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Private Division Boss Says Microsoft Will Have to Prove Game Pass Growth to Keep Doing Acquisitions

Private Division head Michael Worosz said that Microsoft will have to prove continued Xbox Game Pass growth to keep doing acquisitions of middle-sized studios as they did in 2018.

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lxeasy5d ago

So far Gamepass has proven to be very successful and a great service. I love it. With more games releasing day 1 on Gamepass the future is bright.

lollord6d ago

All they do will close all the new studios after one game, if even that.

Ausbo6d ago

They haven’t closed any more studios than other publishers

lxeasy5d ago

@ausbo don't mind him he has a record of trying to troll xbox on n4g.

Lon3wolf6d ago

Sales and/or Game Pass really, not just GP exclusively.

Cmv386d ago

As a consumer game pass sounds great. As a developer participating in capitalism.... game pass seems very offputting.

gangsta_red6d ago

I'm guessing MS gives a developer some sort of cut or percentage depending on if their game is downloaded.

It has to be something similar in line with how Sony and MS can give out free games for Plus and GWG.

shaggy23035d ago

@Cmv38

If the developer is large and its creating a single player focused game I whole heartedly agree.

if though the developer is smaller, and is creating a multiplayer focused game then Game Pass is the perfect place to drop their game. The more players able to play the game means far fewer people loading up the game only to take minutes trying to find a game they can join.

SkippyPaccino6d ago (Edited 6d ago )

For Microsoft to have any type of success with this current price structure (10$ a month) They're going to need a minimum of 10 million subscribers every month. They have to pay to make games, pay 3rd party royalties and pay for the infrastructure that runs the entire thing... I'm not sure how long the leash is before they pull the plug, but I'm sure if they don't have that 10 millions plus subscribers every month by 2020 they'll shut the entire thing down...

battlegrog6d ago

It took netflix a hell of a lot longer to make a profit than 2 years my friend. Thats not how it works

SkippyPaccino6d ago (Edited 6d ago )

Microsoft doesn't have that discipline, I'm sorry... They're the type of company that follows where the wind blows and if after a couple of years, Gamepass is deep in the red, theyll drop it like everything else they've dropped (windows phone etc) They've pumped billions into windows phones and they dropped that at the drop of a hat. What makes you think Gamepass is that special?

I'm just hypothetically speaking. If they're able to get those subscribers in the 10 plus millions than everything will be great for them.

SlagWolf6d ago

Netflix still loses money. I believe they lost like a billion dollars last year.

XabiDaChosenOne6d ago

Netflix to this day is barely making a profit.

averagejoe265d ago

Netflix actually doesn't pull in profit as a company. It spends so much money on content it has yet to turn a profit from it's services. I work in TV and this is a widely known fact. There's entire articles about this online.

jelloaceomega5d ago (Edited 5d ago )

That's so true, Netflix Increase the subscription fee lately just to keep the company afloat.

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EasilyTheBest6d ago

Skippy you have no clue how business works.. Video games make more money than Movies & Music combined.. Microsoft has streaming coming eventually aswell, Microsoft are in this for the long hall, probably around 10 years is my guess before they look for big profits. As someone else said, have a read about Netflix..

SkippyPaccino6d ago

Microsoft doesn't have that discipline in their DNA. There's no way in hell shareholders are going to stand 10 years in the red for Gamepass. 10 millions subscribers a month, is only 100 millions dollars a month for their 1st party games, 3rd party licenses and infrastructure. I doubt Gamepass has even 1 million subscribers a month now (I'm talking about people paying 10$, not those 1$ promo etc). They're a long ways away from that 10 millions a month.

EasilyTheBest6d ago

Microsoft does have the discipline they wouldn't be buying studios and pushing Gamepass if they wasn't in it for the long run..
Streaming could make 10 million subscribers seem tiny.
They know what they are doing. Why are Google, amazon and others spending so much on getting into a game subscription service...

TheUndertaker856d ago

@Skippy: I’ve got to agree with them. You clearly know nothing about business.

You do realize their game division is made up of more than Game Pass, correct? Microsoft was paying for first party, licensing, and infrastructure long before Game Pass. The infrastructure itself has long been documented to be there in the form of Azure.

I’m thinking the only undisciplined one right now may be you. Quick to talk about what you clearly don’t know about and extremely one sided.

SierraGuy6d ago

I think they're already out of cash.

chiefJohn1176d ago

They're not dropping gamepass after just 2 years. They'll stick with it for the entirety of next gen at the very least.

SkippyPaccino6d ago

Maybe, but you're on the same page that they need 10 plus million subscribers to make it work? If not how many do they need? Last year and this year is a wash with all those promos they have. When the promos stop will it be able to stand on its own?

Atom6666d ago (Edited 6d ago )

@skippy

It's not just subs that they're looking at. That's just one part of the picture.

Look for them to continue to cycle 3rd party games out to keep the library changing. It's not about making GP the only way to deliver content. It's about driving subs and keeping you, the consumer, active on the platform.

They will "lose" money on GP but be completely content. We laugh about them using MAUs instead of sales, but that's really what it's all about. Get a customer into the ecosystem, keep them in, and watch them buy additional content the longer they're in. If you get guaranteed revenue while they're there, all the better.

Same as PS+'s game library. Active users = $$$. The good deals get you in the door, and hopefully you stick around and buy your big new releases and DLCs while you're here.

It will take a lot of subs to really make money. But the real goal is active player retention.

rainslacker6d ago

It'll be around for a while. MS will make an effort to make it work. If it does, then they'll keep it. If it doesn't, they'll adjust to see if they can make it work. If it still doesn't work, then maybe MS proper will shut it down. Likely it'll find a place. It may not be the same as we see it today, but it'll exist in some way for quite a while.

chiefJohn1176d ago (Edited 6d ago )

We don't know but I don't think they need 10 million subs a month to keep it a float. 1.2 billion dollars a year? That's probably the targeted goal but they'd be fine with half that. It's the best value in gaming yes it will stand on its own.

SkippyPaccino6d ago

Just think of how many games there's on Gamepass.. Over 200 games, now how much are they paying to licens per game each month? 500k plus, maybe a million plus for the big titles. 500k X 200 games = 100 millions a month. It's not an exact science since we're speculating, but I'm sure we can both agree Microsoft needs 10 plus million subscribers sooner rather than later.

rainslacker6d ago

I'd assume half of that would be enough to prove growth to allow them to keep doing acquisitions. Probably even a quarter. I think some people assume it has a lot more paying subscribers now than it probably does.

EmperorDalek6d ago

I doubt they give a minimum of half a million to every game.

Microsoft are clearly good at business, as they're currently the biggest company in the world. They obviously have a plan, let's just wait and see.

SPEAKxTHExTRUTH6d ago

And where are you getting these numbers from? You have some kind of insider information on MS’s finances?

Imortus_san5d ago (Edited 5d ago )

You mean like Sony Shutdown GT5 online with more then 5 million active users so they could sell more GT6, or how they close GT6 online so they could sell more GT Sports.
There are more chances Sony shutting down PS Now then MS ever shutting down GP.

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