My armchair analysis and spidey sense tells me it seems it doesn't matter how old or new the current platform is, if next gen is around the corner and being hyped up by the platform holder itself, people are gonna stop buying consoles until then.
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Xbox FY20 Q2: Software & services revenue down 11%. Hardware revenue down 43%. Overall gaming revenue down 21%.
- Thread starter Raylan
- Start date
My armchair analysis and spidey sense tells me it seems it doesn't matter how old or new the current platform is, if next gen is around the corner and being hyped up by the platform holder itself, people are gonna stop buying consoles until then.
Saying the number is between 6-12 million is a big enough range to label it guessing. We have no idea, and that's because they don't want us to know. If they're willing to say "millions" they would most certainly be willing to say "more than 10 million" if they could.
Sony apparently has a million plus PSNOW subscribers, but then again they also didn't give away long term subscriptions for a dollar. I'm only going there because there seems to be a desire amongst some to suggest these hidden Xbox numbers are always higher than we think they are, while the other company continues to report big numbers and doesn't keep us guessing.
I haven't bought a game since Death Stranding. I've reached the point where I'm done with this gen.
I've been hearing that number since forever. It must've gone beyond 45M by now.
And yet you compared Game Pass to Netflix despite the fact that Game Pass as a service has additional revenue streams aside from the subscription dollars. Make up your mind.
Netflix and Game Pass are a hell of a lot more similar to each other than Netflix is to Amazon.
They had their first decline in 2016 when they released Xbox One S
I don't think that's guessing at all. If they had never said anything, it would be completely logical to say "well MS has fewer consoles than Sony and Game Pass has fewer games than PS Now, so they probably have around the same or less than PS Now." Instead it's pretty obvious that they're way ahead of Sony here because of the info they've shared.
If you think the Game Pass numbers are lower than 6 million then, yeah, these hidden numbers are probably higher than you think they are. It's not a weird "desire amongst some to suggest..." anything. It's just logic. Why do you have such a strong desire to suggest it's lower despite the evidence?
"Funny corporate math" = basic accounting, or GAAP (Generally Accepted Accounting Principles). Which every public company in the US uses.
StudioTan is correct in what he says, and there is no "semantics" or anything about it. You can be a profitable company that still takes on huge debt to increase growth. The payments on that debt are what will come out of your revenue to affect profits.
You may need to adjust what you think "profitable" means. Or take an accounting class.
I mean, that's the problem with being vague. Can't blame the people to spin it how they want to fit their agenda. That's just how people were, are and will be. It will probably get worse in the next months until launch and I doubt it'll get better after launch, especially if Microsoft will be more competitive than this gen.
Isn't that what Amazon did for many years? Investing all their money into growth?
I guess so, according to what others are saying. I haven't followed Amazon's financial statements but it would make sense.
Some companies like to sit on their cash. Others don't, and use it to try to grow their business further or diversify.
What evidence are you referring to? "Millions" followed by assumptions?
I understand this is an accepted accounting practice.
My main point was that streaming/subscription services rely on companies continuing to spend to maintain customers, and when that spending is on credit there are limits to how long you can keep that up.
Ah so "transaction volume" would refer to MTX rather than game sales?
I don't have an opinion either way on what is sustainable for a streaming service. It's all relatively new types of businesses.
Netflix is banking on growth continuing to support their spend, though, since they're planning on spending $17 billion or more this year alone to develop content. Can't say who is right in this situation.
I will say though, that content does matter in terms of which subs people are going to shell out for. That's why I believe MS also has this strategy in mind with their recent purchases of studios and Gamepass and all that which is being discussed.
Invest to grow your user base, get the content that makes them join and want to stay, and continue to grow your business doing this until it hits that critical mass and suddenly you're raking in the money monthly/yearly.
They believe in the cloud gaming future and Xbox Game Pass. If Microsoft was still just a console manufacturer, I don't see why they'd keep it around.
Xbox is in an enviable position to have a parent company that is willing to burn money (billions) on it without expectation of a return.
Yeah like... xbox is profitable. Just because its not doing as well as its competition doesnt mean that the division is in the red
they think every strategies will gain you money instant
they lose money now but they will gain it later after years
because they focus in service more
Being profitable isn't always enough though. You also have to be relevant and thankfully the Xbox is well known.
All that'll matter to them is that subscription growth. The more they can hook before Sony or Nintendo does their own, the better for them.
I do wonder about how Gamepass makes it's money though and whether it follows the same 'whales' model where there is a small percentage who sub and spend ridiculous money on full price games and DLC too.
They make a net loss with me and my wife as we are now buying less games, and the games we do want we'll only sub for the months we want. So I've gone from spending ~£100+ a year in their ecosystem to a small fraction of that. Given that Microsoft are paying the developers up front for GamePass games (I believe, I could be wrong) then it's an interesting situation.
I'm surely in the minority.
I do wonder about how Gamepass makes it's money though and whether it follows the same 'whales' model where there is a small percentage who sub and spend ridiculous money on full price games and DLC too.
They make a net loss with me and my wife as we are now buying less games, and the games we do want we'll only sub for the months we want. So I've gone from spending ~£100+ a year in their ecosystem to a small fraction of that. Given that Microsoft are paying the developers up front for GamePass games (I believe, I could be wrong) then it's an interesting situation.
I'm surely in the minority.
At this point it's easy to believe MS is in a burning money part (also known as "investing"). I mean all those XGS are not being bought for free or staffed for free you know.
Doesn't mean it's something bad for MS to do. This will all turn into money later on if all goes well.
For a big successful business like MS it comes down to opportunity cost though. Even profitable investments look bad if other more profitable opportunities were available.
If other more profitable opportunities are available then microsoft has more than enough money in the bank to pursue them, they dont need to cut xbox to get money to do that
It's really disappointing that even after all these years and all these pro consumer decisions of recent and listening to their audience there is still a rabid band of people wishing MS/the Xbox brand ill
The chart of Microsoft's share price over the last five years disagrees.
thank you for stating what needed to be said. some of the posts I read here are pure insanity.
Lmao xD. poor MS. :(
Lol. He was being sarcastic.
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I wouldn't call anything "pro consumer" as long as Microsoft Store (the Windows 10 Store) is the mess it is. Microsoft needs to stop pushing their UWP crap already, it hurts Game Pass value a lot. I regret doing that Gold-to-Ultimate conversion because I think the service sucks in its current state.
I'll use my two remaining years of GP to play some cheap Microsoft games but there's zero chance I'll ever pay full price for it if nothing changes.
We must be using different gamepass apps because the one I use on my laptop is responsive and easy to use as a launcher. Also they are releasing their majors on steam aswell if people want to pay for them. I guess you could get gamepass on steam but that would require valves authority aswell
As long as it works and all you want to do is play, you will probably have no issues.
But the moment you need to modify something or the app fails for some reason, you're in trouble. Microsoft Store (and Game Pass) locks games inside folders that you cannot mod in any way, giving permission errors if you attempt to do anything. And there have been many reports of the app just failing to delete a game - and because you can't do anything to the folders, you can't delete anything manually either and the disk space is lost forever.
I think Microsoft really aren't telling the truth when it comes to game pass and how it affects their sales.
Maybe I'm wrong but I have a feeling that it costs them a lot right now and it's part of a very high risk plan that may work out for them in the next gen if it gives them a strong start.
Maybe I'm wrong but I have a feeling that it costs them a lot right now and it's part of a very high risk plan that may work out for them in the next gen if it gives them a strong start.
The OP is really short on information. Perhaps Raylan wants to add more information to put in other points, too?
Also, this quite shows that console sales remain extremely important if they want to keep Xbox successful. Microsoft would not have made any of the Fortnite and RDR 2 money if they hadn't sold consoles to people. Microsoft executives can say stuff like "the future is in ecosystems" all they want, but on PC those two games are on their own launchers and make Microsoft no money.