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Xbox FY21 Q3 earnings : Gaming revenue up 50%, Xbox content and services revenue grew 34% & Xbox hardware revenue grew 232% driven by Xbox Series X|S
- Thread starter JINX
- Start date
Anyone who opts for this interpretation must have fell into a coma around 2013, just woke up and the first thing they did was post in this thread.
140 MAU for Minecraft is bonkers. Almost 1 in 55 living humans log into Minecraft every month. Think about it.
Bonkers.
Bonkers.
We all know exactly why you, and other people, want profit numbers
Mat's the kind of guy who clear things up and state exactly what he meant
Not that certain people will read that or believe it lol
I'm just saying the 2 interpretations I see people taking from the tweet. Clearly the 2nd one is correct (though his tweet is needlessly cumbersome)
I mean this is great results for sure. But I don't know how you came to that conclusion based on these number.
How is it confusing lol?
Game Pass isn't sustainable, it's growing.
I think PS5 will always continue to Outsell Series S/X, If ms get closer bc they deliver, the impact will be in minimum +2 years imo.
The first indication will maybe be at the end of 2021/early 2022 if Starfield,Halo,FH5 is for 2021 and we see a consistant significant growth for Q4 & Q1 2022.
But PS5 is really strong here in Europe and that why the difference is quite massive in global sales.
In the US they got a really good shot ! Not sure about worldwide though.
I think Matt posted that tweet to confuse and troll alot of people. Yeah we know if Gamepass doesn't grow in users, it won't grow at all. Also GP viewership continues to climb. Question alot of people and myself are asking what's the point where GP starts raising tve price. Eventually Netflix had to raise its monthly price as more competitors came into the streaming wars and Netflix producing more exclusive content. Is the GP model sustainable long-term?? Who knows, guess we'll see in 5-10 years how its doing.
My interpretation as well. They have to continue delivering content to drive interest in their platform. I think they have a pretty good opportunity to do so with the amount of investments that they are putting into the platform but content is king for along of gamers and non-gamers. I think they will make another decent sized but not publisher sized acquisition before the year is over to continue the influx of content.
Not if the costs are going to drive even more revenue in the future......
I don't think we need to worry about Xbox's financial health.
Safe to say that MS/Xbox is not that interested in Europe. The demographics there do not show much potential for future growth. If anything, the bet on Xcloud points to South Asia and South East Asia being higher up on their radar (for example, their partnerships with South Korea's leading telecom)
You have to invest to grow.
They have Azure servers througout Europe, why would anyone suggest they are not interested in that region?
I was just responding to the contention that Xbox cannot get close to Sony in Europe. I think MS is going for market leadership in other markets.
I totally agree they will continue to have a strong presence in Europe without the pressure/intention to try to 'get close' to Sony or Nintendo
Not disputing either point. Just pointing out gross revenue isnt a very good metric to judge the health of the xbox division.
That really the big problem for me.
Since 2014 the Europe was poorly supported.
In 360 era, there invest a lot in marketing/coms/partnership etc... If I remember well in France I saw almost more Xbox 360 / Kinect ads than PS3 and wii around 2010-2013. Today may be I only see 1 XSX/S ads and it was for AC Valhalla.
I don't understand what they playing while there's Game Pass to sell to an audience. Their strategy forces them to be more international than ever so they need to show a support in countries where they have struggled before.
gaining marketshare is one thing, the ps3/xb360 scenario is another
It's good to know the xbox division is doing well because it means more investment from MS into gaming. Their goal of AAA games every quarter is looking more and more likely now.
with GP Xbox will need to take Europe seriously. cos the potential for growth with the service is there..
Xbox is poised to do much better than they did during the Xbox One era. anyone not seeing this is........ in denial?
Yup. I expect a couple more acquisitions. GP will need to remain well fed to enable it sustain and even surpass this growth.
Nothing confusing about it, as both statements are true.
It isn't "sustainable" in the same sense that Netflix's model isn't, and it isn't meant to be in its initial phases.
It a (probably huge) loss leader, but it is also meant to be a growth leader, and as long as it grows it'll be fine for MS to dump money in it.
I don't disagree about the importance of 1st party titles. But I think more for NARRATIVE than for sales. (Not that sales are bad).
Let's say a game does crazy numbers and sells 40M copies in a year!!! Oh and EVERY single copy at $70. That's even better than current record holder Animal Crossing (30M sales in 9 months at $60 - so let's say 35M over the year). Spider Man, the best exclusive ever on PlayStation, has done 20M lifetime - less than that in 1st year and not all at full price.
Ok, well PS+ has 45M subs @ $5/mo. Matches that INSANE hypothetical revenue over that year. It matches AC:NH in 9 months (again, best console exclusive ever). It matches Spiderman's lifetime revenue IF every copy were at full price in just 5 months. You could release a TLOU2 in the same year and not match that revenue (let alone the fact that TLOU2 probably cost a LOT more to make than maintaining servers for online.)
So GP today has almost 25M subs @ average of ~$10. You'd need to sell over 40 million copies of first party games at $70 to match that annual revenue. IE: it's likely ALREADY making more revenue than Sony 1st party. When it gets to 30M? Matches PS+ at 45M? Grows the industry and hits 100M?
Anyway. Not that any of that matters. 1st party remains important either way. I just think we can sometimes handwave the scale when we want to hype up exclusives, but neglect to do that for Game Pass.
Ok, well PS+ has 45M subs @ $5/mo. Matches that INSANE hypothetical revenue over that year. It matches AC:NH in 9 months (again, best console exclusive ever). It matches Spiderman's lifetime revenue IF every copy were at full price in just 5 months. You could release a TLOU2 in the same year and not match that revenue (let alone the fact that TLOU2 probably cost a LOT more to make than maintaining servers for online.)
So GP today has almost 25M subs @ average of ~$10. You'd need to sell over 40 million copies of first party games at $70 to match that annual revenue. IE: it's likely ALREADY making more revenue than Sony 1st party. When it gets to 30M? Matches PS+ at 45M? Grows the industry and hits 100M?
Anyway. Not that any of that matters. 1st party remains important either way. I just think we can sometimes handwave the scale when we want to hype up exclusives, but neglect to do that for Game Pass.
Heh. Insane. If Minecraft or Teams were countries, they'd be #8 or #9 globally, about the population of Russia.
Roblox has 200M MAU. INSANE. So.. I guess I should take back what I said earlier about exclusives, huh? haha.
The interesting thing about Game Pass is that as it grows users, it also grows its profit margin. There's a limit to its costs. It doesn't cost any more to add a user to Game Pass. The deals are already signed! The 1st party games are already being made! They're digital goods, all you do with Game Pass is change the entitlement. Eventually, you'll need to add new datacenters for streaming or delivery, but that's abstracted and led far more by the Azure team than by Xbox.
Hence, I don't think they're under pressure to raise prices. It would seem to make more sense to get as many users as possible, because that's how you bring relative costs down, rather than trying to squeeze more out of fewer users. I don't really think that trying to compare Game Pass's pricing to Netflix's is that useful personally.
And ultimately, I just think they're in a much more advantageous position than Netflix.
Netflix can't monetize its movies and shows the same way that Xbox can with games.
Also, MS does not need Game Pass to fund 100% of 1st party development. MS can fund some of that itself. It always has. Netflix cannot do that. All of their sub money must fund all of their development and more.
Netflix didn't use to be a content creator. It needed to partner and build up its own capacity to get there. While Xbox has had to beef up its operations significantly, a lot of that initial groundwork was done. That's a big cost Xbox need not worry about.
Game Pass's library is more curated, by design, than Netflix's. They don't necessarily need the same rabid MOAR MOAR mentality of streaming video because games simply take longer and are much easier to enjoy repeatedly. Thus, they don't make THAT many deals in a year, and those deals often replace games that leave. The spend is entirely arbitrarily set by Microsoft and they can adjust as they desire or need. There's a built in limit of saturation, where you don't want the whole library to meld into a sea of nothing. So once you hit that limit, there's no reason to spend more on 3rd party content deals.
Also, MS does not need Game Pass to fund 100% of 1st party development. MS can fund some of that itself. It always has. Netflix cannot do that. All of their sub money must fund all of their development and more.
Netflix didn't use to be a content creator. It needed to partner and build up its own capacity to get there. While Xbox has had to beef up its operations significantly, a lot of that initial groundwork was done. That's a big cost Xbox need not worry about.
Game Pass's library is more curated, by design, than Netflix's. They don't necessarily need the same rabid MOAR MOAR mentality of streaming video because games simply take longer and are much easier to enjoy repeatedly. Thus, they don't make THAT many deals in a year, and those deals often replace games that leave. The spend is entirely arbitrarily set by Microsoft and they can adjust as they desire or need. There's a built in limit of saturation, where you don't want the whole library to meld into a sea of nothing. So once you hit that limit, there's no reason to spend more on 3rd party content deals.
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Congratulations for the gaming industry :) Next Quarter should be another record with Bethesda part of the picture 😁
There's still a huge difference between doing better than the Xbox One era (pretty much anyone will agree that the Series X/S will do better than the XB1) and doing as good as the Xbox 360/PS3 gen, which was effectively a tie when it comes to hardware sales.
Shit, no wonder the are munching up devs and publishers. Gamepass is going to be their bread and butter in a few years and you can see they are preparing for that. Who's next on the acquired list?
But they were still really low, seeing as how the baseline had been.
This gen will be so interesting. Phil and Satya are truly the best things to happen to Xbox.
I am thinking some pub or dev that will help grow their PC side of things.
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These are record results for Xbox iirc, so I'd say it's better than "solid". Especially when there was no huge first party release. Holiday will be huge, if we really get Halo Infinite, FH5 and Starfield.
The reason is the developer and their pedigree. There are a few developers out there that whenever they release a game the release date results in events. Bethesda is one of those.
Then you must be pleased that Spencer said a while ago that they are running a profitable business.
MS isn't about console sales anymore (although they like them). People with PCs have no reason to buy an Xbox and MS is ok with that. I think in a few years we're going to start to see streaming only users. MS is all about making access to their games and GamePass as easy as possible. That's where the real money is.
A virtual tie seems less likely too based on the early trajectory. I agree Xbox is almost guaranteed to gain marketshare but maybe something more like a SNES/MD scenario?
A lot to unpack in this post.
First of all, Netflix is very sustainable. They are still in their growth phase but soon they'll have so much content they won't need to be spending as much on new stuff. There will be more than any reasonable person can get through.
Second, he's not saying that Game Pass is just a place for MS to dump money into. He's saying it's not sustainable because that implies just maintaining a certain level, he's saying it's actually more than sustainable, it's actually a growth business.
Game Pass is not sustainable, but a growth business.
You can't grow without spending money. Lots of money is going into Game Pass. If GP doesn't grow, you aren't making money.
GP is inherently unsustainable as Microsoft needs to pump more money into it so that it grows beyond what it's at now so that they can keep putting more money into it, cycling growth and money.
If Game Pass saw no growth, it'd get canned. But it is, so Microsoft will continue to invest.
You can't grow without spending money. Lots of money is going into Game Pass. If GP doesn't grow, you aren't making money.
GP is inherently unsustainable as Microsoft needs to pump more money into it so that it grows beyond what it's at now so that they can keep putting more money into it, cycling growth and money.
If Game Pass saw no growth, it'd get canned. But it is, so Microsoft will continue to invest.
