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Comment by fartcannon | Hacker News Reader

Not according to Phil in Nov 2021

https://www.essentiallysports.com/esports-news-not-the-only-...

At 15 dollars per month, 18 million subscribers, that's 3.25 billion dollars. They bought Betheseda for 7.5 billion. So now they're in the hole 4.25 billion and they still have to pay to run an entire extra company.

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Why would you report an acquisition's cost with the operating expenses of an ancillary service? You should compare the operating expenses of Game Pass with its revenues (i.e. Game Pass subscriptions), and you should compare Bethesda's acquisition cost + operating expenses against its projected revenues (i.e. Bethesda game sales/subscriptions. Apples to apples, oranges to oranges.

We could do that, but that would hide the big picture. As Phil himself said, it's not yet profitable. It's a loss leader. True cost of ownership!

You are trolling at this point. I know we are to assume good faith, but the way you’re writing your replies. Repeating this Phil stuff. Combining two completely different things…

It's all Microsoft! The only way you sustain an unprofitable loss leader is by spending money from other parts of the company. To push game pass, theyve been buying IP. What's confusing about that? To There's no need for debasing accusations.

That might all make sense if Bethesda didn't also bring them other revenue streams. I mean, Elder Scrolls Online alone brings in a completely separate subscription stream and cash shop.

You keep ignoring every one saying that Bethesda acquisition which was Zenimax being acquired was also bought for other things and they got other things as well.

Why would you count Bethesda? I don’t understand the rationale. It isn’t even like they are the same revenue stream.

The article you linked does not say anything while adding up its word count. It’s common knowledge gaming companies say consoles never make a profit (except Nintendo). Game Pass is a fledgling growing SaaS. Of course sustainable is the right term. Nothing News worthy.

It's an answer to the reply that said they were profitable. They're not. They're 'sustainable'. That's it.

Even if you want to be anal about this. Phil saying the words sustainable doesn’t mean it’s profitable or not. It is just him saying stuff to the public. As if any corporate exec is ever going to be truly honest in public.

Taking away PR words as fact is not sustainable. It doesn’t work.

where did you get 3.25 billion? is that a years worth of subscription income? Does game pass blow up after that or something? Have subscriptions just stopped, 18 million and ..... no more growth.

If they keep buying stuff, they're not gonna make any money. It is thus a loss leader, as Phil indicated.

Microsoft is buying stuff. Game Pass isn’t buying stuff. Microsoft makes plenty of money. Notice how any one can decide where to draw the line of what is what.

Why do you keep bringing Phil up. A loss leader isn’t the same thing as a growing SaaS. You are putting words in his mouth while repeating Phil said this, said that.

Yes, Microsoft makes plenty of money, that's how they're able to run game pass as a loss leader. Literally the original point.

So then game pass doesn’t lose billions. It makes billions since Microsoft does. Using your logic of assigning expenses and profit any where

You understand those things they are buying have value right? That they are not just throwing money into the void. Investing in future growth is what businesses does in a competitive environment. If they don't keep buying stuff their service will fail and they will lose everything they had invested to that point. Thats how you don't make money.

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