How are we defining "The success of Game pass?" Beyond PR statements? Microsoft's own financials paint a very grim picture. Subscriptions up 14% but gaming revenue down 10% is the loss of 205 million in a quarter right?
But if you look at it as them heavily discounting the services to get people hooked on Game Pass --- to get people to move from $5 a month for just Gold to $15 eventually for Ultimate when the specials run out - AND they give away their first party games...
For sub/services to only be down 3%/1% is actually a pretty strong number. Look at the active users. If 14% more are using and it declined only 3% when we assume a good chunk of them are working with the freebie starter subs. That's about 7 million more monthly users. If they hold just 5% of them for two years, spending a bit each month....well you can see how this scales up.
5% is 350k users. If you get just those to spend the $15 a month long term for Ultimate, that's 5.25 million annually. Before they spend any other money on anything else - and it's pretty much all clear revenue for subs. So even if they buy only a couple games a year and a little DLC and a couple skins here and there, all of which MS collects 30% platform holder fees.
And we ALL know that the more you are play on a system, the more you buy. Check the backlog of every gamer ever. But also then you buy controllers and movie rentals and branded merchandise and the Halo convention and Gears novels and Gears Pop and... I know I've bought movies from Microsoft the past year - simply because I was on the store or had credit - that I'd have otherwise purchased on Google Play or iTunes or Amazon.
And then you've got people using MS Rewards, fueled by the Game Pass Quests, which drives people to Bing, which doesn't show up on the Xbox ledger, but shows in the MS corp overall ledger. Bing has grown in revenue every year, now over 7.5 billion annually.
The math is there as long as they convert intro subs to long-term subs. And let's not forget that this whole two-year push is REALLY about launching the neXtBox, cloud gaming beyond the console and expansion of the PC marketplace foothold. I'd imagine some of this is pegged as essentially marketing spend. It's just a much bigger picture for a much bigger corporation. Too much of this conversation centers on console gaming revenue only. (If you're doing that, Xbox is probably even worse, because Minecraft on all plats makes up for some of the losses.)
The Game Pass idea has tentacles far and wide for the entire MS business in a way that wouldn't work for Sony and Nintendo due to the structure and nature of the organization.
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