Microsoft buys Activision-Blizzard

https://www.boards.ie/discussion/comment/118499208#Comment_118499208

Ok. That sentence was a lot to unpack. Maybe use commas, sentence breaks, etc.

Mitch Connor

https://www.boards.ie/discussion/comment/118499173#Comment_118499173

I am sceptical of that info from Phil.

GP itself might be profitable on paper - but you would also have to take into account the status of the various first party studios. If they start making loses because the payments they get from GP in lieu of titles sold are less than it costs to run the studio, then simply saying GP is profitable is missing a large part of the conversation. I'd be very interested to know the full outlook of MS Gaming in this respect, cause you can't just take GP on its own.

Mitch Connor

https://www.boards.ie/discussion/comment/118499217#Comment_118499217

I think your reading skills need more attention than my sentence structure.

johnny_ultimate

Mod note: Keep it civil please.

Mitch Connor

https://www.boards.ie/discussion/comment/118499214#Comment_118499214

Not MS, no. GamePass.

GamePass is the main driver of this conversation - when talking about games being exclusive on Xbox, where GP is going to be a huge chunk of the revenue stream for any games.

It could certainly be the case that MS don't care at all about profits in the gaming space and the 78billion (and growing) costs will be made up by other parts of the business. In which case, fine, make everything exclusive. But if MS gaming, or the individual studios are to remain or become profitable, I don't see GamePass revenues being able to hold that up mostly on its own.

Dravokivich

https://www.boards.ie/discussion/comment/118499141#Comment_118499141

When you are using an "XXXX as a service" model, you accept items are going to be in and out of the library. It's the same as DVD/Blu rays against Netflix/Prime/ AN media streamer. You've the option to own it, by purchasing it. But when leasing it, you can't claim that ownership.

Mickeroo

https://www.boards.ie/discussion/comment/118499177#Comment_118499177

It's already on mobile officially. You can play it on any android based set top box if you sideload but yeah only a matter of time before it's on those officially too.

Mitch Connor

https://www.boards.ie/discussion/comment/118499270#Comment_118499270

I've said no different.

The original point of the conversation: Poster says it is inevitable that games will leave GP (for licence reasons) and not be playable in any fashion

Second point of the conversation: Second Poster says only third party titles leave GP and are purchasable elsewhere.

Third point of the conversation: I say first party titles have left GP (for licence reasons) but these games were still playable by people who owned them - so the fear a game would leave GP and be unplayable (for everyone) is as yet unfounded. I also made the point that titles on GP can also still be purchased.

The reasons for Forza leaving do not counter any point I made. The knowledge that Forza would leave and will leave in the future does not counter any point I have made.

quokula

https://www.boards.ie/discussion/comment/118498383#Comment_118498383

It's not the same though is it.

Naughty Dog had a prior history on 16 bit and Amiga, but their first real success was Crash Bandicoot which might never have seen the light of day if Sony didn't support and publish it. They worked exclusively with Sony for the best part of a decade after that, before being brought in as an internal studio.

Psygnosis were purchased by Sony before the first Playstation even launched - they had to start somewhere. Psygnosis had been around for a fair few years releasing games for the Amiga primarily, with Lemmings being the only really well known one but Psygnosis only published that and the developers at DMA design remained independent and weren't part of the acquisition. All of Psygnosis biggest brands, from Wipeout to Colony Wars, were created under the wing of Sony.

Insomniac worked exclusively with Sony for the vast majority of their 20+ year existence. Their biggest successes were Spiderman, Spyro the Dragon and Ratchet & Clank, all of which were released thanks to support and publishing from Sony, all of which got support for sequels, and in the case of Spiderman was an IP Sony owned and entrusted Insomniac with. By the time Sony acquired them in 2019 they had a huge catalog of Sony published Playstation games under their belt, along with one or two multiplatform games which didn't do well and one Xbox exclusive, Sunset Overdrive which was moderately successful but never received support for a sequel from MS.

Bend Studio have never released a game for a console other than Playstation, and only had a few fairly small time games under their belt before their first major success in Syphon filter which, to continue the running trend from Naughty Dog and Insomniac, was published by Sony and developed with their support, before Sony went on to later acquire the studio.

Activision Blizzar and Bethesda are publishers who have been making games for decades across multiple platforms and have never had any specific partnership with Microsoft or worked in conjunction with Microsoft to create a franchise with them. Microsoft have bought them in order to remove their games from competing platforms.

Surely you can see the difference? The studios you mentioned all built their most major brands with help from Sony. The games they made, from Crash to Ratchet to Wipeout, all might never have existed in the first place without Sony's support and funding. Microsoft on the other hand are just paying to get existing third party games that they had nothing to do with taken off other platforms.

Are we really going for a Nintendo/Sony = good, Microsoft = bad argument?

These are corporations. All have and would abuse market power.

awec

https://www.boards.ie/discussion/comment/118499258#Comment_118499258

GamePass is profitable. Again, I think you underestimate how lucrative subscription models are.

Every single publisher would love to have every single customer on subscription. It is the dream. There is a lot more money to be made this way.

Mitch Connor

https://www.boards.ie/discussion/comment/118499341#Comment_118499341

but under what terms is GamePass profitable, and how does that impact the rest of Xbox.

Simple example (and not saying this is true)

GamePass brings in $100. The costs directly associated with GamePass are $80. GamePass is profitable. Check.

Studio makes a game for $60. Studio makes $20 from game sales. Studio makes $30 from GamePass payments.

Studio has lost $10.

GamePass is profitable but the structure on which GP is built (the games) is not. Again, I'm not saying that is 100% the case, but it what I would love to know. We also don't know what costs are beign attributed to GamePass when it is called profitable. Certainly not the aquisitions (and they shouldn't be) but are all the costs associated with bring a game to game pass? Even when talking about the contracts with 3rd parties - attributed to GamePass or do MS as the parent take that cost elsewhere.

I'd be really interested to (and will never) know the full details.

ricimaki

Microsoft announced that they now have 25 Million GamePass subscribers along side this. Assuming everyone is paying €10 a month, that's €250M per month in revenue, or €3 billion a year. The realistic figure will be larger...

quokula

https://www.boards.ie/discussion/comment/118499334#Comment_118499334

It's not the corporations but the actions.

Helping to create games and then keeping them on your platform is good (sure, spreading them to other platforms is better, but that's not something that's realistically happening from any platform holder)

Not helping to create games but then just taking existing multiplatform ones and spending money to limit access is bad.

Microsoft have chosen the second strategy. Sony have chosen the first. Both are corporations that exist for profit. Exxon Mobil and Lego are also corporations that exist for profit but I can prefer the actions of one over the actions of the other.

awec

https://www.boards.ie/discussion/comment/118499393#Comment_118499393

Why do you think studios make less money from subscriptions?

Do you think the desire to move to subscriptions is because they all want to make less money?

https://www.boards.ie/discussion/comment/118499425#Comment_118499425

Sony couldn't follow Microsoft's strategy if they tried.

But I'm saying that if they could, they would. Sony aren't a chivalrous knight fighting an evil demon. It's a corporation. No matter how much hand waving you employ, they are a corporation.

johnny_ultimate

Dividing the $70bn deal we're talking about here by $3-5bn in subscription revenue shows the sheer staggering scale of this deal. I mean, even if Microsoft was earning double that annually - very, very possible down the line - it'd take 10+ years to pay off this deal without even taking into account any other expenses. Truly unfathomable amounts of corporate money at play, and far beyond the scope of any forum maths.

It's also a shame that there's so much secrecy around video game sales, finances etc... Makes it very hard to properly analyse the state of play. Microsoft hasn't even confirmed the amount of Xboxes sold for quite some time now, let alone revealed details of full Game Pass financials!

Penn

https://www.boards.ie/discussion/comment/118499393#Comment_118499393

I would also say that "Gamepass is profitable" can depend on a wide range of factors depending on which costs are included in that formula. Eg. If the operational costs of Gamepass and costs of deals with third parties to have their games on Gamepass are covered by the subscription, then it's profitable. If the costs of acquiring companies like Activision/Zenimax were to be included (which they likely aren't as they would be general Microsoft costs rather than Gamepass costs) largely in order to have those games as first party games day one on Gamepass, it's hard to see how Gamepass would be profitable.

Again, 25m subscribers equates to 4.5bn income per year. Regardless of what you include as operational costs or how much of that 4.5bn is profit, it cannot offset the costs of their ABK/Zenimax purchases (75bn+).

awec

https://www.boards.ie/discussion/comment/118499446#Comment_118499446

This is where the benefit of being the big fish comes in.

People talk about using brute force, paying to win etc. Microsoft could buy Sony, that's the difference in scale we are talking about here.

https://www.boards.ie/discussion/comment/118499450#Comment_118499450

Day to day cashflow and acquisitions should be discussed in separation. So long as Game Pass is in (or moving towards) positive cashflow, then it's grand.

Cashflow is short term, and is a reflection of the day to day health of the business.

Acquisitions are a long term thing.

Harika

Super happy to see Microsoft buy them, hope they kick out Bobby. As former employee it was really sad to see the company degradation.

Microsoft did well with Minecraft.

Mitch Connor

https://www.boards.ie/discussion/comment/118499416#Comment_118499416

I'd say the number would be lower - loads of people will have gamed it so far, but also the price per country varies, so loads of people will be paying less than 10.

https://www.xbox-now.com/en/game-pass-comparison?page=1

though I would imagine US, Europe and UK have a large proportion of that 25million and you are looking at about $10 per month for GamePass (not ultimate) in those regions.

Retr0gamer

https://www.boards.ie/discussion/comment/118499322#Comment_118499322

No I don't see any difference. The platform holders always work closely with their partners as they want the best games on their platforms. Sony did the same with plenty of other developers and didn't take them on and the same with MS with the likes of Tecmo etc. And Sony can also be dicks as well like with Speed Freaks were they worked very closely with the Irish developer and then threw them under the bus when CTR came along.

riclad

Thats the trend in america. Mega mergers big companys buy smaller companys for their ip franchises. Its likely new content for call of duty will be on xbox first. Betas of any game will be on xbox first. anyway 95 per cent of games are released on both consoles. I think dozens of people have been fired or left blizzard activision. Bobby kotick will probably retire with a large payout and hopefully theyll bring in rules to promote more diversity and equality in the workplace. Call of duty will be released on xbox and ps5 as it sells millions every year. Xbox lost the last console war. Microsoft is simply paying to tilt marketplace. This would be like sky tv buying ITV and channel 4 to be stronger in the advertising market.

Retr0gamer

https://twitter.com/SeamusBlackley/status/1483490596333445121?t=oYskBdeTaizljfHPSSPJAw&s=19

SuperBowserWorld

I hear Microsoft have also bought the game rights to some movie called ET The Extra Terristerial. They plan to sell 100 million cartridges. And if it doesn't work out Nintendo will save the industry with a new console and some guy called Mario.

johnny_ultimate

Honestly the only acquisitions I tend to be even somewhat comfortable about are the ones where a struggling company gets some sort of security. I'd count something like Microsoft taking over Double Fine or Sony taking over Housemarque as examples there - both small developers with mixed commercial fortunes, but who've made some of their best games with help from bigger companies. I'd still prefer if they were able to operate independently, but there are creative benefits to having the extra resources to make a Psychonauts 2 or a Returnal.

Still, none of the big players have a clean sheet when it comes to managing their smaller studios! Both Sony and Microsoft have absolutely destroyed some of the developers they've acquired over the years.

Retr0gamer

It's such a pity that MS had all that money to do some good and yet choose the darkest timeline of digging Activision out of a hole instead of taking the paragon route and buying Konami.

ricimaki

https://www.boards.ie/discussion/comment/118499507#Comment_118499507

True.

It does show that in a couple of years, they'll have more subscribers, all paying much closer to the actual price, and likely also on more expensive plans (ultimate).

https://www.boards.ie/discussion/comment/118499614#Comment_118499614

Save the industry... in the US. It was doing fine everywhere else.