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Azzanation on 14 May 2023
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LudicrousSpeed said:

Man I can’t believe this thread is still going. You’re making all kinds of assumptions about subs and numbers, none of it makes any sense. Here’s what MS loses by going third party:

Millions of XBLG subs
Millions of GamePass subs
Licensing fees off of millions and millions of physical games sold
Full share minus retailer cut of millions of physical first party sales
Digital shares off of millions and millions of digital games sold
Digital shares off of millions and millions of digital micro transactions/DLC

Here is what they gain:

They can offer a stripped down, more expensive version of GamePass to Sony and Nintendo and make less money off of it, because Sony and Nintendo now get a cut of everything.

They can sell physical games on these platforms but they have to give retailers and share and now pay licensing fees to Sony/Nintendo.

They can sell digital games on these platforms but they have to give platform holders a 30% cut of all transactions.

You assume they’ll see a large growth in GamePass subs, but there’s no basis for that assumption. I sign up for GamePass because of day one first party games and cool third party titles I’d otherwise typically not try or sometimes not even notice. All of that is gone in this new GamePass on competing consoles. They lose subs.

They might sell more physical games since they have two more platforms to sell to. But they make a lot less on each sale. They make 30% less on each digital sale.

The kryptonite to your argument are digital services and transactions. You’ll need to sell an absolute gargantuan number of games to make up the revenue you lose from gold and GamePass and digital transactions. Just saying “well you get a lot more subs!” doesn’t cut it.

There’s a reason Xbox is consistently in third place and yet MS still sticks around and makes profit and invests billions in the product.

Millions of Subs will dominate the profit boards than everything you just mentioned. 100m Subs is $1billion a month. 200m is $2billion a month. They arent hitting those sub numbers hanging onto console hardware. The reason they need to dump the hardware is to lessen the competition with Sony, so Sony will agree to a GP model on PS which Sony will also benefit from profiting. 

Example: 1st Party Xbox GamePass on rival systems means plenty of Nintendo and Sony customers can possibly sign up. Sure they lose the 3rd party games but that model can still exist on PCs etc.

This also means Xbox can release all their games digital as stand alone games on both Nintendo and PS increasing digital sales by a fair margin. Imagine games like Halo Infinite, Gears 5 and Horizon 5 on Switch and PS4.

Yes i am assuming they will sell better, but do you and others really disagree with that assumption?