Its simple. Sony wants to get money from its console business. Microsoft can afford to lose money for Gamepass to take over the gaming subscription market. If Sony could afford it since they are market leaders, they would have done it now.
Microsoft acquired Activision Blizzard King for $69 Billion on 2023-10-13
- Thread starter Rangers
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I have my doubts.
How many sub services have failed. There's no reason for Sony to go this way, they profit nicely sticking with a reliable model.
The console market is never really going to pass 250M consoles. What is the point of gamepass if you own 70% of that market?
What is the point of being the leader if you own 100% of that market?
For subservices to succeed the market needs to be significantly larger.
And MS can afford to go the "unreliable" model. They can afford to lose money on Gamepass until it establishes itself. It still supports my original argument. Your argument makes zero sense because the way you put it for Sony its as if Gamepass will never work, so why even invest in it. Its obvious MS expects to subsidize it to attract more people and grow, unlike what your argument implies.
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If you doubt that Sony could compete with Microsoft on a subscription service, releasing games day 1 whilst still make a profit, then you are agreeing with Sony's concerns. Microsoft have said GamePass is not making much money so if only one company can make a business model work by eschewing sector profits by propping that model up with profits from elsewhere with the intent of competitors being unable to match, you are describing classic anti-competetive behaviour.
I don't think that's what you meant to say, but in essence that is what you're saying. Then the debate becomes how much mutli-platform IP is it appropriate for Microsoft to acquire for this goal - which is what regulators are assessing with regards to Activision-Blizzard.
But - again - the UK CMA and EU regulators - are looking much wider. What's the impact to cloud gaming competitors, what's the impact for anybody else who wants to offer a subscription service, what's the impact for Steam and EGS?
Do you even acknowledge this is much bigger than Sony because you don't seem too.
Ahhh, yes. I think that is a much more apropriate framing. I hope that's indeed what the regulators concerns are, rather than "poor sony".
Regulators are definitely not giving a rats ass if it was Sony or someone else in their place.
They are checking how they will affect competition in the long term and if it is healthy competitive practice, which will reflect later on consumer buying choices.
The idea that it is "about helping Sony" has been an idea created and fed by the media, either for clickbaits or through different agendas or through fanboy paranoia in forums and different game sites.
That would be incorrect interpretation of what I was trying to say, though that’s why it should be investigated, which I agree with. MS says gamepass does not make a lot of money, thereby it cannot be sustained by the console market alone, in order for it to be profitable it’s reach has to be massive, where a TAM is billons and not 200M. Which is why it’s on PC and why they are pushing it to mobile. All sub services have enormous costs but have enormous TAM to work from.
I have my doubt that Sony would _want_ to go this route, until it’s proven this service works. Too big of a risk, high chance of failure with very little return. They are better served by owning their existing market.
The problem that stands for MS and cloud gaming providers, is that unlike video, there is still a latency element that affects the overall experience. So not only is graphical quality significantly degraded compared to native, so is latency. The technology is not there yet, so as much as content is critical, the company that creates the better cloud technology will hold a significant claim over this market.
TLDR; the group that will own sub services and cloud gaming will be the company that develops the technology that makes it good enough to toss native hardware; not the company that owns ABK.
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Of course. I meant to say, the larger gaming market as a whole, including streaming and MS context of funding game pass as a loossy model for penetration and dominance, is a wiser framing than simply the console market. I never meant to say regulators care about sony specifically.
I'm not sure if GamePass can stay profitable even if it becomes more ubiquitous on mobile and PC under its current high investment practices. Not if all studios under MS making AAA content keep releasing it day one on game pass.
At some point, either the subscription will become costlier or tiered (lower tier cant play recent releases), the studios output will be scaled down in production value, or new AAA (perhaps even AA) games won't keep being released on game pass day-one.
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All sub services have a cap on spending. You can do the run rate as an annual cost or a quarterly one. If you do it by quarter you can work out how much revenue you need to break even. How you get there, discount subs, increase sub prices etc, is up to the provider.
I don’t think game pass is in the multi billions per year in cost. It’s certainly doable to get into profitability.
Not if the AAA studios rely mostly on game-pass royalties to subdise their content production.
I would assume that how games are developed and their cost structure would change if 100% of their profits are from subservices. Right now we are in a transition phase where companies are doing both, and still learning if they are getting a good or bad deal from MS. Over time the deals between gamepass providers and developers will reach consistency in terms of payouts and subscriber usage.
Afterwards they can rely on consistent income over the years versus a large upfront in revenue until it dwindles down and they have to ship because they ran out of money.
Yes, that too. Games will be insentivised to make you sink more time into them. Personally, I love games that are dense and high quality, but that you can finish in a weekend or two. Fuck bang for your buck. I'd rather spend mobey on something short but pure than watered down for the sole sake of being more long lasting. Unfortunately, that kind of game will be less profitable in a subscription model.
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Yup, the most popular media subscription services have sustained profits in two environments, a) when there was little competition likeat early non-postal Netflix , and b) where quality content is either non-exclusive (most music) and/or can sustain multiple competing services. Videogames are neither, most games game longer to produce than movies, but on the flip side cost less to can make great profits - but a complex mix of risks.
I am keen to see where GamePass goes. It just doesn't seem sustainable in the console market, I've got no idea how Apple Arcade is doing on iOS but again - Apple can afford to run that on thin profits because have piles of money.
I think that depends on the Microsoft's accountancy. Into which column would you put an acquisition like Activision-Blizzard? It cross consoles and PC videos games, services, and more because of the crazily profitably mobile division. ¯\_(ツ)_/¯.
Same. Bethesda do need to crank games out a little faster but I'd hate for the dynamic to change because they have to churn things out faster because Microsoft understandably want a good stream a new titles, but how do you do that without changing Todd Howard's process? It seems crazy that we've gone from 360/PS3 generation where Bethesda released Oblivion, Fallout 3 and Skyrim, to the One/PS4 generation where we got Fallout 4 (and Skyrim) to this generation where we're getting Starfield (and Skyrim). I have zero expectation of seeing Elder Scrolls VI this generation. As for Fallout 5?
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The market will never grow pass 250m consoles but don't see why you something like game pass with xcloud wouldn't be a smart business model ? The tweets above me say mobile is 3B people. Wouldn't it make sense to create an attritive package for those gamers to have access to the games
Sony must have thought the same , they bought multiple companies to get into the subscription based cloud service market
Starfield , Elder Scrolls are single player games that don't require large player counts to keep the game alive. They are also singular releases that may get paid expansion packs later down the line.
It's so odd how people dig into microsoft about exclusivity but not sony. Sony bought bungie and said destiny will remain on other platforms but why haven't they been drilled about every single company they bought with multiplatform games previously ?
Isn't this where we are as a market already ? people have been complaining about MTXs since horse armor in oblivion on the xbox 360 back in early 2006 and now we are in 2022 trying to use it as a boogey man against subscription options ?
Monthly subs , battle passes , tiers of subs , micro transactions all exist already and are heavily used.
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