Microsoft created Gamepass to undercut the competition with its deep pockets. It makes consumers think "I can get this on PS for RRP or on Xbox for this small monthly sub among other games".
People were attracted to the low $1 fee and the "bang for your buck" excuse the pun. There was no competition on what offered the better value for 3rd party games. Microsoft NEEDS people to stay on the sub to get an ROI. Why? They're spending way more than they the games are worth to generate hoping later down the line, that enough people OR that people will stick around without updating the service.
There are 25 Million confirmed MAUs on GP. We know the cost and how many games reside on the service. Those figures are enough to calculate how much the expenditure. For argument's sake, I purposely based the revenue on the best case scenario that every single MAU pays monthly which is the most expensive for consumers.
25MM MAUS a month equates to £300MM (low @ £1 a month) to £1.44B (high @ £120 a year) annually. Average of 400 titles on the service. £7.5MM highest possible average to spend on per title on GP to break even. Obviously fluctuation on indies versus AAA additions.
Is anyone seriously thinking developers and publishers are accepting £7.5 million for Game pass instead of attempting to gain 125k sales @ £60?
People aren't coming in the droves they thought through undercutting so how do they make consumers move and stay? I reckon buying out the main AAA publishers favoured by giant communities to stranglehold would.
Comments 1
Re: Microsoft Admits Xbox Game Pass Is Harming Software Sales After All
Microsoft created Gamepass to undercut the competition with its deep pockets. It makes consumers think "I can get this on PS for RRP or on Xbox for this small monthly sub among other games".
People were attracted to the low $1 fee and the "bang for your buck" excuse the pun. There was no competition on what offered the better value for 3rd party games. Microsoft NEEDS people to stay on the sub to get an ROI. Why? They're spending way more than they the games are worth to generate hoping later down the line, that enough people OR that people will stick around without updating the service.
There are 25 Million confirmed MAUs on GP. We know the cost and how many games reside on the service. Those figures are enough to calculate how much the expenditure. For argument's sake, I purposely based the revenue on the best case scenario that every single MAU pays monthly which is the most expensive for consumers.
25MM MAUS a month equates to £300MM (low @ £1 a month) to £1.44B (high @ £120 a year) annually. Average of 400 titles on the service. £7.5MM highest possible average to spend on per title on GP to break even. Obviously fluctuation on indies versus AAA additions.
Is anyone seriously thinking developers and publishers are accepting £7.5 million for Game pass instead of attempting to gain 125k sales @ £60?
People aren't coming in the droves they thought through undercutting so how do they make consumers move and stay? I reckon buying out the main AAA publishers favoured by giant communities to stranglehold would.