Updates on Xbox Rog Ally, Play Anywhere, Game Pass... (Official Xbox Podcast)

Gaming
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Wait, first party revenue is now above third party revenue, am I reading that right? Shouldn’t it be the opposite on a console where most revenue comes from royalties from 3rd parties?

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I can believe it. I figure they’re including revenue made on PS, Steam, & the PC Microsoft store in addition which for two of those won’t include first party content at all. Knowing that console third party sales are only 30%, PC third party sales are only 12%, and Microsoft still gets 70%; and then all first party sales on any Xbox platform is 100%. everywhere else their games are available. Xbox first party is also just massive now. They own some of the biggest games ever in Minecraft and COD and they’ll get either 100% or 70% of all of those sales on every platform.

If this is true (and they can’t exactly lie about these numbers straight up (but that comment was also made by Jez Cordern in the Windows Central article so it might be an error)), it’d actually mean they aren’t taking a massive financial risk including a third party storefront like Steam.

Also in the Windows Central Post:

Jason Beaumont emphasized the growth of Xbox Play Anywhere, noting that Xbox transactions even outside of Game Pass are growing by “double digits.” “We’re seeing a strong alignment with developers, for titles that support Xbox Play Anywhere, they’re seeing more play, because the game is available on many more screens. When I think about Xbox Game Pass, we had record Game Pass revenue, and we had our all-time high in Xbox Game Pass payouts to developers.”

“In addition, we’re also seeing double digit growth in both first and third-party transactions as well. So whether your game is in Game Pass or not, there are many more opportunities for developers to reach players within our community.”

That all sounds incredibly good to me. I’ll need to watch the podcast myself, but if these are direct quotes then Xbox can’t be lying through their teeth (legally) and the past five years have been incredibly successful for them. I think they get the short end of the stick from us as outsiders being compared to the market leader, but internally what would matter far more is growth compared to their own historical data. And they can now boast an incredible first party output as a publisher and apparently better third party support than ever. And that’s supposedly paying off for them a lot. I just hope to see XPA become more consistent and eventually standard. Though maybe next gen it’ll just be automatic.

Also man, a LOT of teasing for next gen happening in 2025 from Xbox. I’m starting to believe rumors of a 2026 new console.

Edit: The article also had a comment about them wanting to focus next Gen on a unified experience across platforms and the AMD partnership being apart of that as something they can scale across devices. About what everyone said, but good to see official.

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I mean, I’m not saying they’d be lying, but I find it surprising that a console manufacturer would make so much more than collecting that 30% royalties, unless sales aren’t ‘‘crazy’’ like they are on PS5 I guess to a point where their sales (combined with other platforms like you said) are higher than everything else combined on their platform. Unless it ain’t that high but the massive games like WOW, COD and Minecraft make up for most of it.

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Microsoft also had 6 of the top 10 best selling games on the PlayStation platform. They’ve also had all those silly COD cross-over skins which likely sold like crazy. Pretty sure that’s all considered first party revenue.

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Oh I’m not suggesting Xbox is lying, but the text in the windows central post isn’t italicized or made out to be a quote like the other comments, and I’m not sure where they’re getting that from. If it’s in the podcast (haven’t watched it for myself yet) then yeah there’d be no question.

Yeah, to me it’s Playstation that reveals the context here (if this is true and not just a misquote). Microsoft is dominating the Playstation store that’s to be sure. 6 out of 10 games is nothing to scoff at and some games like COD are massive sellers. And everything there is 70%. But extrapolating we could assume those games (at least the ones that aren’t old ports) are similarly big hits on the Xbox store where they make 100% of the money.

It’s a simple equation. [(xdollarsales * 100%) + (xdollarsales * 70%) + GP Revenue] vs [(mdollarsales * 30%) + (mdollarsales * 12%)]

With X = first party and M = third party then 100% for sales made on storefronts they own (Microsoft store on PC & Console + Battle Net) and 70% for sales made on PS, Steam, and Nintendo. And for third party it’d be 30% on Xbox consoles and 12% on The Microsoft Store on PC. Considering everything that’s under the Xbox first party umbrella now, I can easily believe how they’ll make more from their own first party games than by taking a cut of less than a third of third party sales. And I do believe that certain games are making them more money than other games. Like COD but also probably Sea of Thieves and Forza and Minecraft and WOW. Xbox has so many incredibly popular massive live service multiplayer games now.

I always thought Nintendo made more from first party on their platform as well. Could be wrong. But 30% never sound like that much to especially compared to 100% and I think Nintendo has the output and popularity and pricing where their first party titles are probably doing incredibly well if not better than third party. Similarly Playstation has expressed a lot of concern in that they don’t have as even of a revenue distribution for first and third party titles. Most of Playstation’s revenue comes from the same handful of games they don’t own. I think this is a huge reason for the live service push and presumably the multiplatform one as well. Its a big difference in the types of games Sony sells. Most of their games are one and done single player. Whereas Microsoft has a big number of massive forever games that people keep spending money in past the initial launch date. They would never tell us exactly how or why or by how much though so it’s all just speculation.

That said, I think it’s more healthy for the business to be able to sustain itself on first party content than on third party software. Of course there has to be a balance. I’d be really worried for Xbox if they hadn’t made the comment that third party revenue is growing significantly as well.

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