![]() No idea on what the gradient will be (there actually is data on one of the decks on how this improves with Zenimax and on other deck avg across the entire service) but might be worth seeing at what numbers it will break even. spend per user per hour (may increase as more monetisable games join or games with high montesized audiences) hours per user (may increase as the GP bundle becomes better and bigger IPs join) Two free variables you should account or scale with GP subs: I don't even think we need to model PC GP since Xbox GP is 90% of their market.Ĭannabilisation rate would be useful but since we have overall 1st party revenue on consoles (with PC rev being able to esimtate), its not needed. We have data on console and PC 3rd party margin We can get a rough estimate on total PC revenue (GFW, PC GP, 1st party sales). I know we have data on 1P console revenue. Console games are just too expensive and users don't spend enough hours to support the current model. The key here is that Xbox's monetization model has switched to engagement. XBOX likely monetizes content at LESS than half the industry standard and has no cost advantage. they'll pay but unlikely ever be profitable since costs/hr> revenue/hrĥ. they either can't afford to keep payingĢ. XBOX will either never get meaningful AAA support becauseġ. It is going to be difficult to get AAA content meaningfully below $0.50-$1.00.Xbox is stuck paying MORE per hour of content than their ~$0.40 monetization rated That’s probably the floor for costs, and ignore all the other costs.ģrd party developers have a total cost per game equivalent of $0.30-$0.50/hr and they expect to make 2x-4x their cost in gross profit. ![]() Let’s say they play an average of 50 hours, 1000m of engagement vs $250m in cost is $0.25/hr. Starfield is probably a $200m-$300m game that will likely hit 20m users. development/content cost is the key variable to argue over. $0.25 ($10/40h) from the subscription+ $0.15 engagement monetization Now we know it is about $0.15 per hour from TWO different presentations.Īvg gamer plays about 40 hrs a month so TOTAL MONETIZATION IS ABOUT $0.40/hour. ![]() XBox makes $10/month/user and drives increased engagement and monetization. How and how much money does Xbox Pass makes per user per month Best case Xbox GamePass and XCloud still look like a sub-scale version of the Apple App Store and Google Playstore.ġ. Xbox likely monetizes content at LESS than half the industry standard and has no cost advantage. Xbox will either never get meaningful AAA support and it will unlikely ever be profitable, even at scaleĥ. Why Playstation is CORRECT that the economics of video games do not scale to the current subscription modelĤ. How much it probably cost Xbox to acquire content and why do I believe it is loss-making despite claims to the contraryģ. ![]() How and how much money does Xbox Game Pass makes per user per monthĢ. Moreover, I don't think XBOX will ever be able to scale the business to profitability.ġ. but today's leak almost definitely proves that Sony is right. I initially gave Phil Spencer the benefit of the doubt. I find it interesting that the smallest player - XBOX - is the only one pursuing this strategy while Sony says it is not doable. WHAT A LEAK! I've been spending a lot of time thinking about the economics of the video game industry, and Game Pass. Hey all - hopefully this is the right place to post this. ![]()
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