Least popular by a pretty huge margin, right? I don’t remember the numbers found in the FTC trial, but it was worse than most people had estimated.

Plus, for reference, Fortnite and Roblox (just two of those free to play games, that don’t require any subscription option on any console or PC) have about 30M monthly active users each. With Game Pass hovering around 34M subscribers, that’s peanuts in comparison to the number of monthly people playing all of the top 15 games and little (if anything) else. Free to play / live service games have gobbled up the “normie” market and I’d bet that most of those gamers buy less than a game per year.

That said, the best case for Game Pass is if every existing subscriber were paying for the highest tier at full price; that’d be about 34M x $20, so $680M per month. But we know that’s not the case. If it were, that would fund GP deals, some AA games, and even a handful of AAA games if handled properly. Still, with all these layoffs and seemingly sweeping changes every 6-12 months, who really knows what the hell is going on over there.

Since the latest discussion has been about Game Pass profitability, here’s a very recent article about some of the misinformation that’s been floating around.

https://www.windowscentral.com/gamin...r-an-albatross

I think there's some conflating of subscription models and free-to-play/add ons here, and I also have a hard time calling out people who, well, enjoy subscription services or free to play games as idiots. Now certainly there are major complaints to be had about the predatory nature of free to play and gacha games, the addictive nature of them, etc. But to me as long as these people are adults, they can have their own preferences and spend their money as they please. It's like me saying that people who buy games on discount or used are killing the games industry because they aren't buying them new at full price.

I think I said it before but it's become similar to the movie/TV industry where budgets and lead times are so inflated in order to make a "AAA" game that they just become black holes unless they're instant hits. As others have stated, there's a lot of stuff competing for time and someone can only play so many games in a day. It's also why mobile games have become more prevalent, they're portable on a device you are already carrying around at all times and you can play for a few minutes at a time.

On the other hand, it seems like smaller games are, I'm not sure if we can say thriving, but coming out at a pretty speedy click with high quality. Getting visibility on them when the market is flooded with games is difficult, but that's the other thing, maybe I'm crazy but we have more games coming out (even if we exclude shovelware) than ever, plus we have ways to play almost the entire category of previous games. The barrier to entry into the field is probably lower than ever (as long as you don't need a gigantic budget). Now as the job market shrinks that may not be true for successive generations and that sucks, but I don't think gaming in general is in danger (though the games we prefer might be)

I've spent $712 on Speedstorm. I still have the tokens to get the diamond pass the next 8 months, so through the end of February, a total of 34 months since it came out. That's 21 bucks a month. And after that it's $20 a month. I don't buy cosmetics or upgrade equipment, etc, just the highest tier season pass per month. And it's my number one played game of all time. And it's the FUNNEST game I ever played, have logged in and played every day in the last 26 months. I will play game til the last server is unhooked. But I will NEVER again play a live service game again, just because I hate not being able to miss a day because I WILL miss something. I want to game game game then nothing for a month then game game game then nothing for a month, etc. But I'm glad I picked up DSS. I frontloaded the purchasing because I knew it was as cheap as it would be. I haven't added money in over a year.

I hope I didn't give that impression.

I lump free-to-play and subscription models together in the sense of "devaluing" or presenting a significant hurdle for increasingly-expensive full-priced video games, along with Humble Bundle-type packages, bargain bin Steam sales (where AAA games are $3 or whatever), etc. But it's recognition rather than judgment, if that makes sense. I've been getting free or "free" games as part of subscriptions basically as long as these services have existed, I'm not playing any F2P games right now but certainly have in the past and very well may in the future (I'm more of a single-player campaign guy, so generally speaking, "forever" games -- F2P or premium -- aren't really my thing), and I buy stuff on sale the same as everyone else.

It's a brutal situation. Like you said, the barriers to entry to create and publish a game have never been lower, to the point where there are literally tens of thousands of games releasing every year. So there's an endless flood of indie and AA games, the AAA market is concentrating around fewer but massively more expensive titles that can take an entire console generation to produce, all while a tiny handful of games -- Fortnite, GTA Online, yadda yadda -- are overwhelmingly dominating players' time. Games are often releasing in such rough states that it's often better to just wait a few months for patches and a lower price...which also presents a challenge to recouping those gargantuan nine-figure budgets. And when you can get a slick, hyper-polished AAA game, even if it's a few years old by that point, for pennies on the dollar and often zero incremental cost whatsoever, what does that mean for the economics of the industry? How many of the people who've been laid off over the past year or two can even hope to find another position in gaming? The mantra used to be "go indie!", but the lowest-end is surreally oversaturated, and essentially anything else means you're likely competing against colossal, massively-budgeted games which can make it difficult to stand out. There are success stories to point to like Expedition 33, but those are very few and far between, and even that game had significant support behind it (more than 400 names in the credits).

On the upside, people who buy games but don't actually play them are more than doing their part!

I'm doing my part. I spent $70 on the Summer Steam Sale. There were so many games under $10 and $5 that I went a little crazy and bought twelve games this week.

I still don't see how "Lots of people buy video games on sale that they'll never play" is in any way a counter-argument to "Microsoft is significantly stifling full-priced sales of AAA games by offering them Day One on Game Pass". I don't know how the financials of these things work, but I have to assume that 75-80% of a high-profile, AAA game's profit come in the first 6 months while it's being sold at or near full-price (with the rare exceptions of a super-smash game that keeps on selling like GTA V or Minecraft, or the incredibly rare game that slowly builds in popularity over time like Cyberpunk. And Nintendo is its own thing). When you dramatically cut into sales of your own high-profile first-party AAA games, I just don't really see how you ever recoup that investment. It's hard to know for sure without accurate sales numbers available. Wikipedia lists Call of Duty Black Ops 6 as the top-selling video game of 2024, but I don't know if that is including Game Pass 'purchases' or not.

Say, on average, Game Pass subscribers are paying an average of $10/month. I think that's conservative because there's surely a ton of people on the Ultimate plan, which is $20, and less people on the lower tiers, and people who have bought GPU on sales, etc.
So $10 seems like a pretty low assumption, but better than pretending everyone's paying $20, which is absolutely not the case.
34 million x $10 = $340M per month. Or $4.08B per year.
Now, obviously, there are massive costs related to running Game Pass itself. Servers & facilities, dedicated GP employees, deals with 3rd party devs*, etc. and I couldn't begin to guess how much all of that costs.

We don't really know what AAA games cost to make, but predictions are anywhere between $100M to $400, with a few outliers. That's not an annual cost, but development over multiple years.
For Microsoft's own studios, I imagine the numbers are anywhere in between those, though it sounds like Perfect Dark had ballooned to an insane number.

Regardless...
Profitability of Game Pass is a matter of if those costs of all of the above in addition to game development exceed about 4 billion dollars per year or not.

MS seems to insist that despite everything else, Game Pass is profitable. Maybe they're fudging the numbers, or maybe it's actually working out, or maybe it's right on the line and drops below or rises above from month to month.


*this last one gets very complicated since every deal is different and every deal accounts for the "lost sales" factor in one way or another. I highly doubt they've paid any 3rd parties up to $100M for a GP deal, but if anyone knows, it'd be interesting to see.
Internally, they don't make those same deals, but they surely make the same predictions on how many fewer copies are bought vs. played on the sub.

Of course Sony looked at the same financials and determined that it was not in their best interest to offer new AAA First Party games on even their top PS Plus tier. And they sold tons of copies of Astro Bot as a result. Admittedly Sony has a much larger installed base than Xbox, but GPU cannibalizes heavily from the PC market, which I imagine would be a huge consumer of games like Doom and Call of Duty if it were not readily available for “free” on Game Pass.

Claims of profitability just ring hollow to me when they accompany massive layoffs across all MS owned studios.

No one said that it is…?

If I were to rank the greatest threats to the video game industry, Game Pass wouldn’t rank anywhere near the top.




Circana reported it as the best-selling title of 2024 by dollar value based on retail/digital-with-an-asterisk sales, without factoring in Game Pass.



There are massive layoffs across Microsoft.



But really, there’s no way to know how effective, profitable, or sustainable it is with the very limited information we have. Microsoft under current leadership is very into services and ubiquity, and Game Pass and their embrace of multiple platforms are both very in-step with that. The fact that Game Pass is still chugging along when MS is quick to slash and burn so much else — despite coming nowhere close to the goals we’ve learned about — makes me think it’s either doing well enough or at least shows promise.

Thank you for that. No way to know for sure, but that was a very well reasoned response.

What about AI would lead to mass firings? Are they replacing employees in programming with AI?

From the Seattle Times:

The number of H1B requests from Microsoft have skyrocketed, that's at least one way they are "cutting costs."

Game pass or No game Pass or Live games or No live games is not the real issue...it's just making AAA Games have really became super expensive and costs a lot.....

Awhile back when some of this "Decimating the Gaming Industry" was really starting to wreck havoc....I remember finishing a game and decided to let the credit scroll which majority doesn't even do anymore. I kept looking and waiting till the end and it was like watching the credit of some big sci-fi budget movie. The amount of people, places, devs, artists, sound, voice, translators was staggering.....I then went back and opened my Gears of War 2 XBox 360 case and inside was a pamphlet and it listed the Team Involved and it was like 60-80 people....

10-20 years even with far small Studios and Devs, Games were still coming out at a reasonable pace...and money was coming in, backing up and you never ever hardly saw games cancelled. But it seems the last few years or so we've seen an onslaught of Studio and Devs Closing, Layoffs and In Production Games Cancelled even after millions spent. The losses of Talent and Games in progress has been staggering along with financial losses of games that started out with great promise only to fall flat which that to we very seldom saw.

But when it boils down to the Big Elephant in the Room issue...its all about $$$$ and Return and I dare say especially with Microsoft. Granted, Sony has taken some hits with misses on some Live Games but Mircosoft, I honestly think the Gaming Division is treat like the Black Sheep Stepchild especially the last 5-7 years. The 360 XBox Glory days are long gone along with the staple games that came with it. The numbers speak for themselves as Units and Games for 360 sold. Somewhere when Xbox Series One was introduced, that's when it started going down and I and others think it was a direct result of the Higher-ups at Microsoft started calling the shots and getting more involved in the Gaming Division plans and future. And the recent layoffs today as well over the last several years is evident.....Plus with the acquisition of Studios, they (including Sony) pretty much has a say on Games in production or drawing board. And sadly, some of these at The Top, MS and Sony hasn't a clue as to what Gamers actually want to play.....

To be fair, this has always been happening to some extent. It just wasn't as public. And with dramatically increased development times, it’s more obvious these days too.

Two things I'd push back on a bit: Sony has closed a fair few studios in recent years, and I'd attribute much of that to the fewer-but-bigger blockbuster-ization of Sony's lineup — more than the live service misfires.

While Xbox has more than their share of issues, I wouldn't say that the issue is that they're a black sheep at Microsoft; it's kinda the opposite. Gaming is now one of the company's largest revenue-generating teams; bigger than Windows, even! But with increased attention comes increased scrutiny, increased expectations, yadda yadda. At the end of the day, I think what Xbox is doing broadly aligns with what Microsoft wants, which is why the current management team remains in place, despite…everything. I'd expect layoffs, closed, and cancellations to continue, as Xbox embraces the fewer-but-bigger mantra with as lean a staff as they can get away with.

Agreed. Games are teased early on at the big gaming expos, and that's an important part of building hype (and funding), but with development times on the bigger games approaching or even exceeding the length of console generations, there are major sunk costs if things go off the rails or the games become utter failures.

Concord was supposed to be the premiere title from a new studio (Firewalk), established in 2018 and bought by Sony in 2023. It was apparently one of their most expensive games (reportedly $400 million!), and died within 2 weeks of release, shut down so it's literally impossible to play even if you bought the disc, and resulted in the closure of the studio.
Perfect Dark was supposed to be the premiere title from a brand-new MS studio (The Initiative) formed in 2018, and MS killed it last month, 7 years later. The budget is not known, but it's surely up there with Concord. the Digital Foundry guys suggested that the development had become a bit of a mess due to clashing personalities, but had been "back on track" shortly before this recent announcement about the game being canceled and the studio being closed.
And that's just two in a sea of studios and titles that disappear because of the changes in financing, priorities, etc.


This seems accurate, and bolded for emphasis. However, I would add the point that, like it or not, Satya Nadella and Amy Hood are the top decision-makers for MS, and they seemingly have a vision for how they want Xbox to be run going forward, even if it doesn't align with what Spencer, Bond, and Booty were trying to build with the brand since 2013-ish. That said, I think that team remains in place because they (somehow...) still have some amount of goodwill within the company and the community, though that seems to be going by the wayside depending on which gaming forums you read.

Interesting read over at Videogamer. A few of us have stayed and played Elder Scrolls Online for awhile (PS4 and now PS5). And kept up with the future of it with ESO6 coming along wondering about the future since Microsoft owns Zenimax Online Studios if anything was going to make it to PS5. When the huge recent Layoffs happened, sadly Zenimax was hit hard. A pretty good read on input from some still left, the effects it's having on those left, the cancellation of one project that pretty much everyone said could've been a hit.....

Elder Scrolls Online devs detail “inhumane” Microsoft layoffs as Xbox expects the “carcass of workers” to “keep shipping award-winning games”
Elder Scrolls Online devs detail “inhumane” Microsoft layoffs as Xbox expects the “carcass of workers” to “keep shipping award-winning games” - VideoGamer

Stephen Totilo just reported in his Game File newsletter that development has stopped on Contraband.

Firaxis just got hit hard by layoffs. I have to admit that Midnight Suns is the only game of theirs that I've played, but I did really love it.

This doesn't seem to be good news...

Reports: EA set to be sold to private investors for up to $50 billion - Ars Technica https://share.google/RhZvzZr5pXqr31m7K

Looks like done deal. Gross. Saudi money is never a good thing.

https://www.darkhorizons.com/ea-offi...or-55-billion/

How about Saudi money overseen by Jared Kushner?

They had better not cancel the third Jedi game. 😡

More likely : Build your Ultimate Jedi Team!

Wow, just like that EA is gone.

It couldn't have happened to a worse company.