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Sacred Symbols+, Episode 313 | Destructive Pricing With Matt Stoller (Video) (Patreon)

Published:
2023-07-17 21:36:31
Edited:
2023-07-22 11:44:17
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For your viewing pleasure.

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Destructive Pricing With Matt Stoller | Sacred Symbols+, Episode 313

Please welcome Matt Stoller to Sacred Symbols+. Stoller is director of research at the American Economic Liberties Project, an anti-monopoly thinktank. Already renowned in political circles -- Politico describes him as "a unique blend of historian, analyst, organizer, and carnival barker for... progressive antitrust revivalism" -- he's recently come to the attention of the games industry due to his unabashedly outspoken opposition to Microsoft's acquisition of Activision, a purchase potentially larger than every single act of M&A in the console and PC space ever, combined. Such a move therefore inherently earns deep scrutiny from this podcast, as it should. Unleashing a torrent of consolidation that will undoubtedly make the gaming economy worse isn't a joke, and the pressure coming from the least successful first party isn't inconsequential. Quite the contrary: Gaming's parallel industries -- movies and TV -- are currently crumbling under the apparently endless benefits of streaming and subscriptions, and right now, they're all losing. Will we?

Comments

LastStandMedia

We're going to show our guests respect. Any comments aimed at attacking him -- and not the content of the podcast, which you couldn't have possibly listened to yet as of the time of me posting this -- will be deleted. This community will not turn into the Twitter threads you apparently decry, but mimic here. Sorry. -Colin

LastStandMedia
>>113137606

If you took even 90 seconds of your time to listen to the show, you'd know that this topic comes up almost immediately. Maybe listen to what you're commenting on, that would be helpful next time.

Anonymous
>>113137606

That's too bad. I expected better from LSM, but oh well I still enjoy your content.

Anonymous

Lot of snowflakes here lol

Joe B
>>113137606

Au contraire, its easy when im listening at 3x speed

Anonymous
>>113137606

I’m not commenting on the show or content. I posted his own tweet which demonstrates his character. You’d have a valid point if I commented on the show. I refuse to give people like this a voice and will not listen to it. That said please understand I love 99% of your content. But people like this are adding to the discourse in our country. Out of respect for you and the network i’ll drop it as it’s really not productive. Have a good night :)

Joe B
>>113138472

How is it possible for ice crystals to have Patreons?

Dick Justice

not sure what drama I missed and I don't know who this guy is outside the description, that being said I look forward to hearing why he thinks the way he does even when if I disagree with him. After all, you can't have a good argument for your position without knowing what the other position's opinion is!

Jeffrey Willingham

Colin, you really deserve a lot of respect for being diligent enough to find the people speaking out on this issue in such depth and bringing us this content. I haven't completed the episode yet (currently about half into it) but it's impressive that you hold your own intellectually in a conversation with this guy. I'd be shitting myself asking questions to a Harvard grad. Big kudos to you and the Sacred crew!

JoshM

About halfway through atm, but really enjoying this episode, super insightful. I don't know much about Matt, but hearing the historical background and perspective he's bringing - particularly in terms of the contrary to what we all thought was going on during the trial - is fascinating. Looking forward to finishing the episode!

Fenixrisingxl21

Almost halfway through this, and I don’t get why this guest isn’t being challenged on some of the things he’s saying. Constantly repeats “this was a hostile judge,” but isn’t challenged once to justify why he believes that. Instead, the response is “that’s a fair argument.” While we didn’t hear every piece of testimony over Teams, we did hear a lot of it. At no point did I infer (or see much sentiment that) this judge was hostile to the FTC. She just seemed unconvinced by its arguments.

Wyvborn

What was the point in calling the judge weird lmao

Luke Douglas

I’ll listen with an open mind. Who knows, maybe I’ll have a different view by the end. I always find Colin’s interviews compelling regardless of who the guest is.

Anonymous

Interested to listen to this. At minimum it will bring some insight and perspective

Joaquin Branche

Colin deleted my comment so i’ll say it again! This dude has been wrong every step of the way, if anyone took 5 mins to look at his twitter he doesn’t understand the law and has had lawyers correct him on twitter. He called the judge an idiot boomer after her ruling and doesnt have a modicum of decorum and the REAL reason Colin has him on here is because this doof is the only person who will massage Colin’s ego and agrees with him. Wouldn’t an interesting podcast be Colin going back and forth with someone he disagrees with instead of this? Colin called Florian a complete shill but that complete shill was completely right..

Anonymous

Common L for LSM

Anonymous

Great interview and an interesting discussion. Enjoyed this one!

Brian k lane
>>113147956

Yeah, at the end of the day this feels like a need to validate his fears of the deal. I love lsm, listen to all the shows, but I find collin is pretty disingenuous when it comes to most things that have to do with xbox. It doesn't start, or end with this deal. It doesn't matter though i still enjoy watching their shows. everyone has their own biases.

Joaquin Branche
>>113147956

Completely agree. I actually like Colin. I like his insight on PS and how he uses his voice to speak about things like Tencent and Saudi Arabia but anything and everything Xbox he’s just like the rest of them. A complete fanboy with bias takes. And imma continue to call it out till he bans me

Tyler Kaminski

Great to hear the alternative point from someone with professional knowledge. Pretending their aren't two sides to this issue is just as bad as what you're accusing Colin and the guest of doing.

Benji BOP

It's nothing personal with Matt, I find his background and history with anti-trust really fascinating. But he immediately loses all credibility with me in this episode when he couldn't even admit the FTC presented poor arguments. Instead, he blamed the "weird and hostlie" judge. Colin has given so much pushback on opposing viewpoints to his on this deal, and it's disappointing to see none of that same energy given where its truly valid, here. For as much as Colin shows his disdain for Florian and his biases (which is 100% valid), Matt is the the opposite side of the same coin. So while I appreciate the different viewpoint, spotlighting an equally biased opinion just because you agree more with him, doesn't feel very beneficial to the listener. In contrast to having on Hoeg, who has always been balanced in his analysis of the deal.

Cameron

I loved hearing this discussion. It honestly makes me want to sell my Xbox and not support the monopoly that Microsoft clearly is

Gene Park

i hope y’all listen to this! it’s the kind of content that makes LSM stand out among other podcasts. even if you disagree with the dude he provides good historical context. really enjoyed this one.

bix hutch
>>113149927

He's very disingenuous when talking Xbox. Realize he hasn't stepped foot in the eco system for probably well over a decade which is why he thinks we've just been twiddling our thumbs waiting for games. He speaks from total ignorance with Xbox and it's very obvious. I love his Playstation content but his Xbox content is rough. Xbox first party is like a percent or 2 lower this gen then PS5 on meta. Remember his reaction to the Activision deal? You would have thought his dog died or something. He said "I dare anybody to name one good thing about this deal!". Massive overreaction when in reality we found out that Xbox went on the offensive because they were on the verge of losing COD and Bethesda to Sony. It's total bull shit tbh.

bix hutch
>>113149927

The experts were right the whole time. Xbox was on the verge of losing Bethesda and COD. They decided to compete and the moment Sony starts being on the losing end of these battles you see the extreme bias from the media poke it's nose out. As the judge said, it's not the FTCs job to protect Sony when they were doing everything they could to end Xbox in their ways.

Gar Kelleher
>>113156793

Despite Florian and Matt clearly having their biases....one of them was on the money throughout the entire trial....

Anonymous

Okay episode with good conversation, but the dude is still a little off in my book. This confirmed my suspicions of him from his prior twitter comments. Still I like alternative points of view. I just wish Colin got someone who wasn't a toxic online personality who calls highly educated and hard-working professionals names. I don't even disagree with the guy necessarily. Consolidation is bad, but there must be a better spokesman for the counter-arguement than him. Some good historical info in this pod though.

Sealegs

I concede this was an interesting interview, and I enjoyed the historical background he brought. I think he can clearly make better arguments than calling the judge names on Twitter tho. I think Matt would be against any merger of this size, and I don't think the Judge was particularly hostile. The FTC 100% did not have good arguments. Xbox I think might be dead if they hadn't bought Bethesda. The gaming industry would be worse off if MS had decided to exit the industry.

Sealegs
>>113156793

Florean might be a MS shill, but his coverage of this case has been excellent and proven correct in his assessments. Florean was actually in the courtroom too, which is funny that Matt mentioned that being in the room is different than listening. I don't think I have seen a single other journalist & reporter that followed this case closely call the Judge "hostile".

Sealegs
>>113147956

It's funny seeing Colin try to make the creativity arguments against Xbox, did he watch the same showcases we did? South of Midnight alone looks more creative than anything Sony showed. Where is Sony's answer to Sea of Thieves or Psychonauts? GamePass clearly allows for much more variety and risk-taking; games like Pentament, Grounded, or Hi-Fi Rush likely would not have happened if MS was forced to only follow Sony's strategy. Sony is trapped where now they only make these $200M+ games that feel very similar. I feel like Sony is extremely lacking outside of the 3rd person narrative game space. Sony is going to have to take risks with its live-service roadmap tho if they want to be successful.

Jesse V

Yeah people bringing Twitter crap to this thread is stupid. I’m close to being done with the episode and Matt presents really good arguments, and some questionable ones. Talk about those! Not the fact that he has (HOLD THE PHONE) named called the judge on Twitter. Talking about that is purposely ignoring the content of his actual arguments.

Anonymous
>>113156793

Hoeg is always outstanding. I'm so glad he is recovering so well.

Anonymous
>>113147956

I think you are being a little harsh (but hey I get it - he deleted your comment and that's frustrating), but yeah Colin's takes on Xbox are generally piss poor due to his utter lack of knowledge with the ecosystem. It super evident that he never spent any significant time on the platform whenever he discusses Xbox. A couple weeks ago he didn't even know you can plug in an Xbox controller like how you can a PS controller. It's bad, but the rest of his content is really good. You can't find a better PS podcast than SS. It's pretty crazy how lacking the PS podcasting scene is compared to Xbox (and general gaming). If you get banned, just create a new account.

Joaquin Branche
>>113147956

I feel you but i dont think i am.. this isnt about him hosting this clown my comment is a reflection of how he has acted since 2018 when Xbox started really fighting back this is just another instance of how he really feels.

Kaim Argonar

Gear job Colin. Now be fair and invite your favorite guy Florian Mueller to a podcast - then you managed to cover both sides of the extremes!!

ᴮᵁᴺˢ
>>113163549

Outside of name calling, he’s been pretty slanderous throughout the case, and factually wrong. There’s nothing wrong with an opinion but to completely ignore the facts, or to speak authoritatively on something you lack knowledge in (as Colon does) is wack. Having to resort to name calling online Should disqualify from intelligent convo though. There are better ways than digital hostility.

Pat.

Interesting steam, the thing I’ve learned with drags like this ot really anytime short term is being used to justify the long term is that it almost always never worth the cost . I don’t really know where this deal is going to land but if I was a betting man I would say we’ll probably see ABK degrade significantly over the next decade . A new company will take it’s place .

Anonymous
>>113161458

You nail it. Inviting someone toxic and lacking decorum discredits his arguments. I’m sure there’s someone out there who can offer a similar point of view that’s more credible. For whatever reason Colin decided to go with him. It’s unfortunate.

Fenixrisingxl21
>>113163549

They both take shots at Florian Mueller for being a shill, knowing full-well the guest has previously engaged in namecalling on Twitter. The guest seems to be an overly-hostile shill for the “don’t let big companies get bigger” ideology, but I guess we shouldn’t call his behavior out, and just focus on Mueller’s(?) The guest’s arguments ring pretty hollow to me, as well. While the history lesson is appreciated, the fact of the matter is it seems U.S. law is on Microsoft’s side in this case, and instead of outlining how the FTC could have presented a better case (something Hoeg and other online personalities have done), it’s about classifying the judge as hostile, and somehow presenting the FTC as a competent body who would have won their case with any judge but this one. Failure to accept or even acknowledge the FTC presented a bad case makes it hard to treat his other thoughts with any credibility, since the show kind of devolves into “Microsoft bad, Sony good.”

Fenixrisingxl21
>>113168944

Yes, please. There’s a possibility for a much more spirited debate there, though I’m not sure how familiar Florian is with the video game industry.

Kaim Argonar
>>113168944

Not gonna happen. Colin just wrote me this. Hey Ruben, I wouldn’t have that shill on this show if Microsoft paid me like they pay him. Thanks anyway. -Colin

Fenixrisingxl21

The fact that the only pushback this guest received was when dared to call Sony a bully speaks volumes to the tenor of this episode, and where the host wanted the show to go. Almost any Xbox fan could give examples of how Sony has bullied their rivals, but the host somehow doesn’t seem aware, or doesn’t agree that their tactics are bully-like behavior. Dominant market leader paying to keep games it was already going to get off of rival platforms and their services? Not bully behavior. Third place player buying developers and publishers to ensure it doesn’t lose access to more games? Bully behavior. Once again asking the host to have one of the Dukes or Hoeg on when discussing Xbox, so we can get a hint of impartiality on these episodes.

Johannes
>>113173425

The Dukes and Sacreds are recording this episode for Sacred Symbols+ today.

Kenneth Oms
>>113168944

Florian is a pretty nice guy, he was always upfront about wanting the deal to go through and flew out to San Francisco from Germany to cover the case. It’s a little disrespectful the way he talked about him. All of us know he’s a corporate shill but he ended up being right. I don’t like it when people take a somewhat disrespectful tone over someone they don’t even know. It’s just not very nice, he could just say he doesn’t like him.

Kaim Argonar
>>113173425

100% agree. It just goes to show that the host here had a clear plan on how to discuss this and was not interested in any backfires or counter arguments. This episode was exactly what I expected it to be when Colin announced it. He should definitely bring on Hoeg now at least to bring more balance into this.

Bob Spiers

I enjoyed this. I own all 3 systems and don’t get involved in the drama, but was an interesting listen and put over a lot of points I haven’t heard before.

Kaim Argonar
>>113168944

I swear! I wrote that I had concerns having Matt on the show and as a joke I added that he should invite Florian Mueller so both sides of the extreme are covered. This is the response I got.

Gareth Handa

Excellent episode. Matt made some great points and clearly very smart. I really don't can't fathom how people think Gamepass is going to be great for consumers long term. I love buying games individually, but I guess people have become too use to just getting things this way.

Anonymous

Excellent episode.

Anonymous

Although I may not agree with the points made in this episode, it was an interesting episode nonetheless. My one pushback would be about Microsoft spending money to buy publishers and studios. For better or worse, after the disastrous launch of the Xbox one with Don Mattrick as the leader, when Phil Spencer took over, if they didn't buy Bethesda (at the very least) I feel that Xbox would have been shut down and Sony would be the only one standing. Now with the Activision deal, there is some form of competition (perhaps unnatural) but now Xbox has a chance to push Sony.

Anonymous

There's interesting perspective here but I still am not buying into either of your arguments which is surprising since I really am against general market consolidation. The assumption that Corley was hostile based on private discussions that none of us know about is particularly odd and seems bad faith. While I understand that Corley has a son that works for Microsoft I must question why the FTC chose her for this case. Surely if they thought there would be some conflict of interest they would've went to a different court unless their entire strategy was to use that information to continually drag on the Judiciary process by claiming conflict of interest and appealing and hoping the deals due date would pass by and the deal would dissolve. While I don't believe in consolidation I also don't believe the FTC should be able to delay decisions just because they know they will lose. If the FTC wants more power they will have to earn it by taking cases that actually stand a chance of succeeding.

Fenixrisingxl21
>>113168944

That’s disappointing. I guess the only “shilling” allowed here is if the guest is selling an ideology that Colin agrees with(?) I would assume the Dukes are free to invite Mueller on their show, but it appears Colin wouldn’t even consider being on the episode for a very spirited debate(?)

Brett the Illustrator
>>113163549

Florian can be a shill sure, but he has more class and receipts to back up his claims unlike the guest here.

Parker Petrov
>>113177739

I think it depends on If you derive value from owning the game. Some people do, and some people don't. Suppose you are the type of person who is going to only play a game once and then never go back to it. Owning it makes little sense as it's only a one-time use product. If you play God of War once, paying $70 to play through once may not be considered great to consumers for them where if they got it as part of a subscription the value argument would be different. So to those types of people, a subscription is a value as they are getting to play games and not have the burden of owning them or feeling like they are wasting money. It's the difference between renting a movie and owning a movie. Neither is wrong or bad. It's just a different way to consume the media.

ZG114

Really interesting conversation and it was nice to hear a cogent argument from someone who is against the merger when the prevailing discourse online has been that there’s nothing wrong with Microsoft buying ABK. I really liked hearing about the mid and long term economic effects of Microsoft gobbling up these massive publishers so they can put games day and date on Game Pass. I hope video games don’t go the way of Hollywood and the big streaming services but it feels like it’s destined for that if Microsoft continues to brute force everyone to play their game.

Anonymous

I just wish someone would take both Microsoft and Sony to task for exclusives. That's the most anti-consumer thing about all this, and they are both hugely at fault

Anonymous

I get Matt's point that a single entity having too much concentrated power in a given market is bad for that market. But, Xbox plus ABK would not nearly be as concentrated as say MS with Windows or Azure.

Dick Justice

While this is probably the best argument I've heard against the deal it still entirely hinges on this whole chicken little "THE SKY IS FALLING" argument that is just dumb at it's base level in my opinion. Gaming makes more money then any other entertainment medium, more then movies and music combined. Gaming isn't going anywhere, companies will go out of business, new ones will rise and take their place. Knowing how much money is there no company is going to let it sit there unclaimed. It's also pretty ignorant to claim the deal makes it harder for new people to get into the space. The increased demand for content and ease of which anyone can submit their work to get published means the barrier to entry into the industry is literally at an all time low.

Sealegs
>>113195129

Yeah, there is no acquisition MS could make that Matt would view as acceptable, just due to them being a giant corporation. His views align more with Lina Khan. Big = Bad, Bigger = Worse.

Retlaw

Fantastic and informative discussion, great work!

Anonymous
>>113195795

I thought it was a good review and I appreciate the multifaceted guests that Colin has on. LSM is the gold standard when it comes to content and value. That being said, I am of the opinion that the government should have no say in transactions like these. The true monopolies are created by government intervention, such as case with American utility companies. Wether game pass will be good or bad for the industry in the long is yet to be seen. If I was to guess, it is great for smaller companies and not so beneficial to larger ones who know that their games are to gain a greater profit in the market being sold at full price, as opposed to being on gamepass.

Gareth Handa
>>113177739

True, it really depends for each person. Personally, I have no problem paying 70 for a game. I get so much enjoyment from gaming it's worth it. I actually think we get a great deal nowadays. I remember paying £60 for Street Fighter 2 on the SNES!

Anonymous

So because Sony entered the games industry 7 years before Microsoft they're not a really in the games industry? With that logic then Sony aren't either cause sega and Nintendo came first. Bit of a ignorant thing to say and I'm no fanboy I have everything it's just a silly thing to say imo.

Chris Evans
>>113187278

To be fair MS said if they had it their way there wouldn't be exclusives. Sony and Nintendo are the ones that make exclusives a big deal and in order to compete MS needs to play the same game

AllTooEasy_

I honestly don’t really understand the hubbub. This was pretty level headed and dude made plenty of valid points. People are really entrenched on this topic, I get that but, much of the pro Microsoft outlook is incredibly short sighted and self serving. The whole situation boils down to Colin’s point that Microsoft is losing and can not compete on the same grounds with Sony and Nintendo. Therefore, they spend capital from another industry to change their standing. It’s concerning to those of us that draw this to its logical conclusion.

Timothy

@benryan Think you may be focusing in and overlooking the through line of that point in the discussion-- that being; MS is an office productivity company by a large margin subsidizing from one aspect of their business to fund another.

Zack Apuzzo

Don’t understand the controversy here. I don’t know this man’s twitter history and don’t really care. This was a great discussion. It’s weird to me how many people have been rooting for more consolidation from a tech giant. I enjoyed this episode

Sealegs
>>113187278

The kind of exclusivity deals that I think hurt the most are the withholding content deals Sony does for 3rd party games. Like exclusive exotics, maps and modes in Destiny & CoD only on PS. The stuff with Hogwarts legacy having quests and stuff cut from other players/platforms that also paid the same $70. Xbox doesn’t do that - if I buy a Xbox game on PC it’s the same game.

mattyboy316
>>113226790

Something xbox started first and foremost that everybody seems to have forgotten 🤦

Matt Millard

This was very informative and helpful. I definitely agree on a lot of the points being made here. It’ll be interesting to see how the industry progresses with Microsoft’s aggressive behavior.

Antonio Pereira

Not sure why some people are so upset over this episode. Hearing someone else’s opinion on the matter who isn’t a part of the gaming community in any sense, is important for the overall discussion about the case.

Anonymous
>>113222378

Same can be said for Sony as they started off as a tape recorder company and became famous for pocket radios. They also sell insurance and offer credit and banking services. Don't see Barclays or Kodak Making software though like Sony do now. If Sony had the money Microsoft has they would be buying publishers as well. If Microsoft wasn't buying Bethesda and ABK some other garbage corporation would of done. I rather Microsoft than Google or apple or tencent.

Matthew Kincaid

absolutely phenomenal episode, this is the discourse we need to hear as the industry changes before our eyes

Timothy
>>113222378

It's disappointing that gamers are accepting of consolidation at all on this scale by big corpo. This type of nonchalant attitude is very myopic in nature. It doesn't affect you now but it will eventually. What would it take for a gamer like you to care? You not being able to have choice in any western game of note unless you sub to a 16 dollar sub or you not being able to play any eastern or Asian game unless you invest into closed garden sony and nintendo ecosystems.

The Rose Experience

I’m just going to be plain; Microsoft and Xbox are ruining the video game landscape and many are just too stupid to see it, or for that matter, care. It’s about fanboysim and Xbox” long game which was plainly laid out at the tail end of this discussion. It’s also one I’ve been trumpeting for years in relation to Gamespass. You do not want the eventuality of what it’s going to bring. People think Microsoft are a consumer first company, are you insane? Once they corner the market and condition the consumer base to accept subscription models which inherently devalues games, what do you think will happen? This is crazy and seeing immature fanboys cheer this on like it’s the Warriors winning the title is embarrassing.

Tonys_Always_Write
>>113222378

Sony was a consumer electronics company that subsidized their entry into video games in the 90s. The whole reason they doubled down on releasing their own game console was due to their vendetta with Nintendo over being left at the altar. It's all a matter of business. I'm not trying to express a what-aboutism, but ultimately it's just the nature of our economic system. They are nearly 25 years apart, but you cannot be suprised when one company does what another did. If Microsoft isn't allowed to do it, than really no megacorp can and we should just break up every conglomerate.

Tonys_Always_Write
>>113254452

So BECAUSE Sony's Playstation became the most important part of Sony's income as a whole, that is Microsoft's problem, how?

Justin O'Reilly

I thought this was an excellent conversation. Super informative and interesting, and one of the best Sacred Symbols+ interviews yet.

Anonymous
>>113254599

I'd argue that free to play gaming and live service are far more detrimental to the value proposition of video games. Why pay 70$ when games like Fortnite, and Apex are free? The industry is going this way with or without Microsoft hell Sony is even experimenting with live service games although we aren't sure if they will be F2P or not

The Rose Experience
>>113254599

They’re definitely part of it but have proven they can co-exist, Gamepass and it’s end game do not have other models in mind and the threat of conditioning an entire consumer base to not buy games has been a proven disaster in other fields.

Jimmy G

Great episode. In 7 years, when Game Pass is $21.99 a month and you need to pay an extra $30 on top of that for day-and-date real AAA games, we’ll look back at this and laugh/cry.

Anonymous

Great episode. Ultimately, even if I occasionally totally disagree with Colin (see his take on Ukraine/Russia), the fact we’re getting these interesting and thoughtful episodes on complex topics makes it unique in this space.

PRETENTIEUX

I found this interesting and entertaining. Thanks guys.

Miracle Peach

Awesome episode and great guest. Loved it! So happy you and Matt are pushing back on the merger. It’s dangerous and concerning, yet so many seem to have such a myopic, ignorant, and/or selfish view on it.

Prince Borutski

As a business professor at a Canadian college, I really enjoyed listening to Matt's perspective. He made some interesting points. Thanks for recording this!

Anonymous

While I'm generally against Microsoft's attempted ABK purchase, I can't help but disagree with Colin when he says that Game Pass is nowhere near profitability, even when accounting for the money it cannibalizes from its a-la-carte first party game sales. Supposing all 22 current first party Xbox studios are given a $150 million budget to make a game, the total amount of money spent for those games comes out to $3.3 billion. For the sake of this argument, let's say that 100% of the budgets for these games are taken straight out of Game Pass revenue and nothing else. To factor in the cost of third party games added to Game Pass, let's throw out a ridiculous number, say, $2 billion/year. Based on some leaked numbers for games that were added to the service, including Guardians of the Galaxy ($10-$15 million) and Cooking Simulator ($600k), I actually think $2 billion per year is far ABOVE what they actually spend on third party content, but lets go with it. Take that $3.3 billion for the first party game budgets and add the $2 billion third party games budget, you get $5.3 billion. In their last financial report, Microsoft reported that Game Pass is currently making about $1 billion per quarter, or $4 billion per year. So the total cost is 5.3 billion, and it only makes $4 billion per year in revenue. EXCEPT, the $3.3 billion given to first party studios for their games is going to last them the entire development period of the game-- between 4 to 6 years. So assuming for simplicity that every studio gets all their development budgets at the same time and in one lump sum, yes, that particular year Game Pass will run at a deficit of $1.3 billion (the total Game Pass revenue ($4billion/year) minus the cost of first and third party games ($5.3billion). But the next year, assuming all first party studios have already been given their dev budgets, that leaves only the third party games expenses, which again, is $2 billion. If they use the remaining $2 billion in Game Pass revenue to pay off the deficit from the year prior, they're left with a $700 million profit by the second year, and a $2 billion gross profit every year thereafter until it's time to fund new first party projects. I know this is an overly simplistic view of this, I know it doesn't take into account the speculations on how this may or may not affect the market, but from a sheer numbers standpoint, this seems like a profitable service.

Germanos

Man, the people who actually didn't want this discussion to happen - I feel bad for you. Fantastic discussion. Great arguments. Never been more convinced I was reading the acquisition correct from the start 💪

Gooch Gobbler

I want to push back on the netflix nielsen stuff. Nielsen has a way to tell what you are watching no matter what you are on if you are a nielsen home. Even if you are streaming via PS or Xbox. They use the unique audio encoding for the show