this post was submitted on 03 Apr 2024
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This is a false argument. They ARE profitable when they bother to try and make a good one. It's when they fill it full of mtx and drag every aspect of the game except the enjoyment out for as long as possible to try and convince you to buy shit to make it actually enjoyable after you've already paid full price. They don't get create poor games and then complain they're not profitable enough - bad products aren't profitable because they are bad products.
Even if every $200M game was good, you're still competing against the other $200M games out there, and that's very risky.
I suspect there wouldn't be as many releases if they were only releasing good ones.
True. There would also be even more layoffs in this industry if they threw out years of work and hundreds of millions of dollars at the finish line because they decided not to release a game that didn't turn out to be as good as they'd hoped.
That's just another symptom of chasing perceived profits. If they were dedicated to releasing good products they'd understand retaining good talent that has experience working together is an important part of it.
Obviously that's a pipe dream because they're all vultures circling over a games publisher, picking off what they can until they can feast on its corpse, but still.
I was being facetious. If your development timeline is 7 years, you have no idea how it's going to turn out at the end, but they all set out to make a good product, especially when it takes that much time and money to make. Guardians of the Galaxy was supposedly a very good game that bombed horribly, for instance. There's a lot of risk when your game is that expensive to make, because there are only so many customers out there, and they're already playing other big expensive games. Even Sony is finding that their marquis titles aren't bringing in as many customers as they expected anymore, so they can't keep spending more on games and expect them to be profitable.
That’s also partly because Microsoft is buying customers with gamepass, it’s unprofitable in the long run, but they just need to do it long enough to kill off competitors. Exactly what Netflix did basically.
Youve been able to start to see the ripples forming a few years ago. Devs aren’t making as much from the deal of being on it vs private sales as well.
What do you mean? It's already profitable for them. I'm far more concerned with Nintendo's online subscription than Microsoft's. Nintendo's already crossed the line, and Microsoft still stands to make more money by offering games for sale on Steam than to make them only available via a subscription that isn't doing well with regards to acquiring more customers.
It’s not profitable. They say they spend over 1billion dollars a year, but you read some of the deals and they are $200 million for one game… they also say they make $230 million a month. So if they only make 2.7 billion and spend more than a billion a year with some games costing $200 million….
How is it profitable? It’s being supported by Microsoft itself so they can bleed money to crush competition. They are being intentionally vague and not releasing intimation as it would show they are doing very illegal things.
Lots of this stuff came to light during the merger and is available online to view now.
$2,700,000,000 -$1,000,000,000 = $1,700,000,000
If the rest of their expenditures are less than $1.7B, then it's profitable for the year. Since we've already accounted for the line item where they're licensing products for their service that they don't own, I'd be surprised if they had $1.7B worth of other operating expenses left to pay for, unless you can share a source stating otherwise. But what I see is this stating that it is profitable.
The burden of proof is on you if you think they're doing something illegal. It's not difficult at all to believe that they're doing everything by the book, have a profitable service, and also found a plateau in how many customers are interested in using such a subscription.
Dude.. they spend over 1 billion, but they also have 6 games that cost 1.2billion (200 million a piece). Their costs are far more than 1 billion and probably exceeds the 2.7…. Use some critical thinking here.
You have Phil Spencer saying they are profitable by telling your their sales, but only they spend more than 1 billion, they could also spend more than 10 billion, but they omit that specific information. Why? Because it would show the lie….
Please read
Critical thinking: $200M game budgets are not "per year". They're 5+ year development timelines. Microsoft's output was only a few games. Starfield had a $200M budget over the course of 5 years. Forza wouldn't surprise me if it had about that for its own budget, even though it reuses a lot of legacy code and assets to get there for cheaper than building it from scratch. But that's not $200M per year for those games. How much do you think Hi-Fi Rush cost? We're talking 8 figures for that one, not 9, and that's over the course of 4 years.
They could omit all kinds of things that they didn't do from their financial reports, sure. Why didn't they say that they spent $10B? Perhaps because they didn't spend $10B...
Your link, which I have seen before, refers to how much games are estimated to cost to come to Game Pass, some of which happened and some of which they turned down because they were too expensive. They famously low-balled the impact BG3 would have on the industry and how much it would take to secure that game for Game Pass...if they were interested in doing so.
Why are you talking about game budgets? Microsoft is paying completely finished games 100-300 million dollars to be on games pass. If they are doing that, do you seriously think that they aren’t spending more than 2.7 billion putting games in the service…? It’s obviously far far more than 1 billion dude….
Game pass isn’t profitable, or Microsoft would tell you the full financials to prove how good it is. So why haven’t they…?
In the link that you provided, which I have seen before, you can see that they turned down games for hundreds of millions of dollars but estimated that that's what they would cost to get on Game Pass when they launch. Have you noticed that games often leave Game Pass as well? That's because they have to keep paying those people for those games, and they don't see any value in continuing to do so. If they were spending 10x on licensing what they reported to investors, that would have come out in these leaks, especially since the licensees would be able to do some back of the napkin math when they can see what was spent to license their competitors. But that didn't happen. I'm sorry to disappoint you, but there's no conspiracy here. Microsoft just has a profitable service.
Games leave gamepass since when it comes to renewal they don’t want to since streaming cannablizes sales and leads to lower revenue (already said this) so it’s not Microsoft deciding it’s not profitable, it’s the game wanting control back.
Investors don’t care, Microsoft itself is profitable, the gaming division can bleed money and they won’t care, since the parent company will just give them the difference another way.
Some games cost that much….
Not actually pricing, estimates, but if they were estimating that much, they were liking willing to pay close to it, even half these numbers and it doesn’t look good. Just this collection of games that a drop in the bucket of total games, would cost 1.5 billion dollars. That’s over half their revenue, without even accounting for any operating costs or anything, or the rest of the library.
So, no it is not profitable and it’s hilarious that you’re defending Microsoft for claiming this, why isn’t anyone else other than Microsoft saying the same thing? In fact lots are claiming the opposite since this leak came out and they started looking at the numbers and taking directly to devs involved. Devs hate it
Then please link that instead of their estimates, because if they were lying, publishers calling out bad math is exactly what I'd expect to happen. What I see on this list though are a bunch of costs that can be spread out over several years, not paid out all at the same time. Jedi Survivor, Suicide Squad, and Mortal Kombat account for $800M of this list, and none of them came to Game Pass, meaning Microsoft did not opt to spend that money.
You are misplacing cause and effect. It's more expensive for Microsoft to get someone else's game on Game Pass right at launch than it is after launch, because if it's a game people are already excited for, it will eat sales, as opposed to something like Descenders where most people never even heard of it, so it would serve as a form of marketing. In that case, Microsoft and the other company are essentially making a bet with regards to how much the game would make if it's not on Game Pass, and Microsoft pays them a guaranteed sum up front, which reduces risk but also reduces reward. When a game leaves Game Pass, it's not because they saw their sales tanking and wanted to "take back control". It's that Microsoft isn't offering them enough to make up for the sales they'd expect to otherwise make for the next leasing period. Microsoft doesn't offer them as much for the next period, because they don't expect that keeping that game on the service keeps more people subscribed.
If you can produce that link that demonstrates what you're claiming, I'll read it, but otherwise, this sure looks like you'd rather believe in some boogeyman conspiracy theory than a simple truth.
Or… no amount of money was enough to make those games cannablize their sales, why do you think it’s only Microsoft making decisions…?
What truth? That Spencer says it profitable, but won’t provide the information to prove it…? Yet all the leaks and information point the opposite direction…? You want the truth, don’t listen to Spencer and read between the lines lmfao. The last person you should be listening to on this, is the one at the top of it.
Provide anything other than Spencer claiming it, I bet while you attempt to find that you’ll find the mountain that’s behind you.