Aaron Greenberg on Gamepass sustainability

[KillerMan91]

The constant concern trolling about gamepass has been embarrsing frankly the fact it's even still tolerated here when time and time again Microsoft have said it's profitable is some outright fuckery.

Click to shrink...

So why they don't share any profit figures for their gaming division when they release their financials? You know like Nintendo and Sony do because their gaming divisions actually are highly profitable. When you are trying to hide numbers there is always a reason for that. Just like when Sony started to combine Vita numbers with PSP and how MS completely stopped sharing shipments information for Xbox and now don't even share any profit figures for the whole division.

 

[Deleted member 27723]

right, so the new narrative is that gampass = gaas ???

this place, man...

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It is not the new narrative. It is the logical conclusion.

If you want to make a sustainable subscription model where players stay subscribed to your service, without spending millions upon millions in developing new games yearly.

You create a destiny kind of games, where it keeps players engaged and coming back and paying for the subscription, without having to develop a new game.

Otherwise, how can the subscription model make money if people just subscribe for a month finish the game they are interested in a week then unsub. Where is the profit in that?

 

[Laver]

So why they don't share any profit figures for their gaming division when they release their financials? You know like Nintendo and Sony do because their gaming divisions actually are highly profitable.

Click to shrink...

We know XBox had $3.3B in revenue in the last quarter (if my napkin math is correct).It's a massive endeavour but still kinda a side business, they don't need to provide more details because investors don't demand them, they see it's a growing operation in a massively profitable company and they're happy with that apparently. Nintendo has no other choice but to fully disclose their number on tha gaming side, for Sony gaming is one fo the main pillars also.

 

[jesu]

It is not the new narrative. It is the logical conclusion.

If you want to make a sustainable subscription model where players stay subscribed to your service, without spending millions upon millions in developing new games yearly.

You create a destiny kind of games, where it keeps players engaged and coming back and paying for the subscription, without having to develop a new game.

Otherwise, how can the subscription model make money if people just subscribe for a month finish the game they are interested in a week then unsub. Where is the profit in that?

Click to shrink...

Game pass will be next to worthless if it's full of destiny kind of games.
That's how they will lose subscribers.

The plan is to have a wide variety of games that make people want to keep subscribed.

 

[unicornKnight]

The constant concern trolling about gamepass has been embarrsing frankly the fact it's even still tolerated here when time and time again Microsoft have said it's profitable is some outright fuckery.

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Is it concern trolling really? Most people here have 2-3 years of game pass having paid less than 50$ and it allows them to play multiple 60$ games day one.

Sorry but I will keep being concerned for the next 3-4 years to see where it goes. Meanwhile I will keep taking advantage of potential exploits, right now I'm subbed till August 2021 and that's how I plan to play Halo, Psychonauts 2 and more.

 

[KillerMan91]

We know XBox had $3.3B in revenue in the last quarter (if my napkin math is correct).It's a massive endeavour but still kinda a side business, they don't need to provide more details because investors don't demand them, they see it's a growing operation in a massively profitable company and they're happy with that apparently. Nintendo has no other choice but to fully disclose their number on tha gaming side, for Sony gaming is one fo the main pillars also.

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I mean obviously they don't need to because like you said it's small sector overall for MS but they would absolutely do it if the division actually made a lot of money. Every company wants to highlight things that make money. During X360 days they did share a lot more data including hardware shipments and profit figures.

 

[HBK]

Otherwise, how can the subscription model make money if people just subscribe for a month finish the game they are interested in a week then unsub. Where is the profit in that?

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Because there are new games coming out every month.

You don't need GaaS to consolidate GamePass. Heck, if anything you'll want your GaaS to be "free to play" to be able to milk as many "customer" as possible. There's some basic logical contradiction in that.

 

[Alek]

I mean, even in the video he says in the short term 'it's not a big profit play'.

Gamepass is a foot in the door strategy for Microsoft to pull you into their ecosystem, they're not making a tonne of money from gamepass itself, but they hope that it'll get you spending within their ecosystem. Does however mean that folks need to be happy about the other aspects of your ecosystem, like your hardware and the XBOX game store on PC.

The video doesn't do much to reassure folk about sustainability. It doesn't even say that they break even with gamepass at the moment. In any case, it's clear that game pass is just a small part of their strategy which is ultimately contingent on getting folks to either actively use the XBOX store on PC, or purchase and use XBOX hardware on console.

I think in the past we've seen folks touting gamepass as proof of Microsoft's success, but I think it's clear that they're still reliant on more traditional software/hardware sell through to consumers. So when I see things like articles saying that the 'console war is over' and whatnot, as if it doesn't matter if Microsoft sell their hardware, I think those takes really miss the mark.

 

[2CL4Mars]

The video isn't saying 'MS is your friend, why don't you appreciate them?'

It's saying 'MS is doing something no other company in this history of gaming had done and it should get some credit'.

Competition pushes the whole industry forward and what MS does boxes well for what others can do with similar or even better models.

Unfortunately this close to new consoles alot of people are seeing things from a purely fanboy perspective and what to shit on what is innately a consumer positive idea from the second place platform holder that has no chance of upsetting Sony's first party strategy.

People should be more supportive of the idea because or literally allows you to try more for less without stopping ownership.

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The idea isn't unique, it's a subscription model that the biggest media companies are going for, MS included with Office 365. It was a matter of time before game companies got in on it. Hell Microsoft weren't even the first to do it, EA was with EA Access.

And honestly if EA access hadn't been a success I don't think game pass would exist, or at the very least it would have taken a few more years. Or maybe I'm wrong and it was the plan for a year or 2 before the 2017 launch.

I owned an XB1X since launch and I've had game pass for the majority of those 2½ years and I have been very happy with it, especially when I didn't have many games to play because of financial reasons. Destiny 2 being added is fantastic and it's perfect for a service like game pass and I'm definitely going to finally jump in (Get it? get it? =D) I am actually pretty damn exited for it.

 

[arsene_P5]

So why they don't share any profit figures for their gaming division when they release their financials? You know like Nintendo and Sony do because their gaming divisions actually are highly profitable. When you are trying to hide numbers there is always a reason for that. Just like when Sony started to combine Vita numbers with PSP and how MS completely stopped sharing shipments information for Xbox and now don't even share any profit figures for the whole division.

Click to shrink...

Microsoft doesn't tell what profit Azure makes either iirc. I guess Azure isn't profitable and they have something to hide. I don't know the reason, but maybe they don't think everyone needs to get shareholders information, because that's literally non of their business and most people have no business sense either. Which is fine, since everyone has different jobs and strengths.

 

[Laver]

I mean obviously they don't need to because like you said it's small sector overall for MS but they would absolutely do it if the division actually made a lot of money. Every company wants to highlight things that make money. During X360 days they did share a lot more data including hardware shipments and profit figures.

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I suspect they are moderately profitable tho, they're definitely not taking losses on hardware and other than Game Pass they have no obvious loss leaders. Satya also seems very trigger happy to shut down all the operations that are not profitable and aren't showing any signs of profitability short term.

Besides, what arsene_P5 said.

 

[Pryme]

Yeah but if it wasn't profitable do you think Microsoft would be honest about that? They're a tad biased on the subject.

Hopefully it is viable in the long term as it's a great deal

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It doesn't have to be profitable NOW. That's just silly. This is a long term play.

If it wasn't a profitable venture In their long term projections, they would not be doing this. That's pretty much all anyone needs to know.

I have no idea why anyone would be caught up in whether or not Gamepass is profitable in 2020.

 

[Binhoker]

Game pass is probably the reason I'll get a Xbox series X day one, and pick up a ps5 after a few decent exclusives have dropped. I'm sure it's a fairly common sentiment. It sure as dogs dicks isn't the exclusives they've shown so far that'll keep me around.

 

[Pryme]

It is not the new narrative. It is the logical conclusion.

If you want to make a sustainable subscription model where players stay subscribed to your service, without spending millions upon millions in developing new games yearly.

You create a destiny kind of games, where it keeps players engaged and coming back and paying for the subscription, without having to develop a new game.

Otherwise, how can the subscription model make money if people just subscribe for a month finish the game they are interested in a week then unsub. Where is the profit in that?

Click to shrink...

I just watched the Old Guard on Netflix. Before that, Extraction and 6 Underground.
full length, one and done movies on a subscription service.

with your logic, there really should be no movies on Netflix. Only series.

 

[Iron Eddie]

So why they don't share any profit figures for their gaming division when they release their financials? You know like Nintendo and Sony do because their gaming divisions actually are highly profitable. When you are trying to hide numbers there is always a reason for that. Just like when Sony started to combine Vita numbers with PSP and how MS completely stopped sharing shipments information for Xbox and now don't even share any profit figures for the whole division.

Click to shrink...

When you buy a car do you look to see the margins and how much profit the company made last year? I think all of this stuff is just to make headlines so that we can feel better about our purchases. Selling 50 million consoles or 100 million, what does that really do for you? I don't know if the focus on that really represents how the industry is today, at least for Microsoft. Game Pass isn't really set up for how many copies get sold, it's more about retaining memberships which is why Microsoft says Xbox Live or Game Pass is growing by X percentage. It is the long game so the financials right now would make it look like they are investing, not profiting right now.

 

[skankhunt420]

It's incredible how Sony fanboys are desperate to explain to us how Game Pass is doomed, how Microsoft are losing money or how this business model is unsustainable.

 

[oni-link]

It doesn't have to be profitable NOW. That's just silly. This is a long term play.

If it wasn't a profitable venture In their long term projections, they would not be doing this. That's pretty much all anyone needs to know.

I have no idea why anyone would be caught up in whether or not Gamepass is profitable in 2020.

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I didn't say that. I said it's probably not profitable now, and that I hope it's viable (ie profitable) long term as its a great deal

It goes without saying they think it has the potential to be profitable long term, or they wouldn't be doing it at all

 

[randomMan]

Game pass is probably the reason I'll get a Xbox series X day one, and pick up a ps5 after a few decent exclusives have dropped. I'm sure it's a fairly common sentiment. It sure as dogs dicks isn't the exclusives they've shown so far that'll keep me around.

Click to shrink...

Same here -- looking forward to playing the variety of content on Game Pass (Halo, Gears Tactics, Flight Simulator, etc.), while also playing the glut of October/November games over the end of they year/early next year.

 

[Hyun Sai]

I mean, even in the video he says in the short term 'it's not a big profit play'.

Gamepass is a foot in the door strategy for Microsoft to pull you into their ecosystem, they're not making a tonne of money from gamepass itself, but they hope that it'll get you spending within their ecosystem. Does however mean that folks need to be happy about the other aspects of your ecosystem, like your hardware and the XBOX game store on PC.

The video doesn't do much to reassure folk about sustainability. It doesn't even say that they break even with gamepass at the moment. In any case, it's clear that game pass is just a small part of their strategy which is ultimately contingent on getting folks to either actively use the XBOX store on PC, or purchase and use XBOX hardware on console.

I think in the past we've seen folks touting gamepass as proof of Microsoft's success, but I think it's clear that they're still reliant on more traditional software/hardware sell through to consumers. So when I see things like articles saying that the 'console war is over' and whatnot, as if it doesn't matter if Microsoft sell their hardware, I think those takes really miss the mark.

Click to shrink...

Yeah, there is not much of a debate right now when even them are saying that.

Honestly, if Xbox couldn't rely on Microsoft warchest I would be concerned. I hear nothing really good about Xbox store on PC, and I doubt they'll eat much of Playstation marketshare next gen.

Pretty risky gamble, but they didn't have much of a choice anyway, and they can afford it, so it's at least a success for the gamers profiting from it.

 

[Dunlop]

It's incredible how Sony fanboys are desperate to explain to us how Game Pass is doomed, how Microsoft are losing money or how this business model is unsustainable.

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Come into a Stadia thread, you get a unified front from all fanboys telling you the same thing :P

 

[2Blackcats]

It's incredible how Sony fanboys are desperate to explain to us how Game Pass is doomed, how Microsoft are losing money or how this business model is unsustainable.

Click to shrink...

I mean, there's genuine reasons to be worried that how Microsoft develops games could change for the worse. But as they've hardly been on a roll anyway the gamble seems more than worth it from my point of view.

 

[HBK]

Come into a Stadia thread, you get a unified front from all fanboys telling you the same thing :P

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I don't know the specifics about recurring concerns about Stadia, but there's one key difference: Even if GamePass was to shut down next month, there would be no other loss on the consumer end than the end a service they enjoyed (bar the yearly subs which would likely be refunded anyway). If Stadia closes down, you potentially lose every game you bought there.

 

[clickKunst]

My only concern (which I'm just repeating from another thread) is the tight window of availability for certain titles. Almost every 360 game was available when I signed up to the service without enough time to complete them all before they became unavailable. Nonetheless, Gamepass is a needed step in the right direction and I have a lot more faith in Phil Spencer and his team than any of his competitors right now.

 

[Kilgore]

Why is all games turning into GAAS the main concern about game pass when most of the catalog are single player conventional games? If Game Pass is only sustainable turning all games into GAAS why is Microsoft adding single player games non stop?

 

[TitanicFall]

My prediction:

Gamepass for MS: Short-term loss, long-term gain

Probably not making any money right now, but if they stop platform dependence and open it up to many more people then it could end up like Netflix. Of course GP pricing will also increase.

Gamepass for third parties: Short-term gain, long-term loss

Getting paid up front and getting more exposure is nice. However customers will have been conditioned to pay as little as possible. "I'll wait for it to be on GP" will be analogous to "I'll wait for a Steam sale." You might think you made a potential future sale on your next game, but ultimately most will only be a customer of GP. They won't be your customers. GP eventually gets saturated to where you're not even making much money to be a part of the service.

 

[Decarb]

We know XBox had $3.3B in revenue in the last quarter (if my napkin math is correct).It's a massive endeavour but still kinda a side business, they don't need to provide more details because investors don't demand them, they see it's a growing operation in a massively profitable company and they're happy with that apparently. Nintendo has no other choice but to fully disclose their number on tha gaming side, for Sony gaming is one fo the main pillars also.

Click to shrink...

Investors absolutely get those numbers. MS or Sony don't have to declare them to non-investor public and media though. Heck most numbers are just announced in open for good PR.

 

[Ivanovic]

Game pass is probably the reason I'll get a Xbox series X day one, and pick up a ps5 after a few decent exclusives have dropped. I'm sure it's a fairly common sentiment. It sure as dogs dicks isn't the exclusives they've shown so far that'll keep me around.

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Yeah not really

 

[DrDeckard]

People are rightfully concerned that GamePass will impact how MS will design first party games.

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What about all the none first party, huge third party games they are getting?

 

[HBK]

What about all the none first party, huge third party games they are getting?

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They'll answer you they're at risk of undergoing the same changes to comply to GamePass-like services 🤷‍♀️

 

[Transistor]

People are rightfully concerned that GamePass will impact how MS will design first party games.

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This is pretty much my only concern with Game Pass. I couldn't give two shits if it's sustainable for them. Why would I care as a consumer? If they wanna light money on fire, that's on them, not me. But if the games start all turning into "living" games to ensure constant subscriptions, then that's just not something I'm interested in.

What about all the none first party, huge third party games they are getting?

Click to shrink...

Those are great and I'll continue to love them as long as Microsoft keeps paying for them! Hell, I've made some awesome discoveries thanks to Game Pass.

 

[Deleted member 23046]

The debate about MS financials is someway useless to have but the one about the economical model it represents can be interesting.

 

[Laver]

It's incredible how Sony fanboys are desperate to explain to us how Game Pass is doomed, how Microsoft are losing money or how this business model is unsustainable.

Click to shrink...

Imagine the cognitive dissonance where you repeatedly claim that Xbox is nonexistent in terms of market presence, but the division has generated $11-12B in revenue for the past couple of years and could bring much more now that people are stuck at home and play video games (Nintendo and Sony are also raking in record revenues, but that's beside the point).

 

[Papacheeks]

Why is all games turning into GAAS the main concern about game pass when most of the catalog are single player conventional games? If Game Pass is only sustainable turning all games into GAAS why is Microsoft adding single player games non stop?

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That's only half the story when it comes to games on Gamepass. Look at games like Forza, Sea of thieves, gears 5. All very GAAS model games. Halo Infinite is basically confirmed to be a platform for a 10 year type of plan and that means it's going to be a big service game that is continually updated and will have big chapter/expansions for the different stories they want to tell within it.

Instead of doing numbered halo's. Forza also lost it's number making that more than likely a platform to continually update over the course of years with new cars, tracks, modes, features for however they want to make.

Word is still out on fable's "social" aspects which might just mean co-op missions something that fable 2 dabbled in a little. WHich I think is fine for what that game hopefully is. But if it also down the road we here it being more of a platform where they can annually update it, add content like new campaigns that are like full fledged new titles set in the same engine, world I don't know how you will be able to spin the no GAAS on gamepass.

Right now most outside of Obsidian, Nina Theory and Double fine are making games that fit the GAAS mold so to speak.

And to me it's not super compelling. I'm already sick of games that want to keep you in their games forever on some kind of grind. Talking to you DESTINY.

 

[oni-link]

 

[dd492941]

I've owned the og xbox and 3 xbox 360s. Been with playstation since the beginning and do most of my gaming on ps4 currently, with switch as a secondary device. The one didn't interest me but I almost jumped on one x. I love the idea of gamepass and I'm hoping the cheaper lockhart would make a good secondary gamepass device for when I have ps5. I just wish Microsoft had more games that I was interested in or I'd definitely be in day one over ps5, but as it stands Sony makes some of my favorite games, and as much as I have liked halo, gears, and fable in the past, I need more games like grounded, avowed, new ip to keep me in their ecosystem.

 

[Kilgore]

That's only half the story when it comes to games on Gamepass. Look at games like Forza, Sea of thieves, gears 5. All very GAAS model games. Halo Infinite is basically confirmed to be a platform for a 10 year type of plan and that means it's going to be a big service game that is continually updated and will have big chapter/expansions for the different stories they want to tell within it.

Instead of doing numbered halo's. Forza also lost it's number making that more than likely a platform to continually update over the course of years with new cars, tracks, modes, features for however they want to make.

Word is still out on fable's "social" aspects which might just mean co-op missions something that fable 2 dabbled in a little. WHich I think is fine for what that game hopefully is. But if it also down the road we here it being more of a platform where they can annually update it, add content like new campaigns that are like full fledged new titles set in the same engine, world I don't know how you will be able to spin the no GAAS on gamepass.

Right now most outside of Obsidian, Nina Theory and Double fine are making games that fit the GAAS mold so to speak.

And to me it's not super compelling. I'm already sick of games that want to keep you in their games forever on some kind of grind. Talking to you DESTINY.

Click to shrink...

What's the difference between Forza 5 and 4? Same with Gears 4 and 5. How was SoT changed by game pass while it was in development way after GP even existed. How are Microsoft first party different with a lot of big publishers games that are also GAAS? Why is GAAAS inherently negative?

 

[2Blackcats]

This is pretty much my only concern with Game Pass. I couldn't give two shits if it's sustainable for them. Why would I care as a consumer? If they wanna light money on fire, that's on them, not me. But if the games start all turning into "living" games to ensure constant subscriptions, then that's just not something I'm interested in.



Those are great and I'll continue to love them as long as Microsoft keeps paying for them! Hell, I've made some awesome discoveries thanks to Game Pass.

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I'd be down with a ""living" games" version of all their main franchise's if there's zero other mtx after you subscribe to gamepass.

 

[arsene_P5]

Forza also lost it's number making that more than likely a platform

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Here is the real reason for the new name.

Q: Why is there no number in the name?
A: The new Forza Motorsport is a re-imagination of the Motorsport franchise. We are taking what has made Motorsport great over the last 15 years and pairing that with new game concepts.

Click to shrink...

Forza Motorsport Announcement

The new Forza Motorsport, currently in early development, is a reimagining of the series. We are taking what has made Forza Motorsport great over the past 15 years and pairing it with new game conc...

support.forzamotorsport.net

What's the difference between Forza 5 and 4? Same with Gears 4 and 5. How was SoT changed by game pass while it was in development way after GP even existed. How are Microsoft first party different with a lot of big publishers games that are also GAAS? Why is GAAAS inherently negative?

Click to shrink...

.

 

[Transistor]

I'd be down with a ""living" games" version of all their main franchise's if there's zero other mtx after you subscribe to gamepass.

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Now see, that I could get behind, but I just find living games hard to play. I know many people love living games, and that's fine, but a lot of them just aren't for me. That's why I don't really do any online multiplayer, either. You just have to dedicate so much of your time to a single game. As a parent of two young kids and a full time job, I prefer single player games that have a dedicated end (maybe some DLC or something).

 

[skankhunt420]

I mean, there's genuine reasons to be worried that how Microsoft develops games could change for the worse. But as they've hardly been on a roll anyway the gamble seems more than worth it from my point of view.

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I think Xbox right now is in the best shape they've ever been. There is so much good stuff going on at the moment and it feels like they are finally close to unleashing the full potential of the platform.

As a gamer/consumer, I just hope both Sony and Microsoft deliver great services/games in the future. It's a win-win for me.

 

[Transistor]

As a gamer/consumer, I just hope both Sony and Microsoft deliver great services/games in the future. It's a win-win for me.

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Agreed. Competition is a great thing as the consumers are the real winners.

 

[oni-link]

I'm probably goring to get a PS5, as I've come from having a PS3 and PS4, however I'm really interested in Lockhart and GP for a year as it's a way to catch up up over a decade of Xbox exclusives I've never previously had a chance to play

 

[Deleted member 18161]

Yeah but if it wasn't profitable do you think Microsoft would be honest about that? They're a tad biased on the subject.

Hopefully it is viable in the long term as it's a great deal

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I'm a GP subscriber but it doesn't take a genius to work out that GP is the lure to you then spending more on DLC / MT for the games and most importantly either XBL Gold or upgrading to GP Premium. They then have you in their ecosystem where they get a large slice of your third party purchases that fall outside of GP like say you buy Cyberpunk digitally, they'll get 30% of that $60 because they got you in with GP. Then they're selling first party fancy editions where if you buy it for $70 you get it 3 days earlier than GP subscribers etc. They get the whole pie on that.

There's absolutely nothing wrong with this. It's the reason Sony give their players two "free" games per month to lure people into subscribing to PS+ or Nintendo give access to a ton of NES + SNES games to get you to subscribe to Nintendo Online or Epic give out high value games for free to get you to download the Epic client. It's all the same racket.

Every company wants to rinse as much revenue out of every single one of their customers as possible, make no mistake. That's business.

GP is phenomenal value though no denying that. I pay £4 a month for it on PC and the amount of games either first party, AAA third party or indie is astonishing.

 

[Papacheeks]

What's the difference between Forza 5 and 4? Same with Gears 4 and 5. How was SoT changed by game pass while it was in development way after GP even existed. How are Microsoft first party different with a lot of big publishers games that are also GAAS? Why is GAAAS inherently negative?

Click to shrink...

It's been overtaking the gaming industry. More and more even in single player games like AC:Odyssey there's like a lot of grind filler, and more random missions you can do after you complete the 50hr campaign.

Look at the state of games currently. Anything thats online now has a grind, look at the slate of Ubisoft, EA, Activision barring Crash. Hell look at Crash team racing, mario kart deluxe. It's one thing to have added additional content to prolong the game, another to literally have seasons of content to keep people in your game grinding away.
Huge turn off. For me at least. But I'm seeing it more and more in most shooters and now games that are single player with a multiplayer component like gears. Even though I would have to say gears/halo are more known for their online, their co-op/single player campaigns are also very sought after. I got into gears because of co-op campaign from Halo.

I mean I'm not speaking for everyone, I get that a lot of people are fine with this sort of thing. I'm just saying for me someone with very limited time to play games, I want more of a focused experience and not something I have to commit time to or in a way is designed to have you spend more time in the game.
There's just a lot of this happening right now, and I would rather I see on Gamepass more singular focused experiences.

Here's an example: My room mate has Gamepass still, he got it on a deal for Ultimate and plays on PC. Outside of streets of rage 4, he hasn't touched it. ANd he saw grounded and was like this looks cool. He's big into Honey I shrunk the kids looks of it, then we watched a good long gameplay loop and he saw it was similar to Ark only less janky.
He noped the fuck out.

I get that maybe I'm the outlier, but when there's articles, youtubers also talking about GAAS and not always in the best of light, for me when I see MS changing their first party to almost align with that type of development environment it's a huge turn off.

Here is the real reason for the new name.

Forza Motorsport Announcement

The new Forza Motorsport, currently in early development, is a reimagining of the series. We are taking what has made Forza Motorsport great over the past 15 years and pairing it with new game conc...

support.forzamotorsport.net

.

Click to shrink...

None of that 1 minute interview answers my question.

If anything even though this guys channel is small, he's wondering the same thing:

 

[mhayze]

The math is pretty simple - I'm surprised people are really concerned about profitability (if that's really what they are concerned about). PS3 owners bought 10 games total on average over the entire lifespan of the console (not per year). PS4 is 11 (or ~1.6/yr). That's not even fullprice games (but definitely only counting new game sales).
Gamepass is the equivalent of 3 full price games a year times however long the console generation lasts. There are 10million subscribers already. Its more profitable as long as it stays at this size or grows. Keep in mind there will also almost certainly be purchases outside of gamepass on the platform from both subscribers and non-subscribers.

 

[fourfourfun]

Gamepass for third parties: Short-term gain, long-term loss

Getting paid up front and getting more exposure is nice. However customers will have been conditioned to pay as little as possible. "I'll wait for it to be on GP" will be analogous to "I'll wait for a Steam sale." You might think you made a potential future sale on your next game, but ultimately most will only be a customer of GP. They won't be your customers. GP eventually gets saturated to where you're not even making much money to be a part of the service.

Click to shrink...

This pretty much mirrors other streaming services. To make it a profitable model while being cheap for customers, the actual people who make the product get the short end of the stick. The larger entities are big enough to do ok out of it (or move to their own platform), while the smaller ones get monstered for pennies as they become reliant on the audience bought in to the subscription.

It is where you almost need a Bandcamp but for games - buy digitally or physically direct from the people making the games, ensuring they get the big slice of the cake for their work.

 

[AllThingsPurple]

What about all the none first party, huge third party games they are getting?

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Not trying to be a dick here, genuinely asking, what sort of huge third party games have come to gamepass and are they there day one?

I know very little about gamepass it seemed to me like it was mostly 1st party and indie games they get.

 

[oni-link]

I'm a GP subscriber but it doesn't take a genius to work out that GP is the lure to you then spending more on DLC / MT for the games and most importantly either XBL Gold or upgrading to GP Premium. They then have you in their ecosystem where they get a large slice of your third party purchases that fall outside of GP like say you buy Cyberpunk digitally, they'll get 30% of that $60 because they got you in with GP. Then they're selling first party fancy editions where if you buy it for $70 you get it 3 days earlier than GP subscribers etc. They get the whole pie on that.

There's absolutely nothing wrong with this. It's the reason Sony give their players two "free" games per month to lure people into subscribing to PS+ or Nintendo give access to a ton of NES + SNES games to get you to subscribe to Nintendo Online or Epic give out high value games for free to get you to download the Epic client. It's all the same racket.

Every company wants to rinse as much revenue out of every single one of their customers as possible, make no mistake. That's business.

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People keep quoting that post from me and replying as if I said something else

I know all that, I was just saying (in reply to someone else) it's probably not profitable now, which is fine, it's probably not expected to be

They will have goals and targets for the service, and it may need to be tweaked over time to make sure it hits those targets, but of course it needs to offer an amazing value proposition up front, which it's doing, but that will probably mean it starts off as a loss leader

This is all fine as if it all goes to plan, it will be viable in the long term and we'll all be thrilled with that

 

[Deleted member 22750]

It is not the new narrative. It is the logical conclusion.

If you want to make a sustainable subscription model where players stay subscribed to your service, without spending millions upon millions in developing new games yearly.

You create a destiny kind of games, where it keeps players engaged and coming back and paying for the subscription, without having to develop a new game.

Otherwise, how can the subscription model make money if people just subscribe for a month finish the game they are interested in a week then unsub. Where is the profit in that?

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Come on

nobody denies gaas games will be on gamepass

but the simple fact gamepass is filled with games that don't fit that mold makes what you're saying far fetched

indies are not gonna go extinct

single player story driven games are not going away

 

[fourfourfun]

The math is pretty simple - I'm surprised people are really concerned about profitability (if that's really what they are concerned about). PS3 owners bought 10 games total on average over the entire lifespan of the console (not per year). PS4 is 11 (or ~1.6/yr). That's not even fullprice games (but definitely only counting new game sales).
Gamepass is the equivalent of 3 full price games a year times however long the console generation lasts. There are 10million subscribers already. Its more profitable as long as it stays at this size or grows. Keep in mind there will also almost certainly be purchases outside of gamepass on the platform from both subscribers and non-subscribers.

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In the maths, take that 3 full price games per month and divide that the amount of games released competiting for that money. MS' profitability isn't the big issue here, it is the small to medium entities that are attempting to do well on the platform. In the world of other streaming services, the income goes into a big pot and then gets divided between the people making the product. The large players do just fine as proportionally they make up the biggest amount of the pie in terms of plays and downloads. For the smaller ones, it is better to get a direct sale vs. the pennies that are left.

The entire consumer centric tech pivot tends to centre around this model - being profitable and cheap comes at the expense of the actual people who make up the service. This is the sustainability issue, and it is entirely applicable to Sony too.