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Let's come out swinging: Microsoft's purchase of ZeniMax (and therefore Xbox's acquisition of Bethesda, and all that entails) is the single biggest deal in the history of the video game industry. At a price of $7.5 billion -- $3.5 billion more than Disney paid for Star Wars, and a staggering $7.27 billion more than Sony paid for Insomniac -- it's exceedingly rare to see that kind of money being thrown around. But above and beyond the monetary cost, the addition of eight new teams to Xbox's first party stable (along with dozens of IP) is a seismic event that frankly just doesn't happen. It reads like a forum rumor. Microsoft owns Bethesda Game Studios, now. It owns id Software and its vaunted id Tech. It owns Arkane, Machinegames, and Tango. It's now the holder of licenses from Fallout and The Elder Scrolls to Doom and Wolfenstein. Needless to say, Sony better have its eyes stretched wide open.

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LastStandMedia

I saw no reason to hold this until tomorrow, considering the important and timely nature of the news... Enjoy.

Dennis Johnson

I real pro flex. Can't wait! And thanks!

Rob Aitken

See - this kind love for ones supporters is why you are a cut above *Not a Paid Comment*

Anonymous

Nice release!

Liam Fagan

3.5 billion more than star wars. Just shows how much money games companies make on their current pricing model.

FoxHopSmash

I mean its a great buy but they just bought Obsidian. Basically the same studio but for way more money. Good for them. 2024 is going to be a great time to buy a series X/S.

Anonymous

Chris's voice is back to normal.

Anonymous

This signals to me that Microsoft is really in the video game business to stay, period. That’s great news for gamers. If they keep those games platform locked to Xbox...watch out Sony!

ZachAttacksGames

So much for not seeing Sony as competition and console wars being silly.

Anonymous

Chris's daddy voice is now gone

Anonymous

It’s not just “basically the same studio” lol...They get BGS, Machine Games, Arkane, id Software, etc., all their IP, and all of their engines, primarily the incredible id Tech 7. It’s a massive move

Michael Toledo

Damn I thought Chris still had peanut butter in this throat this week..guess not

Cory Towler

Listen. You just gave me a heart attack. I have work deadlines on Tuesday. I use your schedule to remind me that I must get those done on Tuesdays. When I saw this go live I nearly died because I thought I missed my deadlines. My week revolves around your podcast releases. When you post a SS+ podcast I think it is Tuesday. I have enough shit being changed in my life right now. I was angry. But now that my anxiety has subsided, I can now appreciate new content early. Thank you for adding another year to my life in a matter of minutes.

Anonymous

They did this to bolster GamePass more than anything. Not just sell consoles

JD

Hell of a Monday wake up xD

Anonymous

Very nice C&C, very nice INDEEEEEEDDDDD

Anonymous

As an Xbox listener, I was super stoked to see this news this morning!

Anonymous

Glad I was wearing my brown pants when I checked Twitter... This is 'Ugeeee

Anonymous

This is such an incredible news story. I love console wars and Microsoft is swinging hands now. Is there anything Sony can do to counter this? I really don't think Sony has the capital to counter this. Microsoft is a Trillion dollar company and Sony is only worth 78 billion. This is why Microsoft can do the unsustainable Game Pass model. This is huge I'm delivering this news to all my casual friends to see if they will switch consoles for next gen. There are a lot of Skyrim fans. Just hearing they might not get Elder Scrolls 6 turns them away from PlayStation. I've got a Ps5 preorder and I own a PC so I'm fortunate that I don't have to miss out. This generation is going to be so exciting.

Explosivebob

Sony need to buy Oddworld Inhabitants to counter this aquisition.

Anonymous

I disagree with your take a bit guys. The deal isn't 100% done and there are billions in deals already done. I'm not sure we can say anything yet as the news out there has shown Microsoft let's people get their deals done but are locking down on the future ip- that's my counter point

Anonymous

I have to disagree with this. On Twitter Phil Spenser has welcomed Bethesda to the Microsoft lineup. You are right it's not over, but it's finalizing. Also Tokyo ghost wire and deathloop Microsoft said they will honor the exclusivity deal.

Anonymous

Operation Make Colin Play Games On His Fancy Computer has now commenced.

Davosplat

Oh wow, I am still reeling from this news. I am an old school xbox guy and this is the - wait for it - WILDEST thing I have ever seen from MS. Dayum...I'd best get my Series X tomorrow...

Nierly Crazy

Chris’s voice was back to normal until around 44:30, then it sounds like it went back. Ah well, now that I know it’s him I don’t mind as much lol. When it comes to acquisitions I think the most likely candidates are. PlayStation: Housemarque, BluePoint, Kojima Productions Xbox: Asobo, Bloober, Moon, The Behemoth Wildcards: Playdead, Remedy, SuperGiant, From Software, Studio MDHR

Aurang

What a Suprise, thanks you guys. Love spontaneous gifts such as this episode.

Miles Williams

I've never owned a Xbox, but I'm telling you right now... if Obsidian makes another Fallout game I'll be buying one. This makes it possible, right? A guy can dream!

Brandon Soto

This is a bunch to do about nothing, honestly. This proves once again that Microsoft is desperate for games and can’t make their own exclusives. Are there any amazing games from Bethesda in the past decade besides Doom & Wolfenstein? And if so, are they billion-dollars franchises? Idk. Sony should not even respond or do anything, honestly, except maybe Bluepoint Games.

Andrew

The Xbox series S looks even better. The games coming down the pipeline for Xbox are coming and you could own an Xbox series S with game pass and never buy a game. Huge

larry Seitz

Small dick energy Microsoft.

Nierly Crazy

Skyrim, Dishonored, Prey, Evil Within, ESO all released in the last decade.

Nierly Crazy

That team deserves as much help as they can get. Whether they go first or third party, I’d be happy for them. Wouldn’t be surprised if they work with Private Division for their next title.

Nierly Crazy

It sounds like part of the reason Star Wars was sold at 4 billion too was because George chose Disney.... or so we’ve been told. Might’ve costed more otherwise.

Anonymous

It’s crazy how times change so quickly: 2013 Microsoft fucked up and pissed everyone off by telling them they can’t sell their games 2020 Microsoft being praised for a model where you won’t ever *own* any games in the first place.

Craig Mcguire

Shoutout to Todd Howard getting Sony to cut the cheque on timed exclsuivity deals while simultaneously selling those IPs and being aquired by Microsoft.

Anonymous

I still think this is bad for consumers. There is a big difference between securing niche title exclusives and single studios - vs outright buying massive chunks of the industry. MS just bought a % of the industry, not a single studio like Insomniac. Would be like Sony buying EA or Ubisoft. Also Fallout and Skyrim are two of the largest multiplat franchises, which means a massive % of their player base will be locked out. This feels different. While I think Colin is right and they won’t keep these exclusive - I wouldn’t put it past MS to flex their muscles and make one title like Skyrim exclusive just to put the pressure on.

Anonymous

I follow like 3 Xbox podcasts and every time big Xbox news breaks, my man Colin is the first one to put something up. Shouts out to the guys.

Dom posa

People are crazy if they think Xbox would keep these games exclusive. Would like to see them do something like that but they won’t. The selling point will be you can play the games here on a subscription instead of paying $70 over there and if you pay $70 over there, we still get paid . And every Bethesda game is on ps now right now and no one has cared

Craig Mcguire

Elder scrolls, Fallout and possibly starfield sure. But its not like the rest of their IP sell gangbusters.

Jeremy Miller

Since Microsoft now owns both Bethesda and Obsidian, does this mean Fallout New Vegas 2 is a real possibility?

Michael Maneage

Though Sony has taken a slightly different approach over the past few years by focusing on third party studios and console exclusives , I think they would most likely do well by continuing to forge their own path and not playing a tit for tat game. I've never owned a Microsoft console, but for the first time I'm interested in what their library will look like in a few years. To add, though this is a humongous, ballsy move, none of Bethesda's library would make me want to buy a console. Fallout 4 actually made me question if the series had finally grown a bit long in the tooth. While their games are still good I'm wondering if they could go the Rare route.

TL

Reminds me of the old Pc game pipe dreams. They just rerouted to get to the end, lol.

Andrew

Also, I don’t think this has been discussed but imagine all the low income families who can’t afford multiple games. Game Pass is a W for them too

Jeff Frizz

Xbox is FINALLY on Sony's level. This is GREAT for all gamers. There has never been a better time.

JP Morris

I wonder when we’ll get the Bethesda back catalogue on Game Pass

Joey Rawlings

If you play the “drink when Chris says the word ‘wild’”, let me know where to send flowers - you’ve got to be dead.

Joey Rawlings

As a serious post, I don’t think Sony has an easy move here - they could buy 3 studios to diversify and it wouldn’t move the needle that much. Microsoft just bought 5-6 in one clip. Sony’s only matching play would be to buy something insane like EA, Activision or Take Two and I definitely don’t see that happening. The only thing I could think of would be to figure out a way to take the entire PS1-PS3 + Vita + PSP catalog and make them downloadable to the PS5 (aka lean into what made them Sony rather than trying to figure out where Sony goes next) and even that might 25-year necromancy of content not be good enough.

Anonymous

Sony buying nintendo when /s

Zack Fair

Chris saying the PlayStation showcase was decent, what was he fucking watching?? He's definitely biased towards Xbox

Zack Fair

It was bloody awesome!!

Chris

I think it’d be stupid of Microsoft to acquire Bethesda and then release anything outside of contractual obligations on PlayStation. It’d save me hundreds of dollars if that was their choice, so I wouldn’t complain, but I think it’d be stupid of them. I don’t love this acquisition, but now I’m waving a wad of hundreds around with my shirt off, metaphorically. You paid for me, now take me, Microsoft

David Graham

And I thought Bethesda's big bomb was Fallout 76. ...I'll see myself out.

Jake Z

I don't think Sony needs to respond to this move at all. Nor does Nintendo. Xbox was minor league and Sony and Nintendo are major. But Xbox decided to get good. Now they can all compete on the same playing field.

DB Cooper

Chris sounds normal again!

Biv

With all due respect to both of you, you are out of your gourds.  The current games with contracts, which may include Starfield, will go where they are contracted. But you don't spend 7.5 billion on a property only to lose money by selling them on Playstation.  And that WOULD cost them money.

Biv

People WILL buy a console for Elder Scrolls or Starfield.  If the only way to get the game is to buy an Xbox, buy it full price on PC or get it on Gamepass for phone or PC, they will. In other worlds, if it was going to sell 10 million with Sony, it'll sell ten million without.  If not immediately, it will eventually.  And MS is playing the long game.

Biv

The messaging you keep underlining is the exact same messaging Xbox has been using since E3 last year.  When they say "on whatever you play" they mean "Xbox/PC/phone/tablet". Even if they did lose money by not selling on PS, it is far more important to use Bethesda to push Gamepass than it is to sell copies. It's a new day.  You don't win with games, you win with services and making pro-consumer moves.  And, if Sony doesn't wake up to that, Xbox is going to bury them with it.

Miles Williams

I honestly think Microsoft will make the new games exclusive. I don't get what they would gain from putting them on Playstation. Sure they get money from the game sales, but Fallout and Elder Scrolls would sell systems like hot cakes. If I was them I would absolutely make them exclusive. What do I know though? I guess time will tell.

Biv

I agree with Colin, though. Sony's best response is not to buy a studio, it's to make a new one and have it focus on a genre that they don't have. Frankly, from someone who owns both systems every generation, PlayStation's first parties are stale as hell. The only dev they have that's innovating is media molecule, and the PS fanboys crap on them. Sony has become the third person box. And I'm not sure why Collin still puts naughty dog on such a high pedestal. After the debacle that was the shitty TLoU2, and the way they treated the fans and critics, their good will is shot.

OnkiDonkGinkGonk

Of course I love many of Sony’s exclusive games and I’ve played most of them. God of War, Persona 5 Royal, and Bloodborne are among my favorite games ever. The exclusivity doesn’t have anything to do with it though, I honestly couldn’t care less if they were on Xbox too, I’ve just always liked PlayStation more and that’s where I like to play games. I have to say that when I saw the news today about Microsoft acquiring not only Bethesda Softworks, but also all of the studios that Bethesda publishes, I was surprised and at the same time uneasy and maybe just a little disappointed. Wolfenstein, Fallout, and Doom are among my favorite franchises of all time and the idea of not being able to play them on PS5 has kind of bummed me out and lessened my excitement for the upcoming generation. I still plan on only getting the PS5, but I just really hope Microsoft decides to release future Bethesda games on all platforms. Even if they were day one releases on GamePass and $70 on PS5 after a year long exclusivity, I still just want to play those games on PlayStation 5.

Real Radec

Bluepoint, Kojima Pro, Konami IP and Fromsoftware would all be amazing acquisitions for Sony. I wonder if they will go for the likes of Housemarque, Sumo Digital, Level 5 or even Oddworld Inhabitants. Crazy times await!

Dom posa

Capcom. They only sell 7% on Xbox anyway . Until Xbox makes some good games, there’s no competition.

Craig Mcguire

I have to agree here and given everything thats happened this week im surprised Colins so quick to believe more silver tongued corporate BS after what we've seen spun by Jim "Lyin" Ryan. Both Microsoft, Todd Howard and especially Phil Spencer play loose and fast with the best of them.

JD

FromSoft and Capcom would be huge gets for Sony. They're all Japanese companies and culturally they would be a better fit for Sony than MS

bix hutch

I think you guys are out of your mind if you think Xbox isn’t going to be pulling exclusives off this deal. They want gamepass subscribers and they need to tempt PS gamers to come over. The only example of them allowing a game they own on PS is Minecraft which we all understand that move. Ori and Cuphead they don’t own. I could see some cases maybe coming over but I read those comments differently. Remember that Xbox ecosystem includes PC, phones and tables now so talking about putting the games on all kinds of screens doesn’t mean its going to Sony. I say a large portion of those games are Xbox family exclusive or at least timed for a year or more.

JD

Even Colin wouldn't resist playing New Vegas 2 on PC if it was locked out off Playstation.

Luke Silletta

This is crazy. I might have to use the money I make selling that second PS5 I pre ordered and buy an Xbox series X.

Empty Symbol

It's completely insane to me that they seem to be totally fine with letting their old catalogue of games go to waste. They haven't been able to figure out how to get full backwards compatibility or get PSNow in a condition that seems appetizing to players. It's a shame really, and honestly really baffling considering microsoft turned their ship around with backwards compatibility even though the Xbox One wasn't designed to be able to do that.

Anonymous

Doesn’t play. Says length is 0:00/0:00

Real Radec

Hmm, interesting that Chris is into Xbox and Bethesda crossovers in games now, wonder if hes more lenient on the idea of a proper and well funded PS All stars successor.

KingKeiffer

Oh thank god! Chris’ voice is back!

Piston Pants

Canceled my ps5 preorder after seeing this news. Just kidding. But I did come to a realization that even if Microsoft holds all these as exclusives, I don't care. It came to me that I have zero interest in any Bethesda game. None of them. It actually surprised me when I realized that. Great show guys.

Anonymous

Good episode. I'd like to mention one thing. When you were naming and comparing the studio 'types' you mentioned how Sony-owned studios weren't very diverse, which is mostly true. However you classified Guerilla and Insomniac as "third person action games" studios. While it's true their last game (or few games) released were that, they are also know for their first person shooters as well. It's important to note that these studios have very diverse styles and catalogs. I know you were just generalizing but I just thought I'd mention that.

Piston Pants

I also think this pushes Sony to have more third party console exclusives in the vein of FF16

Anonymous

I just noticed I feel pretty similarly. Other than elder scrolls, keep the rest. And we get what, One ES title per decade?

Anonymous

If $60 per game is too cheap . How can 10 bucks a month be feasible?

Anonymous

This news is definitely a game changer. Like everyone else, I can't wait to see how this plays out. In my opinion, I feel that people who are focused on the exclusivity aspect are missing the point. In looking at Microsoft and Sony, we're now looking at two companies headed in completely different directions within the games space. And I don't mean "good" or "bad". Instead, Microsoft is focusing on services and subscriptions. They have the capital to roll this out and back it up for years to come. Meanwhile, Playstation has the games, but Sony isn't leveraged to compete in this fashion. Don't get me wrong, Sony/Playstation are not going away, but the landscape will be much different in 5 to 10 years. At some point I don't think they will necessarily be competitors anymore, because of the different focus of each company.

Scott MacLure

Glad to hear that, the last podcast was slightly off putting only because it didn't sound like normal Chris.

Anonymous

This is the first comment I’ve ever left but the sexual undertones of Colin saying underline that is enough to give the dead boners

Anonymous

My first Patreon post and I have to say, y'all dismissing the real possibility of MS making the IP's timed exclusive is kinda weird.

Anonymous

Remember that Game Pass is on PC and mobile devices as well. Xcloud also makes it feasible to play new games on older PCs. I won't buy an Xbox, but I will buy the streaming service if it is good. Putting the service everywhere will help them make more money.

Anonymous

Guys i gotta say, Chris laying in bed shirtless looking up at the ceiling and podcasting is making me feel... strange. I don’t know what to do with these feelings.

Derek Waechter

I think that Phil Spencer might have said he didn’t want Xbox to do that anymore, going forward. He’s all about having all the games available for everyone, Xbox or not. That would explain why they’re being quote unquote dismissive. But, anything is a possibility, especially in the realm of video games!

Joshua Brown

They’re trying to grow the gamepass audience. I keep hearing “well they’ll want a return on their $7.5 billion investment so they’ll release Bethesda games everywhere” They’re playing the long game here, I don’t think they’re desperate to make that money back as fast as possible. At first I thought it could go either way but now having slept on it a few days I’m in the mind that these games are probably going to be exclusive to Microsoft platforms. Their messaging in words like “any device or platform” to me just sounds like a word salad for saying you can play these games on XCloud.

David P

I'm confident they'll keep them exclusive. Sure it cost them a lot, but they can grow the console brand strength over time by also keeping them exclusive. That and these games will still release on PC, where it will also sell many copies. Minecraft aside, they've still never put their other exclusives on PS, even if they came close with MCC. And cuphead seems to have no sign of MS branding on the PS4 release.

Anis

It's good that microsoft is competitive again, but I prefer they make their own exclusives like sony and nintendo rather than just buying publishers and gate them for other console makers. Thankfully the only bethesda game that I want is future elder scrolls series and I still can get that on pc.

Anonymous

Thanks for answering my question! I think PS Now will have a lot less bargaining power without the power of Bethesda. I won’t be re-upping my subscription after using it when the price dropped.

Vitali S

I think you guys giving Microsoft too much credit when you say they will release on PS. They never said that specifically they said other platforms which to me means xcloud on pc or via Android phone. I have a feeling big games will be exclusive to pc and Xbox and small ones will come over. They also sell their games on steam which is huge.

Your Boi Nicky V

I don't see why MS would put GamePass or Bethesda games on PS5. Surely they still want to shift as many consoles as possible. Taking a 30% cut on 3rd party games and micro transactions along with a monthly fee for Live is presumably way more profit than whatever GamePass will make.

Johnny Waffles

Probably has something to do with Sony outnumbering Xbox sales 3-1 this generation. What good does it do Microsoft to sell their games to a third of the market? It might drive some sales to the Xbox, sure, but I don't think Microsoft is touching Sony in console sales again without something outrageous happening. And I don't think Zenimax going to Microsoft is that outrageous.

LastStandMedia

Well, we don't really know what's coming down the pike with games. The landscape has yet to be fully written.

LastStandMedia

Not only that, but the pricing model of the console being more of a 0% APR rental is huge, too.

LastStandMedia

I think you're wrong about Naughty Dog. A vast majority of people that played TLoU2 loved it. As for making a new studio, it's worth the initial trouble and investment that requires to create something exactly in the image you're looking for, as opposed to making something fit.

LastStandMedia

I think they will be pulling exclusives. Just not the biggest games. Look at Minecraft Dungeons! They didn't even make THAT exclusive.

LastStandMedia

Well, Insomniac was never known for FPS, even during Resistance. Guerrilla was an FPS studio, but hasn't released one in seven years and counting...

LastStandMedia

There honestly may never be a way to make Gamepass profitable. They just might not care, so long as it's working out for their gaming vertical overall.

Pete

Hey Colin, Interesting take from you and Chris. I do find it a bit weird that you're so quick to dismiss the possibility of Microsoft making these games exclusive to the XBOX ecosystem. Exclusivity is the key lever that every gaming platform/console in the present and past have used to lock people into their ecosystem. Once there, you start profiting from their purchases. Just remeber, the last couple of years from MS has been the exception, rather than the norm. And it can just as easily be argued that the reason for this openness is that XBOX consoles don't have deep market penetration this gen. Sure, if next gen console sales follow the same ratio as this gen, I can see MS opening up. But during this critical phase, at the start of a console generation, where they are trying to make their platform/ecosystem relevant/dominant again, I think it's a bit naive to think they won't be leveraging the IP/assets they just spent 7.5B to obtain, to get people to jump ship. You obviously have a lot more experience in this industry, so I trust your gut feeling. But do you really think there's more money to be made by MS in games publishing and subscription services rather than the traditional profiting from sales on your platform? My 2 cents. Appologies for the wall of text. Cheers, Pete

Biv

Colin, the reason I post separately sometimes is the stupid app sometimes gives me a character limit for no reason I can determine.

Anonymous

"We dont want Bethesda making Fallout" I could not disagree more. While Fallout New Vegas is the best of the Fallout games since Bethesda acquired the IP, Fallout 3 and 4 are both exceptionally great games. Fallout 4 took some steps back in the roleplaying department but it's still an incredibly good game. The nay-sayers who have nothing but bad things to say about it are just whining that it's not as good as New Vegas. Halo 3 wasn't as good as Halo 2 but it's still amazing. Just because a subsequent game in a series isn't quite as good doesnt mean it's terrible. I want Bethesda to continue doing the mainline Fallout games, and let Obsidian and InXile do the spinoffs, with Obsidian doing New Vegas style entries and InXile doing CRPG turn-based entries similar to Fallout 1 and 2. I like Bethesda's more serious, dark, gritty approach to the franchise, and Obsidian's more satirical, light hearted take. I'd also like to point out that part of the reason New Vegas was so good is because Bethesda had already laid most of the groundwork. New Vegas re-used a TON of assets, including armor, weapons, player animations, and the engine itself. They were able to skip alot of the ground work that would usually go into making a game and focus more on quests and story. Not saying Obsidian isn't great, but i'd argue everything they've done since New Vegas is average at best. Pillars pales in comparison to Divinity, which is far prettier and plays far better. The Outer Worlds pales in comparison to Fallout, as TOW ended up being a clunky mess with a shallow story that im convinced people only like because they hate Bethesda so much. Grounded is surprisingly good, if shallow in content, and we'll have to see how Avowed turns out. But I feel like people are ignoring the less than stellar stuff Obsidian has made since New Vegas.

Prof JJJ (edited)

Comment edits

2022-01-24 02:38:30 Hey C&C, Can you address Jim Ryan’s recent comments that a GamePass like service (with day and date first party releases) is “not sustainable” for PlayStation because Sony’s first party games cost “over $100 million.” A cursory investigation into the numbers shows this is not true. For simplicity, assume a price of $10 per month. Also assume that PlayStation maintains its current user base of about 120 million users. If you can get just 25% of your users to buy into the service this translates to revenue of $3.6 billion per year (120,000,000 x 25% x $10 x 12). Obviously, the numbers look even better if Sony can get more than 25% of customers to buy in (which honestly should not be hard). Surely this is high enough to fund several first party games per year and still have money left over to acquire some 3rd party titles for the service. Using the same math, you can see why Microsoft is pouring so much effort into GamePass. Their goal is to get GamePass onto all Smart TVs, phones, tablets, PC, etc. Realistically, the service could hit 50 or even 100 million subscribers over the next few years. This would translate to annual revenue (again assuming an average price of $10 per month) of up to $12 billion per year (with 100 million subscribers). To use some financial jargon, the “addressable market” for gamers is well over one billion world wide. 100 million subscribers is less than 10% of the market. It seems like this is a real missed opportunity for Sony.
2020-10-01 15:44:13 Hey C&C, Can you address Jim Ryan’s recent comments that a GamePass like service (with day and date first party releases) is “not sustainable” for PlayStation because Sony’s first party games cost “over $100 million.” A cursory investigation into the numbers shows this is not true. For simplicity, assume a price of $10 per month. Also assume that PlayStation maintains its current user base of about 120 million users. If you can get just 25% of your users to buy into the service this translates to revenue of $3.6 billion per year (120,000,000 x 25% x $10 x 12). Obviously, the numbers look even better if Sony can get more than 25% of customers to buy in (which honestly should not be hard). Surely this is high enough to fund several first party games per year and still have money left over to acquire some 3rd party titles for the service. Using the same math, you can see why Microsoft is pouring so much effort into GamePass. Their goal is to get GamePass onto all Smart TVs, phones, tablets, PC, etc. Realistically, the service could hit 50 or even 100 million subscribers over the next few years. This would translate to annual revenue (again assuming an average price of $10 per month) of up to $12 billion per year (with 100 million subscribers). To use some financial jargon, the “addressable market” for gamers is well over one billion world wide. 100 million subscribers is less than 10% of the market. It seems like this is a real missed opportunity for Sony.

Hey C&C, Can you address Jim Ryan’s recent comments that a GamePass like service (with day and date first party releases) is “not sustainable” for PlayStation because Sony’s first party games cost “over $100 million.” A cursory investigation into the numbers shows this is not true. For simplicity, assume a price of $10 per month. Also assume that PlayStation maintains its current user base of about 120 million users. If you can get just 25% of your users to buy into the service this translates to revenue of $3.6 billion per year (120,000,000 x 25% x $10 x 12). Obviously, the numbers look even better if Sony can get more than 25% of customers to buy in (which honestly should not be hard). Surely this is high enough to fund several first party games per year and still have money left over to acquire some 3rd party titles for the service. Using the same math, you can see why Microsoft is pouring so much effort into GamePass. Their goal is to get GamePass onto all Smart TVs, phones, tablets, PC, etc. Realistically, the service could hit 50 or even 100 million subscribers over the next few years. This would translate to annual revenue (again assuming an average price of $10 per month) of up to $12 billion per year (with 100 million subscribers). To use some financial jargon, the “addressable market” for gamers is well over one billion world wide. 100 million subscribers is less than 10% of the market. It seems like this is a real missed opportunity for Sony.

LastStandMedia

I'm just surprised that they'd suddenly move in the complete opposite direction from where they were moving. I'm not saying Bethesda games couldn't be exclusive; I'm saying it's a totally different strategy from the one they've been endeavoring to establish.

LastStandMedia

I just couldn't get into Fallout 4. It's been 10+ years since I've played Fallout 3, and about 10 years since I've played New Vegas. It's entirely possible I just don't like the series anymore? I dunno.

LastStandMedia

What are you insisting isn't true, though? All he said is that his games have huge budgets. Gross and net revenue are different things, and if Microsoft is losing money on Gamepass, Sony would lose, too.

Prof JJJ

The question is not about whether Microsoft is losing money now. The question is what subscriber number is necessary for that business model to become profitable. The subscriber model fundamentally changes the arithmetic of the business model for game platforms. Obviously, Microsoft thinks it can get to the critical subscriber number for the model to work. I guess Sony doesn't think it can - or it simply doesn't feel the need since the current model is working for it. As a financial analyst, I just find the whole notion of changing the business model for game delivery to be fascinating.

Prof JJJ

Those quotes were widely reported about two weeks ago (Sep 18?). Apparently, Ryan made them after the PS5 showcase. Perhaps the media was misreporting the comments, but multiple articles ran about Ryan saying Sony would not offer a GamePass-like service. My comment below was also in reply to this, but for some reason it showed up as a separate post.