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Phil Spencer talks about how deals for games on Game Pass works

Governergrimm

Governergrimm

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Jun 25, 2019
6,686
TitanicFall said:
Just that the point of a service is to make money. Aside from the third party payouts, they still have to finance first party titles that will no longer make the same money they used to because of GP.
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It would be the question if MS is concerned about it. Right now it probably isn't, in the long run of course it needs to be profitable. If MS isn't looking for immediate return on investment and are only focused on growth right now then profitability isn't important. So I'm the long run yes it needs to be profitable but that isn't the driving metric at the moment.
 
Vinc

Vinc

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Oct 25, 2017
7,410
In all honesty, this sounds absolutely fantastic. The only potential downside for the health of the industry is how it could ultimately affect consumer behavior, but that remains to be seen and they've said early indicators are promising.

All in all though, from what I see in this interview, Microsoft seems to be doing a great thing for overall industry health with this service.
 
Pyccko

Pyccko

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Oct 25, 2017
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Phil Spencer—or should I say SPENDcer—is out of control, somebody needs to stop this menace before he destroys the entire gaming industry
 
spacer

spacer

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Oct 30, 2017
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Governergrimm said:
It reads like you want them to tell us the exact amount of money that changed hands. Like they are beholden to give the public a spreadsheet of where the money went and a copy of the contract. Not sure that's what you are angling for but level of detail is well beyond what they owe the general public .
Edit: for the sake of curiosity it's interesting but due to the broad range of deals doesn't say anything of all of the deals they made.
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Where did I say we're owed anything? I am simply curious to know what those numbers are, and Phil rephrasing those deals, in generalities, again for the hundredth time doesn't add anything to the Game Pass conversation. That's my point. I don't ever expect to find out how much money exchanges hands between Microsoft and developers for GP deals. That doesn't mean I don't want to know.
 
Governergrimm

Governergrimm

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Jun 25, 2019
6,686
spacer said:
Where did I say we're owed anything? I am simply curious to know what those numbers are, and Phil rephrasing those deals, in generalities, again for the hundredth time doesn't add anything to the Game Pass conversation. That's my point. I don't ever expect to find out how much money exchanges hands between Microsoft and developers for GP deals. That doesn't mean I don't want to know.
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Fair enough. I see people try to discredit or downplay GP based on not being explicitly told how the sausage is made. Wanting to know out of curiosity is fine. I am curious myself but also don't expect a detailed financial breakdown.
 
smurfx

smurfx

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Oct 25, 2017
10,643
big publishers are the ones getting the good deals while they probably play hardball with smaller developers. same way activision forced microsoft to give them a piece of xbox live money.
 
RoKKeR

RoKKeR

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Oct 25, 2017
15,489
Really fascinating stuff. Makes sense to have different arrangements given the type of game.
 
TheThreadsThatBindUs

TheThreadsThatBindUs

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Oct 26, 2017
6,151
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Paying for full production costs for smaller dev studios is a massive win for the developer; especially when they don't have to provide any service exclusivity in the exchange and can free sell the title simultaneously on other platforms. On the flip side the marketing costs are still there and can often be multiple times larger than the game production costs, depending on the level of market penetration targeted.

Ostensibly, this absolutely won't work for games approaching AAA $100m sized budgets.
 
totofogo

totofogo

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Oct 29, 2017
5,543
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Acquiring studios to build out a library of exclusives is still a bad move, but this is really awesome to hear. The model of paying out dev costs and still allowing the dev to sell their title in traditional means is awesome, and a direction I wish (video) streaming could have gone as well.
 
Jiraiya

Jiraiya

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Oct 27, 2017
10,350
smurfx said:
big publishers are the ones getting the good deals while they probably play hardball with smaller developers. same way activision forced microsoft to give them a piece of xbox live money.
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Not sure how you come to this conclusion considering the games available on the service. Even the example of Activision and Microsoft doesn't line up with your speculation of small devs getting worse deals.
 
DopeyFish

DopeyFish

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Oct 25, 2017
10,822
noeybys said:
All this tells me is, how much a studio can profit from having their games on gamepass depends on how well they can negotiate with Microsoft.
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well, there's a curation aspect to it

paying for development costs means MS is going to be more restrictive on that, of course.

so having a release history... having working code, etc... having a definable plan with no runaway costs. It would be a contract.

But in the context of things, there would be only so much money going around for curated work (right now) but as I've said before in other threads when Game Pass grows, the amount of prepaid development cost projects are going to skyrocket as subscriber counts grow. The financials would kind of reverse and then MS would then start acting like a movie studio instead of a game studio. Imagine screenplays but for games.
 

Deleted member 6235

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Oct 25, 2017
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smurfx said:
big publishers are the ones getting the good deals while they probably play hardball with smaller developers. same way activision forced microsoft to give them a piece of xbox live money.
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That doesn't seem really true based on a lot of statements from indie/smaller developers. There's a lot of examples, but this one from the solo dev of She Dreams Elsewhere paints a pretty good picture of these deals:

Following a successful showing at the open house, Gooden was offered a Game Pass deal in October. Though he's unable to talk details, he says it was "pretty huge" and "still the biggest financial deal I've ever gotten, to the point where I had to ask them to repeat the numbers on the phone call."
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"Until that point I'd been bootstrapping," said Gooden during his GDC talk. "The game was funded out of pocket through videography gigs and other one-off hustles. I was also doing publisher negotiations at the time too, and the Game Pass deal allowed me to fund the rest of the game, make it profitable, and still do everything I wanted to do with a publisher, without having to get a publisher."
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Chance_Boudreaux

Chance_Boudreaux

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Oct 27, 2017
777
I don't remember which episode it was, but Mike Bithell spoke about Game Pass payments in an episode of Play, Watch, Listen. What he said goes in line with Phil's reply. Apparently in some cases the developer will get paid enough to cover the cost of the game in question AND their next game. Apparently they're very generous, especially to indies.
 
sacrament

sacrament

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Dec 16, 2019
2,119
spacer said:
Where did I say we're owed anything? I am simply curious to know what those numbers are, and Phil rephrasing those deals, in generalities, again for the hundredth time doesn't add anything to the Game Pass conversation. That's my point. I don't ever expect to find out how much money exchanges hands between Microsoft and developers for GP deals. That doesn't mean I don't want to know.
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Why do you want to know? Are you into accounting, etc? These are legal contracts that are under strict NDA, and key to how MS and their partners operate. I am positive Sony would like to know too, and any other competitor.

I understand the interest but the responses you are getting highlight a level of naiveness that makes it sound like you're entitled to something which you definitely can't have unless you work at these companies (and still cant share). Surprised we even got this level of transparency - it's pretty great.
 
Biggzy

Biggzy

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Oct 27, 2017
2,929
Browser said:
Why wouldn't it be legal?

It sounds perfect to me. Flexibility for partnership deals that accommodate each dev's needs. and MS gets to have a service with over 100 games.

Way better than "the deal we can offer is X. Take it or leave it"
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I think the user is being sarcastic lol.
 
Sangetsu-II

Sangetsu-II

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Oct 26, 2017
2,512
Definitely not a profitable model for MS if most games are pay me now deals. But very good for gamers and devs. Makes sense why they want as many subs as possible to finally break even, TV app coming next year let's see if everybody gets on board.
 
Lobster Roll

Lobster Roll

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Sep 24, 2019
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spacer said:
I'm not saying they SHOULD or that it would be a good idea. I'm just saying I want to know. All of this nebulous talk about what the deals are like are basically pointless without that data.
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Are you familiar with contracts & agreements? I am not asking maliciously, but I'm genuinely curious. Why do you think the general public would be privy to this information?
 
spacer

spacer

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Oct 30, 2017
1,976
sacrament said:
Why do you want to know? Are you into accounting, etc? These are legal contracts that are under strict NDA, and key to how MS and their partners operate. I am positive Sony would like to know too, and any other competitor.

I understand the interest but the responses you are getting highlight a level of naiveness that makes it sound like you're entitled to something which you definitely can't have unless you work at these companies (and still cant share). Surprised we even got this level of transparency - it's pretty great.
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Do you ask the same questions when people want to know about NPDs? Or concurrent player counts? Or literally other other metric about games that can be discussed? No I'm not "into" accounting. I just think in a thread literally titled "Phil Spencer talks about how deals for games on Game Pass work" we'd, you know, have data to actually talk about it.
 
tatotiburon

tatotiburon

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Oct 27, 2017
378
Killa
K' Dash said:
is this even legal?
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Prine

Prine

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Oct 25, 2017
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spacer said:
Do you ask the same questions when people want to know about NPDs? Or concurrent player counts? Or literally other other metric about games that can be discussed? No I'm not "into" accounting. I just think in a thread literally titled "Phil Spencer talks about how deals for games on Game Pass work" we'd, you know, have data to actually talk about it.
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Thread is about how it works, not how GP performs. Don't need detailed numbers to understand the strategy, which is all this is.
 
StrangeChatwin

StrangeChatwin

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Oct 25, 2017
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I have to say, it's pretty fucking cool and refreshing to have a head of brand have casual and open conversations about what goes on behind the scenes from a deal and financial standpoint.

I'm too accustomed to boneheaded decisions, complete silence and zero transparency from the big three.
 
Cat Party

Cat Party

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Oct 25, 2017
10,541
StrangeChatwin said:
I have to say, it's pretty fucking cool and refreshing to have a head of brand have casual and open conversations about what goes on behind the scenes from a deal and financial standpoint.

I'm too accustomed to boneheaded decisions, complete silence and zero transparency from the big three.
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Don't forget all the gaslighting we dealt with, and still deal with to this day. "Our customers don't want X feature," "We don't have Y on our service for the safety of our players," etc.
 
Chippewa Barr

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Def surprised me they foot the bill for the whole production sometimes.

I wouldn't be surprised if the engagement numbers are huge in games with microtransactions as well.

Even myself, I haven't bought a game on Xbox platform since RDR2 came out on the One X in like 2018...but...I have bought DLC for a game on Game Pass (Minecraft Dungeons specifically) cause my GF and I burned through it and wanted some more afterwards.

I imagine a lot of money comes from here too, which no doubt is negotiated separately.

mazi said:
1 2 3
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Lol I knew the meme, but never knew the exact posts it came from. That person's post history says everything...
 
sacrament

sacrament

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Dec 16, 2019
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spacer said:
Do you ask the same questions when people want to know about NPDs? Or concurrent player counts? Or literally other other metric about games that can be discussed? No I'm not "into" accounting. I just think in a thread literally titled "Phil Spencer talks about how deals for games on Game Pass work" we'd, you know, have data to actually talk about it.
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Deal structure, which he's talking about, is incredibly interesting and is data to talk about. And some of these details are new - particularly their payments/production of games which not only get on GamePass but also externally through other retail platforms like Playstation, etc.

The actual financials are not relevant (you don't need to know margins, or how it impacts their top or bottom line). And it's different than statistically understanding of sell-through, etc. which they are not obligated to share if it's not relevant to their successful or to their shareholders. In this case, it's really rare for them to talk about the deal structures but specifics are unnecessary.
 
Scottoest

Scottoest

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Feb 4, 2020
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smurfx said:
big publishers are the ones getting the good deals while they probably play hardball with smaller developers. same way activision forced microsoft to give them a piece of xbox live money.
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This makes no sense, because games from big publishers are by and large not the games Microsoft has tareted for day-and-date deals, etc. When it comes to games from big publishers, it's generally games coming many months after release to give them a second wind, or deals for part of their back catalogue.

There's also the minor observation that smaller developers have actually spoken about their experience with Game Pass, and overwhelmingly were positive about it.
 
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