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[Ozriel]

I haven't compared Game Pass' time-to-profitability to Netflix and Spotify because it isn't possible to do so since we don't even know if Game Pass is profitable. Since we don't have actual data the only thing we can do is look at other companies who have gone through similar subscription models. I never said it was a 1:1 comparison. It's just the closest we've got. My response for this wasn't even to you. It was towards another user asking why I personally didn't think they were profitable yet. Your opening response of "Christ" tells me that you're getting bent out of shape, and there is no reason for that.

You cited other subscription services like Netflix and Spotify, mentioned that their time to profitability was a long time and stated that that’s what you expect to see for all subscription services, including Gamepass.

If that’s not a comparison, I don’t know what is.

It's not a piece of information from which we can deduct success or failure. It's simply the product of number of subscribers (which we already knew) times the average cost of the service (which we also knew).

The only thing you can take from this thread is that some GAF users seemingly get very emotional with this subject and tend to jump to conclusions on both sides (which we already knew).

You knew the average cost of the service?

 

[Ozriel]

It's amazing. First party games would have to sell 50 million copies at $60 to get to $2.9 billion a year. They had zero first party games release this year and even if the subs failed to increase, they wouldve made almost $3 billion without their first party even lifting a finger.

For example, Sony sold 47 million first party games last fiscal year. This includes Ratchet, Returnal, MLB The Show, HFW and GT7. And not all of them at full price.

MS is doing better than Sony without actually releasing a single game.

Doesn’t work that way.
Revenue =/= profit.

 

[MacReady13]

Doesn’t work that way.
Revenue =/= profit.

Clearly Microsoft is paying no one to put these games on game pass, hence the amazing profitability! Playstation is doomed!

Seriously though, if this was the money making machine some wish it was, both Sony and Nintendo (and especially Nintendo) would be all over this model.

 

[FalsettoVibe]

10 pages in and everyone is still like.....

 

[StreetsofBeige]

Whilst your post is fine and makes logical sense, you do have to keep in mind we literally have people in this thread claiming that Activision Blizzard will 'pay for itself' in a couple of years, so they too ignore the asset value and think that somehow $69 billion profit will be made in the space of a couple of years and so people saying 'err no, it would take decades' are at least accurate to those types of claims.

If some people are thinking the profits from Activision (I think it's been trending at about $2.5B last few years???), then they are wrong in thinking it will pay for itself purely on profits. Even if profits ramp up, it'd take ages to pay off.

People taking into account "it will pay for itself in xxx time" is ok if they want to take that stance. But for you gaffers who dont understand payback and profits, there's a big difference between pay back on something that has a good inherent asset value, vs. something like.... if you buy a car for $50,000 how long will it take to cover that. Totally different situation as cars depreciate in value fast and you'll be lucky to get 50% of the buy price 5 years later.

As another take, if you buy a house for $1 million dollars. Although it might take 20 years worth or mortgages to pay it off and own it, it's not like the value of the home drops to $0 the second you buy it. It's still going to be worth $1 million the next day. If you get lucky and are living in a good area in an appreciating economy, your home might be worth $1.2 million a year later, sell it and you just made profit on it. And all you did was pay 1 year worth of mortgage on it.

 

[Sir Vilhelm]

1 million x 1000 = 1 billion..

 

[8BiTw0LF]

 

[mckmas8808]

Me waiting to see how much profit GP generated while watching the usual suspects pretend revenue is profit.

"THEY" don't want to talk about that though.

 

[akimbo009]

"THEY" don't want to talk about that though.

Who cares about profits? Revenue and POTENTIAL profit is king for wall st. Since it's a growing, new line of business revenue growth from here will dominate the evaluation - at some point profits will be expected but early days still, and $2.9 Billion in 5 years is a pretty fast growing business worth investing in.

 

[mckmas8808]

Who cares about profits? Revenue and POTENTIAL profit is king for wall st. Since it's a growing, new line of business revenue growth from here will dominate the evaluation - at some point profits will be expected but early days still, and $2.9 Billion in 5 years is a pretty fast growing business worth investing in.

Gamers should care more about profit, than revenue. Especially gamers that like to talk about the video game business on gaming forums. Why should we care about Wall Street?

 

[akimbo009]

Gamers should care more about profit, than revenue. Especially gamers that like to talk about the video game business on gaming forums. Why should we care about Wall Street?

Why should gamers give a shit about any of this? Are folks afraid of losing their games or something? I don't understand what you mean... But taking it at the face, why do they care about profits?

 

[phil_t98]

Gamers should care more about profit, than revenue. Especially gamers that like to talk about the video game business on gaming forums. Why should we care about Wall Street?

Gamers should care about games and not pretend to be wall st level accountants

 

[Ozriel]

Gamers should care more about profit, than revenue. Especially gamers that like to talk about the video game business on gaming forums. Why should we care about Wall Street?

You're never going to get profits. Getting Revenue via this acquisition scrutiny is actually a stroke of fortune, for those who are into the financial side of things.

Most of the rhetoric around 'profit' in this thread is being argued in bad faith. And you're knowingly amplifying one of the actors. Well done!

 

[DaleinCalgary]

Who cares about profits? Revenue and POTENTIAL profit is king for wall st. Since it's a growing, new line of business revenue growth from here will dominate the evaluation - at some point profits will be expected but early days still, and $2.9 Billion in 5 years is a pretty fast growing business worth investing in.

fucking rights,

I'm going to start up a bank that only makes change. If you come in with a $20 thats 3 fives, and five ones back to you.

Thats $20 pure revenue towards my bottom line.

 

[ReBurn]

Clearly Microsoft is paying no one to put these games on game pass, hence the amazing profitability! Playstation is doomed!

Seriously though, if this was the money making machine some wish it was, both Sony and Nintendo (and especially Nintendo) would be all over this model.

Did you miss the time when Sony made a 3-tier subscription model where two of those tiers are literally this?

 

[Gamerguy84]

It doesn't matter what profit is or isnt.

They have all the money in the world to keep doing this. We all thought they were crazy for giving away GP back in 17. They continue to do so and are spending billions on top of it. They keep sweetening the pot with EA pass, third party games, etc.

I wish they would get this friendly with their office suite.

 

[transformer]

Another thread where people don't understand the difference between revenue and profit

Didn’t Microsoft post like $70B in profit last year with a crazy margin? Yeah, revenue doesn’t equal profit, but are we going to pretend they don’t have profit?

 

[ChorizoPicozo]

Didn’t Microsoft post like $70B in profit last year with a crazy margin? Yeah, revenue doesn’t equal profit, but are we going to pretend they don’t have profit?

MS ≠ Xbox.

 

[Frank Horrigan]

Didn’t Microsoft post like $70B in profit last year with a crazy margin? Yeah, revenue doesn’t equal profit, but are we going to pretend they don’t have profit?

What the post above me and below you said. Microsoft and Xbox are different things.

 

[StreetsofBeige]

You cited other subscription services like Netflix and Spotify, mentioned that their time to profitability was a long time and stated that that’s what you expect to see for all subscription services, including Gamepass.

If that’s not a comparison, I don’t know what is.




You knew the average cost of the service?

Anti-Gamepass people's argument about sub plans and profits falls apart when many popular sub plans out there are losing money.

Spotify has never made profits ever. They still lose money even to this day. The service is still around and the songs keep growing. Gamepass has the backing of MS who have fully funded all Xbox stuff for 20 years and given what they do now are even more aggressive than ever. So for GP doom and gloomers, the only point they can harp on is that MS doesn't disclose full P/L statements for their GP sub plan, so they assume it's a doom and gloom scenario.

The goal posts already moved. It used to be GP is a bad service of $1 sales. Now that GP does $2.9 billion, notice how they all shut their mouths about sales and now focus on profits, which will always be undisclosed based on MS's transparency. They assume not disclosing it mean it's bad. But Sony doesn't disclose full financial statements for their PS+ service either, nor does even Apple for their 5 key product segments.... Macs, Phones Tablets, Watches, Services. The only Profit info you will ever see from Apple in decades worth of Wall St numbers is. You never know. Maybe Apple loses money on Watches.

Products profit
Services profit
Total profit

You wont see how the 4 hard goods profits split out as they combine it into one bucket. It doesn't mean the financials bad. They just dont want to disclose it to that granular detail. It's like every public income statement compacted into like 10 lines of data, when in reality something like costs can literally be like 40 lines of different costs which an employee wou'd see.

 

[Ozzy Onya A2Z]

Anti-Gamepass people's argument about sub plans and profits falls apart when many popular sub plans out there are losing money.

Spotify has never made profits ever. They still lose money even to this day. The service is still around and the songs keep growing. Gamepass has the backing of MS who have fully funded all Xbox stuff for 20 years and given what they do now are even more aggressive than ever. So for GP doom and gloomers, the only point they can harp on is that MS doesn't disclose full P/L statements for their GP sub plan, so they assume it's a doom and gloom scenario.

The goal posts already moved. It used to be GP is a bad service of $1 sales. Now that GP does $2.9 billion, notice how they all shut their mouths about sales and now focus on profits, which will always be undisclosed based on MS's transparency. They assume not disclosing it mean it's bad. But Sony doesn't disclose full financial statements for their PS+ service either, nor does even Apple for their 5 key product segments.... Macs, Phones Tablets, Watches, Services. The only Profit info you will ever see from Apple in decades worth of Wall St numbers is. You never know. Maybe Apple loses money on Watches.

Products profit
Services profit
Total profit

You wont see how the 4 hard goods profits split out as they combine it into one bucket. It doesn't mean the financials bad. They just dont want to disclose it to that granular detail. It's like every public income statement compacted into like 10 lines of data, when in reality something like costs can literally be like 40 lines of different costs which an employee wou'd see.

Tax obfuscation. Many gamers/posters don't see through it or understand it. All the large corpos do it and with the same shit accounting firms that enable them to get away with it.

 

[akimbo009]

What the post above me and below you said. Microsoft and Xbox are different things.

What's that matter? Same bank account, and companies use their profits to fund new ventures all the time. In fact, that's expected. Not really what point your making forcing a separation of their P&L when to a consumer it really doesn't matter.

It's like me giving a shit about Ford's profits because I drive one of their trucks... It doesn't matter.

 

[Frank Horrigan]

What's that matter? Same bank account, and companies use their profits to fund new ventures all the time. In fact, that's expected. Not really what point your making forcing a separation of their P&L when to a consumer it really doesn't matter.

It's like me giving a shit about Ford's profits because I drive one of their trucks... It doesn't matter.

It's late, I shouldn't have made the post because I don't have the energy or concentration to follow through with an explanation. Sorry

 

[akimbo009]

It's late, I shouldn't have made the post because I don't have the energy or concentration to follow through with an explanation. Sorry

Do more coke with your profits!

 

[Warablo]

That is a crazy amount of money even if we aren't talking about profit.

 

[Bumblebeetuna]

Hardly anyone in here is confusing revenue with profit. You can be happy to see it’s generating so much revenue and yet also understand that it’s not all profit.

 

[MacReady13]

Did you miss the time when Sony made a 3-tier subscription model where two of those tiers are literally this?

I'm sorry- how many brand new games are released onto Sony's sub service exactly?

 

[HeisenbergFX4]

Gamers should care more about profit, than revenue. Especially gamers that like to talk about the video game business on gaming forums. Why should we care about Wall Street?

I honestly don't care about their profits, I care about what I am playing

I don't think I saw many people applauding Sony's increasing the price of the PS5 and say we should care about their profit

 

[The_Mike]

I'm sorry- how many brand new games are released onto Sony's sub service exactly?

That just makes sonys service even worse compared to gamepass.

 

[BusierDonkey]

I don't care if Microsoft is making anything off Gamepass and I won't unless it causes a massive price hike or causes Gamepass to collapse and be shut down for being unprofitable. In the first case I'll unsub, in the second I'll play another way. Until then...

Some of you could play entire games in the time you fret online about a massive corporation profiting on something you aren't ever going to use.

 

[StreetsofBeige]

What's that matter? Same bank account, and companies use their profits to fund new ventures all the time. In fact, that's expected. Not really what point your making forcing a separation of their P&L when to a consumer it really doesn't matter.

It's like me giving a shit about Ford's profits because I drive one of their trucks... It doesn't matter.

Exactly. Companies can have different divisions with their own mini P/L statements, but it all rolls up to one corporate number with one balance sheet and one income statement roll up to disclose.

It goes to show how little business sense people have when you got a million publicly traded companies with their financials available from a few mouse clicks. All anyone has to do is skim some reports to get an idea what info is shown.

The whole theory of "every department is their own silo working independently and can only afford what they do" is such nonsense, someone doesn't even need to work in an office to know that isnt true.

You'd think after MS bought Bethesda for $7 billion a few years ago or MS buying LinkedIn for $26 billion, that would eye openers enough to know anything can happen.

 

[MacReady13]

That just makes sonys service even worse compared to gamepass.

Point is, if it was making massive profits for Sony they'd be doing it. They clearly don't have the cash to splash and lose hence why ONLY microsoft is doing it out of the 3 console makers.

 

[ReBurn]

Point is, if it was making massive profits for Sony they'd be doing it. They clearly don't have the cash to splash and lose hence why ONLY microsoft is doing it out of the 3 console makers.

What are you talking about? Sony is literally doing it with two of their three PS+ tiers.

 

[MacReady13]

What are you talking about? Sony is literally doing it with two of their three PS+ tiers.

Sorry but you're saying that I can grab the new God of war, day 1, on Sony's sub service instead of buying it at the shops or on psn? Is that what you're telling me?

 

[Iced Arcade]

So in two years Xbox divisions profits will be $79 billion?

of course, you would take that as 2 years and think "ya know...ima reply to dat cause a couple means 2"

my bad for saying a couple years.

 

[Trazyn the Infinite]

It’s amazing, console warrior calls console warrior a console warrior….
fascinating

Please, tell me which console I “war” for. Nintendo fanboys claim I am a Sony/Xbox Fanboy. Xbox Fanboys claim I am a Nintendo/Sony Fanboy. Sony Fanboys claim I am an Xbox/Nintendo Fanboy. I have been called such five times this week alone from each subsection of mentally midget console warriors.

Reality is I criticize and praise all platforms in equal measure. I don’t tie myself to a particular brand or box in a desperate bid to create a non-existent personality or reason to myself why I couldn’t buy/afford another platform. You, alongside the warriors liking that post should seek psychiatric help immediately.

What's truly desperate is downplaying Game Pass' massive success and coming into a thread that debunks your shitty narrative to scream "bu-but where's the profits? Wheres the exclusives?!?" and then tell all the people who are thoroughly enjoying Game Pass that they're the desperate ones.

You are as pathetic as the rest of your console warrior brethren in this thread. Not once did I mention anything about people being desperate, mentioning anything about profits (or revenue, before you try that strawman argument next), and I actively praised GamePass. You can criticize the lack of quality in exclusives and the poor release schedule of them while still praising GamePass as a whole. They aren’t one and the same thing - I know that is hard for your little warrior brain to wrap around, but I think you can manage it.

The crazy part is that Game Pass is doing so good and getting so much praise in what is most likely the last down year Xbox will have in a very long time, and it's making many of y'all visibly upset. I wonder what early 2023 will do to you guys when these massive games start dropping, the ABK deal closes and Family Game Pass launches. Gonna be a rough gen for some, it seems.

Again, I didn’t criticize nor am I upset about GamePass doing well. I don’t think you understand words or have basic reading comprehension.

 

[T0kenAussie]

Clearly Microsoft is paying no one to put these games on game pass, hence the amazing profitability! Playstation is doomed!

Seriously though, if this was the money making machine some wish it was, both Sony and Nintendo (and especially Nintendo) would be all over this model.

Nintendo didn’t even wanna know about online despite the bucket loads of cash Xbox made with live gold in the 7th generation them not doing something isn’t a big show of what will or will not work

But they are both at the least dipping their toes in to the waters with worse offerings from a value perspective imo but they are there with Nintendo locking virtual console behind tiers and Sony relying more on third parties and deep back catalogues

Will they ever copy gamepass 1:1? Maybe maybe not

Does that invalidate gamepass? No

Does gamepass invalidate them? Also no

 

[Amiga]

Doesn't come close to making up for the sales of standalone games. This is the revenue of 3-4 exclusives for Sony, who now make revenue from both PS+ and standalone games.

 

[StreetsofBeige]

Doesn't come close to making up for the sales of standalone games. This is the revenue of 3-4 exclusives for Sony, who now make revenue from both PS+ and standalone games.

Which PS exclusive games make up $2.9 billion in one year?

 

[akimbo009]

Doesn't come close to making up for the sales of standalone games. This is the revenue of 3-4 exclusives for Sony, who now make revenue from both PS+ and standalone games.

Feels like you need to learn more about recurring revenue versus repeat revenue... And which is preferred for businesses.

 

[Jigsaah]

Can't we just say good job Microsoft and appreciate the fact that this means Gamepass is here to stay more than likely? It's great for all consumers.

GAF:

Ok, I'll just go fuck myself.

 

[Ozzy Onya A2Z]

Doesn't come close to making up for the sales of standalone games. This is the revenue of 3-4 exclusives for Sony, who now make revenue from both PS+ and standalone games.

Just wait for those US$70 games getting MTX/GaaS as well. Good times ahead.

 

[Helghan]

The people asking for the profit numbers... Tell me you know nothing about business without telling me you know nothing about business.

Game Pass is a story of scale. If the the number of subscriptions grow, the revenue and profit will grow too, since the cost will stay very similar. Therefor they don't care about the profit at the moment, they need to make sure their subscription numbers go up.

 

[jhjfss]

Just wait for those US$70 games getting MTX/GaaS as well. Good times ahead.

GT7 already here. No need to wait.

 

[DenchDeckard]

I'm sorry- how many brand new games are released onto Sony's sub service exactly?

Point is, if it was making massive profits for Sony they'd be doing it. They clearly don't have the cash to splash and lose hence why ONLY microsoft is doing it out of the 3 console makers.

How much profit is Sony making from their exclusives? please provide the information so we have a clear understanding and something to compare this to. I haven't seen anyone who argues about profits give us any idea of what the average big exclusive makes profit wise so we have any idea of what the baseline is and what could be considered a success. Until that's provided in dont know why anyone is talking about profits about anything here.

Even provide revenue for sonys titles?

 

[zedinen]

Microsoft Gaming, like Sony Music, is bleeding cash due to a low CF/CapEX ratio.

It's possible for a business to be both profitable and have a negative cash flow hindering its ability to survive on its own.

Sony Music posts accounting profits, yet lives off PlayStation.

Microsoft Gaming, like Sony Music, is living beyond its means because someone else is footing the bill.

A new CEO could put an end to the cross-subsidization or overspending in poorly performing divisions ...

 

[Skifi28]

I haven't seen this amount of poop flinging since I visited the zoo a few years back.

 

[oldergamer]

Doesn’t work that way.
Revenue =/= profit.

And you think there was no profit in that 2.9 billion? You think its still not a sustainable business and or losing money

 

[trikster40]

Generated 2.9B, that doesn’t say profit, so it’s not taking into account money spent on GP.

Question is: do you think MS spent more than that on GP titles, personnel, maintenance, etc?

 

[Amiga]

Feels like you need to learn more about recurring revenue versus repeat revenue... And which is preferred for businesses.

Sony make money on both. separate revenue from standalone games means more funding for standalone games.

Game Pass is a story of scale. If the the number of subscriptions grow, the revenue and profit will grow too, since the cost will stay very similar. Therefor they don't care about the profit at the moment, they need to make sure their subscription numbers go up.

It will take over 20 years for MS to makeup the cost of the Activision deal alone.