The cost of games relative to their respective prices seems to have hit a tipping point. The gaming industry has experienced several months year of studio la...
That’s also partly because Microsoft is buying customers with gamepass, it’s unprofitable in the long run, but they just need to do it long enough to kill off competitors. Exactly what Netflix did basically.
Youve been able to start to see the ripples forming a few years ago. Devs aren’t making as much from the deal of being on it vs private sales as well.
What do you mean? It’s already profitable for them. I’m far more concerned with Nintendo’s online subscription than Microsoft’s. Nintendo’s already crossed the line, and Microsoft still stands to make more money by offering games for sale on Steam than to make them only available via a subscription that isn’t doing well with regards to acquiring more customers.
It’s not profitable. They say they spend over 1billion dollars a year, but you read some of the deals and they are $200 million for one game… they also say they make $230 million a month. So if they only make 2.7 billion and spend more than a billion a year with some games costing $200 million….
How is it profitable? It’s being supported by Microsoft itself so they can bleed money to crush competition. They are being intentionally vague and not releasing intimation as it would show they are doing very illegal things.
Lots of this stuff came to light during the merger and is available online to view now.
So if they only make 2.7 billion and spend more than a billion a year with some games costing $200 million….
How is it profitable?
$2,700,000,000
-$1,000,000,000
= $1,700,000,000
If the rest of their expenditures are less than $1.7B, then it’s profitable for the year. Since we’ve already accounted for the line item where they’re licensing products for their service that they don’t own, I’d be surprised if they had $1.7B worth of other operating expenses left to pay for, unless you can share a source stating otherwise. But what I see is this stating that it is profitable.
They are being intentionally vague and not releasing intimation as it would show they are doing very illegal things.
The burden of proof is on you if you think they’re doing something illegal. It’s not difficult at all to believe that they’re doing everything by the book, have a profitable service, and also found a plateau in how many customers are interested in using such a subscription.
Dude… they spend over 1 billion, but they also have 6 games that cost 1.2billion (200 million a piece). Their costs are far more than 1 billion and probably exceeds the 2.7…. Use some critical thinking here.
You have Phil Spencer saying they are profitable by telling your their sales, but only they spend more than 1 billion, they could also spend more than 10 billion, but they omit that specific information. Why? Because it would show the lie….
Critical thinking: $200M game budgets are not “per year”. They’re 5+ year development timelines. Microsoft’s output was only a few games. Starfield had a $200M budget over the course of 5 years. Forza wouldn’t surprise me if it had about that for its own budget, even though it reuses a lot of legacy code and assets to get there for cheaper than building it from scratch. But that’s not $200M per year for those games. How much do you think Hi-Fi Rush cost? We’re talking 8 figures for that one, not 9, and that’s over the course of 4 years.
they could also spend more than 10 billion, but they omit that specific information. Why? Because it would show the lie….
They could omit all kinds of things that they didn’t do from their financial reports, sure. Why didn’t they say that they spent $10B? Perhaps because they didn’t spend $10B…
Your link, which I have seen before, refers to how much games are estimated to cost to come to Game Pass, some of which happened and some of which they turned down because they were too expensive. They famously low-balled the impact BG3 would have on the industry and how much it would take to secure that game for Game Pass…if they were interested in doing so.
Why are you talking about game budgets? Microsoft is paying completely finished games 100-300 million dollars to be on games pass. If they are doing that, do you seriously think that they aren’t spending more than 2.7 billion putting games in the service…? It’s obviously far far more than 1 billion dude….
Game pass isn’t profitable, or Microsoft would tell you the full financials to prove how good it is. So why haven’t they…?
In the link that you provided, which I have seen before, you can see that they turned down games for hundreds of millions of dollars but estimated that that’s what they would cost to get on Game Pass when they launch. Have you noticed that games often leave Game Pass as well? That’s because they have to keep paying those people for those games, and they don’t see any value in continuing to do so. If they were spending 10x on licensing what they reported to investors, that would have come out in these leaks, especially since the licensees would be able to do some back of the napkin math when they can see what was spent to license their competitors. But that didn’t happen. I’m sorry to disappoint you, but there’s no conspiracy here. Microsoft just has a profitable service.
Games leave gamepass since when it comes to renewal they don’t want to since streaming cannablizes sales and leads to lower revenue (already said this) so it’s not Microsoft deciding it’s not profitable, it’s the game wanting control back.
Investors don’t care, Microsoft itself is profitable, the gaming division can bleed money and they won’t care, since the parent company will just give them the difference another way.
Some games cost that much….
Not actually pricing, estimates, but if they were estimating that much, they were liking willing to pay close to it, even half these numbers and it doesn’t look good. Just this collection of games that a drop in the bucket of total games, would cost 1.5 billion dollars. That’s over half their revenue, without even accounting for any operating costs or anything, or the rest of the library.
So, no it is not profitable and it’s hilarious that you’re defending Microsoft for claiming this, why isn’t anyone else other than Microsoft saying the same thing? In fact lots are claiming the opposite since this leak came out and they started looking at the numbers and taking directly to devs involved. Devs hate it
That’s also partly because Microsoft is buying customers with gamepass, it’s unprofitable in the long run, but they just need to do it long enough to kill off competitors. Exactly what Netflix did basically.
Youve been able to start to see the ripples forming a few years ago. Devs aren’t making as much from the deal of being on it vs private sales as well.
What do you mean? It’s already profitable for them. I’m far more concerned with Nintendo’s online subscription than Microsoft’s. Nintendo’s already crossed the line, and Microsoft still stands to make more money by offering games for sale on Steam than to make them only available via a subscription that isn’t doing well with regards to acquiring more customers.
It’s not profitable. They say they spend over 1billion dollars a year, but you read some of the deals and they are $200 million for one game… they also say they make $230 million a month. So if they only make 2.7 billion and spend more than a billion a year with some games costing $200 million….
How is it profitable? It’s being supported by Microsoft itself so they can bleed money to crush competition. They are being intentionally vague and not releasing intimation as it would show they are doing very illegal things.
Lots of this stuff came to light during the merger and is available online to view now.
$2,700,000,000 -$1,000,000,000 = $1,700,000,000
If the rest of their expenditures are less than $1.7B, then it’s profitable for the year. Since we’ve already accounted for the line item where they’re licensing products for their service that they don’t own, I’d be surprised if they had $1.7B worth of other operating expenses left to pay for, unless you can share a source stating otherwise. But what I see is this stating that it is profitable.
The burden of proof is on you if you think they’re doing something illegal. It’s not difficult at all to believe that they’re doing everything by the book, have a profitable service, and also found a plateau in how many customers are interested in using such a subscription.
Dude… they spend over 1 billion, but they also have 6 games that cost 1.2billion (200 million a piece). Their costs are far more than 1 billion and probably exceeds the 2.7…. Use some critical thinking here.
You have Phil Spencer saying they are profitable by telling your their sales, but only they spend more than 1 billion, they could also spend more than 10 billion, but they omit that specific information. Why? Because it would show the lie….
Please read
Critical thinking: $200M game budgets are not “per year”. They’re 5+ year development timelines. Microsoft’s output was only a few games. Starfield had a $200M budget over the course of 5 years. Forza wouldn’t surprise me if it had about that for its own budget, even though it reuses a lot of legacy code and assets to get there for cheaper than building it from scratch. But that’s not $200M per year for those games. How much do you think Hi-Fi Rush cost? We’re talking 8 figures for that one, not 9, and that’s over the course of 4 years.
They could omit all kinds of things that they didn’t do from their financial reports, sure. Why didn’t they say that they spent $10B? Perhaps because they didn’t spend $10B…
Your link, which I have seen before, refers to how much games are estimated to cost to come to Game Pass, some of which happened and some of which they turned down because they were too expensive. They famously low-balled the impact BG3 would have on the industry and how much it would take to secure that game for Game Pass…if they were interested in doing so.
Why are you talking about game budgets? Microsoft is paying completely finished games 100-300 million dollars to be on games pass. If they are doing that, do you seriously think that they aren’t spending more than 2.7 billion putting games in the service…? It’s obviously far far more than 1 billion dude….
Game pass isn’t profitable, or Microsoft would tell you the full financials to prove how good it is. So why haven’t they…?
In the link that you provided, which I have seen before, you can see that they turned down games for hundreds of millions of dollars but estimated that that’s what they would cost to get on Game Pass when they launch. Have you noticed that games often leave Game Pass as well? That’s because they have to keep paying those people for those games, and they don’t see any value in continuing to do so. If they were spending 10x on licensing what they reported to investors, that would have come out in these leaks, especially since the licensees would be able to do some back of the napkin math when they can see what was spent to license their competitors. But that didn’t happen. I’m sorry to disappoint you, but there’s no conspiracy here. Microsoft just has a profitable service.
Games leave gamepass since when it comes to renewal they don’t want to since streaming cannablizes sales and leads to lower revenue (already said this) so it’s not Microsoft deciding it’s not profitable, it’s the game wanting control back.
Investors don’t care, Microsoft itself is profitable, the gaming division can bleed money and they won’t care, since the parent company will just give them the difference another way.
Some games cost that much….
Not actually pricing, estimates, but if they were estimating that much, they were liking willing to pay close to it, even half these numbers and it doesn’t look good. Just this collection of games that a drop in the bucket of total games, would cost 1.5 billion dollars. That’s over half their revenue, without even accounting for any operating costs or anything, or the rest of the library.
So, no it is not profitable and it’s hilarious that you’re defending Microsoft for claiming this, why isn’t anyone else other than Microsoft saying the same thing? In fact lots are claiming the opposite since this leak came out and they started looking at the numbers and taking directly to devs involved. Devs hate it