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Tom Warren: Game Pass is not profitable yet
- Thread starter Deleted member 27723
- Start date
People have been saying it is currently profitable on here for a long ass time, and we routinely get threads asking why Sony (or even Nintendo) don't have an equivalent. Now that this comes out some of the same folks are saying it isn't news or we already knew this. C'mon now.
Typical of a subscription service to begin as a loss leader.
I really hope those sacrificing ownership to go all in on gamepass are prepared for the inevitable price rises.
I really hope those sacrificing ownership to go all in on gamepass are prepared for the inevitable price rises.
Not only is it not profitable, but we don't know when Microsoft expects it to become profitable. For all we know, they could be planning to pour money into Gamepass for several years before they start seeing a true return on investment.
It's more a service like it can be sustainable to MS, without a profit. That doesn't mean it is for the other platform holders, it's why the "why don't Sony & Nintendo just do the same" is silly.
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The earliest year for profitability is probably 2025 or something, and possibly 2030
The earliest year for profitability is probably 2025 or something, and possibly 2030
It explicitly says that gaming is profitable for Microsoft, which is corroborated by their financials.
No, closer to 20€ a month for the one with first party Day One releases. Because otherwise they'll be taking huge losses.
some of it can be a weird obsession, but there's also the ecosystem situation. people have spent their hard-earned money into certain ecosystems, and the level of success of those things is something they are literally invested in.
for people wondering why this matters:
it gives us an idea of how the service may evolve in the future. at some point, they're going to want to turn a profit which can be done through some combination of lowering costs and increasing revenue. this will likely be done through some combination of the following: lowering the number of games included, lowering compensation to publishers/developers, increasing subscription price
it gives us an idea of how the service may evolve in the future. at some point, they're going to want to turn a profit which can be done through some combination of lowering costs and increasing revenue. this will likely be done through some combination of the following: lowering the number of games included, lowering compensation to publishers/developers, increasing subscription price
Not just consoles. It's on PC, with streaming options on PC and Phone, with TVs and Facebook in the works.
Yes, but "gaming" also includes everything they do across PC. Its not just Xbox.
But the way its worded seems to imply that for Xbox specifically the hardware is always sold at a loss, with software picking up slack.
I misinterpreted that comment as "gaming" overall was profitable but the console business specifically wasn't due to losses on hardware.
Indeed.
But I don't need to worry about MS asking me for more money until December 2024, haha.
game pass isn't at all like Netflix, Netflix only makes money from subscriptions, game pass doesn't have to be profitable if it brings more people/time spent to the platform result in more games/mtx sales
Don't worry it's normal for a subscription service to not be profitable in the growth stage. In fact MS or any other company would do something wrong, if they are profitable right now. As mad as it sounds, because this would mean they aren't 100% invest into growth.
No, there were plenty of people insisting on Gamepass being sustainable. Profitable =/= sustainable.
They aren't in the red. Microsoft is profitable as Spencer said a while ago and now a MS guy in the court case of Epic can Apple.
Here is a great explanation why this doesn't matter for a huge company with to much money in the bank:
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Spencer never said that. Spencer said Xbox is profitable and it is.
MS is playing this smart, with all the deals and promotions to get people to sign up they are going to train large swaths of people to keep using game pass. Eventually many will stick with the service when most of the deals are taken away. If MS can consistently supply great day 1 content for the service in the next few years, I will continue to subscribe, even without the xblg conversion offers.
That doesn't happen ever. PS+ has only about 40m subscribers on a much larger base for far less money, and that's mandatory for console multiplayer.
Its probably the ceiling.
75-100m subscribers doesn't happen unless you're giving gamepass away for free on PC.
Xbox itself is profitable, so they aren't burning as much money as you think. To your concern, well many developers already said it's good for them and services like Netflix, Spotify or now Gamepass grow the industry.
Well Spencer also said Xbox is profitable in the past. So wether you include PC or not doesn't change the outcome. But I can understand you asking this, because I would've asked this myself, if I didn't knew what Spencer said in the past.
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It may not be, but its existence seems to annoy a lot of people who aren't in the MS ecosystem.
And you can't put a price on that.
And you can't put a price on that.
PS+ is restricted to a single platform, and the potential target audience is a lot smaller. I expect there will be a big uptick in GamePass subscribers on PC in the next couple years. The only question remains whether it will be on the revamped Windows store (rumored to launch this fall) or if MSFT will have to take the poison pill of Steam because they can't get it right. That's not mentioning the streaming/mobile aspect at all.
Sure things could not work out for them, but hard cap of 40 million is way too pessimistic IMO.
This. I have game pass for 3 years at an average cost of $5 per month, which is an absolute steal. In 3 years if MS can really accelerate their day 1 releases for first party titles with all the studios they have, and have a good amount of day 1 or 3-6 months after launch for 3rd party titles, it'll be a service I'd gladly pay full pop for if all the deals dries up.
Agree. Its one of the reason I always stick to they dont have to do a Game pass service exactly 1:1 and still have success. Too many times I point to Disney Plus charging a same day access fee for movies launching in theaters or WB going back to the traditional model in 2022 for movie releases and when they come to streaming.
But for some reason some ppl just seems to put fingers in their ears and go la la la la la when trying to discuss this from a broader business perspective.
If MS feels this is the best way for them, great. But other dont have to do it or do it the exact same way.
Not gonna like, I agree with you on this...
WIld.
This is normal for subscriptions. I remember getting insane deals on Netflix early on.
Do you know that if you do a Google search for 'Phil Spencer Gamepass profitable', it brings up a lot of results with Spencer saying Gamepass is sustainable?
You're conflating 'profitable' with 'sustainable
Aren't most of his posts about MS games, studios and hardware news? Basically what you'd expect a consumer enthusiast (with an xbox bias) to post?
How's any of that at odds with his post saying there's way too much focus on managing Microsoft's finances.
Are you new to subscription services in the growth phase? They don't get any more business savvy than Tim Cook, yet Apple's giving away years of Apple TV+ subscriptions and gave away 3 - 6 months free Apple Music subs to grow users
There's also nothing they're doing that's financially out of reach of several other players in the gaming space.
They could do what Sony did and release ps now with mostly old games, high price and let it just languish in the market. Sony was first but they completely dropped the ball. Only now are they trying a bit to get it going, but momentum is hard to jump start after a service flatlines. MS has to keep going hard on game pass from a value perspective with deals and content to keep this flywheel humming.
Pretty much, and outside of being console war fodder, no one should care.
Funny thing about that, the original guy who posted it unironically wasn't even talking about Game Pass, he was talking about getting rid of Xbox Live Gold and making multiplayer free.... but it's still funny.
Yes it does. They need to be investing all the money they bring in in acquiring and creating content in this stage. Right now is all about grabbing as many people as possible.
