Xbox+Bethesda: Discussion Thread

Gaming
904

Breaking my break to share this amazing comment from ResetEra that explains how SaaS companies (Like what MS has become under Nadella) look at their revenue and breaks down PR speak from a place of experience

"Sorry, long post incoming, dont’ mind me… just wanted to put some things out there and disappear into the shadows to lurk again… lol.

This is anecdotal, of course, as I work for a small/medium SaaS provider but one-time fees are not a metric we use in terms of growth internally or to our investors when reporting during end of FQs or FYs.

ARR (annual recurring revenue) is the driving metric and how much that increases YoY in total and per customer.

One-time fees are nice to have but it’s not what we’re “selling”. We want you in the door with an base annual fee and then upsell you other modules/services to increase that base annual fee over time, thus, increasing the overall ARR per customer.

For example, the management team doesn’t care if we get a one-time $1,000 training course sale, their focus is on getting the $750 annual training subscription. $1,000 dollars now is not as valuable as $1,500 over two years, $2,250 after three years… etc.

Of course, people can cancel the subscription (still got their $750 though) but if the overall ARR continues to rise YoY and we remain below the 3% ARR churn rate… we’re good and investors are happy, as per our metrics.

Now if you increase the scale, as Microsoft operates in a vastly different league than we do, I can see how some can be lead astray trying fit the new paradigm into old business models (especially, when competitors are keeping existing business models that are proven to work). I had trouble wrapping my head around it when we switched from offering an on-premise platform to only offering a cloud based platform. We used to front load costs at the point of sale and then charge a small recurring annual support fee… but now, since moving to a subscription model, we’ve lowered the price of the upfront costs but turned it into a recurring fee for the duration that they are a customer, so we make more money than before as long as they stay subscribed.

We can then upsell them other modules/services to get even more money and increase each customer’s ARR.

Again, they can always cancel but we got some money and had the opportunity to upsell, it just didn’t convert to anything… them’s the breaks.

As others have noted in this thread… that $45 one-time PlayStation sale, is immensely less valuable (over time - and this is an over time play) and equivalent to the $1,000 one-time training fee I mentioned above. I can’t do anything with that and there is no growth/upsell opportunity there… even when we’re dealing with the hypothetical 10 million in PlayStation sales. That $45 remains $45 but if I can get them into my ecosystem, even for a second, the revenue potential is much higher (3rd party sales, GamePass, Gold, DLC)… there are options available to increase that’s user’s spend in my ecosystem. Doesn’t mean it’s going to pan out but the opportunity is there and that’s what counts.

If I go to our management team and investors and say, " Hey, I can get you $450 million in one-time sales ."… they are going to say, " Cool, but what is the ARR on the deal? “, and I’ll say, " None .”… they’ll look at me funny and be like, " Ok, go find a way to turn the $450 million one-time into ARR, that is more important .". And ONLY if I can’t find a way to do it, they will probably say, " Ok, do the deal ."… but if I can convert it to ARR (even some of it), you’d be looking at the new CFO of the company (I believe this was a similar pitch from Phil to Satya that put him on the Senior Executive Team - One-time vs. ARR).

I don’t know if Microsoft looks at it the same way we do (I think they do because recurring revenue is their God… lol), so there could be leeway when it comes to exclusives but in my opinion after yesterday’s statement, if you buy a PS5 expecting any future Zenimax games other than those that have already been stated as coming to the platform, it will be at your own peril. Those saying that they need to make back the 7.5 billion on Bethesda games (weird to single these out but not other first party games) or that they are leaving short-term money on the table (at the expense of growth - what investors care about) from guaranteed PlayStation sales do not fully understand how Microsoft does business now, the ecosystem they are building and the business model they are promoting. Frankly, they couldn’t compete and grow against Sony’s traditional model, so they are going to disrupt the industry with a new model… because they have the money and time (corporate backing, finally) to do so. What do yo do when you can’t win the game… change the game your playing, of course.

Which brings me to an interesting hypothesis (ie. garbage speculation) when it comes to Phil’s statement yesterday, as I am kind of familiar with some corporate-speak and it’s intentional vagueness (I’ve had to write some of these myself… lol):

This is the next step in building an industry-leading first party studios team, a commitment we have to our Xbox community. With the addition of the Bethesda creative teams, gamers should know that Xbox consoles, PC, and Game Pass will be the best place to experience new Bethesda games, including some new titles in the future that will be exclusive to Xbox and PC players.

“This is the next step in building an industry-leading first party studios team, a commitment we have to our Xbox community.”

This line acknowledges that Xbox first party has been weak but we promised our fans that we’d do something about it… and we did. We know our fans have heard, “xbox has no games”, for years but now things are going to be different going forward. I think, this is the first hint at exclusivity for the Xbox platform (Console/PC/Mobile).

“… gamers should know that Xbox consoles, PC, and Game Pass will be the best place to experience new Bethesda games”

Now this is where I think it gets a bit sneaky on Phil’s part, cause this line acknowledges that there are NEW games coming to other platforms (in my opinion, he’s referring to Deathloop & Ghostwire) but you know what, don’t play them on PlayStation, wait and play it on Xbox where it will be BEST (Definitive Edition, all DLC included, maybe further enhancements/extra… GamePass). Essentially what he’s trying to do is freeze anyone on the fence and get them to wait and give Microsoft ALL of the initial purchase or signed up for GamePass. Is it a bonkers move that potentially cuts off upfront revenue, yes, but I know I’d probably put similar language in a statement when TIMED exclusives coming to other platforms are involved (remember this is an over time play, not immediate). I mean, most people will still buy these games on PlayStation but if he can convince a handful to wait and buy/subscribe in the Xbox ecosystem… that’s a win.

“… including some new titles in the future that will be exclusive to Xbox and PC players.”

This is your exclusivity statement for new games in the Xbox ecosystem, right here (in my opinion, starting with Starfield). Why say, " some "? Because there are still " new " games coming to other platforms, Deathloop and Ghostwire, for example. He won’t make a blanket statement right now because, it’s not true that " all new games " are exclusive (adding qualifiers is never a good idea in a statement/announcement/press release) and we probably won’t ever get that messaging (maybe after 2021, if Ghostwire launches in Oct. 2021). There might be some other aspects to doing it this way (for better or worse)… keeps the focus on the welcoming of the studios, so they don’t have deal with the vitriol on social media or in articles (for a little while), there are no consoles for the mass’s to buy so it’s a wasted PR cycle, gives them leeway just in case they need to adapt and change course… who knows, but, in my opinion, it’s all just marketing.

I bet marketing (aka Aaron Greenberg & Pete Hines) would love the opportunity to be able to say that the E3 (or whatever) Xbox + Bethesda presentations are the most watched E3 presentations ever (start to increase your mindshare). You don’t do that by getting PlayStation only users turned away, so you get them to tune in too. Then you show GAMEPLAY not a CG trailer, but GAMEPLAY and ending with " Xbox Exclusive – Console/PC/Mobile "… internet explodes. Then hope that seeing GAMEPLAY can sway a PlayStation user or undecided user to enter the ecosystem because what they saw was, “Cool!, I need that!”. They will probably use Starfield to establish a base metric for this type of rollout and use future exclusive announcements to measure things going forward against it (might not be a perfect science but metrics are made to be tweaked). If they are able to peel more and more users tuning in for each game/gameplay announcement/reveal into their ecosystem… that’s a win!

That said, this magic trick only has so many rabbits in the hat, so the effect will be diminished each time and then it will be common place that all games are exclusive, with the anger that would have come with a one shot “all exclusive” announcement now being spread over years (kind of like our subscription fees… lol) and eventually conditioning users to expect exclusivity.

Anyway just some food for thought that’s been cooking in my brain since yesterday’s news… back to lurking (life is nuts, so I don’t really post often anyway)… and, hey, if you made it this far… impressive."

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905

Man some people are taking this way too personal.

Even if MS buys out any previous Sony agreements and NOTHING from Zenimax appears on Playstation the Xbox “no exclusives” narrative isn’t going to change. Zenimax games are going to PC and Streaming that much is certain so the “I can just play that on my gaming PC” response to PS vs Xbox list wars will continue.

906

This is true if were are looking at a game as a one and done affair, but that isn’t the case anymore. What if you consider the game itself is the ecosystem? Remember now games provide perpetual revenue via online components and microtransactions. Putting a game you own with reoccurring revenue streams on a competitor’s platform is getting them into your ecosystem without them buying your hardware.

So putting a AAA, single player, one and done, hardware marketing game on the competitor platform makes no sense, nobody disputes that. But what about putting a MMO or game that has tons of optional content that constantly being released? Furthermore, what if you have plans on releasing movies, TV shows, toys, books, etc… based on your content?

I’m sure MS is exploring this and that is why we aren’t getting an everything is exclusive answer.

907

The vast majority of the discourse around the purchase has been “MS needs/should still put these on Playstation” and you are arguing that they should play right into that narrative. Which is pure idiocy.

908

Yikes. Seriously, read posts before replying…it ain’t that hard to respond to what I actually said instead of whatever you dreamt up.

909

You need to come down your high horse buddy. Everything you wrote applies to yourself.

If I’m confusing my assumptions vs reality so are you. If I’m not in the know in any area so aren’t you.

“Don’t imagine you are in the know in that area. Ya aren’t.”

What’s up with your snarky quip? I made a perfectly valid point and this is your rebuke? I got more to say on the subject but I’m tired and it’ll be for tomorrow.

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910

Maybe read the very next sentence after the one you bolded…or hell I dunno, perhaps the sentence before? You’re proving my point about ppl straight up ignoring what I type in some desperate eagerness to mash the reply button first.

I’m snarky because a host of ppl are responding with absurd arguments that have no relationship to what they are replying to. Instead, ppl are attributing statements and positions and ‘agendas’ to me that never originated with me at all, all out of some weird persecution complex or something. All of this would be fixed simply by READING the posts you all are so eager to reply to. A handful of ppl (Zappy, Staffy, PsyDec and Lucas Taves) all read and engaged with what I actually posted, but most others replying aren’t bothering. It’s corrosive and drives discussion into insults, like the guy who said that my position that ‘timed exclusives sell consoles’ is evidently ‘nonsense’ and I’m being ‘idiotic’ for suggesting it.

It takes no time/effort to read and think on a post and digest its points before responding.

911

If youre admitting to being snarky because of opposing opinions then you’re invested in this too much. Take a break from the keyboard.

912

Nah, I’m good thanks. Consider your own advice.

Me: None of us here have any idea what actually makes the most sense for them. Don’t imagine you are in the know in that area. Ya aren’t. All we can do is try parsing vague statements and try considering the different angles in hopes of finding what seems most probable.

You: Everything you wrote applies to yourself. If I’m confusing my assumptions vs reality so are you. If I’m not in the know in any area so aren’t you.

^^Do I really to explain how you prove my point here? And I’m not snarky due to differing views. Ask Lucas Taves. I’m snarky because folks like you reply in an adversarial way instead of just reading what you are relying to first. I made a post saying essentially how ‘none of us know the details’ and you replied by pretending that I claimed I somehow knew the details but you didn’t…

All I am asking is for you to read my posts before replying. Take some time to think on what I’m saying.

913

The fact that this is all just wild speculation leaves me scratching my head as to why people are absolutely losing their crap over someone disagreeing with them.

I have thoughts on where I think they may go but ultimately, I’m just stoked I’ll get new Bethesda games day and date on Game Pass.

Now if someone wants to yell at me, here’s my stab at it:

  • MS can’t talk exclusivity across the board because they likely can’t even acknowledge that Deathloop or Ghostwire Tokyo are eventually coming to Xbox. So we probably won’t really know anything for a couple years, to be honest.
  • Wolfenstein 3 is likely already being developed multi-platform and will probably be released that way.
  • Indiana Jones probably will be multi-platform unless MS negotiates a deal with Disney. They couldn’t even legally be part of the discussions between Disney and Bethesda until this week. They won’t want to rock the boat but may ask if exclusivity is an option.
  • I’d generally lean towards Starfield being multi-platform due to how long it’s been in development but I imagine MS will eat the development costs of the PS edition to plant their flag on a brand new blockbuster franchise.
  • I’m not convinced that MS has committed as to what to do with Elder Scrolls and Fallout yet. I tend to think they’ll try to discern how much Starfield is moving the needle on Game Pass subscriptions.
  • I can’t imagine any other Bethesda games not being exclusive the Xbox platforms, even future iterations of Wolfenstein and Doom. My dream is a crossover between the two franchises. That’d be one heck of a flagship title.

Ultimately, this is how I’d approach exclusivity with Bethesda but that doesn’t mean that’s how Phil Spencer, Pete Hines, Matt Booty, Todd Howard and Satya Nadella will want to approach it.

In the end, I think everyone’s expectations are far too high for those expecting them know exactly what they’re going to do in every single case yet. I doubt they’re as concerned about that as the fact that they alone get to decide what happens with these franchises and they’ll all be coming to Game Pass irregardless of those game-to-game decisions.

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914

I’ll take a stab yelling at ya! :stuck_out_tongue:

That part above is actually an interesting take. Not sure it is accurate since I am pretty sure it is now officially known that those games are 1 yr exclusives. That might not be enough to allow MS to really discuss them openly though due to potential terms of the contracts though. I’d imagine MS could still talk around those games easily if they wanted to be clear. I’m not sure they want to be clear yet personally.

Not sure I follow what ya are saying wrt Starfield. Are ya saying multiplat of not since it sounds like you hedge on both, lol.

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915

It’s a waiting game. Great thing is that we have Gamepass - the best past-time😀

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916

Regarding Starfield, I’m saying that if we were just thinking about this specific game (and not future sequels or Game Pass), they’d likely go multi-platform due to the sunk cost already invested in development for PS5. However, I’m guessing they’ll eat those costs because of the inherent value launching a new franchise that massive may have on console sales and Game Pass subscriptions.

As far as Deathloop and Ghostwire Tokyo are concerned, it’s almost certain that there is a non-disclosure agreement in place to prevent discussion of when the games may come to other platforms. You probably shouldn’t tell people that all future Bethesda Games will be exclusive because it could implicitly acknowledge that the exclusivity deals with Sony are temporary, which could breach contract (we know that but MS shouldn’t acknowledge it from a legal standpoint). It’s potentially a gray area but there’s no reason to antagonize Sony when you have to honor an agreement with them.

Basically, I’m presuming that as long as there are agreements in place for games to come to other consoles, they’ll never talk definitively about Bethesda exclusivity. Frankly, I’m still not convinced that they’re even 100% sure what they’ll do with every game yet. I think they’re simply excited to control the destiny of these incredible franchises and developers.

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917

The problem I have is that people are telling MS what to do based on console warring and list wars online. Yet MS have the full business decision and information in front of them. You have no idea of the implications of any of this or the cost or the benefit. Just a very very basic idea that exclusive content = good. Which I don’t think anyone disagrees with including MS and they’ve very clearly stated their desire for their to be exclusive content here.

The issue is clearly not that MS don’t want to make games exclusive but clearly that when you buy a publisher lock and stock things initially are more complex. In many many ways. I’m not being funny but a company like MS who are without doubt the biggest company of any in the gaming space might know what they are doing. I suspect not ripping up deals or putting staff at risk or upsetting the relationship or risking talent leaking all rank above instant console war gratification. Had they said ‘hey nothing changes we will publish these games cross platform’ then you’d arguably have a point. But they didn’t. So what on earth is the hullabaloo about if not pointless online and social media idiots arguing over lists?

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918

If Xbox wants to be the Netflix of gaming they need to start acting like it. Content. Content. Content.

Remove all Bethesda and Minecraft from the PlayStation Store. This is how you have clear messaging. Legacy titles have usefulness here and they should absolutely be a card that Microsoft plays.

When Disney pulled their legacy titles from Netflix it was a big deal. When Microsoft pulls Minecraft, Doom, Skyrim, Fallout, ect, that is how you win the generation and become the Netflix of gaming.

919

I wonder if hardware supply constraints help edge MS toward “timed” exclusivity for games that have had a substantial amount of work already completed for other platforms. I mean while we wait for clarity of what is and isn’t exclusive MS are not losing sales to people buying PS5’s in the assumption that they will be able to play Starfield. No-one can buy any at all. So in that respect having “exclusives” to sell hardware doesn’t help when there is no hardware to sell, and likewise no one will buy gamepass now for Starfield when we don’t know when it comes out.

Flipping all those eager to try a new generation console who have been waiting for months to buy with even “just” a timed exclusivity for Starfield could be a viable stratgey, I mean traditionally gamers are impatient, and if they don’t have either a PS5 or Series console when they finally go back on sale an announcement of “Starfield this holiday, console launch exclusive Xbox” could be sufficient to flip many customers to/back to Xbox.

Indeed, they will know when supply constraints begin to lift so such an announcement would be an almost perfect opportunity to get Series consoles back front and centre in the press.

Just thinking aloud, found your points interesting Tavish, certainly more interesting then claiming any exclusivity is stupid or making life worse for us.

920

I personally don’t see it as complex for one simple reason - Microsoft owns Bethesda, period. That’s it. There’s nothing else to it. Microsoft can have them exist for eternity or shut them down tomorrow. Either way, it’s completely up to Microsoft.

Another reason would be if Sony acquired them or Google. All their future games would be fully exclusive to their respective eco-system as they should be but yet, with Microsoft and Xbox, it’s never that easy, simple and straightforward even though it should be because after the last decade and Xbox almost being shut down completely, I would like to think that Microsoft/Spencer and everyone else can see what is most important which is making the Xbox brand the most valuable it can be and like it or not, having their future games like Starfield or The Elder Scrolls VI be multi-platform or a timed exclusive will do nothing but devalue the brand and piss off the majority of the Xbox fan base.

Sony rarely devalues their PlayStation brand or their IP’s and normally do whatever it takes to dominate and they don’t let up which is why they’ve been #1 for the last 25 years starting as a nobody in this industry and kicking Nintendo’s and Sega’s ass at the same time while sending one of them out the hardware business.

Nintendo even when doing poorly never ever devalues their brand or their IP’s to an even larger extent than what Sony does with PlayStation. You want that decade old Skyward Sword remaster? $60 please. And they never lower their game prices and rarely ever put their exclusives on sale because to do so would be devaluing them in their eyes and they’re not going to do that.

I realize that an American company like Microsoft is way more nonchalant than their Japanese counterparts who are ruthless, vicious and take no prisoners which is why they’ve been on top of the mountain for what seems like forever.

Microsoft has easily and by far the best opportunity they’ve ever had to make Xbox a dominant leader in the gaming industry but they never ever will be because they just don’t have the balls, backbone and spine to do what is necessary for their brand to be at such a high value to where people wouldn’t have a problem paying $60 for a decade old remaster.

But nope, it’s not who they are anymore which is disappointing because I would like to see Xbox actually win a single generation instead of being in 3rd place yet again. Maybe being the best doesn’t mean much or anything to you or others but that’s probably also why you may be against console wars and list wars because you know you can’t win. For once, I would like to see Microsoft strive to be the undisputed clear cut best. As someone who’s invested a lot of money over the years into Xbox 360 and now Xbox Series X, I truly believe that’s not asking a lot at all and if anything, is what every single Xbox fan should expect from Microsoft especially now.

You would think that the Xbox division almost being shutdown and buried a few years ago would have been a wake up call and as of now, it obviously wasn’t. Maybe I have been spoiled by the best going from Nintendo to Sony and outside of Xbox 360, always had the best. Now, im expecting Microsoft to deliver me the best. I will not accept anything less and neither should any Xbox fan who demanded the Gold price increase to be rolled back but yet, don’t want to speak up to have Bethesda games be exclusive because at the end of the day, it’s not about Sony or Nintendo, it’s about Xbox and getting the absolute most out of it because if you’re not going to get the most out of it then what’s even the point of investing your money and time into it all?

I’m 42, old school and been gaming since NES and my all time favorite games and best of the best every generation are mostly exclusives to one console or another because these games should be the bar in which all other games are held to. They should be the standard for each platform. Sony’s first party exclusives are that standard for PlayStation. Nintendo’s first party exclusives are that standard for Switch.

When you look at Xbox and see that the standard is third party multi-platform games, that to me is simply unacceptable. Especially now more than ever when you consider that they have a whopping 22 studios and a few of the best of all time. All of this also applies to any other company that enters the gaming industry with hardware/consoles or a streaming service because if your own games and IP’s aren’t the best on your platform, then you have a lot to prove.

This generation for me is make or break for Microsoft and Xbox. If they can’t become dominant in at least North America after the last almost three years worth of acquisitions then to be perfectly honest, im simply going to lose all confidence, hope and trust in them because if they can’t do it with the 22 studios they currently have, then I know that they never will and for me, that’s just very disappointing and disheartening.

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921

Got a question for ya’ll. Why do you think Sony has been hard on timed exclusives? Do you think it’s because Jim Ryan likes blowing money on console wars? Or do you think it’s because they have data to suggest it brings people into the ecosystem?

922

This is one of the dumber takes I have seen, during a time of particularly dumb takes.

The acquisition of Bethesda and ramp up of existing studios shows they have serious investment here. They don’t want you to pay $60 for a remaster and why should anyone want that. They simply want you to pay $14.99 a month for a subscription. If they can really nail Game Pass and xCloud then it doesn’t matter how much people value Sony/Nintendo I.P. they will have become the front runner in the gaming industry.

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923

He just really wanted to watch Aeris die in HD.

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