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Topic: The Xbox Game Pass Thread

Posts 21 to 28 of 28

Justifier

@ralphdibny
You'd think that Game Pass version of 1st party title would include season pass as well?

"Wake me... when you need me."

Xbox Gamertag: Justifier1651

ralphdibny

@Justifier Forza horizon 4 doesn't and gears of war 3 doesn't, but those are just two I've played, don't know if there are others

ralphdibny

LtSarge

One thing that's bothering me with about the topic of Game Pass is how people can still say that the service is unsustainable.

We know that there are 15 million subscribers now. Let's say that the average price that the subscribers are paying is $10. 15 million subscribers times $10 is $150 million, and that's each month. Take that times 12 months and Microsoft will see a revenue stream of $1.8 billion each year. Now take into the fact that the growth of subscribers have been 5 million additional ones in just 5 months (from 10 to 15). Now let's say that they'll earn on average 10 million subscribers each year (because 5 million for every 5 months). That means in the coming year, the amount of subscribers will increase from 15 to 25 million. Take that times $10 again and that will be $250 million each month and $3 billion every year. Do that for another year and you'll have 35 million subscribers, $350 million in revenue every month and $4.2 billion in a year.

To put this in another perspective, in the coming three years, Microsoft will earn back the amount of money they paid for ZeniMax Media and have a lot of left over (1.8 + 3 + 4.2 = $9 billion).

Like this is easy mathematics if you just put together the numbers and facts. It's obvious that Microsoft has figured this out and that's why they aren't bothered by paying that large sum of $7.5 billion for ZeniMax. Microsoft is seriously going to earn so much money from this and how people are not getting this is beyond me.

LtSarge

carlos82

@LtSarge some big assumptions in your easy mathematics such as future growth, as well as completely ignoring the costs of making all of the games for the service and paying third parties to put their games on. I mean how many of the current subscribers have even paid full price with the amount of offers that have been available? I'm paid up until this time next year for the grand total of £1 and there's no guarantee I'll continue to subscribe.

On the flip side I wouldn't expect any company to go down this route unless they believed they could make money at some point and if they do get near the numbers you suggested and paying full price, then that should be above the threshold for profit

Older than I care to remember but have been gaming since owning a wooden Atari 2600 and played pretty much everything inbetween.

LtSarge

@carlos82 You do realise that in economics we use historic patterns to predict future patterns? It's called forecast, all companies do this. To then undermine the term to "assumptions" is not correct at all.

If the problem here is that you haven't read the news, then here you go: https://www.eurogamer.net/articles/2020-09-22-xbox-game-pass-...

"As of this month, Xbox Game Pass now has 15 million subscribers, up from the 10 million figure Microsoft announced in April. That's a 50 per cent increase in just five months."

Meaning 5 million subscribers in 5 months. There's no "assumption" here, it's a fact that Game Pass has 15 million subscribers now and I'm using this as a prediction for future subscriber counts. Of course this might not happen, but we're talking about the future here. Nobody knows exactly what's going to happen, but we can predict it with previous patterns and trends, as all companies do.

Also there's no way that costs for adding games on Game Pass are going to be upwards of billions of dollars. I thought that's obvious? The fact still remains that if this pattern persists, Microsoft are going to make tens of billions of dollars each year on Game Pass and they are going to be earning a profit as soon as they cross this initial threshold of losses.

It's true that Microsoft has been going hard for the €1 deals but they will eventually run out and that's when we can see the attachment rate of subscribers. But even then it's not hard to figure out that Game Pass is a much more compelling offer at €10 than buying each game for €80 next generation. As I said in another article on the site, if you are choosing to pay €80 for each game instead of investing in Game Pass then you must like wasting money in that case. Each and every business deal Microsoft has made regarding Game Pass has increased the value of Game Pass, e.g. Bethesda games and EA Play. Even if Microsoft raises the price of Ultimate to €20 that's still dirt cheap compared to buying each game separately for €80. In other words, a lot of people are going to opt for Game Pass in the future. It's literally the best deal in gaming.

Edited on by LtSarge

LtSarge

carlos82

@LtSarge I have read that and just because over the last 5 months there has been a huge jump it doesn't mean its going to happen in the next 5 months, the 5 after that and so on. So I'd say the tens of billions of dollars income is a very big assumption at this point. If they do get to those numbers then of course they'll be making a lot of money but at the moment that's basically almost everybody who owns an Xbox One. So either the new consoles are going to be a lot more successful or plenty of PC and mobile gamers are going to pick up the slack. As for games development costs, AAA games are getting budgets of well over $100 million these days so releasing multiple of them per year is going to be pretty expensive plus whatever deals third parties are getting to put their games on.

Gamepass is a good offer but even this year I've bought more games for my Xbox then I've played through Gamepass. For me the value in Gamepass isn't in first party AAA games as the cost between buying them and subscribing isn't that big over the year but in all the smaller indie titles and the odd third party that I wasn't sure about and getting to play them that way

Older than I care to remember but have been gaming since owning a wooden Atari 2600 and played pretty much everything inbetween.

Ryall

I wonder what the breakeven point for game pass is. If we move to a situation where Microsoft third-party development is funded by game pass subscribers how many subscribers are needed?

Ryall

Dpullam

@LtSarge Well said! I am a firm believer in Xbox Game Pass and have been ever since I returned to Xbox gaming!

Gamertag: DeePullThree
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