One thing to keep in mind, if someone buys a game for $70, Microsoft doesn't get $70. That money is chopped up between MS, the retailer, the developer/publisher, license fees, etc...
A gamepass subscription, on the other hand, goes right to Microsoft.
That's my point gamepass isn't failing or whatever these people say because they want Xbox to fail. Gamepass is stacked if the games are good and they're actually exclusive to Xbox and you can get on game pass people would be more willing to buy a discounted Xbox series s and game pass.
If you need more math, there are about 34mil subscribers... Not sure how many of which tiers, but either way, that's between $340mil and $578mil.
The question I have is how much they're paying for licensing fees for games to be on game pass.
That’s just gamepass. Then we have PlayStation and pc players buying the game among other Activision blizzard properties as well as selling non call of duty things on the Switch. We also have Mtx in WoW, Sea of Thieves, halo infinite, and of course the coming mtx in black ops 6 and other existing call of duty games.
As well as the 30% cut of games purchased on their storefront and the 70% cut they take on sales on steam.
They will, over time start narrowing down what they license, another big reason for the spending spree. I am sure the goal is to eventually limit 3rd party content and go with in house development.
there is no "being a fanboy", it's just a fact. The console is doing bad, Wii U numbers are a failure, that's just factual and you're coping. Whether or not I go outside doesn't change those facts. You're probably going to respond with more cope.
There's zero facts involved in your warped mind that's created a scenario that while you push fries and hope to make it to burgers one day and call a wildly successful console a failure, Xbox continues to make money hand over fist.
Go outside, because you clearly need a break from this as it's painfully obvious you have no clue as to what reality looks like.
OP didn't account for the cost to microsoft. 1 games cost to develop is far less than the cost of the 400 games currently on game pass. Making more money doesn't always equate to more profits.
The math more than works out for first party games, people are being intentionally obtuse because they want Xbox to fail for some reason.
It's more questionable for third parties but it's MS job to make the numbers make sense for them. If they regularly have worthwhile games launching on Game Pass then they will have the money to make third party deals with GP revenue, too. It's all about giving reasons to stay subscribed.
There's a whole load of stuff around subscriptions vs one off sales, e.g. https://blog.emb.global/subscription-based-business-model/
There are benefits to both customers and the businesses involved.
Also, making more money doesn't necessarily need to be the only driver - subscriptions give stable regular income that can give more security and ability to plan long term than the peaks and troughs (and potential flops) of standalone game sales.
Its not as simple as the argument put forth here.
For one many of the long term subscribers have long term deal rates and are not paying any where near 17 bucks a month. (Gamepass gold to Ultimate deals). Secondly many people will just sub for a month or 2 and cancel.
I tried PC game pass for a month and then never renewed. I just did not like it compared to steam at all. Now I will just buy any xbox games that I really like.
Microsoft obviously knows what it is doing and has mathed that they need the sales from other platforms to suplement their game pass revenue. Originally they had projected a much higher gamepass sub growth rate than they actually got and are now adjusting to the new reality.
Well I just have it around renew automatically so I don't worry about it17$ is nothing in this day and age. I used to rent games at the video store and gamefly so for it's a no brainer.
The assumption that everyone is going to stay subscribed in perpetuity is not a guarantee. Especially at a time when everything is a subscription and people are getting subscription fatigue. Also there really aren't many big third party games going to gamepass anymore and people may still want to play those. That's going to make people decide between those games and game pass.
Those who believe that 3rd party games are losing by being on Game Pass are just wrong.
They're not forced to do it. The math must show them that the fee Xbox pays them is greater than their sales predictions.
For 1st party games, it's not only about a simple math exercise. Having them on Game pass is enough to sell more hardware, more DLCs, more microtransactions, etc.
People are forgetting to be consumers first because of tribalism. They want to support the creators when their main goal is to squeeze as much money from you as possible. Well it's my job to keep as much money as possible.
I did the math 1 million people but $70 game that would be 70 million for one year game pass it's $215 if 1 million people buying your game pass that is 250 million if you times that by 12 months
Problem is, with the studio shutdowns last month, it feels as though Microsoft wants players to sub to game pass yet also buy each $60-70 game individually at the same time.
This is all speculation, you don't know what the developers or the publishers get. Xbox doesn't get every cent from subscribers, they have overheads they have to pay too.
Game Pass has potential to make more money than selling the game if the game otherwise would flop. People wanted Hogwarts and Cyberpunk on Game Pass thinking they would flop but then would you look at that Hogwarts beat Cod in sales. Basically no Dev will put a game on there they are confident will actually sell. It's why every square Enix game comes to game pass but only the old or obscure Capcom titles did. This leads to game pass generally getting mid 3rd party games like Exoprimal or Lords of the Fallen aka games you buy bargain bin or strictly on sale. There's a reason Capcom didn't put Street Fighter 6 on game pass.
It's much simpler. A console owner buys on average two games a year. That's at most $140 revenue. Game Pass makes $132 a year.
The king of first party games (Sony) gets 10 % of overall game sale revenue from first party games. So let's apply this best case scenario to Microsoft. 10 % of $140 is $14. Out of the remaining $126 they get in a best case scenario (all digital sales) 30 % or $37.8, for a total of $51.8 from all game sale revenue per customer per year. They now have $80.2 per Game Pass subscriber per year to spend on third party content without making less money overall. But since Game Pass is more A and AA games and way less AAA content that is typically sold - those AAA game sales still happen for Game Pass subscribers. So now Microsoft actually makes more money. Cause even if you already paid $132 a year, you still are going to pay $70 for GTA VI or the newest EAFC or Madden. Which is already included in the base $140 a year of the average non Game Pass subscriber.
This sub is getting more idiots day by day. You basically explained how gamepass is fantastic for consumers but you kept saying it makes more money which is incorrect. Million cod buyers give more money than million gp users in a month.
Besides, players enjoy games and discuss games instead of becoming unpaid Sony/MS warriors.
Well for starters, PS has their own service now. From a dev standpoint, the concern is justified without knowing the internals. There have been articles stating that some games get money up front for going on GP (I think this why Tunic launched day one? Funded their dev time, although I may be thinking of a different indie title) while others are a per download deal so it’s not as easy as “this money gets equally spread across every game developer.” On top of that, how many studios alone does MS own? Now divide your 17 across them they each make less than a dollar per month off that per subscription? Sounds like a tough sell to maintain on its own. It’s a great center piece for MS but they need sales and DLC to supplement the business model hence live service games and big games like COD being a massive part of their business model as well as needing full price sales of their games on other platforms. GP is the benefit to being in the Xbox ecosystem, but it is not the main profit driver for the Xbox ecosystem imo.
Well if you want to get down to the nitty gritty Xbox is owned by Microsoft which is owned by Bill Gates which is a trillion dollar company so to them Xbox is a blurp to be honest you think Bill Gates really gives a f*** about Xbox lol 😂 I wasn't talking about developers I was talking about Xbox themselves and yeah PlayStation has a service but it's not as good as game pass they're not giving out Day One exclusive games for basically free. If I'm a PlayStation person I want to play Doom cod all these games that might be multiplatform I have to pay for them if I am on Xbox I don't I would rather pay $17 a month and get access to all these games instead of buying one game that is going to be ass I have saved so much money on playing games that have come out that have been ass.
The last half of what you said reiterated what my comment finished on. If you think MS doesn’t care about Xbox while ponying up $70bil to purchase ABK, then I think you’re missing parts of how they want to operate their business.
Xbox is doing well but they have to make changes to their business model to keep this sustainable. For example, closing some studios that are “under performing” money wise because their investors don’t like seeing their investments not doing well enough, and releasing games on multiplatform despite past statements that they would be doing so and having a core of their players be upset by this.
Don’t get me wrong, I’m totally in on GP being a great subscription to be on, but it does not make more money for all games on Xbox in all instances.
Never said it did I'm just saying the people who say that game pass is unprofitable or wrong it can't be improfitable if you're making people pay monthly you're going to technically make more than you would people buying the game. And everyone's mad about the business is being close but if they're not making money then why would they keep it open it's a business 101 if something is not making you money then why would you keep it open yeah it sucks for the developers yet sucks for everything else but people lose their jobs every day in the normal world it isn't involved in video games it's just business. I'm getting it wrong I feel bad for the people but at the end of the day those developers are going to find another job no one would care if the local factory in your town shut down. I promise this happens more than you think but I'm happy we can engage in civil debate.
I think you’re missing out on some important points from my first comment in how important sales on other platforms and DLC are to maintain this. If you were correct, then they would give us access to everything in every game on game pass would they not? They wouldn’t be increasing pricing of the subscription, they wouldn’t have a need to release titles on other platforms because the exclusivity of the games would be enough for console sales and GP subs to keep them afloat. If so, then why are they doing what they’re doing business wise? I think it’s more of Walmart type of situation, where Walmart sells some products at a loss for the sake of getting the customer to come to their store because it’s cheaper than the other business, but now that they’re here, they’ll spend more money with that company.
What do you mean by DLC do you mean the stuff we got in 2008 with fallout 3 where it was brotherhood of steel in and point lookout or are you talking battle passes and skins that isn't DLC that's microtransactions. Can can someone tell me what exclusive Sony has that I'm not about to name infamous last of Us uncharted Spider-Man god of war and horizon zero Dawn those are the only real big games that have come out that I have heard about the only reason Sony is successful is because in the seventh generation of consoles when Xbox One first came out they failed miserably everyone went to PlayStation and then they spent the last 10 years until PlayStation 5 came out building there library just like I won't give up Xbox to PlayStation cuz I've spent the last 11 years on Xbox. And yeah they might lose money or whatever but still Xbox game pass is more profitable to Microsoft in the long run.
I used to do math like this when I was 14 years old too.
One thing to keep in mind, if someone buys a game for $70, Microsoft doesn't get $70. That money is chopped up between MS, the retailer, the developer/publisher, license fees, etc... A gamepass subscription, on the other hand, goes right to Microsoft.
To be fair, it also goes to the devs/publishers to get them on the service.
And MS has to pay the studio for having the game on GP. So, no, they don't get "100%."
That's my point gamepass isn't failing or whatever these people say because they want Xbox to fail. Gamepass is stacked if the games are good and they're actually exclusive to Xbox and you can get on game pass people would be more willing to buy a discounted Xbox series s and game pass.
If you need more math, there are about 34mil subscribers... Not sure how many of which tiers, but either way, that's between $340mil and $578mil. The question I have is how much they're paying for licensing fees for games to be on game pass.
That’s between 340-578 mil PER MONTH
Let’s take a conservative 450M every month, that’s 5.4B for the year. Activision/Blizzard was 70B.
That’s just gamepass. Then we have PlayStation and pc players buying the game among other Activision blizzard properties as well as selling non call of duty things on the Switch. We also have Mtx in WoW, Sea of Thieves, halo infinite, and of course the coming mtx in black ops 6 and other existing call of duty games. As well as the 30% cut of games purchased on their storefront and the 70% cut they take on sales on steam.
Of course there are more avenues that will be making money. I was only giving a comparative example to put the GP number in perspective.
They will, over time start narrowing down what they license, another big reason for the spending spree. I am sure the goal is to eventually limit 3rd party content and go with in house development.
Judging by those leaked documents that game out a while ago, it can be quite substantial.
Absolutely, all that coin directly to them. That's huge.
Because the great minds of Reddit know far more than a multi-billion dollar corporation who's been making money longer than they've been alive.....
and that multi billion dollar corporation somehow has a failing console and doesn't know why.
A failing console..... hahahahaha! You're embarrassing yourself.
I mean look at the stats and how the sales are comparing to PS5. It's selling less than the Nintendo Switch and that includes the S.
That by no means means a "failing console." That's ridiculous.
doing wii u numbers is failing, being forced to go third party is failing. What is your metric of failure?
Being a fanboy is failure. This console is doing fantastic. Go outside, bud.
there is no "being a fanboy", it's just a fact. The console is doing bad, Wii U numbers are a failure, that's just factual and you're coping. Whether or not I go outside doesn't change those facts. You're probably going to respond with more cope.
There's zero facts involved in your warped mind that's created a scenario that while you push fries and hope to make it to burgers one day and call a wildly successful console a failure, Xbox continues to make money hand over fist. Go outside, because you clearly need a break from this as it's painfully obvious you have no clue as to what reality looks like.
"wildly successful" by what metric? Xbox is forced to go multi platform yet my mnd is warped. Keep coping, lol
Poor math, accounting is never that simple… lazy explanation to an idea that is correct.
OP didn't account for the cost to microsoft. 1 games cost to develop is far less than the cost of the 400 games currently on game pass. Making more money doesn't always equate to more profits.
Run-on sentences are hard to read.
Reinforcing the old Xbox gamers don't buy games lol
The math more than works out for first party games, people are being intentionally obtuse because they want Xbox to fail for some reason. It's more questionable for third parties but it's MS job to make the numbers make sense for them. If they regularly have worthwhile games launching on Game Pass then they will have the money to make third party deals with GP revenue, too. It's all about giving reasons to stay subscribed.
This post feels like OP was correct for the wrong reasons.
There's a whole load of stuff around subscriptions vs one off sales, e.g. https://blog.emb.global/subscription-based-business-model/ There are benefits to both customers and the businesses involved. Also, making more money doesn't necessarily need to be the only driver - subscriptions give stable regular income that can give more security and ability to plan long term than the peaks and troughs (and potential flops) of standalone game sales.
Its not as simple as the argument put forth here. For one many of the long term subscribers have long term deal rates and are not paying any where near 17 bucks a month. (Gamepass gold to Ultimate deals). Secondly many people will just sub for a month or 2 and cancel. I tried PC game pass for a month and then never renewed. I just did not like it compared to steam at all. Now I will just buy any xbox games that I really like. Microsoft obviously knows what it is doing and has mathed that they need the sales from other platforms to suplement their game pass revenue. Originally they had projected a much higher gamepass sub growth rate than they actually got and are now adjusting to the new reality.
Well I just have it around renew automatically so I don't worry about it17$ is nothing in this day and age. I used to rent games at the video store and gamefly so for it's a no brainer.
The assumption that everyone is going to stay subscribed in perpetuity is not a guarantee. Especially at a time when everything is a subscription and people are getting subscription fatigue. Also there really aren't many big third party games going to gamepass anymore and people may still want to play those. That's going to make people decide between those games and game pass.
Those who believe that 3rd party games are losing by being on Game Pass are just wrong. They're not forced to do it. The math must show them that the fee Xbox pays them is greater than their sales predictions. For 1st party games, it's not only about a simple math exercise. Having them on Game pass is enough to sell more hardware, more DLCs, more microtransactions, etc.
Thank you oh my god a normal person on Reddit
People are forgetting to be consumers first because of tribalism. They want to support the creators when their main goal is to squeeze as much money from you as possible. Well it's my job to keep as much money as possible.
do you subscribe to gamepass?
I did the math 1 million people but $70 game that would be 70 million for one year game pass it's $215 if 1 million people buying your game pass that is 250 million if you times that by 12 months
Problem is, with the studio shutdowns last month, it feels as though Microsoft wants players to sub to game pass yet also buy each $60-70 game individually at the same time.
You should apply for Microsoft Gaming CEO.
I would turn that mfr around
This is all speculation, you don't know what the developers or the publishers get. Xbox doesn't get every cent from subscribers, they have overheads they have to pay too.
This also seems like console war bait
Game Pass has potential to make more money than selling the game if the game otherwise would flop. People wanted Hogwarts and Cyberpunk on Game Pass thinking they would flop but then would you look at that Hogwarts beat Cod in sales. Basically no Dev will put a game on there they are confident will actually sell. It's why every square Enix game comes to game pass but only the old or obscure Capcom titles did. This leads to game pass generally getting mid 3rd party games like Exoprimal or Lords of the Fallen aka games you buy bargain bin or strictly on sale. There's a reason Capcom didn't put Street Fighter 6 on game pass.
It's much simpler. A console owner buys on average two games a year. That's at most $140 revenue. Game Pass makes $132 a year. The king of first party games (Sony) gets 10 % of overall game sale revenue from first party games. So let's apply this best case scenario to Microsoft. 10 % of $140 is $14. Out of the remaining $126 they get in a best case scenario (all digital sales) 30 % or $37.8, for a total of $51.8 from all game sale revenue per customer per year. They now have $80.2 per Game Pass subscriber per year to spend on third party content without making less money overall. But since Game Pass is more A and AA games and way less AAA content that is typically sold - those AAA game sales still happen for Game Pass subscribers. So now Microsoft actually makes more money. Cause even if you already paid $132 a year, you still are going to pay $70 for GTA VI or the newest EAFC or Madden. Which is already included in the base $140 a year of the average non Game Pass subscriber.
This sub is getting more idiots day by day. You basically explained how gamepass is fantastic for consumers but you kept saying it makes more money which is incorrect. Million cod buyers give more money than million gp users in a month. Besides, players enjoy games and discuss games instead of becoming unpaid Sony/MS warriors.
Well for starters, PS has their own service now. From a dev standpoint, the concern is justified without knowing the internals. There have been articles stating that some games get money up front for going on GP (I think this why Tunic launched day one? Funded their dev time, although I may be thinking of a different indie title) while others are a per download deal so it’s not as easy as “this money gets equally spread across every game developer.” On top of that, how many studios alone does MS own? Now divide your 17 across them they each make less than a dollar per month off that per subscription? Sounds like a tough sell to maintain on its own. It’s a great center piece for MS but they need sales and DLC to supplement the business model hence live service games and big games like COD being a massive part of their business model as well as needing full price sales of their games on other platforms. GP is the benefit to being in the Xbox ecosystem, but it is not the main profit driver for the Xbox ecosystem imo.
Well if you want to get down to the nitty gritty Xbox is owned by Microsoft which is owned by Bill Gates which is a trillion dollar company so to them Xbox is a blurp to be honest you think Bill Gates really gives a f*** about Xbox lol 😂 I wasn't talking about developers I was talking about Xbox themselves and yeah PlayStation has a service but it's not as good as game pass they're not giving out Day One exclusive games for basically free. If I'm a PlayStation person I want to play Doom cod all these games that might be multiplatform I have to pay for them if I am on Xbox I don't I would rather pay $17 a month and get access to all these games instead of buying one game that is going to be ass I have saved so much money on playing games that have come out that have been ass.
The last half of what you said reiterated what my comment finished on. If you think MS doesn’t care about Xbox while ponying up $70bil to purchase ABK, then I think you’re missing parts of how they want to operate their business. Xbox is doing well but they have to make changes to their business model to keep this sustainable. For example, closing some studios that are “under performing” money wise because their investors don’t like seeing their investments not doing well enough, and releasing games on multiplatform despite past statements that they would be doing so and having a core of their players be upset by this. Don’t get me wrong, I’m totally in on GP being a great subscription to be on, but it does not make more money for all games on Xbox in all instances.
Never said it did I'm just saying the people who say that game pass is unprofitable or wrong it can't be improfitable if you're making people pay monthly you're going to technically make more than you would people buying the game. And everyone's mad about the business is being close but if they're not making money then why would they keep it open it's a business 101 if something is not making you money then why would you keep it open yeah it sucks for the developers yet sucks for everything else but people lose their jobs every day in the normal world it isn't involved in video games it's just business. I'm getting it wrong I feel bad for the people but at the end of the day those developers are going to find another job no one would care if the local factory in your town shut down. I promise this happens more than you think but I'm happy we can engage in civil debate.
I think you’re missing out on some important points from my first comment in how important sales on other platforms and DLC are to maintain this. If you were correct, then they would give us access to everything in every game on game pass would they not? They wouldn’t be increasing pricing of the subscription, they wouldn’t have a need to release titles on other platforms because the exclusivity of the games would be enough for console sales and GP subs to keep them afloat. If so, then why are they doing what they’re doing business wise? I think it’s more of Walmart type of situation, where Walmart sells some products at a loss for the sake of getting the customer to come to their store because it’s cheaper than the other business, but now that they’re here, they’ll spend more money with that company.
What do you mean by DLC do you mean the stuff we got in 2008 with fallout 3 where it was brotherhood of steel in and point lookout or are you talking battle passes and skins that isn't DLC that's microtransactions. Can can someone tell me what exclusive Sony has that I'm not about to name infamous last of Us uncharted Spider-Man god of war and horizon zero Dawn those are the only real big games that have come out that I have heard about the only reason Sony is successful is because in the seventh generation of consoles when Xbox One first came out they failed miserably everyone went to PlayStation and then they spent the last 10 years until PlayStation 5 came out building there library just like I won't give up Xbox to PlayStation cuz I've spent the last 11 years on Xbox. And yeah they might lose money or whatever but still Xbox game pass is more profitable to Microsoft in the long run.