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[Godot25]

$183m a month according to ampere.

183m per month? That's 2,2 billion per year.
Not bad at all considering fact that first-party games are MIA this year.

have a source article?

 

[Bernd Lauert]

183m per month? That's 2,2 billion per year.
Not bad at all considering fact that first-party games are MIA this year.

have a source article?

https://www.ampereanalysis.com/insi...ed-by-services-offering-download-distribution

60% of a $3.7b market.

 

[Godot25]

https://www.ampereanalysis.com/insi...ed-by-services-offering-download-distribution

60% of a $3.7b market.

Well. And since Nadella said after Q3 (jan-mar) and Q4 (apr-june) that Game Pass grew it is probably even more now since article is about 2021

 

[Banjo64]

The "shovelware" sold 700k copies, while essentially nobody bought Kao the Kangaroo

If game sales were representative of quality those 700k sales would mean something.

That’s never been the case though, see; any crap Pokémon game that Game Freak put out selling 15m copies whilst games like Okami sold 500k.

Goat Simulator had sold over 2.5m copies in 2015, but it’s fucking shit.

 

[Helghan]

And they paid them 22% of their revenue, talk about overkill.

How is that overkill? 22% of the revenue of last fiscal year. Makes sense that if you want the game on your subscription service that you pay around that amount.

 

[SmokedMeat]

This is the stuff nobody discusses - how much it’s costing Microsoft to put all of these games on Game Pass.

I like Game Pass but the overall costs must be astronomical. This is why Sony’s afraid to join Microsoft in the deep end.

 

[Kokoloko85]

Lol, Id love to see how much money gamepass is making. They are obviously spending bucks on it

 

[Bernd Lauert]

This is the stuff nobody discusses - how much it’s costing Microsoft to put all of these games on Game Pass.

I like Game Pass but the overall costs must be astronomical. This is why Sony’s afraid to join Microsoft in the deep end.

Idk about astronomical. We could do estimates for the month of August 2022.

Ghost Recon Wildlands:
Turbo Golf Racing:
Shenzhen I/O:
Two Point Campus:
Offworld Trading Company:
Expeditions: Rome:
Cooking Simulator: $600k
Midnight Fight Express:
Opus:
Exapunks:
Tinykin:
Fenyx Rising:
Immortality:
Commandos 3:

 

[Ozriel]

Surely spending $1m for A Hat in Time, Blue Fire, even Kao the Kangaroo would be better than this shovelware?

That would have been spectacularly bad business. On Steamspy, Cooking Simulator has more than twice as many CCUs, followers and owners as Bluefire and Kao combined.

 

[TheGodfather07]

This is why we ain't seeing many big AAA 3rd party games on the service. It would cost Microsoft alot of money to get them.

 

[Ozriel]

Idk about astronomical. We could do estimates for the month of August 2022.

Ghost Recon Wildlands:
Turbo Golf Racing:
Shenzhen I/O:
Two Point Campus:
Offworld Trading Company:
Expeditions: Rome:
Cooking Simulator: $600k
Midnight Fight Express:
Opus:
Exapunks:
Tinykin:
Fenyx Rising:
Immortality:
Commandos 3:

All of these combined will not have cost MS more than $15 million for a 12 month contract. Or approx $1.4m per month

Meanwhile, at 25 million monthly active subscribers at an average sub fee of $8, that's $200 million in GP revenue in a month.

Don't crucify me if my math doesn't check out

 

[phil_t98]

$183m a month according to ampere.

Aren’t they way over 20mill subs a month

Last I read was close to 25 million so I think your figure is way lower. Now I wouldn’t put it at 250 million a month but I would probibly guess 220-230 a month

 

[Wohc]

Meanwhile, at 25 million monthly active subscribers at an average sub fee of $8, that's $200 million in GP revenue in a month.

 

[Banjo64]

That would have been spectacularly bad business. On Steamspy, Cooking Simulator has more than twice as many CCUs, followers and owners as Bluefire and Kao combined.

I’d rather game pass was a vehicle for discovering quality. As stated previously, Goat Simulator had over 2.5m buyers in 2015, that doesn’t make is a better game than Ico or Okami that sold 500k in their original runs.

 

[Punished Miku]

I'm surprised you guys think that's a lot for a game that may be on there 6 months to a year.

 

[Ozriel]

I’d rather game pass was a vehicle for discovering quality. As stated previously, Goat Simulator had over 2.5m buyers in 2015, that doesn’t make is a better game than Ico or Okami that sold 500k in their original runs.

Not sure how this tells you that Cooking Simulator isn't a good game.

Quality is one thing, but GP inclusions have to be stuff that people would actually want to play. So better to put your budget towards Cooking Simulator than Kao the Kangaroo.

Activision purchase will bring Crash and Spyro to GP, so it reduces the need to chase platformers.

 

[Dr. Wilkinson]

This makes me wonder what they are paying for to bring other games to Game Pass that don't join voluntarily? Especially AAA games? $6 million? $60 million?

"Join voluntarily"? Why would a developer who's not owned by Microsoft put their game on Game Pass unless they are being paid an agreed-upon lump sum up front? Beyond an older game that's been out for awhile and past it's sales cycle, I don't see what the benefit is unless you're being paid to put it on the service. Visibility can't be that big a reason without some money to back it up and justify it.

"Sure, Team Xbox, here's our game. Please put it on Game Pass. Don't worry about compensating us at all!"

 

[Nautilus]

As another post above has pointed out, 600k is equal to just 40k GPU subscribers' 1 month fee. This is a minuscule amount in context.

You didn't understand what I meant. Gamepass is getting dozens of games every single month, that range from small(like Cooking Simulator) to big games, like Guardians of the Galaxy.

If MS is paying to get a game like Cooking Simulator onto gamepass, its safe to assume that most non-MS games are being moneyhatted.

So if MS needs to pay Cooking Simulator 600k to get into the service, I wonder how much they spend to get those 20 to 30 small games that are added every single month to the service(which isn't permanent), and how much they pay to get big games like Guardians in(5 million? 10 million?).

And when you add all these small moneyhats, it ends up being a fuckton of money every single month. It's not a "minuscule ammount". There is a reason why MS is making their games that get into gamepass more and more like GAAS. Running Gamepass, at least at its current price, must be absurdely expensive and risky.

 

[Punished Miku]

You didn't understand what I meant. Gamepass is getting dozens of games every single month, that range from small(like Cooking Simulator) to big games, like Guardians of the Galaxy.

If MS is paying to get a game like Cooking Simulator onto gamepass, its safe to assume that most non-MS games are being moneyhatted.

So if MS needs to pay Cooking Simulator 600k to get into the service, I wonder how much they spend to get those 20 to 30 small games that are added every single month to the service(which isn't permanent), and how much they pay to get big games like Guardians in(5 million? 10 million?).

And when you add all these small moneyhats, it ends up being a fuckton of money every single month. It's not a "minuscule ammount". There is a reason why MS is making their games that get into gamepass more and more like GAAS. Running Gamepass, at least at its current price, must be absurdely expensive and risky.

I honestly don't think it's that much. Take this total and divide it by how many months it's on the service.

Then look at how much money they get every month from subs.

 

[Wohc]

You didn't understand what I meant. Gamepass is getting dozens of games every single month, that range from small(like Cooking Simulator) to big games, like Guardians of the Galaxy.

If MS is paying to get a game like Cooking Simulator onto gamepass, its safe to assume that most non-MS games are being moneyhatted.

So if MS needs to pay Cooking Simulator 600k to get into the service, I wonder how much they spend to get those 20 to 30 small games that are added every single month to the service(which isn't permanent), and how much they pay to get big games like Guardians in(5 million? 10 million?).

And when you add all these small moneyhats, it ends up being a fuckton of money every single month. It's not a "minuscule ammount". There is a reason why MS is making their games that get into gamepass more and more like GAAS. Running Gamepass, at least at its current price, must be absurdely expensive and risky.

Moneyhatted? Did you think MS or Sony get those games for free or what? 600k is nothing if they really make 200m+ each month.

 

[Nautilus]

All of these combined will not have cost MS more than $15 million for a 12 month contract. Or approx $1.4m per month

Meanwhile, at 25 million monthly active subscribers at an average sub fee of $8, that's $200 million in GP revenue in a month.

Don't crucify me if my math doesn't check out

Thats assuming:

1) Your average sum is correct(Probably isn't, as Gamepass is underdeveloped countries, when converted back to dollars, is far cheaper than that average).

2) That MS "only" spends 15 million per month on games(Big games like Guardians, which happens once a month give or take, must easily cost at least 5 million. And I personally think I'm lowballing it)

3) The astronomical ammount of money that MS must spend maintaining and developing the service(servers, staff, develop new functions, marketing, etc)

 

[Nautilus]

I honestly don't think it's that much. Take this total and divide it by how many months it's on the service.

Then look at how much money they get every month from subs.

If moneyhatting was the only cost that MS had with the service, I would agree. But its not.

Marketing, servers, staff dedicated to Gamepass, developing new tools and functions, money that gets from underdeveloped countries being far lower than in places like US, etc.

They all add up. And when you are constantly pouring anywhere from 25 million to 50 million to "rent" games onto your service, that will expire after a while, it starts getting extremely expensive.

Don't get me wrong, at this point I don't think MS is bleeding money anymore, though I don't think they are making bank either. But anyone pretending this isn't a big deal is fooling themselves.

 

[Nautilus]

Moneyhatted? Did you think MS or Sony get those games for free or what? 600k is nothing if they really make 200m+ each month.

Their costs aren't 600k every month, and I highly doubt they earn 200 million every month, from subs alone at least.

 

[SmokedMeat]

$20 on Steam, with 84% positive reviews.

‘Shovelware’ indeed.


I remember the thread with sneering comments about Powerwash simulator. And now it’s one of the most played games on Gamepass, and has 3679 concurrent players yesterday on Steam.

For an enthusiast gaming forum, many here are weirdly ignorant about gaming in general.

A lot of people here only know AAA. They line up and preorder their Battlefields and get worked up over $70 remasters because for them there’s nothing else.

 

[Punished Miku]

If moneyhatting was the only cost that MS had with the service, I would agree. But its not.

Marketing, servers, staff dedicated to Gamepass, developing new tools and functions, money that gets from underdeveloped countries being far lower than in places like US, etc.

They all add up. And when you are constantly pouring anywhere from 25 million to 50 million to "rent" games onto your service, that will expire after a while, it starts getting extremely expensive.

Don't get me wrong, at this point I don't think MS is bleeding money anymore, though I don't think they are making bank either. But anyone pretending this isn't a big deal is fooling themselves.

I don't think they're making tons of money, and they may not even be 100% breaking even. But I was just surprised that anyone thought $600k was a lot. What if the game is on GP for a year? $50k a month when they're pulling in millions a month.

 

[adamsapple]

You didn't understand what I meant. Gamepass is getting dozens of games every single month, that range from small(like Cooking Simulator) to big games, like Guardians of the Galaxy.

If MS is paying to get a game like Cooking Simulator onto gamepass, its safe to assume that most non-MS games are being moneyhatted.

So if MS needs to pay Cooking Simulator 600k to get into the service, I wonder how much they spend to get those 20 to 30 small games that are added every single month to the service(which isn't permanent), and how much they pay to get big games like Guardians in(5 million? 10 million?).

And when you add all these small moneyhats, it ends up being a fuckton of money every single month. It's not a "minuscule ammount". There is a reason why MS is making their games that get into gamepass more and more like GAAS. Running Gamepass, at least at its current price, must be absurdely expensive and risky.

They earn roughly $180m from subs alone each month (see Bernd's post on top of the page).

I think they're able to more than make up for the price of putting the games up just based on sub prices alone going by the little publicly available info we have, since they don't reveal detailed specs.

But that's besides the point, I don't think MS is dependent on game pass's revenue stream to survive, the service itself is sustainable but it's likely doesn't earn three digit profits, and they're ok with that.

 

[marjo]

Doesn't Gamepass have around 30 Million subs? Even assuming a low average rate of 5$ per sub per month (to take into account a the lower priced international subs), that's still 150 Million a month in recurring revenue.
600k is nothing.

 

[Nautilus]

I don't think they're making tons of money, and they may not even be 100% breaking even. But I was just surprised that anyone thought $600k was a lot. What if the game is on GP for a year? $50k a month when they're pulling in millions a month.

Its more about 600k for such a "nobody" game that seems alot, since that implies that most of those 20 to 30 games that goes into the service gets at least that.

 

[SmokedMeat]

Let's say there's at least 5 million people paying the current GP ultimate price. They're making all these millions each month, that 600k is nothing but an investment.

The overall cost is massive though. I’d be curious to know what it really is.

Take that $600k and just assume that’s the going rate, and multiply that by how many third party games are on the service. I mean there’s what? A couple hundred?

Then you’ve got EA and Ubi linked in. They get something.

Then you’ve got all of your first party games that are being developed that are day one on GP. While those games are also available for purchase, there’s no question that GP is heavily eating into those sales.

Microsoft can certainly keep it going, but subscriptions are costly.

 

[SportsFan581]

If MS is paying to get a game like Cooking Simulator onto gamepass, its safe to assume that most non-MS games are being moneyhatted.

Not exactly a money hat, games on GP are available on other platforms most of the time. Obviously, they are paying for every game on the service (either as payments to third parties or through overhead costs of internal studios). Content will always be the greatest expense for GP, just like Netflix or any similar service. However, that doesn't mean they can't turn a nice profit that is higher than the industry average in %.

 

[Ozriel]

"Join voluntarily"? Why would a developer who's not owned by Microsoft put their game on Game Pass unless they are being paid an agreed-upon lump sum up front? Beyond an older game that's been out for awhile and past it's sales cycle, I don't see what the benefit is unless you're being paid to put it on the service. Visibility can't be that big a reason without some money to back it up and justify it.

"Sure, Team Xbox, here's our game. Please put it on Game Pass. Don't worry about compensating us at all!"

OP really poisoned the thread with some weird ass takes.

You didn't understand what I meant. Gamepass is getting dozens of games every single month, that range from small(like Cooking Simulator) to big games, like Guardians of the Galaxy.

If MS is paying to get a game like Cooking Simulator onto gamepass, its safe to assume that most non-MS games are being moneyhatted.

So if MS needs to pay Cooking Simulator 600k to get into the service, I wonder how much they spend to get those 20 to 30 small games that are added every single month to the service(which isn't permanent), and how much they pay to get big games like Guardians in(5 million? 10 million?).

And when you add all these small moneyhats, it ends up being a fuckton of money every single month. It's not a "minuscule ammount". There is a reason why MS is making their games that get into gamepass more and more like GAAS. Running Gamepass, at least at its current price, must be absurdely expensive and risky.

You only have to look at the thread for August GP games to know that they aren't adding 'dozens' of games every month. And based on my napkin math for this month, they aren't spending that much annualized.

Day 1 AAA games cost more, but you forget that these games are chosen to boost GP subscriber count. So for example, paying $20 million for MLB the Show works out quite well if it brings just 180k new subscribers.

 

[Torrent of Pork]

Yep

And actually 600k sounds like a very low price. Only reasons the devs are happy with it is because the game was already pretty successful before, and gamepass is just a bit of extra money on top.
If gamepass was the majority of their playerbase they'd be firing their employees and closing down in a few months.

IMHO they should've negotiated for more. Much much more. Studios wont survive on shitty deals like that.

It also depends on the size of the dev. If I was one of these solo guys devoting years of my life to a passion project that blows up, and MS offers to dump 600k into my personal lap it would be a life-changing amount of money.

That would set me up for the next decade to work on more games.

 

[SportsFan581]

Take that $600k and just assume that’s the going rate, and multiply that by how many third party games are on the service. I mean there’s what? A couple hundred?

Then you’ve got EA and Ubi linked in. They get something.

600k per game would be nothing, let's say they added 12 games a month or around 150 a year at 600k each. That's only 90m a year for a service that could easily be generating over $2b a year in revenue. Most of these games are costing them 7 or 8 figures I would think.

EA play is only $30/yr for an individual person, I'm sure MS is getting a discount on their 25m users.

 

[phil_t98]

183m per month? That's 2,2 billion per year.
Not bad at all considering fact that first-party games are MIA this year.

have a source article?

Microsoft is quietly bringing in billions from its Netflix-like Game Pass service as subscribers top 25 million

At a minimum of $10 per month per subscriber, Microsoft is bringing in at least $250 million each month from its Game Pass service.

www.businessinsider.com

 

[phil_t98]

https://www.ampereanalysis.com/insi...ed-by-services-offering-download-distribution

60% of a $3.7b market.

Added another link

 

[adamsapple]

Microsoft is quietly bringing in billions from its Netflix-like Game Pass service as subscribers top 25 million

At a minimum of $10 per month per subscriber, Microsoft is bringing in at least $250 million each month from its Game Pass service.

www.businessinsider.com

And that is from January. They've reported Game Pass subs off-setting loss in revenue from not having any big first party games in the latest quarterly reporting.

I'll guess it's at or above 30m right now. Once more first party stuff starts coming out, and/or Activision closes, it should get a healthy boost.

 

[Jimmyisback]

We already know it's sustainable. If a service isn't working after a certain amount of time.. Things will change course naturally. But I'll continue to enjoy the best service in gaming while it's here and a steal.

 

[phil_t98]

And that is from January. They've reported Game Pass subs off-setting loss in revenue from not having any big first party games in the latest quarterly reporting.

I'll guess it's at or above 30m right now. Once more first party stuff starts coming out, and/or Activision closes, it should get a healthy boost.

Just shows that if they paying 600k for some games (indie) there is a lot of scope for the bigger games to. Poss 4 billion a year in revenue

 

[Ozriel]

The overall cost is massive though. I’d be curious to know what it really is.

Take that $600k and just assume that’s the going rate, and multiply that by how many third party games are on the service. I mean there’s what? A couple hundred?

Then you’ve got EA and Ubi linked in. They get something.

The vast majority of the older third party games there aren't being handed many hundreds of thousands of dollars.

Then you’ve got all of your first party games that are being developed that are day one on GP. While those games are also available for purchase, there’s no question that GP is heavily eating into those sales.

Microsoft can certainly keep it going, but subscriptions are costly.

Sure, subscription services will ensure that your launch retail sales are eaten into. But you've forgotten how sub services work.

For example, Gears 5 came out in 2019 and had its retail sales reduced due to Gamepass. But a hefty chunk of those who subscribed to Gamepass because of Gears 5 will have remained on the sub since then and have continued to hand over money to Microsoft, years after Gears 5. That's pretty much MS bet... That subscribers stick and continue to provide a steady stream of cash.

It's no different from how they're running Office subscriptions. MS used to sell Office for what, $200? Now they have a ton of folks paying monthly for Office 365 and their shareholders love it. I've never seen any shareholder complain about Office retail sales dropping.

When Call of Duty gets added to GP post acquisition, the service will skyrocket.

 

[Nautilus]

OP really poisoned the thread with some weird ass takes.



You only have to look at the thread for August GP games to know that they aren't adding 'dozens' of games every month. And based on my napkin math for this month, they aren't spending that much annualized.

Day 1 AAA games cost more, but you forget that these games are chosen to boost GP subscriber count. So for example, paying $20 million for MLB the Show works out quite well if it brings just 180k new subscribers.

But there are the costs of maintaning and running Gamepass. Its not only the moneyhats.

I just think you are all lowballing the costs and difficulties that comes with either those moneyhats, or the profit splits that they do with EA and Ubisoft(since their own subscriptions are included into gamepass, and I doubt those are one time payments)

 

[Griffon]

It also depends on the size of the dev. If I was one of these solo guys devoting years of my life to a passion project that blows up, and MS offers to dump 600k into my personal lap it would be a life-changing amount of money.

That would set me up for the next decade to work on more games.

After taxes? It would barely pay for a solo 3 years project, little to no profit.

This is hardly life changing...

I swear... you people have no idea how much money it takes to make a game, and how much money those games make outside of gamepass (hint: it's a lot more).

 

[adamsapple]

But there are the costs of maintaning and running Gamepass. Its not only the moneyhats.

I just think you are all lowballing the costs and difficulties that comes with either those moneyhats, or the profit splits that they do with EA and Ubisoft(since their own subscriptions are included into gamepass, and I doubt those are one time payments)

I don't think anyone is lowballing, you're just overthinking it. MS seems to be fine paying indie developer these lucrative deals and then also make bigger deals for games like Guardians. They're making 180~200m on game pass subs alone each month, it could be higher as we don't have the accurate and latest total subscriber figure.

It has been a sustainable service for a while and with higher sub counts, it will continue to be so.

"I know there's a lot of people that like to write [that] we're burning cash right now for some future pot of gold at the end," Spencer told Axios in a new interview. "No. Game Pass is very, very sustainable right now as it sits. And it continues to grow."

It's at a point now that it is actually helping them off-set loss in revenue from not having big first party releases on a quarterly basis, as of the latest earnings report:

Gaming revenue decreased $259 million or 7% driven by a decrease in Xbox content and services and Xbox hardware. Xbox content and services revenue decreased 6% driven by lower engagement hours and monetization in third-party and first-party content, offset in part by growth in Xbox Game Pass subscriptions.

-

TL;DR - it's doing fine and growing.

 

[Chukhopops]

But there are the costs of maintaning and running Gamepass. Its not only the moneyhats.

I just think you are all lowballing the costs and difficulties that comes with either those moneyhats, or the profit splits that they do with EA and Ubisoft(since their own subscriptions are included into gamepass, and I doubt those are one time payments)

Even if their operating costs, revenue share etc represented 50% of their total revenue, they would still be able to pay an average of $ 2.4M per game on the service per year to break even (based on the current catalog size and revenue provided above).

Indies won’t cost that much.
Most first parties won’t have any royalty or revenue-share.
Old catalog like BC games, as well as publisher back catalog won’t cost that much.

Also keep in mind that whatever they pay for e.g. FIFA is compensated by a 30% cut on the MTX generated.

TLDR: it’s not a bad business overall.

 

[Nautilus]

Even if their operating costs, revenue share etc represented 50% of their total revenue, they would still be able to pay an average of $ 2.4M per game on the service per year to break even (based on the current catalog size and revenue provided above).

Indies won’t cost that much.
Most first parties won’t have any royalty or revenue-share.
Old catalog like BC games, as well as publisher back catalog won’t cost that much.

Also keep in mind that whatever they pay for e.g. FIFA is compensated by a 30% cut on the MTX generated.

TLDR: it’s not a bad business overall.

You all are making A LOT of assumpsions on those math of your that are overoptimistic, such as assuming a high average per sub, zero knowledge on operating costs, how much MS pays per game, or revenue share to other subs added to gamepass, as the Ubi and EA one, etc.

But like I said, I don't think they are bleeding money, and MS must be happy where they are now at this moment. I just don't share this "Ah they are fine, let's not look too deep in this" attitude some of you have.

But that's enough of this topic, and that's all I'm gonna say about it.

 

[FritzJ92]

If thats 600k for a year of staying on GamePass, that breaks down to 50k a month. I don't think that is a big deal.

 

[adamsapple]

If thats 600k for a year of staying on GamePass, that breaks down to 50k a month. I don't think that is a big deal.

As an example, Two Point Hospital (which is leaving on Aug 31st), was added in Feb 2020.

Indie games generally tend to stay on the service for 2+ years and in many cases they just renew their deal before they come off.

 

[SmokedMeat]

The vast majority of the older third party games there aren't being handed many hundreds of thousands of dollars.



Sure, subscription services will ensure that your launch retail sales are eaten into. But you've forgotten how sub services work.

For example, Gears 5 came out in 2019 and had its retail sales reduced due to Gamepass. But a hefty chunk of those who subscribed to Gamepass because of Gears 5 will have remained on the sub since then and have continued to hand over money to Microsoft, years after Gears 5. That's pretty much MS bet... That subscribers stick and continue to provide a steady stream of cash.
When Call of Duty gets added to GP post acquisition, the service will skyrocket.

I’m not sure what subscriber retention looks like, but I’d imagine CoD alone will keep that percentage high.

 

[Wohc]

Wanted to give it a try for 5 minutes after all the hate. Played more than an hour and had great fun. It's somehow addicting. One more meal, just one more meal

 

[Bernd Lauert]

I just think you are all lowballing the costs and difficulties that comes with either those moneyhats, or the profit splits that they do with EA and Ubisoft(since their own subscriptions are included into gamepass, and I doubt those are one time payments)

Only EA Play is included with Gamepass. Ubisoft+ Classic is not.

 

[Ezquimacore]

Microsoft is a 2 trillion company.