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Deleted member 7537
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Is on my Netflix account. And has the N of Netflix Original so I guess it’s exclusive (at least outside the US)
Business aspects of Subscription Game Libraries [Xbox GamePass, PSNow]
- Thread starter iroboto
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Is on my Netflix account. And has the N of Netflix Original so I guess it’s exclusive (at least outside the US)
hmm.. I actually really liked Discovery. Picard was a bit more disappointing to me.
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Deleted member 7537
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Way off topic but I thought 1st season was good. A liked the arch story behind the season, however it had some flaws and in Season 2 most of the good parts went away and the bad parts stayed
("dude, if we merge this black hole with these antimatter particles, we'll create a ripple tunneling effect that will save the whole galaxy)
Might be getting some news on the future of Game Pass...
So Geoff Keighley had an interview with Ryan McCaffrey & Geoff compared Game Pass to basic cable.
Looks like there might be premium packages(like HBO or Showtime for cable) for Game Pass. EA Access was floated as an idea where you get all of those titles on xCloud. There's also been rumblings that Sega may be doing something similar for their titles.
Tommy McClain
So Geoff Keighley had an interview with Ryan McCaffrey & Geoff compared Game Pass to basic cable.
Looks like there might be premium packages(like HBO or Showtime for cable) for Game Pass. EA Access was floated as an idea where you get all of those titles on xCloud. There's also been rumblings that Sega may be doing something similar for their titles.
Tommy McClain
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I think what GamePass really has going for it is that it's very simple to understand how good a deal it is for the price. Don't fuckup GamePass, Microsoft! You don't need a mind-boggling array of options like you do for Windows 10 where no bastard can work out which version available to them is the cheapest for what they want to do. Communicating things isn't your forte.
I think what GamePass really has going for it is that it's very simple to understand how good a deal it is for the price. Don't fuckup GamePass, Microsoft! You don't need a mind-boggling array of options like you do for Windows 10 where no bastard can work out which version available to them is the cheapest for what they want to do. Communicating things isn't your forte.
The problem is that the larger Game Pass gets, the more publishers will take issue with it. They need to embrace larger publishers like EA, Ubisoft, Sega, etc or the market will fragment & we will have the same problem we have now with Netflix, HBO Max, Disney+, etc.
Tommy McClain
Don't fuckup GamePass, Microsoft! You don't need a mind-boggling array of options like you do for Windows 10 where no bastard can work out which version available to them is the cheapest for what they want to do. Communicating things isn't your forte.
I hope they can present a consistent Game Pass
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Bingo. This is what I think of as the PS+ (PlayStation Plus) paradox and why I have reservations regarding Microsoft's ability scale profitability as the number of users increases.
When Sony launched PS+ early in the PS3's lifetime, it was a pretty good deal. The "free" (*not free) games were really decent back when PS3 console sales were low because for devs/publishers it meant that including your game in the monthly PS+ "free" games package meant you were losing only limited potential sales. The quality and/or timeliness (the period after launch in which a game may appear) got worse as PS3 sales grew because Sony couldn't simply accord to underwrite lost potential sales of for was an increasingly growing user base.
We know GamePass isn't hugely profitable because Microsoft have said so. We know from devs, particularly indie devs, who have games in GamePass that it's a really good deal for them as Microsoft compensate them up front regardless of the number of times a game is played. This business model does not look to scale well in terms of costs because as the numbers of users increase, the compensation needs to as well and it's detached for actual download/play-rates - not to mention to need to scale infrastructure - and Microsoft are tossing in xCloud as well.
I really applaud what Microsoft are trying to do, but whether or not it's a sustainable business model is the biggest question. There is no doubt that GamePass presents tremendous value for gamers and that in itself should tell you that somebody is eating those costs. We know that is Microsoft. I can't see how they can expand the GamePass user base without having to change the way GamePass works, either less games on offer or higher costs, or maybe a bit of both. That's not to say it won't still be a great deal, after all there are only so many games you can play in a month but less games equates to potentially less appeal.
It'll be interesting to watch Microsoft try to create a game subscription business out of nothing. I.e. they're not taking an existing business model and improving on it, they are literally trying to create the industry's first profitable game scubscripton business model.
I think it’s the wrong way to look at it. MS has been around for a while and are as large as corporations get. All projects will need to be released budgets which means Game Pass contracts are budgeted well in advance.
So you line up what you want and then you leave a remaining budget for unexpected run over. If there isn’t any run over and you have more than enough to afford more games by end of quarter you pick up some smaller titles.
Game Pass is not profitable today, but the budget is certainly capped. There’s no way they spend all their budget and then overspend because players play more. It just won’t happen like that and not reflective of how large corps operate
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Microsoft will hopefully be mindful of what happened to Sony in the past 20 years. In terms of revenue and business Sony was a much larger company than Microsoft. In the earlier 2000s many of Sony's business units began losing money and Sony propped them up with income from profitable business units. This culminated in the Sony financial crisis shortly after the launch of PlayStation 3 where over the course of around three-to-four years Sony reviewed the profitability outlook of all of their business units and either killed, sold or reformed them. Business is precarious.
Microsoft's success was once predicated on selling licences for new versions of Windows every few years, with MS Office being a close second. To get a sense of perspective, the area of computing where Microsoft clearly leads the market is desktop operating systems and that has very little revenue because of their strategy for Windows 10. This is not to say that Microsoft are doomed but just to illustrate how quickly things can change. 20 years ago Apple were months from being bankrupt, they've had a meteoric rise by arguably staying just ahead of the mainstream technology curve and targeting their products at people with money to spare.
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I think this is the wrong way to look at it. Look at IBM, Dell, HP, Compaq and every other massive IT company who operated like this and collapse into itself. Being around for a long time a bad metric. This is what almost did for Apple and resulted in Sony being a shadow of its former self.
What drives profit is the here and now, not what you did in the past 10, 20 or 30 years. That's history, nobody cares.
And when income from increasing number of subscribers results in all of the publishers/developers want more and more recompense for potential lost sales, what do you do?
What Microsoft are doing now is paying devs in advance of knowing how popular their games may be. This does not seem remotely sustainable, certainly not if Microsoft want a wider variety of games included to widen appeal, which is editable. We know Microsoft aren't making a lot (if any) money from GamePass now and they are obviously being generous with devs regarding payments for inclusion in GamePass. As the number of subscribers rises this problems becomes more urgent, not less.
Again, for anybody unclear how Microsoft are incentivising devs to be included in GamePass, watch this Alanah Pearce discussion which includes a dev with games in GamePass. How is this remotely sustainable? Something has to give.
Your concerns please?
Why aren't we talking about how nice this is for the customer instead of how Microsoft is evil & they're going to lose all of this money.
Tommy McClain
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Johnny Awesome
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GamePass is amazing value.
MS should stick to their plan. They need 20 studios putting out a major $1 billion game every 60 months (5 year dev cycle). That's a AAA game every 3 months at a cost of $4 billion per year. They don't need anyone else if they do that.
Then they can supplement with other minor AA titles, indie titles and year+ old 3rd party stuff that's mostly run its course in the marketplace.
I think they can get to 50 million subscribers by doing that and work up from there to 100 million subcribers. At that point 3rd parties pretty much HAVE to be on the service.
MS should stick to their plan. They need 20 studios putting out a major $1 billion game every 60 months (5 year dev cycle). That's a AAA game every 3 months at a cost of $4 billion per year. They don't need anyone else if they do that.
Then they can supplement with other minor AA titles, indie titles and year+ old 3rd party stuff that's mostly run its course in the marketplace.
I think they can get to 50 million subscribers by doing that and work up from there to 100 million subcribers. At that point 3rd parties pretty much HAVE to be on the service.
Every corporation does forecasting and budgets, has done and will continue to do so in perpetuity. Game Pass as a project has a maximum allowance. If all projects went over maximum allowance there would be job losses all the time to make up for the shortfall. Companies that have good financials stick to their budgets. Which is an important factor because it doesn't matter how game studios monetize their profits off Game Pass, the total Game Pass Project has a maximum budget to pay out. So every company that goes onto Game Pass is budgeted, the contracts and the number of contracts are designed to ensure that Game Pass does not go over budget for the year.
With respect to the topic of monetization, it doesn't matter. Once the contract is signed it will be adhered to until expiry. Once the contract is expired the publishers can decide if they want to draft or extend the existing one. So if they want to leave, that's fine. MS still has the maximum allowance and even if they want to extend, MS doesn't have to extend a contract either if they are already out of budget for the fiscal year.
What MS is doing is paying an upfront fee to get the game onto the service. And then additional payments based around some metrics. There's nothing unsustainable about it. If you have a budget of 1-2 Billion in contracts each fiscal year, then you'll budget to ensure you won't take too many games to go over budget. If your subscriber base continues to increase, revenues will increase. It's up to MS to decide next year to increase the budget or cap it. It frankly doesn't matter, because if subscribers increase but the budget is capped, eventually the tipping point will turn into profit.
cheapchips
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We know they've done that with some indie devs. We don't know what deals they've struck with larger publishers do we?
The problem is that game prices (cost to make games) is also increasing...so, let’s say they go up by 5% p/y (which I think is a low forecast) - then you have to build your model over and above that.
I’m just still struggling with what will have to give because I can’t see it getting enough subscribers- @Johnny Awesome seems to think they can hit 100m.
Well firstly that implies a significant amount of PC gamers will subscribe, do we have any data on how PC gamers feel about subscription models? Console gamers have been paying since XBLive so are well and truly used to it. What percentage of EA Access is on which platform?
And even then I’d love to get an idea what % currently pay full price.
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I'm not understanding the relevance but maybe we've off-track. I took her earlier comment about Microsoft being large as perhaps a reference to the old warchest argument but perhaps I was mistaken.
I can't imagine anybody is signing multi-year long contracts for GamePass with Microsoft and it's not like Microsoft are growing their user base in double digit percentages every quarter. So this isn't about the contracts they're signing now suddenly disadvantaging publishers, but say in five years time if Microsoft have 20 million GamePass subscribers, are they still paying these generous up front packages regards of the number of plays/downloads for games?
It's unsustainable if they want to increase profitability. If I'm a dev now and Microsoft offer with 4 million credits for my game with their 10 million subscribers, if they have 20 millions I'm going to be looking at 8 million credits (more with inflation). What model of business economics reduces the overall costs as the user base scales (because so does the infrastructure costs)?
I'm not sure why you keep talking about budgets, budgets are not magic, not do guarantee return, profit or even revenue. You can have the best business model in the world with tiered budgets and still end up out of pocket because plenty of companies have faced exactly this. Having a budget doesn't mean you're going to succeed, or your profitability will scale with demand or that you won't be faced with higher costs from people whose software you want.
It's unimaginable that big publishers are getting a worse deal than Indies here. Their monetisation maybe be different - perhaps more directly tied to plays/downloads but there is no way any larger publisher is going to take any risk of loses from sales by including their product in GamePass.
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