people are still trying to find a way to say that gamepass is bad for gaming and for gamers i guess
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Phil Spencer confirms Game Pass is profitable
- Thread starter Frieza
- Start date
people are still trying to find a way to say that gamepass is bad for gaming and for gamers i guess
Devs are happy, customers like it, Phil says it's profitable. That's a decent trio.
His point I think is that the statement doesn't really mean anything. If it was doing real numbers it would be on some other accounting documents (can't remember what he called them).
So it's somewhere in the middle, and with the way "creative accounting" works it could be nearly any kind of money and he still wouldn't be lying, of course it's profitable if you're leaving out most of the costs associated with it.
That's not what he said.
He said that because Gamepass is a internal initiative they CAN be more liberal with accounting practices. That doesn't mean they ARE taking those liberties.
If most of the costs are already expensed too other parts of the business, they aren't being "left out" to appear profitable. It means that there exist efficiencies that allow one aspect of the business to operate more cheaply.
My employer has a customer that burns coal to generate electricity. They also sell synthetic gypsum to drywall manufactures. The syn-gyp Is a byproduct of environmental protection measures that the power company is legally required to take.
So, would you count the cost of synthesizing the gypsum as expense of the syn-gyp business or an expense of the the power generating business? The answer is- it's a cost of the main business, generating power… this company would incur these same synthesizing costs whether or not their syn-gyp business existed.
It's the same with Gamepass. Most of the expenses that make Gamepass tick are costs associated with running Xbox anyway. So it's not funky accounting to leave them out when figuring that Gamepass is profitable.
Gamepass' entire offering is essentially a byproduct of Xbox's platform- it's just a portion of the Xbox store repackaged and sold a different way. The only Gamepass specific expenses is the cost of convincing Devs/pubs to go along with the repackaging- and these costs are relatively low. If Gamepass subs are bringing in 200m a month in revenue, it's hard to believe licensing costs exceed that.
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Because some people just can't leave a good thing alone, there always has to be a catch. Then I ask myself, do these people actually enjoy playing videogames?
You're interpreting the video pretty differently to me. I'm not going to watch the whole thing again but the line at 29:22 ,"I have questions about game pass profitability , I think if it were truly profitable in the manner that is suggested by what Phil Spencer says it would appear it their annualised statements ....." Is enough to know how that dude feels about it
That line basically confirms what I'm saying… he's speculating on what profitable could mean, because he's has no access to any data to confirm one way or another.
We know how he feels about it… but this video provides 0 incite on what the Gamepass balance sheet actually looks like.
That said, xbl and game sales are also grouped into "content and services" rather than appearing separately in the statements. Does that mean they are also unprofitable?