XBOX |OT|

[trunkswd]

Zippy6 said:

G2ThaUNiT said:

I’m shocked at the 3% profitability margin. Here Satya and Hood wanted that at 30% lol. Phil and Sarah were clearly in desperation mode.

Massive change was always gonna be coming with the mess Phil left. That’s crazy that Asha even called them out mentioning being in this position from decisions made over the past 5 years.

They invested too much into getting tons of studios, and then put all the games on a subscription. The amount they were spending on creating gamepass content increased exponentially and with that the profit they were getting from each subscriber decreased. They tried to increase gamepass to $30 to fix this and there was a mass exodus of subscribers.

It's hard to make profit when so many of your fanbase are getting all your games so cheap. I stacked Gamepass PC at the beginning of this year for just £7/month. That's only a little more than the price of one game per year. They release just two games I'd purchase in a year and they're getting less money from me and that money has to be shared with other publishers.

How many fans do they have that would be spending $300+ a year just on their first party games? But instead just get gamepass which money needs to be shared with third parties.

I just don't see how they can have a high profit margin while giving away all their games day one on a subscription. Especially a subscription that sees them reportedly spend $1 Billion annually for third party content.

Microsoft was clearly hoping Game Pass would keep growing to like 100 million subscribers, which is unrealistic. We don't know how many subs there are, but after the last increase they lost millions of subs. I had Ultimate tier maxed out at 3 years before the last increase thanks to MS Rewards. That is now down to 2 years and a few months. Once it runs out I will probably switch to PC Game Pass. 

I could see them investing less in third-parties to help lower costs as they now have a steady stream of first-party games.