discounts to build up the base and get word of mouth out. That's literally how every subscription service has done it. Why is it seen as a negative for gamepass to do this but no other service.

If you know some alternative method for building up a customer base on a fairly new service sub... I'd suggest contacting MS as they will pay you well.

 

[Mr.ODST]

So many business illiterates here. First, the $1 deal gives you one month in most countries. The conversion trick would still give MS $150. But like any subscription service.... It's common to give out free months / cheaper discounts to build up the base and get word of mouth out. That's literally how every subscription service has done it. Why is it seen as a negative for gamepass to do this but no other service.

If you know some alternative method for building up a customer base on a fairly new service sub... I'd suggest contacting MS as they will pay you well.

Its like making a new business you want to sell premium products but you charge full price straight away.

Word of mouth is always the most powerful tool, my gf wanted to play crash bandicoot and any new games that come out, she wont spend a lot of money on games so told her to get a Series S and Gamepass and when she saw the amount of games she is still subbed to this day because we can co-op but also she can try indie titles she likes the look of without having to invest a ton of money.

 

[Papacheeks]

Aye. They stopped sharing Xbox One sales after about 3 years when the sales were lower than expected.

It's not that Game Pass isn't growing, it says so in the article that it is, it's just that growth isn't as rapid as had been hoped.

It's also 37% vs last years 86% in growth. So a huge slow down, if thats because of no launch games who knows? But it looks like not having big exciting games has curbed excitement and the need for Halo and the likes looks that it did have a big effect on numbers. You wonder since its coming out end of the year what 2022 growth will look like?

They have starfield so I would assume compared to 2021 2022 will be a much better year growth wise.

 

[Leyasu]

Approaching the stage at which people will suddenly realize the ceiling for this is a lot lower than they dreamed of. Price about to go upsies

Not even 1 yr into this cycle and we already have posts like this.

And a big ol fucking lol at the people who agreed with you. Same warriors doing the same shit

 

[Papacheeks]

Did try to tell everyone a while back that growth isn't linear.

Some people here were talking as if they could keep on growing subs 80% a year. That's not how it works. Growth is almost always front loaded.

ESPECIALLY WHEN you have the hype of a new console launch. Thats what really boosted their numbers. Then even with outriders, flight sim, mlb the show, they did less than half in growth. I do wonder if B4Blood is doing a good job boosting numbers since thats their big game for gamepass this fall. I feel halo being F2P and it coming out in December really fucked growth for gamepass for 2021.

 

[reksveks]

It's also 37% vs last years 86% in growth. So a huge slow down, if thats because of no launch games who knows?

Also the situation around covid changed where lockdown loosened up generally.

Separately I want to have a look at the Netflix earning call from this week.

https://s22.q4cdn.com/959853165/files/doc_financials/2021/q3/Q3'21-Website-Financials.xlsx

 

[Leyasu]

I think there was one reason why Gamepass increased so much last year: Covid-19.
MS probably expected it to keep growing at that rate. I don't think Halo was the only reason why this happened.

But it was something that happened throughout the industry. PSPlus peaked during Covid as well.

“Microsoft expected it to keep growing at that rate” so they projected 40+% instead of 80+%

Was your post in jest??

 

[DonJuanSchlong]

Wololoo!

 

[Tiago Rodrigues]

“Microsoft expected it to keep growing at that rate” so they projected 40+% instead of 80+%

Was your post in jest??

Don't take my post so literally. I meant an exception like 2020 screwed up a lot of predictions going forward. How many people subscribing during 2020 would stay subscribed? How many would leave? For how long would Covid 19 have an effect in the industry? How many games would be delayed or not? There were a lot of variables during 2020 that these companies couldn't account for, so numbers like these could always miss their targets.

All i'm saying is these Gamepass numbers aren't all doom and gloom like some posts are trying to make them seem. That's all.

I'm sure once Halo and MS's first party titles start to drop, this will change for them and numbers will increase even faster.

 

[Mr.ODST]

Don't take my post so literally. I meant an exception like 2020 screwed up a lot of predictions going forward. How many people subscribing during 2020 would stay subscribed? How many would leave? For how long would Covid 19 have an effect in the industry? How many games would be delayed or not? There were a lot of variables during 2020 that these companies couldn't account for, so numbers like these could always miss their targets.

All i'm saying is these Gamepass numbers aren't all doom and gloom like some posts are trying to make them seem. That's all.

I'm sure once Halo and MS's first party titles start to drop, this will change for them and numbers will increase even faster.

The biggest issue to add to Gamepass is that Xbox is just not getting enough Series X's to people, every week in the UK there is 1 or 2 drops for a PS5, Xbox is close to 1 - 2 a month and even then extremely low stock.

 

[Papacheeks]

The biggest issue to add to Gamepass is that Xbox is just not getting enough Series X's to people, every week in the UK there is 1 or 2 drops for a PS5, Xbox is close to 1 - 2 a month and even then extremely low stock.

Thats on Microsoft for being late in starting production. They didnt start till August 2020. They will always be behind. ANd it seems series s is much easier to produce so those are readily available in a lot of markets. Series x being more complex in components and a much larger chip means not as many per wafer.

This was also an issue with Xbox One X. They produced more xbox one s because of components. THe chip for xbox one x was enormous. So in shipments you would get couple boxes of XBX, BUT A shit load of S's.

 

[mrmeh]

Good. Subscriptions should have never come to gaming.

It also doesn't make much sense unless you like a lot of the games added to it. 3-4 games I'd rather just buy and be out $200-240 no reoccurring fee than pay $120 a year.

You would rather pay twice as much for those 3-4 games per year? On the face of it that makes no sense, you like boxes/discs?

 

[ZywyPL]

Hard to comment without any data, I mean an actual numbers. 86%, 37%, but what were the startign points? Because 37% from let's say 10M is much bigger growth than 86% from 2M... It would be really nice if MS started to share some numbers, like consoels sold, XBL MAU, GP subs, just anything. How hard can it be?

 

[Cyberpunkd]

Hard to comment without any data, I mean an actual numbers. 86%, 37%, but what were the startign points? Because 37% from let's say 10M is much bigger growth than 86% from 2M... It would be really nice if MS started to share some numbers, like consoels sold, XBL MAU, GP subs, just anything. How hard can it be?

Not hard at all, they just don’t want to do it.

 

[Black_Stride]

Hard to comment without any data, I mean an actual numbers. 86%, 37%, but what were the startign points? Because 37% from let's say 10M is much bigger growth than 86% from 2M... It would be really nice if MS started to share some numbers, like consoels sold, XBL MAU, GP subs, just anything. How hard can it be?

For what purpose would they release those numbers to NeoGAF?

 

[Chukhopops]

You would rather pay twice as much for those 3-4 games per year? On the face of it that makes no sense, you like boxes/discs?

Yeah that’s a weird argument, plus what happens if you’re not an ultra-casual playing only 3-4 games per year?

ESPECIALLY WHEN you have the hype of a new console launch. Thats what really boosted their numbers. Then even with outriders, flight sim, mlb the show, they did less than half in growth. I do wonder if B4Blood is doing a good job boosting numbers since thats their big game for gamepass this fall. I feel halo being F2P and it coming out in December really fucked growth for gamepass for 2021.

Less than half in growth rate, not in growth. In terms of growth they achieved for 2020-2021 77% of the subscriber growth they had in 2019-2020.

I think all sub services saw a sub spike at the beginning of confinement and a churn spike at the end. PS+ grew only by 1.3M net subs in the same period.

 

[Majukun]

they should try to score some oldish AAA games that are still popular, like a borderlands 3 or smt, every once in a while.

 

[Dream-Knife]

You would rather pay twice as much for those 3-4 games per year? On the face of it that makes no sense, you like boxes/discs?

I'm on PC, so no boxes. PC also has no disc drive.

Yes, I'd rather own things than rent them. This applies to everything.

 

[vkbest]

Game pass can't be profitable at least by current model. They need +200 million subs paying full price (and probably even so they wouldn't get profits) or stop releasing full AAA games. Netflix is not investing so much money every year as Microsoft is doing, and they needed +150 million subs to get some profit.

Don't think there are +200 million people spending $160-180 every year on a rental service.

 

[yazenov]

Yes their silence on the numbers is a red flag.

MS usually updates us on subscription numbers and pumps their chest when things are going well for them. When they are silent for many months you know something is up (or down). If they were consistent with their hiding the numbers of Gamepass subs we wouldn't have doubt their success, but they just had to shout out of the roof tops when things go well for them. I mean, at least be consistent.

Its similar to their hiding of the units sales of their hardware when they were dead last last generation. We were used to them pumping their chests during the 360 gen.

I guess now subscription numbers dont matter now? similar to their stance where software sales and hardware don't matter.

 

[Boss Mog]

Why is their so much thirst on gaf for Gamepass to fail

Because a lot of people here don't subscribe to the "you'll own nothing and be happy" creed, that's why.

 

[Basil King]

Everyone from Disney to HBO and Netflix releases sub numbers. MS needs to do the same.

I get that no one wants to admit to doing poorly at the box office or NPD, but come on, you gotta show the numbers no matter what.

Do you really think gamepass is doing poorly? It’s at what? 20 million by now at least? That’s with no big releases? Once the games start coming (in literally under a month) it’s only going to grow.

 

[Bernd Lauert]

Game pass can't be profitable at least by current model. They need +200 million subs paying full price (and probably even so they wouldn't get profits) or stop releasing full AAA games. Netflix is not investing so much money every year as Microsoft is doing, and they needed +150 million subs to get some profit.

Don't think there are +200 million people spending $160-180 every year on a rental service.

Netflix will approximately spend $13.6b on content this year. You gotta re-do that math.

 

[reksveks]

Game pass can't be profitable at least by current model. They need +200 million subs paying full price (and probably even so they wouldn't get profits) or stop releasing full AAA games. Netflix is not investing so much money every year as Microsoft is doing, and they needed +150 million subs to get some profit.

Don't think there are +200 million people spending $160-180 every year on a rental service.

Calculation pleases?

 

[mrmeh]

Good. Subscriptions should have never come to

I'm on PC, so no boxes. PC also has no disc drive.

Yes, I'd rather own things than rent them. This applies to everything.

A subscription service is not quite renting but leaving that aside is there a rationale behind that? i.e. if its more expensive why the compulsion to own, what's the benefit to pay twice the cost?

I bought many CDs/Blu Rays back in the day and now I feel its just easier and cheaper to stream, I still do buy films occasionally on iTunes when they are not easy to access. I have a Steam Library full of games I will never play from deals like humble etc.. so that hasn't been ideal for me either.

 

[Dream-Knife]

A subscription service is not quite renting but leaving that aside is there a rationale behind that? i.e. if its more expensive why the compulsion to own, what's the benefit to pay twice the cost?

I bought many CDs/Blu Rays back in the day and now I feel its just easier and cheaper to stream, I still do buy films occasionally on iTunes when they are not easy to access. I have a Steam Library full of games I will never play from deals like humble etc.. so that hasn't been ideal for me either.

Because after the enticing period is over and everyone subscribes to these services and stand-alone games are priced out of the market, they'll have you stuck with increased costs and no ownership.

I still buy some vinyls, but I also download all of my music. Tried streaming because I couldn't put my music easily or as much when I had an iphone; hated it.

 

[reksveks]

Everyone from Disney to HBO and Netflix releases sub numbers. MS needs to do the same.

Don't think Apple does for Apple TV which probably is cause its not the core focus of their business and investors don't care to push them on it. I don't know if this is right but it's the standard.

 

[reksveks]

Netflix will approximately spend $13.6b on content this year. You gotta re-do that math.

Just for some context, though we are missing rev splits and margins.

In a previous post from another thread.

Revenue for FY21 - 54,093
Operating income - 19,439
Expenses for Xbox , Surface , Hololens , Search and Windows < 34.6bn.

 

[ZehDon]

Because a lot of people here don't subscribe to the "you'll own nothing and be happy" creed, that's why.

... every game on Gamepass is purchasable - and at a discount?

 

[The Eradicator]

I do find it funny that we are in a thread about MS's financial filing complete with a foreword from their CEO himself AND the board themselves, and people are like it doesnt mean anything. Like if this doesnt mean anything to investors then what does? lol

Exactly. Stock prices react to earnings calls like this all the time. Year over year changes and projections for future earnings are precisely what investors look at.

 

[mrmeh]

Because after the enticing period is over and everyone subscribes to these services and stand-alone games are priced out of the market, they'll have you stuck with increased costs and no ownership.

I can't think of a comparable market where that has happened? Obviously sub costs will change overtime but they will always have to be balanced and have to provide value, MS isn't the only provider of games If they become unreasonable people will switch.

Sony and MS could charge allot more for there first party titles which players cannot get elsewhere... but they do not as even though they have a monopoly on Forza or GoW they would lose sales.

There is no scenario where they can lure people in and then ramp up cost to an unreasonable level and that be beneficial to them.

 

[akaFullmetal]

20 million subs is really good, but far from the 30 million that people were pumping their chests about. With everything open for last half year from Corona, that might of made a big difference.

 

[OmegaSupreme]

I'm not surprised it's plateaued a bit. It needs to be on everything. With games from everybody to truly be the next big thing. I'm not sure that will ever happen though.

 

[The Eradicator]

These threads really boil down to some people puts a good spin and some put bad spin.

Im mean you say rate of growth drives investment , so the gamepass situation is not good right, because it missed targets?

There are positives + negatives to this report, but overall the gamepass situation is good, very good even.

Growth is always good, but growth alone is not what businesses and investors look at. Seems like a lot of people here could learn what we're talking about by spending some time investing themselves, and reading articles through the lens of the financial industry, not articles from the gaming industry. 37% growth is not a bad thing, but missing the 48% projection is a bad thing. Both can be true at the same time. Investors rely heavily on guidance from companies before they invest. If a company makes it a habit to miss their projections, then over time, this will affect investor confidence. Apparently, lots of people in this thread aren't fully aware of how the financial people think. Hint: they don't think like people warring on a gaming forum.

 

[Bernd Lauert]

Exactly. Stock prices react to earnings calls like this all the time. Year over year changes and projections for future earnings are precisely what investors look at.

Yeah, it means investors will have to very slightly adjust their expectations. What it doesn't mean is that Gamepass is dead, as several people here implied.

 

[Boss Mog]

... every game on Gamepass is purchasable - and at a discount?

 

[The Eradicator]

Yeah, it means investors will have to very slightly adjust their expectations. What it doesn't mean is that Gamepass is dead, as several people here implied.

Well, I never implied that Game Pass is dead, but by the same token, MS can't make a habit out of missing projections for that division. Even if investors don't notice the numbers, MS does, and stuff like this can definitely affect the budget that the Xbox division is given to work with. That's just how things work, whether or not people want to acknowledge it.

 

[Bernd Lauert]

Well, I never implied that Game Pass is dead, but by the same token, MS can't make a habit out of missing projections for that division. Even if investors don't notice the numbers, MS does, and stuff like this can definitely affect the budget that the Xbox division is given to work with. That's just how things work, whether or not people want to acknowledge it.

Gamepass is a long term investment. If five years from now they're massively underperforming projections, then yeah it might have an impact on the budget. Right now? Nope.