From the way things are going, Xbox Game Pass is likely going to become the 'Netflix of gaming'

[StudioTan]

Anything is sustainable if you're fine with just throwing money at it regardless. In it's current form it's not sustainable. Even if all of a sudden everyone started paying the full $10-15 a month do you think Microsoft will keep throwing bags of money at developers forever to keep getting big games like DMC5 on it?

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If every one of the 40+ million Xbox owners subbed to Game Pass that would be 400 million a month in revenue, the equivalent of selling almost 7 million copies of a $60 release per month, or selling 80 million $60 games per year. That's not including Xbox Live so let's say everyone subs to Game Pass Ultimate instead, that's 600 million per month/7.2 billion a year in game revenue which would the same as selling 120 million $60 game per year. Not including DLC and MTX.

They could fund a $100M budget game every month and have 300-500 million left over for 3rd party games and profit. Yes, I think Microsoft would be fine with that.

 

[leng jai]

If every one of the 40+ million Xbox owners subbed to Game Pass that would be 400 million a month in revenue, the equivalent of selling almost 7 millions copies of a $60 release per month, or selling 80 million $60 games per year. That's not including Xbox Live so let's say everyone subs to Game Pass Ultimate instead, that's 600 million per month/7.2 billion a year in game revenue which would the same as selling 120 million $60 game per year. Not including DLC and MTX.

They could fund a $100 million budget game every month and have 300-500 million left over for 3rd party games and profit. Yes, I think Microsoft would be fine with that.

Click to shrink...

Getting 40 million concurrent subs at $10-15 sounds pretty far fetched. How many subs do they have right now giving it away for $1?

 

[Deleted member 426]

If every one of the 40+ million Xbox owners subbed to Game Pass that would be 400 million a month in revenue, the equivalent of selling almost 7 million copies of a $60 release per month, or selling 80 million $60 games per year. That's not including Xbox Live so let's say everyone subs to Game Pass Ultimate instead, that's 600 million per month/7.2 billion a year in game revenue which would the same as selling 120 million $60 game per year. Not including DLC and MTX.

They could fund a $100M budget game every month and have 300-500 million left over for 3rd party games and profit. Yes, I think Microsoft would be fine with that.

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How do third party games figure into that calculation?

 

[Pasha]

Getting 40 million concurrent subs at $10-15 sounds pretty far fetched. How many subs do they have right now giving it away for $1?

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Well you did raise the hypothetical.
He's just explaining that at about 40mil subs MS wont have to "throw" money at it, they be making more than enough to fund AAA first party releases and acquire 3rd party releases.

 

[thecaseace]

Getting 40 million concurrent subs at $10-15 sounds pretty far fetched. How many subs do they have right now giving it away for $1?

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You could take half of that estimate above and still MS would be taking in a sizeable sum.

20m GP subs within the next couple of years should be obtainable though admittedly this is a guess.

Also wasn't the DMC5 deal rumoured to be $15m, a small chunk of rolling subscriber revenue when you think about it?

 

[StudioTan]

Getting 40 million concurrent subs at $10-15 sounds pretty far fetched. How many subs do they have right now giving it away for $1?

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I'm using your own example. You said:

Even if all of a sudden everyone started paying the full $10-15 a month do you think Microsoft will keep throwing bags of money at developers

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Yes, I think they'd be happy to keep doing that. Netflix has 150 million subs, there is lots of room for MS to grow.

How do third party games figure into that calculation?

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DMC5 was rumoured to have cost them 16 million to put on the service. That would be the top end, indies are not getting anywhere near that money. So using the same hypothetical scenario 400-600 million per month is more than enough for first party content + 3rd party games.

 

[Yearsoflurking]

Getting 40 million concurrent subs at $10-15 sounds pretty far fetched. How many subs do they have right now giving it away for $1?

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Between pc and xbox that should be doable. They should be near 20mm within the next couple of years

 

[leng jai]

I'm using your own example. You said:


Yes, I think they'd be happy to keep doing that. Netflix has 150 million subs, there is lots of room for MS to grow.

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By everyone I meant people who actually sub not literally every single person that owns an Xbox.

 

[Aswitch]

I already consider it to be honestly. It's an insanely great value. PlayStation is more than likely going to catch up though eventually, but it's great that this competition is breeding PlayStation to catch up to Xbox in that aspect.

 

[Era of not Yakuza]

They will need the games though. I might be interested in a gaming subservice, but game pass basicely lacks any game I'm interested in.

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yep
and some people here talking about how sony MUST do something similar
It's like saying that because Netflix is so successful, people will stop going to theaters, and that isn't and won't happen.
Sony and Nintendo just need to keep their great output of exclusives

I already consider it to be honestly. It's an insanely great value. PlayStation is more than likely going to catch up though eventually, but it's great that this competition is breeding PlayStation to catch up to Xbox in that aspect.

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This I definitely agree. PSNow became 1000% more interesting since MS started Gamepass and Sony made some changes.

 

[StudioTan]

By everyone I meant people who actually sub not literally every single person that owns an Xbox.

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The point is you say it's unsustainable, that's demonstrably not true. You forget MS has already done this with Office. That suite used to cost hundreds of dollars and now you can get it for 10 bucks a month. Having sustained, stable monthly revenue can end up making more money in the long run plus you have a much better idea of what you can budget. The alternative is spending millions of dollars to make a game that maybe doesn't end up selling. It can be a much riskier proposition.

 

[12Danny123]

The point is you say it's unsustainable, that's demonstrably not true. You forget MS has already done this with Office. That suite used to cost hundreds of dollars and now you can get it for 10 bucks a month. Having sustained, stable monthly revenue can end up making more money in the long run plus you have a much better idea of what you can budget. The alternative is spending millions of dollars to make a game that maybe doesn't end up selling. It can be a much riskier proposition.

Click to shrink...

I agree, I think this is the reason why Microsoft is very much okay with burning money in the short term, because MS already has went through this transition, Sony never experienced this transition before, they've only focused on traditional console gaming and the business model around it.

 

[rusty chrome]

Actually, this whole thing has made me concerned for developers. I've already seen tons of people saying shit like, "I'll just wait for it to come to Game Pass" instead of actually buying their games.

I usually get responses like, "they'll be ok, man", coming from people that are obviously subscribed to the service and want to keep getting these games for what basically is for free. It has devalued games in a really awful way, and considering the cost of games development is usually pretty high, I'd say that's pretty insulting to developers. There are still tons of developers that don't want to put their games on Game Pass or services like it, and would prefer to actually sell copies people can actually own, so what does that do to the true value of games in general?

There's no way of telling that whatever Microsoft pays them to have their games on Game Pass is truly enough to cover the consequence of people losing interest in buying games.

Microsoft recently jumped the gun and said Control is coming to Game Pass. Imagine all the people that saw this, people that already had interest in the game, but now decided not to buy it because of this rumor that Microsoft started. This rumor likely made them lose out on tons of potential sales for Control, so here's hoping that Control winning GOTY from some sources can still help the game sell.

 

[leng jai]

The point is you say it's unsustainable, that's demonstrably not true. You forget MS has already done this with Office. That suite used to cost hundreds of dollars and now you can get it for 10 bucks a month. Having sustained, stable monthly revenue can end up making more money in the long run plus you have a much better idea of what you can budget. The alternative is spending millions of dollars to make a game that maybe doesn't end up selling. It can be a much riskier proposition.

Click to shrink...

I said it's unsustainable in its current form, as in giving it away with $2 promotions, the gold/ultimate conversions and free trials while getting high profile third party games regularly. So obviously it's going to change and theoretically become sustainable/profitable down the track if Microsoft gets to their end goal. Either way we know they're not going to take losses forever. I've never once been Microsoft when it comes to Game Pass, my concern has always been what it means for third party developers and what the state of the games will be on the service 2-3 years down the track. I doubt people will be anywhere near as good of a value proposition then as it is right now. There's an argument that Microsoft will make money because people will spend more money in their ecosystem but then at the same time claim there won't be any change in how games are designed in the future or increase in microtransactions/DLC. I don't think you can expect to have it both ways.

I don't know about this Office comparison. Bundling and piracy was probably big factor for why it's better for them to just get people to pay a subscription fee. What percentage of people were actually paying the retail lump sum back in the day? Even then that's a once off payment compared to giving you access to literally hundreds of games that worth several magnititudes more than that if you add up their "retail" value.

 

[PopcornMegaphone]

Actually, this whole thing has made me concerned for developers. I've already seen tons of people saying shit like, "I'll just wait for it to come to Game Pass" instead of actually buying their games.

I usually get responses like, "they'll be ok, man", coming from people that are obviously subscribed to the service and want to keep getting these games for what basically is for free. It has devalued games in a really awful way, and considering the cost of games development is usually pretty high, I'd say that's pretty insulting to developers. There are still tons of developers that don't want to put their games on Game Pass or services like it, and would prefer to actually sell copies people can actually own, so what does that do to the true value of games in general?

There's no way of telling that whatever Microsoft pays them to have their games on Game Pass is truly enough to cover the consequence of people losing interest in buying games.

Microsoft recently jumped the gun and said Control is coming to Game Pass. Imagine all the people that saw this, people that already had interest in the game, but now decided not to buy it because of this rumor that Microsoft started. This rumor likely made them lose out on tons of potential sales for Control, so here's hoping that Control winning GOTY from some sources can still help the game sell.

Click to shrink...

It seems to me these subscriber services have been a boon to content creators. Look at all the money Amazon, Netflix, Disney, etc are throwing around.

Also, people can still buy games and it is optional for content creators to put their games on these services.

I just don't foresee this to be an issue. If anything sub services are great for niche games.

 

[tutomos]

There is a big chance that Gamepass won't reach the scale we're talking about here, but that's probably ok.

 

[Iwao]

There are currently no subscription numbers shared by Microsoft to support the thesis, and there's also nothing to suggest it's something that can be sustaininable in the long-term. It's still the biggest question mark about Xbox's future since they're going all in on it. I'm sure they're spending a LOT of money to gain as many subs as they can. Why not tell us how many subs that is? If they aren't willing to share the numbers now, what makes people think we will ever know the true reach of the service when the price eventually goes up from its $1 promotions to a more permanent and realistic fixed cost?

 

[Bradwaung]

There are currently no subscription numbers shared by Microsoft to support the thesis, and there's also nothing to suggest it's something that can be sustaininable in the long-term. It's still the biggest question mark about Xbox's future since they're going all in on it. I'm sure they're spending a LOT of money to gain as many subs as they can. Why not tell us how many subs that is?

Click to shrink...

Why do you care about the number of subs it has? Are you a shareholder?

It's such a great deal that some of you are concerned about MS not being able to sustain the service.
Just enjoy it and let MS worry about its sustanability.

 

[Rndom Grenadez]

Won't be surprised if most people still stick with the service when it goes full price.

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Many people here have stacked Ultimate for 3 years. My GP ultimate doesn't end until 2022.

 

[thecaseace]

There are currently no subscription numbers shared by Microsoft to support the thesis, and there's also nothing to suggest it's something that can be sustaininable in the long-term. It's still the biggest question mark about Xbox's future since they're going all in on it. I'm sure they're spending a LOT of money to gain as many subs as they can. Why not tell us how many subs that is?

Click to shrink...

I don't see MS sharing those subscription numbers for a long time.

Also it wouldn't matter to you if they did. Because surely your next logical question would be, 'well how many are paying full price?'

If you're that interested in the state of their model your own logic would suggest you have to wait

 

[Iwao]

Why do you care about the number of subs it has? Are you a shareholder?

Click to shrink...

Why is a thread being made on the idea that there are 9.5 million subs?

 

[Edge]

They will need the games though. I might be interested in a gaming subservice, but game pass basicely lacks any game I'm interested in.

Click to shrink...

Wow, If Game Pass lacks in any game you're interested in, this might be the wrong hobby for you in general. Have you ever tried movies?

 

[thecaseace]

Actually, this whole thing has made me concerned for developers. I've already seen tons of people saying shit like, "I'll just wait for it to come to Game Pass" instead of actually buying their games.

I usually get responses like, "they'll be ok, man", coming from people that are obviously subscribed to the service and want to keep getting these games for what basically is for free. It has devalued games in a really awful way, and considering the cost of games development is usually pretty high, I'd say that's pretty insulting to developers. There are still tons of developers that don't want to put their games on Game Pass or services like it, and would prefer to actually sell copies people can actually own, so what does that do to the true value of games in general?

There's no way of telling that whatever Microsoft pays them to have their games on Game Pass is truly enough to cover the consequence of people losing interest in buying games.

Microsoft recently jumped the gun and said Control is coming to Game Pass. Imagine all the people that saw this, people that already had interest in the game, but now decided not to buy it because of this rumor that Microsoft started. This rumor likely made them lose out on tons of potential sales for Control, so here's hoping that Control winning GOTY from some sources can still help the game sell.

Click to shrink...

How do people know what is and isn't coming to GP outside of Microsoft published games?

Goose game was a complete surprise when announced for GP but also a sales success on Switch and Steam.

Seems like the Goose game guys would've got paid pretty handsomely at release and then again effectively by MS once the sales dropped off.

Remember indies cannot budget for definitely getting Gamepass money, the only effective way to budget is that dev costs are made up by sales. There's no guarantee Microsoft come knocking. But if they do that's a bonus.

 

[Dphex]

my opinion: If Sony doesn´t pay attention Gamepass will come to bite them next gen.

there will be many players "ah well, i go with an Xbox" -especially younger folks still in school or university who don´t have much money to spend or people who just don´t want to spend too much on gaming.

or it will be "i buy an Xbox first, PS5 later" but only as soon as the exclusives roll in. because frankly, Sony is one step behind now, they will offer backwards compatibility with the PS5, something the Xbox already has and on top you have Gamepass where many titles arrive day one without the need to buy them.

personally i was less than impressed with the Sony exclusives this gen (Bloodborne was the only title where i was really interested in, the rest didn´t do much for me)
i really think the next gen could swing in Microsofts favour if they continue to be this aggressive when it comes to Gamepass. i won´t buy a PS5 to play old PS4 games, Horizon 2, Spiderman 2, Knack 3 and even more sequels and third person cinematic games.

besides that, surely gamepass is there to change peoples thinking about games, basically it is the first step to a streaming future, you don´t own the games but they are there to play for a monthly fee. for people like me who more or less power through games and sell them directly after that it is a viable alternative to classic gaming where you buy the games. it is an alternate model for consuming games.

it will be exciting to see where all this leads to next gen. if it is sustainable or not is not the players problem, as Spencer himself said, they have the money to burn on this service. it is the same as Epic burning money to secure exclusivity, they do that because they can.

basically Gamepass is THE big advantage Microsoft has in their cards now and it can save people a lot of money...so surely more and more people will subscribe to the service

 

[SpecDot]

my opinion: If Sony doesn´t pay attention Gamepass will come to bite them next gen.

there will be many players "ah well, i go with an Xbox" -especially younger folks still in school or university who don´t have much money to spend or people who just don´t want to spend too much on gaming.

or it will be "i buy an Xbox first, PS5 later" but only as soon as the exclusives roll in. because frankly, Sony is one step behind now, they will offer backwards compatibility with the PS5, something the Xbox already has and on top you have Gamepass where many titles arrive day one without the need to buy them.

personally i was less than impressed with the Sony exclusives this gen (Bloodborne was the only title where i was really interested in, the rest didn´t do much for me)
i really think the next gen could swing in Microsofts favour if they continue to be this aggressive when it comes to Gamepass. i surely won´t buy a PS5 to play old PS4 games, Horizon 2, Spiderman 2, Knack 3 and even more sequels and third person cinematic games.

besides that, surely gamepass is there to change peoples thinking about games, basically it is the first step to a streaming future, you don´t own the games but they are there to play for a monthly fee. for people like me who more or less power through games and sell them directly after that it is a viable alternative to classic gaming where you buy the games. it is an alternate model for consuming games.

it will be exciting to see where all this leads to next gen. if it is sustainable or not is not the players problem, as Spencer himself said, they have the money to burn on this service. it is the same as Epic burning money to secure exclusivity, they do that because they can.

basically Gamepass it is THE big advantage Microsoft has in their cards now and it can save people a lot of money...so surely more and more people will subscribe to the service

Click to shrink...

You know, a lot of people keep saying this, but can you remind me how well the Xbox is selling in territories that's not the US/UK/Europe? Because it seems a lot of y'all are forgetting Nintendo's huge resurging, and Sony's worldwide appeal.

 

[StudioTan]

There are currently no subscription numbers shared by Microsoft to support the thesis, and there's also nothing to suggest it's something that can be sustaininable in the long-term. It's still the biggest question mark about Xbox's future since they're going all in on it. I'm sure they're spending a LOT of money to gain as many subs as they can. Why not tell us how many subs that is? If they aren't willing to share the numbers now, what makes people think we will ever know the true reach of the service when the price eventually goes up from its $1 promotions to a more permanent and realistic fixed cost?

Click to shrink...

There's nothing to suggest it can't be sustainable either, so why are you assuming it isn't? Without sub numbers how are you sure they're spending a LOT of money on it?

 

[DailyCalmSpirit]

Does this mean that after a few years it'll be mostly awful while still raising the price?

 

[Bede-x]

Actually, this whole thing has made me concerned for developers. I've already seen tons of people saying shit like, "I'll just wait for it to come to Game Pass" instead of actually buying their games.

I usually get responses like, "they'll be ok, man", coming from people that are obviously subscribed to the service and want to keep getting these games for what basically is for free. It has devalued games in a really awful way, and considering the cost of games development is usually pretty high, I'd say that's pretty insulting to developers.

Click to shrink...

There's almost certainly a group of people - especially us on Era that play a lot of games - that'll get more value out of Game Pass, instead of outright buying the games. We simply get access to them cheaper. And it's also possible it'll get harder as a developer selling games outside subscription ecosystems in the future, because people using the services are primarily looking for games there.

The flip side of that coin is that there could also be people, who'll end up paying more with a subscription than they would have otherwise and that's what subscription providers are counting on. I just took a look at the Game Pass app on iOS to see which was the most popular game and right now it's Minecraft (at least here in Denmark). A game you can get relatively cheaply. What are the chances that some of those playing Minecraft will end up paying more for it in the long run? What if they're there mainly for Minecraft, but end up checking out more games and upping their engagement with the ecosystem, in comparison to if they had just bought Minecraft. What if they buy a subscription to play a little with their friends, but forget to turn off auto-renewal?

There are many ways this can end up playing out, but I think it's too early to make the call as to how beneficial or detrimental these services are to the overall health of the industry.

 

[12Danny123]

my opinion: If Sony doesn´t pay attention Gamepass will come to bite them next gen.

there will be many players "ah well, i go with an Xbox" -especially younger folks still in school or university who don´t have much money to spend or people who just don´t want to spend too much on gaming.

or it will be "i buy an Xbox first, PS5 later" but only as soon as the exclusives roll in. because frankly, Sony is one step behind now, they will offer backwards compatibility with the PS5, something the Xbox already has and on top you have Gamepass where many titles arrive day one without the need to buy them.

personally i was less than impressed with the Sony exclusives this gen (Bloodborne was the only title where i was really interested in, the rest didn´t do much for me)
i really think the next gen could swing in Microsofts favour if they continue to be this aggressive when it comes to Gamepass. i won´t buy a PS5 to play old PS4 games, Horizon 2, Spiderman 2, Knack 3 and even more sequels and third person cinematic games.

besides that, surely gamepass is there to change peoples thinking about games, basically it is the first step to a streaming future, you don´t own the games but they are there to play for a monthly fee. for people like me who more or less power through games and sell them directly after that it is a viable alternative to classic gaming where you buy the games. it is an alternate model for consuming games.

it will be exciting to see where all this leads to next gen. if it is sustainable or not is not the players problem, as Spencer himself said, they have the money to burn on this service. it is the same as Epic burning money to secure exclusivity, they do that because they can.

basically Gamepass is THE big advantage Microsoft has in their cards now and it can save people a lot of money...so surely more and more people will subscribe to the service

Click to shrink...

TBH, this is a problem as this could cause Sony to loose the potential users who don't want a console but are willing to subscribe to a Game Subscription. Like I say Sony needs to be more aggressive and so far they are perfectly fine with MS gobbling up the users who want a game subscription but not a console.

 

[Pryme]

Many people here have stacked Ultimate for 3 years. My GP ultimate doesn't end until 2022.

Click to shrink...

So do I, but what has that got to do with what I said?

It's going to expire sometime. And at that point, Gamepass will most likely be an even bigger mainstay than it is now.

 

[Instro]

So how long until the game streaming service market is as fractured as the tv/film one?

 

[12Danny123]

So how long until the game streaming service market is as fractured as the tv/film one?

Click to shrink...

I mean there's always room of acquisitions if Microsoft, Sony want those IPs.

 

[JayC3]

Given that the OP is banned, the thread has been locked.