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Forums - Gaming - Prediction: Microsoft to become largest 3rd party publisher.

G2ThaUNiT said:

You probably should have read the link before making this comment. In short, Xbox was still in the profit margin even in their worst first party output year being 2022. Even if you remove Sony and Nintendo, Xbox is still making a profit. 

Yeah, that graphic bar shows the problem. The revenue vs. profit in Playstation is well known from many years (it is), and is just awful. Awful. So much money gets lost for the company (yes, a 7% against 12% or even 10% margin seems "not that important", but it really is and shows an internal serious manegement problem in SIE nobady seems to solve anymore).

The Nintendo situation, btw, is extremely impressive. Would be an insult for Sony... but to be fair, it can't be defined as "the normal situation" to be compared. It isn't. Is just an extraordinaire job.



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JohnVG said:

Yeah, that graphic bar shows the problem. The revenue vs. profit in Playstation is well known from many years (it is), and is just awful. Awful. So much money gets lost for the company (yes, a 7% against 12% or even 10% margin seems "not that important", but it really is and shows an internal serious manegement problem in SIE nobady seems to solve anymore).

The Nintendo situation, btw, is extremely impressive. Would be an insult for Sony... but to be fair, it can't be defined as "the normal situation" to be compared. It isn't. Is just an extraordinaire job.

Sony has already drastically improved their profit margins. Looking at it year over year, SIE's operating income for the last quarter was 13% compared to the 7% it was the year prior. Its only going to get better with Bungie no longer eating into their margins and hardware profitability improving. Not to mention the PS+ price hike won't impact financials until their next fiscal year. PS5 won't truly peak profit wise until 2027 - 2028.

Also, isn't that Nintendo figure for the whole company, which would include stuff like movies or Pokemon trading cards? Not really a fair comparison in that case. Something like The Last of Us adaptation would be accounted for in Sony Pictures rather than Sony Interactive for example. Am I wrong in this regard? The graph is also using accountability margin for Xbox. Does Microsoft even use that metric for their financial reports? 

Edit: Went to the original source for that graph (TweakTown). It goes on to cite Phil Spencer's testimony that "Xbox business today runs at a single digit profit margin." 

Last edited by PotentHerbs - on 18 December 2024

PotentHerbs said:

Also, isn't that Nintendo figure for the whole company, which would include stuff like movies or Pokemon trading cards? Not really a fair comparison in that case.

Not fair? Ok. We can compare Sony Group Corporation, the parent company using the net incomes (annual profits) in $ dollars.

Sony net income in 2024 was about $6.7 Billion. That includes EVERYTHING of Sony, and I mean everything: Film/TV, games, music, appliances...
Nintendo net income in 2024 was about $3.25 Billion. That includes EVERYTHING of Nintendo (basically, games)

  • Best year in Nintendo was 2021, with $4.4 Billion net income
    Best year in Sony was also 2021, with 11 Billion net income (Attention: Sony only surpassed the 7 Billion mark 3 times, the other 2 were 2019, $8.26B and 2022, $7.85B).
  • Worst year since 2008 in Nintendo was 2012, with $-527 million in losses (I believe is one of the 2 years with net losses in Nintendo history. Other one being 2014, $-224 millions).
    Worst year since 2009 in Sony was also 2012, with $-5 Billion in losses. Sony had -1 Billion (or more) loses 5 years since 2009, from 2009 to 2015.

More fair?



only777 said:

I wasn't happy that Pemalite was rather mean to my video post and made some untrue assumptions about my post intentions, so to please him, here's where I was going to take that locked thread, but now in text only form.

Microsoft has ruined Xbox, the business decision to push Game Pass above all else is a disaster that is playing out in front of us all.

Starfield not pushing the needle in hardware sales and Gamepass simply doesn't generate the revenue to fund the running and development costs of the Many, many Microsoft Game studios.  I did layout the maths in the video I created, but I'm not linking it again as I don't want to be branded as self promoting.

We saw in the FTC leak the costs of bringing 3rd party games to the service.  We know that games like COD are costing around a billion dollars to get out the door now.  So with all the costs of development and maintenance outweighing what the service is actually bring in, at some point something has to give.

Xbox sales are slowing down, Game Pass is not bringing in new users to the Xbox Console eco system, Starfield actually saw two thirds of its sales from PC users.  So what's actually happening here?  Xbox players are migrating to either PC or leaving the system altogether and going to PlayStation.

In a world where the primary Game Pass platform is PC, Microsoft has a problem.  PC gaming is too entrenched in Steam for Microsoft to realistically find more than 50 million users, and with Xbox console sales stalling Microsoft has to do something.

That something is to become the biggest 3rd party in the industry.  I think Game Pass will continue on as Microsoft's PC subscription service, although all Microsoft studio's titles will see releases on Steam, PlayStation and Nintendo. 

I also think we are looking at the last Xbox generation in the Series X|S consoles.  With Game Pass failing to push Microsoft out of 3rd place, they will refocus their efforts into becoming the biggest powerhouse 3rd party publisher in the industry because this makes the most business sense.

I believe the timeline will look something like this:

  • 2024: Starfield is announced for PlayStation 5
  • 2026: Xbox Game Pass is re-branded to Microsoft Game Pass
  • 2027: Microsoft announce that there will be no new Xbox consoles

It took some time; but I was right; Source: https://www.videogameschronicle.com/news/microsoft-was-the-no-1-games-publisher-in-the-world-last-month/

Microsoft are now the biggest 3rd party publisher in the world!

Plus 64% of their profit is made on PlayStation!



Sony want to make money by selling art, Nintendo want to make money by selling fun, Microsoft want to make money.

only777 said:

I had my doubts, but you stuck to your guns. 



...to avoid getting banned for inactivity, I may have to resort to comments that are of a lower overall quality and or beneath my moral standards.

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DroidKnight said:
only777 said:

I had my doubts, but you stuck to your guns. 



Sony want to make money by selling art, Nintendo want to make money by selling fun, Microsoft want to make money.

only777 said:

Microsoft are now the biggest 3rd party publisher in the world!

Plus 64% of their profit is made on PlayStation!

nostradamus title unlocked :)



only777 said:
only777 said:

I wasn't happy that Pemalite was rather mean to my video post and made some untrue assumptions about my post intentions, so to please him, here's where I was going to take that locked thread, but now in text only form.

Microsoft has ruined Xbox, the business decision to push Game Pass above all else is a disaster that is playing out in front of us all.

Starfield not pushing the needle in hardware sales and Gamepass simply doesn't generate the revenue to fund the running and development costs of the Many, many Microsoft Game studios.  I did layout the maths in the video I created, but I'm not linking it again as I don't want to be branded as self promoting.

We saw in the FTC leak the costs of bringing 3rd party games to the service.  We know that games like COD are costing around a billion dollars to get out the door now.  So with all the costs of development and maintenance outweighing what the service is actually bring in, at some point something has to give.

Xbox sales are slowing down, Game Pass is not bringing in new users to the Xbox Console eco system, Starfield actually saw two thirds of its sales from PC users.  So what's actually happening here?  Xbox players are migrating to either PC or leaving the system altogether and going to PlayStation.

In a world where the primary Game Pass platform is PC, Microsoft has a problem.  PC gaming is too entrenched in Steam for Microsoft to realistically find more than 50 million users, and with Xbox console sales stalling Microsoft has to do something.

That something is to become the biggest 3rd party in the industry.  I think Game Pass will continue on as Microsoft's PC subscription service, although all Microsoft studio's titles will see releases on Steam, PlayStation and Nintendo. 

I also think we are looking at the last Xbox generation in the Series X|S consoles.  With Game Pass failing to push Microsoft out of 3rd place, they will refocus their efforts into becoming the biggest powerhouse 3rd party publisher in the industry because this makes the most business sense.

I believe the timeline will look something like this:

  • 2024: Starfield is announced for PlayStation 5
  • 2026: Xbox Game Pass is re-branded to Microsoft Game Pass
  • 2027: Microsoft announce that there will be no new Xbox consoles

It took some time; but I was right; Source: https://www.videogameschronicle.com/news/microsoft-was-the-no-1-games-publisher-in-the-world-last-month/

Microsoft are now the biggest 3rd party publisher in the world!

Plus 64% of their profit is made on PlayStation!

They were the biggest 3rd party publisher as soon as they acquired Activision/Blizzard so yeah this whole thread was pretty pointless like all your other rubbish threads and rubbish Youtube videos. 



They became the biggest 3rd party publisher the instant they got ABK.



Chris Hu said:

They were the biggest 3rd party publisher as soon as they acquired Activision/Blizzard so yeah this whole thread was pretty pointless like all your other rubbish threads and rubbish Youtube videos. 

I know you're upset right now; and listen, as an ex-90s Sega Fanboy myself I know how hard it is watching your Team being leveled into the dirt.

So instead of firing back at you; I'm going to be the bigger man here and say:

"It'll be okay.  Nintendo and Sony make great consoles too, and I'm sure in time you can learn to love them like you do the Xbox"

I believe in you.



Sony want to make money by selling art, Nintendo want to make money by selling fun, Microsoft want to make money.