MS: "90 million active Xbox Live Users (up from 64 last quarter); more than 10 million GamePass subs"

[Axel Stone]

I'm not sure how or why looking beyond the PR and focusing on the actual numbers. Those are some huge increases in Live and GP, right? So I wanted to see what the profit and/or revenue that was generated...

And saw that that huge increase only equated to a 2% increase. Perhaps GIBIZ puts it more succinctly than me?

Microsoft's gaming revenues flat in Q3 2020

Between the effects of COVID-19, post-holiday lulls, and the continued waning console cycle, it was a quiet Q3 for Micr…

www.gamesindustry.biz

We should be able to discuss these things without the negativity. After all these are just numbers disclosed in an earnings report. Some months are better than others. FOr the record I expect Both Sony and Nitendo's gaming divisions to be similarly flat in profit/revenue with higher engagement.

That's not a dig or a compliment on any publisher. Just the numbers during this crazy period in gaming.

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We can't tell what profit or loss those increases generated by looking at a headline figure that includes profits and losses from a number of other sources as well as these services.

 

[bcatwilly]

Since some like numbers you should actually look at both the prior quarter Xbox revenue AND more importantly their previous forward looking guidance for the just reported quarter where they projected low double digit percentage decrease in gaming revenue which actually turned out to be just 1% overall instead which of course included 20% revenue decrease for hardware. They over performed their own financial projections significantly.

While we wait for the new Xbox Series X console to launch later this year, overall gaming revenue has decreased 21 percent for the recent quarter. Microsoft notes that Xbox content and services revenue also decreased by 11 percent, primarily due to a "third-party title" (likely Fortnite or Red Dead Redemption 2) performing better last year. Subscription growth has partially offset this decrease, but clearly the third-party game boosted Xbox content revenue last year.

Microsoft's CFO Amy Hood also revealed gaming revenue will decline next quarter in the "low double digit range" due to console sales and "lower transaction volume on a third-party title."

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[SuikerBrood]

How about their revenue being down?

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20% less hardware revenue. And Fortnite is less popular.

 

[Scottoest]

If you give away the service at 1$ it's obvious that tons of people will want to give it a try.
The issue for GamePass is and has always been how long it will be feasible to keep the service in the promotional phase with those deals?
How many people will continue to stay subscribed at full price? Will third parties ever be convinced to put their new games on this kind of service? Can they afford the fact that all their premium first party titles might not see a huge return from full price sales anymore (see what happened with Gears 5)?
If Microsoft wants to pay the bill forever that's cool, who cares about it they're rich enough, but is that going to happen?
The fact that some people want to celebrate certain numbers pretending they don't know the context behind them is absurd (GamePass and even more the 90m Live active users).

Btw they reported -1% overall gaming related revenues and -20% hardware revenues:

Xbox Services & Content Revenue Grows 2% Year On Year; Microsoft Gaming Revenue Down 1%

Today, Microsoft announced its financial results for the third quarter of the fiscal year 2020, , related to the period between January 1 and March 31.

twinfinite.net

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There's tons of consumer research suggesting that once people sign up for a subscription (especially a relatively inexpensive one), they are unlikely to cancel it. It's getting people to sign up in the first place that presents the biggest hurdle.

This is why Microsoft are running these ridiculous promo deals for the service - because they have lots of market research suggesting that most of these subscribers are going to eventually become payers of the standard monthly rate. And by letting people get a promotional rate for months or even years, those people are essentially integrating the use of Game Pass into their gaming routine.

Game Pass is probably losing money for Microsoft overall right now, but that is very deliberate and intentional in order to aggressively expand the service into as many homes as they possibly can. I expect the next-gen console launch will be another period of Microsoft aggressively pushing the service; probably with a code in the box for a few months free.

I'm also willing to bet that we grossly overestimate the number of people who are on those multi-month promo deals in the first place. This forum is a self-selecting group of "core" gamers who find ways to eke out the best possible deal, like buying three years of XBL up front and then converting it to Game Pass time. But the average casual gamer probably took advantage of a $1 for one month, or $3 for three months deal, and has been paying the standard monthly rate for a while now.

In summation, 10 million active Game Pass subs in three years is a huge success, irrespective of how much those users are paying per month right now.

 

[OG_Thrills]

We can't tell what profit or loss those increases generated by looking at a headline figure that includes profits and losses from a number of other sources as well as these services.

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Well they don't give specifics but I'm assuming at least some of it is attributed to the 20% decline in XBOX hardware. I suspect Sony results will be simmilar as the console prices have to fall due to the next generation (hopefully) starting soon.

 

[gamstat]

if anyone wants it (sorry for the old picture)

 

[Nameless]

One of the few bright spots throughout all of this is seeing the industry not only sorta booming at a time when many are not, but reinforcing its value in a way that should continue to pay off once we're on the other side. IDK, between this, Switch/AC, what's happening with the e-sports scene, that Fortnite concert, no doubt similar spikes in engagement with Steam & PS, this feels like one those weird moments for gaming.

 

[T0kenAussie]

Btw they reported -1% overall gaming related revenues and -20% hardware revenues:

Xbox Services & Content Revenue Grows 2% Year On Year; Microsoft Gaming Revenue Down 1%

Today, Microsoft announced its financial results for the third quarter of the fiscal year 2020, , related to the period between January 1 and March 31.

twinfinite.net

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Concern trolling is silly. By the way if you hadn't noticed we are 6 months out from next gen and hardware always takes a hit in launch years

 

[TheRealBigRich]

If you give away the service at 1$ it's obvious that tons of people will want to give it a try.
The issue for GamePass is and has always been how long it will be feasible to keep the service in the promotional phase with those deals?
How many people will continue to stay subscribed at full price? Will third parties ever be convinced to put their new games on this kind of service? Can they afford the fact that all their premium first party titles might not see a huge return from full price sales anymore (see what happened with Gears 5)?
If Microsoft wants to pay the bill forever that's cool, who cares about it they're rich enough, but is that going to happen?
The fact that some people want to celebrate certain numbers pretending they don't know the context behind them is absurd (GamePass and even more the 90m Live active users).

Btw they reported -1% overall gaming related revenues and -20% hardware revenues:

Xbox Services & Content Revenue Grows 2% Year On Year; Microsoft Gaming Revenue Down 1%

Today, Microsoft announced its financial results for the third quarter of the fiscal year 2020, , related to the period between January 1 and March 31.

twinfinite.net

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That's a lot of cold water lol

 

[jwhit28]

$60 a year for PC Gamepass seems too good to be true for much longer. It has paid for itself 3 times over already and Streets of Rage 4 and Yakuza Kiwami 2 aren't out yet.

 

[Spark]

This is why a platform agnostic future is inevitable, and why Sony is dabbling with first party PC releases and PSnow. Having your entire ecosystem locked down to a single, plastic box is going to become archaic, especially as Microsoft is dipping their fingers into almost every gaming platform.

 

[PianoBlack]

I don't know that Netflix is the best example, from what I remember they continue to borrow more and more money. Obviously their subscription numbers are beyond healthy, especially with the onset of COVID-19.

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That's exactly my point. If you think Game Pass is actually in bad shape because it's all $1 conversion fairy dust, you must think Netflix is the next Enron. Borrowing money to give away free trials that cost them money!

Being serious: The reality is that most of these subs (for both services) are "real" subs, and that most people are normals who get their free trial month or whatever the deal is and then just pay the regular price. The "but what are the real numbers" comments are noise. MS isn't investing billions behind a two-console next gen, first party studios, and cloud streaming service that all hinge on Game Pass as the core of the strategy just so they can serve up games to 10 million trial users.

 

[lunanto]

There's tons of consumer research suggesting that once people sign up for a subscription (especially a relatively inexpensive one), they are unlikely to cancel it. It's getting people to sign up in the first place that presents the biggest hurdle.

This is why Microsoft are running these ridiculous promo deals for the service - because they have lots of market research suggesting that most of these subscribers are going to eventually become payers of the standard monthly rate. And by letting people get a promotional rate for months or even years, those people are essentially integrating the use of Game Pass into their gaming routine.

Game Pass is probably losing money for Microsoft overall right now, but that is very deliberate and intentional in order to aggressively expand the service into as many homes as they possibly can. I expect the next-gen console launch will be another period of Microsoft aggressively pushing the service; probably with a code in the box for a few months free.

I'm also willing to bet that we grossly overestimate the number of people who are on those multi-month promo deals in the first place. This forum is a self-selecting group of "core" gamers who find ways to eke out the best possible deal, like buying three years of XBL up front and then converting it to Game Pass time. But the average casual gamer probably took advantage of a $1 for one month, or $3 for three months deal, and has been paying the standard monthly rate for a while now.

In summation, 10 million active Game Pass subs in three years is a huge success, irrespective of how much those users are paying per month right now.

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Good post mate.

 

[TheZynster]

thats 100m per month in revenue mind you...

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unless a lot of people did what i did and got locked in till 2023 for like $100


god tier deal....gamepass ultimate for the cost of $1 to tack onto your gold sub that you stacked during that E3 deal

 

[GamerJM]

if anyone wants it (sorry for the old picture)

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90 million times 72% is 64.8 million, which still seems like a really high number of X1s.

 

[Proven]

90 million times 72% is 64.8 million, which still seems like a really high number of X1s.

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I am pretty sure the Xbox one is close-ish to 60 million.

 

[SubvertedTrope]

if anyone wants it (sorry for the old picture)

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I was more talking about actual game software that you can play when you sign up lol, but this is vaguely interesting. How are PS, IOS and Nintendo platforms using Xbox Live though?

 

[Iron Eddie]

90 million times 72% is 64.8 million, which still seems like a really high number of X1s.

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Multiple accounts?

 

[Axel Stone]

90 million times 72% is 64.8 million, which still seems like a really high number of X1s.

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Probably skewed by the timing. 1AM UTC is prime gaming time in Xbox's biggest market, the States, and when most of Europe - where PC is likely to be a larger slice of that pie - is asleep.

 

[VeePs]

Those numbers reported are huge increases in Live and GP, right? I wanted to see what translates to in terms of profit and/or revenue that was generated... I'm not sure how that's a negative thing?

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With Game Pass at least, its not suppose to make a profit, at least not yet. That's literally the whole point of all of Microsoft's promotions.

Matt recently said this:

Game Pass is obviously not profitable, which is exactly how it's supposed to be at this point.

If GP was currently profitable, that would mean the MS wasn't growing the service as aggressively as they could be.

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Nah. More revenue from knock-on effects sure, but not enough to change anything.

Again, no one at MS is worried Game Pass isn't profitable right now. It's not supposed to be.

So fans don't have to be either.

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And I agree. Game Pass isn't profitable right now. Microsoft is investing into it, via first party games, third party deals, and a cheap price to get gamers attracted - so gamers can test it out and see how it works. That's the whole point, to be aggressive and push the service, and show gamers there can be a better option than just buying $60 games or waiting for a sale.

Either way you slice it tho 10 million is a great number. Hopefully it keeps going up.

 

[Spark]

I was more talking about actual game software that you can play when you sign up lol, but this is vaguely interesting. How are PS, IOS and Nintendo platforms using Xbox Live though?

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Minecraft, Ori and Cuphead. I don't doubt Xbox games like Halo and Forza etc would be made for PS platforms if they allowed Gamepass to exist there. Hardware is a secondary concern for Microsoft these days. They want their service everywhere.

 

[Hippopuncher12]

Minecraft, Ori and Cuphead. I don't doubt Xbox games like Halo and Forza etc would be made for PS platforms if they allowed Gamepass to exist there. Hardware is a secondary concern for Microsoft these days. They want their service everywhere.

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God, that would be the dream, PS is my primary and will be next gen as well, I still pay for Gamepass even though I rarely use it, if I could get it on PS or hell even Switch I would be so damn happy. Doubt Sony will ever allow it unfortunately.

 

[GamerJM]

I am pretty sure the Xbox one is close-ish to 60 million.

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Okay, but are literally all of them in active use? Mine isn't.

 

[ZeoVGM]

One of the most incredible values in gaming ever.

They should bring back 1 vs. 100 but make it a GamePass exclusive.

Also, do we know when the Final Fantasy series is hitting the service? It was announced last fall but only XV is on there yet.

 

[TheChunkyPotato]

Multiple accounts?

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That would make sense. Probably lots of siblings who share an Xbox but have their own accounts, etc.

 

[Deleted member 64241]

Impressive numbers, and wow @ gamepass.

 

[Scottoest]

That's exactly my point. If you think Game Pass is actually in bad shape because it's all $1 conversion fairy dust, you must think Netflix is the next Enron. Borrowing money to give away free trials that cost them money!

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As far as sustainability, Game Pass is actually even in a better position than Netflix, because a) they constantly cycle things in and out of the service rather than a continuous bloating of their costs as the library gets bigger and bigger, and b) all of he most expensive content is owned and produced by Microsoft themselves - they aren't paying someone else out the nose for it.

 

[zedox]

unless a lot of people did what i did and got locked in till 2023 for like $100


god tier deal....gamepass ultimate for the cost of $1 to tack onto your gold sub that you stacked during that E3 deal

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Yea...and most likely they did not.

As far as sustainability, Game Pass is actually even in a better position than Netflix, because a) they constantly cycle things in and out of the service rather than a continuous bloating of their costs as the library gets bigger and bigger, and b) all of he most expensive content is owned and produced by Microsoft themselves - they aren't paying someone else out the nose for it.

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Netflix does cycle things out.

But that's not the reason they are in better position. The better position is because of DLC/MTX and the ability to purchase. Their entire revenue isn't based on just the subscription. The subscription is where they want people to start. They are just giving options and getting money however they can but with a low barrier to entry.

 

[Dokkaebi G0SU]

Okay, but are literally all of them in active use? Mine isn't.

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Mine either! Fucking conspiracy mate.

 

[thecaseace]

$1 subs are a thing amongst the userbase on Era. But most normal people have used that deal and are currently on the monthly or annual.

Gamepass certainly looks 'sustainable' from here.

 

[Prine]

If you give away the service at 1$ it's obvious that tons of people will want to give it a try.
The issue for GamePass is and has always been how long it will be feasible to keep the service in the promotional phase with those deals?
How many people will continue to stay subscribed at full price? Will third parties ever be convinced to put their new games on this kind of service? Can they afford the fact that all their premium first party titles might not see a huge return from full price sales anymore (see what happened with Gears 5)?
If Microsoft wants to pay the bill forever that's cool, who cares about it they're rich enough, but is that going to happen?
The fact that some people want to celebrate certain numbers pretending they don't know the context behind them is absurd (GamePass and even more the 90m Live active users).

Btw they reported -1% overall gaming related revenues and -20% hardware revenues:

Xbox Services & Content Revenue Grows 2% Year On Year; Microsoft Gaming Revenue Down 1%

Today, Microsoft announced its financial results for the third quarter of the fiscal year 2020, , related to the period between January 1 and March 31.

twinfinite.net

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Ahem...you should see page 13 of the report, here's the quote.

Don't even think I need to caption this.

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[TuMekeNZ]

If you sub to Gold why the hell would you not go for the Ultimate sub??? Seems like a real no brainer to me

 

[Smurf]

What's with the huge increase in active users? Did sales of the consoles explode or is it growth in the pc market for them?

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my guess would be this little thing called covid-19

 

[OG_Thrills]

With Game Pass at least, its not suppose to make a profit, at least not yet. That's literally the whole point of all of Microsoft's promotions.

Matt recently said this:

And I agree. Game Pass isn't profitable right now. Microsoft is investing into it, via first party games, third party deals, and a cheap price to get gamers attracted - so gamers can test it out and see how it works. That's the whole point, to be aggressive and push the service, and show gamers there can be a better option than just buying $60 games or waiting for a sale.

Either way you slice it tho 10 million is a great number. Hopefully it keeps going up.

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I think the confusing part about your post, to some, is that I disagree with none of it. GP at 10 million in 3 years is decent progress. The jump this quarter is eye opening which is why I wanted to see the potential revenue/profit.

Any way you divvy up that pie that's a lot of gamers. Gamers who at some point, will have to start paying monthly and I'm guessing many already have.

It's going to be interesting to see how they leverage that number moving forward.

 

[SlipperyMoose]

Wow shout out to Gamepass putting in that work. We still haven't seen a mainline halo or Minecraft launch Day and date on it yet.

 

[VeePs]

) all of he most expensive content is owned and produced by Microsoft themselves - they aren't paying someone else out the nose for it.

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Microsoft is also selling content, on the same service & platforms (Physical, Xbox Store & Windows Store), and other platforms (Steam).

On top of that, some games have micro transactions - for instance the Witcher 3 is on Game Pass, but the expansion pass isn't. So if someone is enjoying the game, and wants the expansion pass, both Microsoft & CDPR see profit that way. And if someone is enjoying a game on Game Pass and wants to buy it, they'll get it for a 20% discount.

GP at 10 million in 3 years is decent progress

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That last line at the end was me just commenting on the numbers in general - I wasn't trying to imply you weren't impressed or anything like that. I'm sorry if it came off that way.

 

[FacelessSamurai]

$60 a year for PC Gamepass seems too good to be true for much longer. It has paid for itself 3 times over already and Streets of Rage 4 and Yakuza Kiwami 2 aren't out yet.

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It's supposed to go up to 10$ a month, the 5$ is a promo and only temporary.

 

[OtterX]

You sure you got my point right?
If you play League of Legends and have Xbox Live account on your PC, MS still counts you as active Xbox Live user.

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Are you required to have an Xbox live account on PC for LoL? That doesn't sound right.

 

[Askherserenity]

The fact that anyone would continue to concern troll Xbox over stuff like this is hilarious. Xbox Game Pass is the best thing to happen for gamers this whole generation, and millions of us will be enjoying the full Xbox Series X launch lineup as part of this subscription instead of having to spend another $120 or $180 on games at launch. Amazing times to be an Xbox gamer!

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Series X Launch is going to be insane. They must have so many 1st party AND 3rd party games lined up for Gamepass at launch.

 

[FacelessSamurai]

That's exactly my point. If you think Game Pass is actually in bad shape because it's all $1 conversion fairy dust, you must think Netflix is the next Enron. Borrowing money to give away free trials that cost them money!

Being serious: The reality is that most of these subs (for both services) are "real" subs, and that most people are normals who get their free trial month or whatever the deal is and then just pay the regular price. The "but what are the real numbers" comments are noise. MS isn't investing billions behind a two-console next gen, first party studios, and cloud streaming service that all hinge on Game Pass as the core of the strategy just so they can serve up games to 10 million trial users.

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Everyone here apparently is only on 1$ promos, but I don't know any gamepass subscrbers in real life that isn't paying full price for ultimate.

 

[rapid32.5]

Switched from PS+ to GamePass last year no regrets. Pricing is amazing, always can find a deal here and there.

 

[scrapple]

Gears Tactics, worth it alone... so fun.

 

[Cantona222]

I can see that people will get hooked on Gamepass and will never unsubscribe anytime soon. Streets of Rage 4 will be on the service on day one.

 

[Avenger]

Keep pushing

 

[OG_Thrills]

That last line at the end was me just commenting on the numbers in general - I wasn't trying to imply you weren't impressed or anything like that. I'm sorry if it came off that way.

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I'm impressed that they've given an actual figure for GP because from the best of my knowledge they haven't until now. If my memory serves me correctly.

 

[gamstat]

How are PS, IOS and Nintendo platforms using Xbox Live though?

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PS and Nintendo - mostly Minecraft: Bedrock Edition.
iOS - Xbox App for iOS.

 

[cyrribrae]

Decrease in gaming revenue is because the consoles have outperformed end of lifecycle projections (largely thanks to subscriptions and Fortnite). Hardware defied the trend for a bit too, but not this late in the game, when Xbox has been clearing out stock at low prices. That Game Pass number is absolutely staggering, and it highlights that Xbox is MAKING MONEY and a *lot* of it. (And yet, still just a drop in the bucket for a company that cleared 35 Billion in sales and made more than 10 BILLION dollars in profit THIS QUARTER). Absolutely insane.

As for active Xbox Live users - if your PC automatically connects to the Xbox app on boot, you're a monthly active user. If you ever check Xbox live on your phone. Or log into Minecraft anywhere, you are a monthly active user. Even if you're not playing any games nor spending any money, you MAY be an active user. Still - that's an INSANE jump in usage from the 50-60M we were seeing before.

Really good numbers, should provide a good morale boost to Xbox and their teams going into console crunch time (especially doing it all from home).

 

[Lobster Roll]

Everyone here apparently is only on 1$ promos, but I don't know any gamepass subscrbers in real life that isn't paying full price for ultimate.

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This is an enthusiast forum that is knowledgeable about sales, deals, or tricks like the $1 promos. A thread from April 14 regarding FF7R's combat and whether or not people liked it had a grand total of 1,606 votes on the poll. For the biggest game that's been released in 2020. This place is a small bubble of enthusiasts, so I wouldn't get trapped into thinking that just because the average Era user says they have $1 Gamepass until 2022 that it's anywhere near the norm.

 

[jaymzi]

Does the price reset to back $1 or something after you stop subbing for a few months?

I remember subbing back when Gears 5 came out for one month for $1. I just checked how much it would cost me to resub and it is $1 again.

 

[Puroresu_kid]

I'll be added to the list when the new xbox drops.