Wasn’t it obvious when that datasheet was released in one of the lawsuits. They paid Rockstar hundreds of millions for GTA V. Of course it’s unsustainable. Not to mention the pricing of GP is too good to be true. MS is hemorrhaging money on GP, on purpose. They basically play the standard Silicon Valley play book. Instead of making things yourself just sell access to customers to producers and price out the competition by undercutting them and incur heavy losses, so you become the only gatekeeper in town. And instead of a store like Steam where the studios and publisher can set their own prices they use a subscription model so they can not only gatekeep access to the customers MS can decide what they want to pay these game devs before the product even hits the service. And if they ever achieve a monopoly the game devs basically have no choice but to accept whatever MS offers.
MS may not have invented it (although I’d argue they essentially did) but they did perfect it. That was the whole idea behind windows and IE, market share dominance at any cost.
They paid Rockstar hundreds of millions for GTA V. Of course it’s unsustainable.
I wouldn’t be so sure. Best estimates for their subscribers are north of 25M and as high as 35M. The $1 subscribers have dried up by now, but even if we assume an average of $10/month/user, in the current world where there’s a $20 tier with the really juicy stuff, that’s at least a quarter of a billion dollars per month in revenue. Now that’s revenue, not profit, but those several hundred million dollar deals also died down, as well as their willingness to license outside content anywhere near as much as they used to, which they can feasibly afford to do because they’ve built up a portfolio of games that they own in perpetuity, not unlike what Netflix did.
Depending on how you do accounting, they may or may not have paid off the $70B. They’re firing people and cancelling projects, according to reporting, because they want to free up $80B of capital across the organization to invest in AI. Whatever money these other sectors are making, the money AI could make is seen as being way higher.
Wasn’t it obvious when that datasheet was released in one of the lawsuits. They paid Rockstar hundreds of millions for GTA V. Of course it’s unsustainable. Not to mention the pricing of GP is too good to be true. MS is hemorrhaging money on GP, on purpose. They basically play the standard Silicon Valley play book. Instead of making things yourself just sell access to customers to producers and price out the competition by undercutting them and incur heavy losses, so you become the only gatekeeper in town. And instead of a store like Steam where the studios and publisher can set their own prices they use a subscription model so they can not only gatekeep access to the customers MS can decide what they want to pay these game devs before the product even hits the service. And if they ever achieve a monopoly the game devs basically have no choice but to accept whatever MS offers.
MS may not have invented it (although I’d argue they essentially did) but they did perfect it. That was the whole idea behind windows and IE, market share dominance at any cost.
We call it the Walmart model
I wouldn’t be so sure. Best estimates for their subscribers are north of 25M and as high as 35M. The $1 subscribers have dried up by now, but even if we assume an average of $10/month/user, in the current world where there’s a $20 tier with the really juicy stuff, that’s at least a quarter of a billion dollars per month in revenue. Now that’s revenue, not profit, but those several hundred million dollar deals also died down, as well as their willingness to license outside content anywhere near as much as they used to, which they can feasibly afford to do because they’ve built up a portfolio of games that they own in perpetuity, not unlike what Netflix did.
MS is making money from Gamepass
Have they paid off the 70 billion? If they are making money, why are they firing people and cancelling projects?
Depending on how you do accounting, they may or may not have paid off the $70B. They’re firing people and cancelling projects, according to reporting, because they want to free up $80B of capital across the organization to invest in AI. Whatever money these other sectors are making, the money AI could make is seen as being way higher.