Phil Spencer: “The only concern I see from consumers about Game Pass is is it sustainable...Game Pass is doing very well for us and developers”

[Akita One]

Yup; boils down to how many people are willing to pay full price, and who those people are.

If nothing but people who were buying tons of games anyways continue to subscribe, it probably won't work out. If it's a healthy mix of people who were buying tons of games and people who weren't, it probably will will work out.

And hopefully people who weren't spending $120 a year previously but are now, are also playing more games. That's the other thing about stuff like GamePass, it's a great value, it's not some "Math Trick" to try to profit (like something like MoviePass was), it legitimately is a nice way for any gamer casual / hardcore or not to play some games.

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Perfectly explained, and I'm glad you brought up MoviePass which some people believe this is an equivalent of (it's not)...

Just as a comparison, I bet these same people think that Disney putting Avengers Endgame on Disney+ has lowered the total amount of post-theatrical release revenue that the movie has brought it...Ignoring the millions that signed up for the service as soon as they heard it would be available day one.

 

[AegonSnake]

I just bought 3 months of Gamepass Ultimate for a dollar. Again.

ive been a subscriber for 12 months on and off since april 2018. and i only paid full price once when i forgot to cancel my membership. the rest have been $1.

i have yet to beat a single game using the gamepass so im not sure if its been a good deal so far.

 

[riotous]

My one big hope is that MS doesn't roll Game Pass into Xbox Live Gold and make it mandatory for online gaming next gen. As someone who primarily buys his games physically (so I can, y'know, actually own my games), this would really hurt MS's relation with retailers.

Unfortunately, since they probably will (it's getting harder and harder to buy an Xbox Live Gold subscription without GamePass attached to it), well...

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This is a bizarre worry; GamePass will eventually not be heavily discounted and you'll always be able to buy just XBL Gold from MS. XBL Gold is like a money printing machine with very few costs.

 

[Akita One]

There is absolutely nothing crazy about it and nothing you said is any sort of argument against my Math.

The answer to your question though: MS would have to pay way less than they'd make off of GamePass to those publishers. 3rd parties aren't putting their guaranteed 10 million+ sellers on GamePass day one. They are putting older games on it, or newer more low-profile games. At full price MS can EASILY pay these publishers and have a healthy profit.

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Yup, just like every other entertainment subscription service...some upfront payment based on how "new" the game is and how it sold previously, and payments after that based on hitting certain engagement milestones. Microsoft and devs on these services have explained this ad nauseum.

 

[Prine]

You claimed that Gears 5 is one of Microsoft's most profitable games of all time. You are unwilling to actually give any evidence to support this claim (unsurprising as you'll find it incredibly hard). So let me lay it out for you again.

Gears 5 did not sell well. It is nowhere near one of Microsoft's best selling games.
Gears 5 will struggle to monetise strongly because it has a dwindling player base.
Gears 5 definitely lead to a lot of Game Pass subscriptions but they were extremely heavily discounted

If you think this paints a pretty picture for games like Gears 5 (high budget, moderate quality) on subscription services you're seriously mistaken. More over, while a lot of people do make extremely repetitious points on this forum about Game Pass, Game Pass does not defy economic gravity and, whatever the fanatics here think, Game Pass will have downsides.

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Gears 5 has more players then 4, Phil has said it's successful and they're pleased with it, these are facts and a endorsement from the guy that writes the cheques for its continued support. I don't think anything you've said about it isn't more then fabrication and a complete misreading of not only Gears but Gamepass. Sea of Thieves didn't start off well but is now getting GOTY awards and selling consistently , same for Forza 4, Master Chief Collection and State of Decay. Shows games with fleshed out multi this gen can live well beyond initial release, and usually see a uptick in players, I don't see why that won't happen to Gears 5 multi once things are ironed out. GP facilitates that.

Even with your arbitrary criteria, GP has, for many of its games bolstered thier performance.

 

[Evolution of Metal]

Jared Wade: Now you are at MoviePass. How is that going currently, and what are the goals over the coming year? I know that since you've come on, the price point has changed and you maybe have found some new markets. But it's still a rapidly developing company, so where do you see things now?

Mitch Lowe: What I'm really trying to do for movie-going is the same thing that Netflix did for watching movies online and that is making it easier to see a wider variety of content by making it more affordable and reducing the barriers to seeing independent content, foreign content, and documentaries. And it goes back to what Netflix — among others, not just Netflix — really did: They got people into this concept of being able to try stuff without any incremental costs.

Even though what we were really trying to solve was the late-fee problem — the anxiety built upon the pressure of returning the movie — the byproduct ultimately was that people started watching something they never would have rented from Blockbuster. Because there was no incremental cost of watching something that was "iffy" in their mind, people started exploring film. They started exploring genres, exploring directors. And it actually expanded people's interest in consumption.

So at MoviePass, by creating a low-cost price to be able to go as many times as you want — it's really Netflix for the movie theater — people are already starting to see films that they wouldn't see otherwise. In fact, our customers are increasing, by almost 100%, the amount that they going to films that make under $20 million at the box office.

And for theaters, we're getting people to go during the daytime and during the weekdays when there are tons of available seats. So it's having a big impact, and now it's a matter of launching a price point that it would be insane not to take. And we're about to announce something along those lines.

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Without any kind of data how much revenue/userbase the service is generating, there is nothing to discuss. Every single CEO/PR person will assure the customers that they know what they are doing, and they will succeed with the product.

 

[Empyrean Cocytus]

This is a bizarre worry; GamePass will eventually not be heavily discounted and you'll always be able to buy just XBL Gold from MS. XBL Gold is like a money printing machine with very few costs.

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I think it's more about what Microsoft focuses on. I set up my Xbox Live Gold and PS Plus to expire at the end of November so I can get a new year's subscription during Black Friday when they are on sale. I couldn't find a single Xbox Live Gold deal during Black Friday, everything was a deal on GamePass. I got a year's subscription to PS Plus for $40 no issue.

 

[janusff]

Without any kind of data how much revenue/userbase the service is generating, there is nothing to discuss. Every single CEO/PR person will assure the customers that they know what they are doing, and they will succeed with the product.

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Yuuup

 

[EdgeXL]

I do not understand how it is possible for Game Pass to be sustainable when multiple people on the internet told me that it was unsustainable. I should think that the average Era/old place/Twitter user is in a better position to assess the viability of Game Pass than Microsoft's VP of Gaming.

 

[Deleted member 11626]

Why won't they release numbers then?

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Nobody cares about your console wars

 

[Liliana]

Funny how amazing Game Pass is in this industry. Literally the only "concern" is that it's too good and cannot be sustainable.

I cannot praise XGP enough. My favorite thing to come out of gaming in the past 15 years or so.

 

[Rosol]

Nobody cares about your console wars

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Ah yes, company transparency - anyone asking for it must be a console warrior? Is corporate transparency a bad thing, or would you prefer they get away with lying and stretching the truth to us more?

 

[Akita One]

Without any kind of data how much revenue/userbase the service is generating, there is nothing to discuss. Every single CEO/PR person will assure the customers that they know what they are doing, and they will succeed with the product.

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Except GamePass/Netflix and MoviePass have zero in common. The former is "renting" unrestricted access to entertainment and the latter is selling limited access to space in a building. MoviePass didn't have any capability to negotiate on either end, which is why it was a pipe-dream. MoviePass also never had any positive news or revenue around it. There were not any movies theater companies saying "boy this is bringing in alot of new customers and existing customers are spending more".

 

[DigSCCP]

There is absolutely nothing crazy about it and nothing you said is any sort of argument against my Math.

The answer to your question though: MS would have to pay way less than they'd make off of GamePass to those publishers. 3rd parties aren't putting their guaranteed 10 million+ sellers on GamePass day one. They are putting older games on it, or newer more low-profile games. At full price MS can EASILY pay these publishers and have a healthy profit.

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There is a huge gap between "health profit" and "same as selling 2 games".
Your math doesn't make sense, not to talk about sustainability.
If you want to talk about revenue only ok.
But when we talk about sustainability and/or "health profit" we need more data to back it up, we need more metrics to make this claims realistic...something that we don't have.

 

[Jamie]

It's a wonderful service and if Phil isn't concerned, I'm not either.

 

[riotous]

There is a huge gap between "health profit" and "same as selling 2 games".
Your math doesn't make sense, not to talk about sustainability.
If you want to talk about revenue only ok.
But when we talk about sustainability and/or "health profit" we need more data to back it up, we need more metrics to make this claims realistic...something that we don't have.

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OK so you've declared that my math doesn't make sense; can you actually provide an argument or just going to declare it?

The entire gaming industry works off of that Math I proposed; they all share a pie that "per gamer" is actually pretty small. You guys are over-thinking how much MS has to pay publishers for games to be on Game Pass.

 

[Deleted member 11626]

Ah yes, company transparency - anyone asking for it must be a console warrior? Is corporate transparency a bad thing, or would you prefer they get away with lying and stretching the truth to us more?

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Do you have a financial stake in the company?

 

[CaptNink]

All this concern just shows how much people love MS and Xbox! How wonderful!

 

[DigSCCP]

OK so you've declared that my math doesn't make sense; can you actually provide an argument or just going to declare it?

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I mean it's not hard to understand this bro :
- Model A : your revenue it's X and you don't have to pay anything
- Model B : your revenue it's the same same X but you have to pay Y upfront
Which one is most profitable?
I am not saying GP it's not health/sustainable/profitable, like I said before we don't have sufficient data to claim this, all I'm saying is that comparing two different models because they bring the same revenue, while having different costs, is not enough to 'prove' how one model can be sustainable as the other.

 

[Deleted member 45460]

I just bought 3 months of Gamepass Ultimate for a dollar. Again.

ive been a subscriber for 12 months on and off since april 2018. and i only paid full price once when i forgot to cancel my membership. the rest have been $1.

i have yet to beat a single game using the gamepass so im not sure if its been a good deal so far.

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The $1 deal is only once per account.

 

[SecondNature]

. As a Canadian gamer, Im pretty salty that Sony doesnt have this because Im not ever paying full price for games and am in the habit of constantly trading games. I utilize Amazon E3 deals to turn profits or break even on big named games and use the money to keep funding new purchases.

Can someone explain the math with Game Pass?

I dont understand how such a cheap price is possible for such recent, big games. And is the outcome not just going to result in Sony, EA, etc. doing the same thing? I dont like THAT future.

 

[TechnicPuppet]

I feel like a lot of the game pass money MS is pumping in is marketing budget at the moment.

As the subscribers numbers pick up they will have massive buying power. That's when they really become the Netflix of gaming. Or who knows maybe Sony will decide to go for it instead and it's them that does it.

 

[zedox]

For the people who are "concerned"...in 5 years we are still at a place where no numbers are shown, you still gonna be asking the same question? I wonder how long yall can ask the same question and have the same concerns. That dexterity will be awesome to see.

. As a Canadian gamer, Im pretty salty that Sony doesnt have this because Im not ever paying full price for games and am in the habit of constantly trading games. I utilize Amazon E3 deals to turn profits or break even on big named games and use the money to keep funding new purchases.

Can someone explain the math with Game Pass?

I dont understand how such a cheap price is possible for such recent, big games. And is the outcome not just going to result in Sony, EA, etc. doing the same thing? I dont like THAT future.

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EA already has EA Access (and recently EA Access Premiere on PC) since the beginning of this generation...I wonder how its sustainable ;). I hope for Sony to do the same with PSNow. Will be great for gamers.

 

[AegonSnake]

The $1 deal is only once per account.

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nope. i just subscribe just yesterday. $1 per month plus two months free. it literally says its a christmas offer. or holiday or something.

i have been using these $1 for 1 and $2 for 2 month offers for over a year now.

 

[Shpeshal Nick]

I just bought 3 months of Gamepass Ultimate for a dollar. Again.

ive been a subscriber for 12 months on and off since april 2018. and i only paid full price once when i forgot to cancel my membership. the rest have been $1.

i have yet to beat a single game using the gamepass so im not sure if its been a good deal so far.

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lol

Sure mate

 

[Hamster Plugin]

. As a Canadian gamer, Im pretty salty that Sony doesnt have this because Im not ever paying full price for games and am in the habit of constantly trading games. I utilize Amazon E3 deals to turn profits or break even on big named games and use the money to keep funding new purchases.

Can someone explain the math with Game Pass?

I dont understand how such a cheap price is possible for such recent, big games. And is the outcome not just going to result in Sony, EA, etc. doing the same thing? I dont like THAT future.

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The idea is that you are spending $10 every month so MS gets $120 per year. It's a loss if you only get one month to play a game for cheaper and then unsub. Subscriptions are meant to be reliable revenue.

We already have Origin Access and Uplay+ on PC. So other publishers are already doing this thing. You're going to get a lot of publisher subscriptions next gen if Game Pass becomes successful. EA and Ubisoft are extremely likely to separate themselves from Xbox Game Pass and do their own subscription instead.

 

[Deleted member 45460]

nope. i just subscribe just yesterday. $1 per month plus two months free. it literally says its a christmas offer. or holiday or something.

i have been using these $1 for 1 and $2 for 2 month offers for over a year now.

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you've broken the system then, because it does not allow me to renew mine at the sale price

 

[TheUnseenTheUnheard]

I bought the 3 months if ultimate. How do I get my discord nitro sub?

 

[Raider34]

Ah yes, company transparency - anyone asking for it must be a console warrior? Is corporate transparency a bad thing, or would you prefer they get away with lying and stretching the truth to us more?

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How about you post your Xbox name so we can check your numbers?

 

[Rosol]

Do you have a financial stake in the company?

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To me - if they're not making profit off it, it's a key indicator that the cost will inevitably go up over the next few years; or selection will take a nose dive. You don't have to have a financial stake in the company to use it as a good predictor on whether the value proposition of games-pass will hold up over time. My response was more about corporate transparency and the fact you attacked another poster who was asking for it.

 

[Proven]

Without any kind of data how much revenue/userbase the service is generating, there is nothing to discuss. Every single CEO/PR person will assure the customers that they know what they are doing, and they will succeed with the product.

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The one huge difference is that you are comparing Microsoft to MoviePass which had to raise money all the time. I remember using MoviePass and it literally didn't work for a few hours because they ran out of money.

 

[UraMallas]

It's a really good interview, btw, if yall want to quit flinging shit at each other and have a listen.

 

[trugs26]

I love how the average user here spends more time searching for numbers and demanding for data instead of playing games, they are not even shareholders or data analyst but they need their god damn numbers for "reasons".

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Some consumers care about the industry and would like to know that their money is supporting the developers. Rather than just trusting quotes from specific people, the numbers won't obscure the fact of the matter.

 

[Deleted member 8196]

Some consumers care about the industry and would like to know that their money is supporting the developers. Rather than just trusting quotes from specific people, the numbers won't obscure the fact of the matter.

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So the consumer should be alright since developers are saying it clearly that GP is a good deal for them.

 

[trugs26]

So the consumer should be alright since developers are saying it clearly that GP is a good deal for them.

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If all the developers are saying it then yeah it's fine. If they're all saying it.

 

[AegonSnake]

. As a Canadian gamer, Im pretty salty that Sony doesnt have this because Im not ever paying full price for games and am in the habit of constantly trading games. I utilize Amazon E3 deals to turn profits or break even on big named games and use the money to keep funding new purchases.

Can someone explain the math with Game Pass?

I dont understand how such a cheap price is possible for such recent, big games. And is the outcome not just going to result in Sony, EA, etc. doing the same thing? I dont like THAT future.

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its an age old model. hbo, showtime and more recently netflix have been using it to great success. HBO shows have always been light years ahead of anything on tv with some exceptions like AMC's breaking bad and mad men. its how netflix is able to pour in literally billions into new content creation every year. because they get a guaranteed $15 a month from millions of subscribers. though i hear Netflix actually loses money, but their stock is like $400 so it doesnt really matter. its a model that everyone who is investing in netflix despite billions in loses knows works in the long run.

you've broken the system then, because it does not allow me to renew mine at the sale price

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i wasnt able to get the previous $1 a month deal ultimate back when gears 5 came out. it kept erroring. but i was able to get the pc only deal to go through. even this one didnt go through the first time, so i just tried it again.

but before this, i have definitely always used $1-2 deals. i only remember paying full price once.

 

[Bugalugs214]

Some consumers care about the industry and would like to know that their money is supporting the developers. Rather than just trusting quotes from specific people, the numbers won't obscure the fact of the matter.

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Yeah its actually such a poor deal for developers Phil has to kidnap them all and force them to make games while he takes in billions of profit with 1$ trials. Poor devs.



/s

 

[Rosol]

How about you post your Xbox name so we can check your numbers?

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Check my numbers?? This sounds a little creepy..

 

[Deleted member 8196]

If all the developers are saying it then yeah it's fine. If they're all saying it.

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https://www.gamesindustry.biz/artic...irst-time-subscription-is-fair-for-developers

 

[____]

Do you have a financial stake in the company?

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I do. Luckily it's been very profitable in the last year. I'd like to buy a few more shares but I got in at a good price.

 

[Raider34]

Check my numbers?? This sounds a little creepy..

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Your gamer score I don't think you have a Xbox your just in here trying to console war

 

[PRrambo_]

As long as it stays dirt cheap like is, im good.

I'm sure the price has to increase eventually then is when I will worry.

 

[Bede-x]

Doesn't Forza Horizon 4 have those wheel spins you can spend real money on?

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Basically everything in this post is wrong. Eg/ Uncharted 4 has microtransactions. Forza Horizon 4 doesn't.

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Forza Horizon 4 does have microtransactions and you can buy wheelspins with real money, but not individually. You can buy a VIP Pass that gives you extra wheelspins, double money earned from races and some other stuff. There's also a treasure map, you can buy that will help with finding all the bonus signs in the game.

 

[melodiousmowl]

This. I'm happy and if developers are happy too what do I care about Microsoft's bottomline? Smarter people than us with access to far more data have signed off on this and seem happy with the figures so far.

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100% this. We have next to 0 data.

MS CLEARLY figured out that a HUGE % of people dont buy enough games a year. Whats better than taking away the barriers to spending way more time gaming and finding what you want to play?

MS also has the data on PC/console crossover, and I bet it drove that decision as well.

 

[SecondNature]

You guys are right, EA Access is a thing of course. But how would 3rd parties work here? Do companies start fighting for exclusivity deals? Im just trying to imagine something like Sony, Activision, EA, Ubisoft, and Microsoft all having sub models. Subbing to all of them might cost like $30 a month. Which still isnt bad, Id say, and it's not like people will sub to all of them.

I also feel like it feels like cheating-- a new game comes out, I pay $1 to play it and then I'm out. Obviously, it works for devs, it just feels so good to be true. I recently bought Halo MCC for PC. I didnt realize I couldve just bought it on Game Pass which wouldve saved me big. This kind of model has to force everyone to adopt at this point, no? I dont see why Id buy a game on Steam again.

But Im curious to see how it works out with the library catalogs. Seems everyone will be fighting over exclusivity deals. I feel like the bubble has to pop at some point. TV shows are in a similar position with Netflix/Disney +.

It's all very interesting to see unfold.

For gamers, it's definitely a win. Provided that we dont see scummier things come out of this like tying save files and profiles to sub services and then having your provider lose licensing.

How is the money divided? Are companies really making more money in the sub model compared to having people buy games? I guess this depends on the game.

I really like MS's model, I just find it insane that it's so cheap. I have to assume the price will eventually go up.

 

[StudioTan]

Without any kind of data how much revenue/userbase the service is generating, there is nothing to discuss. Every single CEO/PR person will assure the customers that they know what they are doing, and they will succeed with the product.

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I've seen some disingenuous posting on this forum but this one has to take the cake. You're comparing one of the richest and most successful companies in the world to a startup.

Microsoft has already been through this with Microsoft Office, one of their biggest money makers, moving to a subscription service. They know what they're doing.

 

[Akita One]

Some consumers care about the industry and would like to know that their money is supporting the developers. Rather than just trusting quotes from specific people, the numbers won't obscure the fact of the matter.

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But they give these numbers every quarter and every year but people are still skeptical because they want "Xbox Services" to be broken down in some SKU related way that doesn't reflect the overall revenue. It's why I made the comment about Gears possibly being the most profitable game they've had, and someone came back asking about it's unit sales. It's apple and oranges. Consistently increasing revenue during a time period where they have released 3 games not named Forza is the numbers.

 

[riotous]

I mean it's not hard to understand this bro :
- Model A : your revenue it's X and you don't have to pay anything
- Model B : your revenue it's the same same X but you have to pay Y upfront

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Sorry I really didn't understand your previous posts but I get what you are saying now.

Sure I'm not claiming it's exactly the same business from start to finish as selling 2 games per year. It should be obvious that it's a simplification meant to highlight a point. That point being that the average console owner isn't generating that much software revenue per year. We are told that consoles with a 7-8:1 attach ratio at the end of a generation did well; so that's suggesting that the average console owner only buys one game per year. The entire industry sustains off of that... it can afford subscription services that bring in the revenue of 2 games per year per consumer (while buying other games to boot.)

 

[Fifstar]

Ask yourselves this question:

If a console ended a 7 year generation with a "14:1" attach ratio, would that console be a huge success?

Then look at the full price of Gamepass, which is... the cost of 2 games per year, representative of that 14:1 attach ratio mentioned above.

People need to realize these services can be massively profitable as is, at the asking price. They aren't some loss leader meant to eventually squeeze consumers/developers out of profits once people are hooked. Right now MS is giving GP away at super low prices hoping people keep subscribing at full price, so there's some loss leading going on.. but the service itself is not designed that way.

Do the math; GamePass is MORE than sustainable at full price, it's a massive revenue success for everyone involved as long as it's mainstream enough to attract casuals along with the whales who are saving money from it.

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Attach rate is a bit different as it's an average calculated with all consoles sold Vs all games sold. In comparison obviously you don't generate money from systems not sold in the first couple of years.
Your general point still stands though, at a price of 10 to 15 bucks for a subscription gamepass will increase overall revenue of the Xbox ecosystem. All the big hitters like GTA, cod or FIFA generate additional revenue that's not included in Gamepass.

 

[AegonSnake]

lol

Sure mate

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why would i lie about this?