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Sales Data Growth for gaming subscription services is still "stalled"

Maybe a dumb question, but hasn't console growth (at least PS and Xbox) as a whole kinda stalled? Feel like I keep hearing that and that's why both Sony and MS are looking for other ways to grow their business

And if that's the case, doesn't it naturally follow that their subscription numbers would also stall because they aren't really bringing new folks into their own ecosystems? Like, how many people are really buying PS5s at this point that didn't already have a PS4 (and presumably either were already subbed to PS+ or were just never gonna subscribe)
 
It’s only going to get worse you imagine, as costs of making games increases then that will surely have a knock on effect to these subs and they will also need to increase in price. I personally prefer to wait for good sales and buy my games, I might be in the minority but I feel less inclined to stick with a game if it’s part of a ‘buffet’ games subscriptions service than if I own it.
 
since MS put all their eggs in the gamepass basket they really have only one option now, and it WILL happen

Fee hikes
 
I don't see a way for the current model (or form, if you will) of game subs to succeed. You simply can't apply here what the movie / TV and music industries did, respectively. Games / gaming is its own beast in terms of how people interact with the medium, very different from simpler (as in, more straightforward) nature of consuming audio and / or video content.
 
Imitatio said:
I don't see a way for the current model (or form, if you will) of game subs to succeed. You simply can't apply here what the movie / TV and music industries did, respectively. Games / gaming is its own beast in terms of how people interact with the medium, very different from simpler (as in, more straightforward) nature of consuming audio and / or video content.
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Even TV/movie streaming is a bubble waiting to burst. Everyone's setting art on fire because venture capitalists were convinced streaming is the future.
 
BlackthornOrion said:
Maybe a dumb question, but hasn't console growth (at least PS and Xbox) as a whole kinda stalled? Feel like I keep hearing that and that's why both Sony and MS are looking for other ways to grow their business

And if that's the case, doesn't it naturally follow that their subscription numbers would also stall because they aren't really bringing new folks into their own ecosystems? Like, how many people are really buying PS5s at this point that didn't already have a PS4 (and presumably either were already subbed to PS+ or were just never gonna subscribe)
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Not many. The vast majority of these subscribers have been subscribers since the previous console at least. There's a ceiling in how large a subscriber count any such service will attract.

What's nuts is Microsoft a few years ago had a goal to grow Game Pass to 100 million subscribers by 2030, which was always ludicrous. But that was seriously their aim.
 
Mekanos said:
Even TV/movie streaming is a bubble waiting to burst. Everyone's setting art on fire because venture capitalists were convinced streaming is the future.
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Completely agree with this. The mulltiple content providers feel more like gatekeepers before a paywall than providers of a service I gladly pay for. I dropped every sub I ever had because of rising prices and quality that took a nosedive. As of now, I still prefer physical media simply because of the convenience of access.
 
Imitatio said:
Fair enough, yeah. Music's seemingly the only one of those doing well enough, at least as far as I can tell.
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What? Music was the first art form to go down! For the general public, music is now a freeware form of art. The only ones who make a living on recordings these days are Spotify, a couple of the big companies, and some really famous artists. It's a huge struggle for the 99% remainder of the music world.

The reason why so many song writers are selling their music catalogues nowadays are because they don't get paid almost anything for the songs being played anymore.
 
Does that mean that NSO subscription is flat as well?

I wonder if Nintendo is planning to add more stuff to their subscription model for the Switch 2 to try to increase subscription revenue or if they are happy with what they get from their more lowkey subscription model as it is today.
 
jariw said:
What? Music was the first art form to go down! For the general public, music is now a freeware form of art. The only ones who make a living on recordings these days are Spotify, a couple of the big companies, and some really famous artists. It's a huge struggle for the 99% remainder of the music world.

The reason why so many song writers are selling their music catalogues nowadays are because they don't get paid almost anything for the songs being played anymore.
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This topic isn’t about the artists (or developers) themselves though, but the financial viability and success of corporations offering these platforms / services. You’re mixing two different aspects (which obviously correlate. And I’m well aware of the struggles artists and writers are facing in the current constellation).

You might as well reword my initial post to
“Music streaming platforms seemingly are the only ones of those doing well enough, at least as far as I can tell.”
if it helps making things clearer.
 
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people only have so much time. You can have all the content in the world, but if i don't have the time to watch/listen/play, and loose access the moment i stop paying, then the incentive of "watch anything all the time" becomes null if i pay comparable to what i would pay to rent a movie when i have time or just outright buy it.

music has the benefit of being ubiquitous, at social gatherings, at home, during sport, during commute. shows are harder to integrate everywhere, and games are impossible.

There is also the fact that... no service can grow forever. FB and Youtube gained a saturation that high cause they are free. The moment you want payment, you are putting up a huge wall. That wall can be monetary (12-18€ is not so much in the us, but in places where thats food for 2-3 days its a lot).
Or it can simply be by excluding people with the right payment options. (up till a few years ago it was hard to me to get a credit card simply cause i needed to get one for just a couple of uses but pay yearly fees).

Or your card service is not accepted, or ...

And what brought the breaking point: rising cost of living everywhere, high inflation for a while, making it that the average person has less disposable income, all services increased the price by a couple Dollar, and it crossed the "its so low i don't care it i don't really use it enough" point back to "ok, do i really need it?"

if a service is a no brainer in price, you don't care if you don't use it. But the prices where just to gather the people. they thought people will be to lazy to cut off a subscription, now they know they are not, and the new prices are not inscentivising enough.
 
regarding gamepass in particular,

the time or even "focus" investment for games is usually way higher compared to movies/tv shows and music which is probably why despite a huge library on a subscription, this won't interest many people besides a pretty hardcore fanbase.

A more casual audience will lean towards an even cheaper avenue for gaming : free to play whether it's on phones, PC or consoles (and the occasional big indie hit that has usually a multiplayer component such as among us).

I think the biggest blow for xbox/microsoft in regards to gamepass is how little the PC subscription moved the needle overall as more people would still rather use steam overall.
 
Aether said:
people only have so much time. You can have all the content in the world, but if i don't have the time to watch/listen/play, and loose access the moment i stop paying, then the incentive of "watch anything all the time" becomes null if i pay comparable to what i would pay to rent a movie when i have time or just outright buy it.

music has the benefit of being ubiquitous, at social gatherings, at home, during sport, during commute. shows are harder to integrate everywhere, and games are impossible.

There is also the fact that... no service can grow forever. FB and Youtube gained a saturation that high cause they are free. The moment you want payment, you are putting up a huge wall. That wall can be monetary (12-18€ is not so much in the us, but in places where thats food for 2-3 days its a lot).
Or it can simply be by excluding people with the right payment options. (up till a few years ago it was hard to me to get a credit card simply cause i needed to get one for just a couple of uses but pay yearly fees).

Or your card service is not accepted, or ...

And what brought the breaking point: rising cost of living everywhere, high inflation for a while, making it that the average person has less disposable income, all services increased the price by a couple Dollar, and it crossed the "its so low i don't care it i don't really use it enough" point back to "ok, do i really need it?"

if a service is a no brainer in price, you don't care if you don't use it. But the prices where just to gather the people. they thought people will be to lazy to cut off a subscription, now they know they are not, and the new prices are not inscentivising enough.
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This. I don’t even pay for a Nintendo online sub unless I’m actively playing an online game most days. And that’s a pretty cheap one.
 
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Even before Microsoft's fuckery, i was already pondering unsubscribing from Gamepass Ultimate because it has basically become a try-before-purchase service for me, the only game i'm consistently playing is Forza Motorsport now, since i want to purchase the rest in the platforms i'm most likely to play them on (as in, i can't conceive Cassette Beasts outside the Switch, for example)

The only reason i'm keeping PS Plus is because i'm sharing the service with my BIL - being me the owner of the account - but even with that i'm seriously considering downgrade to Extra, or even go as low as Essential. The price is too steep, and the Premium offering too meager, i expected better from Sony when it came to managing their retro games.
 
Maybe I'm old-fashioned, but I still don't think the subscription model works for games. They're too time-consuming.

It'll only "work" if it becomes the only way to consume games, which I don't see happening anytime soon.
 
Earthbounder said:
Maybe I'm old-fashioned, but I still don't think the subscription model works for games. They're too time-consuming.

It'll only "work" if it becomes the only way to consume games, which I don't see happening anytime soon.
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Games are so divers, hard to say.

Testing games? great way.
Finishing short games? works. A game that i finish in a couple of hours will be worth the subscription.

Tending to never finish game but starting many different ones? then the subscription model is ideal.
Taking 2 months for AA releases? sure, then you're probably still break even.

but the moment you don't have so much time to play games AND play the same games for a long time, then it doesn't work anymore.
 
Imitatio said:
This topic isn’t about the artists (or developers) themselves though, but the financial viability and success of corporations offering these platforms / services. You’re mixing two different aspects (which obviously correlate. And I’m well aware of the struggles artists and writers are facing in the current constellation).

You might as well reword my initial post to
“Music streaming platforms seemingly are the only ones of those doing well enough, at least as far as I can tell.”
if it helps making things clearer.
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Spotify has required cash infusions from the Big 3 record labels. They are the biggest equity holders in Spotify at this point. It's not profitable. Apple Music isn't profitable, either. Apple is just subsidizing it in the hope that they get some sort of streaming monopoly one day.

The end game of this is for streaming to become like the pre-internet radio where you can get a sample of a new record then you need to go buy a record or a CD. There will still be piracy as there always has been and always will be piracy (those who are old enough to remember the '80's remember renting a CD or record from your friend or the library and recording it on a blank cassette). But at least someone will be making some money for their work other than the software bros. The solution isn't to beat the pirates to the bottom. The solution is to contain costs of media and make the physical version more interesting than the pirated file. For example, records sound better than crummy streams and look cool.

In fact, the retailers are tickled pink that records are selling well. Just like video games, it's a 33% gross profit margin off an impluse buy item on almost no shelf space.

That is the end game for movies too. I know that many corners of the internet rant about how they'll never go back but it will happen. The industry will have to take a haircut and rebuild its business model over years but it's either that or a complete crash which is looking likely right now.

To tie that into video games, Gamepass never worked because it's a worse experience than buying a game. With Gamepass, you own nothing, you have to keep paying and paying and paying to access a game if your real life gets in the way of playing it (if you buy a game, you own the copy and can play it whenever you have some free time). You're basically forced to binge video games to feel like you're getting your money's worth. It becomes a chore and a job rather than entertainment.
 
Earthbounder said:
Maybe I'm old-fashioned, but I still don't think the subscription model works for games. They're too time-consuming.

It'll only "work" if it becomes the only way to consume games, which I don't see happening anytime soon.
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It can work for shorter games. But when every current AAA game is on the service that usually takes 15 to 20 hours, and even longer, to beat, there is only so much time you can give it.

I think it's why I love the nso service because the games it offers so far are either highscore base games, like a lot of nes games, or games that can easily be beaten in on sitting. At worst they take a day or two, outside of some rpgs of course. Or you got the 99 games, which are meant to just play a bit here and there for multiplayer.
 
Would love to see how EA Play, a subscription service available on three different platforms, is fairing in comparison to PS+/Gamepass
 
metwars said:
I think it's why I love the nso service because the games it offers so far are either highscore base games, like a lot of nes games, or games that can easily be beaten in on sitting. At worst they take a day or two, outside of some rpgs of course. Or you got the 99 games, which are meant to just play a bit here and there for multiplayer.
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Also helps that NSO is the cheapest so far. Of course, they'll probably raise fees in the future, but right now I think it's a good deal
 
Danny said:
Does that mean that NSO subscription is flat as well?

I wonder if Nintendo is planning to add more stuff to their subscription model for the Switch 2 to try to increase subscription revenue or if they are happy with what they get from their more lowkey subscription model as it is today.
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I suspect they're happy with what they've achieved from NSO and realistic about how big it can grow. The desired number of subs is some percentage of active Switch owners. They can grow it by improving the content now and again, without spending that much. I'm sure they see it all as bonus revenue, not as some key driver like Xbox seems to think GamePass is.
 
Seeing this and just all the news about how unprofitable TV/Movie streaming has been, i feel like we're on the verge of a huge shift in media distribution. Not sure what it will be but with ever increasing subscription cost and adds being introduced in services like Netflix and Prime it's becoming more and more apparent that as user growth stalls they are getting desperate to start increasing revenue by any means.

Already noticing an increase in free and paid "Live" TV services. I could see a future where you pay 20$ a month for Netflix's Live TV model and the on demand stuff becomes a premium... which would bring us back to kinda how things were before but with worse options with no physical rental stores and a much smaller pool of companies controlling most content and how it can be obtained making the opportunity for consumers to own any of that content a lot more restrictive (and also perhaps more temporary).

Kinda glad the streaming model never took over for gaming before reaching this point. As an option it's nice for those who play a lot of games but I can maybe have 2 single player games on the go at most, and most multiplayer games I play are either free of pretty cheap.
 
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neil said:
I suspect they're happy with what they've achieved from NSO and realistic about how big it can grow. The desired number of subs is some percentage of active Switch owners. They can grow it by improving the content now and again, without spending that much. I'm sure they see it all as bonus revenue, not as some key driver like Xbox seems to think GamePass is.
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Exactly. The games they have there are mostly "free" (emulation development aside, the roms that nintendo owns are free for them, and the licensed ones...i dont think they are paying much).
The additional games...none of them could be sold for full price.
Its all just an incentive. The DLC maybe... but its not as if much was added over time.
Online services? yeah, the infrastructure is still not that great, and most of their games don't need much.

Its a +. Its "free money", in that most of the cost is covered by a fraction of the userbase, all subscriptions above that are bonus.

Microsoft planned to base their whole business on Gamepass, nintendo would not change at all if they would remove the service.

It is definitely the most healthy service... but also the most inconsequential.
If i would be on XBox, i would probably have game pass for phases. On Switch, for the most time i did not think of it.
2 years overall, both with friends, and both times i asked myself: is playing Smash online a couple of times a year worth it.
 
NSO is supplemental. For Xbox, the subscription is the primary business model.

Subscriptions in games has become like subscriptions in TV. There's so many competing services to sign up for and it's just irritating people. They're going to sub to one or two full time and that's it. Maybe they'll do a month sub if there is a show they really want to watch. It takes months for a normal person to beat a single game, if they beat it at all. Plus with all the live service games, it just isn't worth it to a sub continuously running on multiple services.
 
neil said:
I suspect they're happy with what they've achieved from NSO and realistic about how big it can grow. The desired number of subs is some percentage of active Switch owners. They can grow it by improving the content now and again, without spending that much. I'm sure they see it all as bonus revenue, not as some key driver like Xbox seems to think GamePass is.
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NSO is legacy games and DLC. It's a supplemental service to Nintendo and their investment in it has been as a supplemental service. The first party games make up the bulk of the lineup and those aren't going anywhere, and the licensed games that are on the service may as well have been given away to them. (Barring exceptions like Goldeneye)

Yeah, I suspect they're happy.

If anything, Nintendo probably makes more money off NSO subs than they ever did from the VC originally.
 
Old Sorta Fan said:
Spotify has required cash infusions from the Big 3 record labels. They are the biggest equity holders in Spotify at this point. It's not profitable. Apple Music isn't profitable, either. Apple is just subsidizing it in the hope that they get some sort of streaming monopoly one day.
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Huh; TIL! Good to know.

So streaming platforms and sub services like these are basically a dead end, no matter the industry (music, tv/film, games), at least in their current form.
 
BlackthornOrion said:
Maybe a dumb question, but hasn't console growth (at least PS and Xbox) as a whole kinda stalled? Feel like I keep hearing that and that's why both Sony and MS are looking for other ways to grow their business

And if that's the case, doesn't it naturally follow that their subscription numbers would also stall because they aren't really bringing new folks into their own ecosystems? Like, how many people are really buying PS5s at this point that didn't already have a PS4 (and presumably either were already subbed to PS+ or were just never gonna subscribe)
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There isn't a simple answer to your question, but what I would say is this:

While all console makers have had historical peaks where one of their hardware platforms has sold the most, we've never been in a generation where two out of the three console makers are both selling above 100 million.

What I mean by that is: The PS2 is Sony's best selling console (at around 160 million) but overall that generation hit around 200 million, and frankly the Xbox and Gamecube offered next to no competition at all. Sony selling gangbusters was offset by Microsoft and Nintendo selling around 40 million between them.

If you look at today's consoles: While Sony and Nintendo haven't yet managed to beat the 155-160 million mark that is the sales highpoint for both of them, the fact is that they are both selling in huge amounts that has never happened concurrently before. Historically, Nintendo selling gangbusters coincides with Sony not selling as well, and vice versa. We're not in a position where the PS4 sold 140 million, the PS5 is tracking to sell better, and the Switch is on track to be Nintendo's best selling console ever.

The only weak point here is Xbox - If consoles overall still aren't growing, then its because Xbox has consistently failed to compete with Sony and Nintendo. The 360 sold around 90 million. The Xbox One sold around 60 million. We don't have hard figures for Series X/S, but they're somewhere around 30 million and tracking downwards hard. If the market is able to support Sony and Nintendo offering different consoles that sell 100 million+, if the market is able to support Steam growing consistently YoY on PC, then there is an argument that the market absolutely should be able to support Xbox releasing a compelling console as well. The problem is that Microsoft have not risen to the challenge - At a time when everyone else is on their absolute A-game, they have consistently fumbled the ball, then complained that its the industry's fault when they get left behind.
 
Not doing day one first party releases on PS+ might be the smartest idea Jim Ryan had, given how it's a big reason why Microsoft is in a hole
 
Expected. Only so many people want to pay for online and subscription services where you don't own said game.

Same could be said about digital store fronts, but when it's the only choices you have, well you have to do digital
 
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I bet Microsoft was hoping that converting XBOX Live Gold into GamePass Core would up the subscriptions, but looks like the answer is no.
 
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Earthbounder said:
Maybe I'm old-fashioned, but I still don't think the subscription model works for games. They're too time-consuming.

It'll only "work" if it becomes the only way to consume games, which I don't see happening anytime soon.
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People kept saying Game Pass is like Netflix but to me it’s always been more like Kindle Unlimited. It’s pretty niche and most people don’t consume games as fast as television/movies.
 
JazzPotatoes said:
There isn't a simple answer to your question, but what I would say is this:

While all console makers have had historical peaks where one of their hardware platforms has sold the most, we've never been in a generation where two out of the three console makers are both selling above 100 million.

What I mean by that is: The PS2 is Sony's best selling console (at around 160 million) but overall that generation hit around 200 million, and frankly the Xbox and Gamecube offered next to no competition at all. Sony selling gangbusters was offset by Microsoft and Nintendo selling around 40 million between them.

If you look at today's consoles: While Sony and Nintendo haven't yet managed to beat the 155-160 million mark that is the sales highpoint for both of them, the fact is that they are both selling in huge amounts that has never happened concurrently before. Historically, Nintendo selling gangbusters coincides with Sony not selling as well, and vice versa. We're not in a position where the PS4 sold 140 million, the PS5 is tracking to sell better, and the Switch is on track to be Nintendo's best selling console ever.

The only weak point here is Xbox - If consoles overall still aren't growing, then its because Xbox has consistently failed to compete with Sony and Nintendo. The 360 sold around 90 million. The Xbox One sold around 60 million. We don't have hard figures for Series X/S, but they're somewhere around 30 million and tracking downwards hard. If the market is able to support Sony and Nintendo offering different consoles that sell 100 million+, if the market is able to support Steam growing consistently YoY on PC, then there is an argument that the market absolutely should be able to support Xbox releasing a compelling console as well. The problem is that Microsoft have not risen to the challenge - At a time when everyone else is on their absolute A-game, they have consistently fumbled the ball, then complained that its the industry's fault when they get left behind.
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The one flaw with your analysis is you're only looking at consoles. Yes the GC only sold ~20 million, but it was also sold alongside the GBA which sold ~80 million for a net of >100 million pieces of hardware sold. Same when Sony had a "down" period with the PS3, they had the fairly successful PSP to compliment.

I'd also add that mobile continues to be big and we have a growing market of handheld pc and portable emulation machines. Everyone is seeing growth but Microsoft who continues to shrink further into irrelevance. Sony has a similar problem with lack of growth but that's due to how high their costs are which eat into their profits.
 
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Game subscriptions don’t make a whole lot of sense since the way games are consumed is totally different than movies, tv shows, news, and sports entertainment.

XBOX has found themselves in a hole. They based their entire company pivot towards Game Pass and it hasn’t really worked out well for them. The subscriber increase during the pandemic years was artificial and has since tapered off.

Data shows that consumers are still purchasing their games outright / a-la-carte along with expansion packs, DLC, etc in vast numbers.

The majority of households already have enough subscription services - Netflix, Hulu, Amazon, Spotify, etc - another service for $15 - 20 per month may not be appealing to most people except for the most hardcore of consumers, and there aren’t enough of those people to bank roll a service like Game Pass. The math doesn’t make sense. And if it doesn’t make sense, it won’t make cents.
 
The closest analog to the sub model I think gaming has is GAAS games. Because the habits of a person playing a FTP game for an hour a day is closer to a person getting their netflix and chill moment. But that's just for one game at a time.

Most average people don't jump from game to game, they pick maybe one or two and then stick to it like glue, maybe gliding off for a trend every now and then.
 
Imitatio said:
Fair enough, yeah. Music's seemingly the only one of those doing well enough, at least as far as I can tell.
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for how long though

the convenience is wild but artists are fucked and only getting more fucked

Spotify keeps trying to sue our burgeoning union

Spotify literally, somehow legally, stopped paying artists this year for any song that gets fewer than 1000 streams per year. That 1000 streams is maybe like $4.

The little bit of revenue (like $25 in a good year? and only if two people also buy something on iTunes still?) I earn from streams is now gone. That's the money I put back into new release fees.

So... Spotify says I'm literally worthless! Has ceased honoring the agreement. Instead of saying I'm only worth a fraction of a fraction of a cent. It is wildly profitable for them to declare every artist like me not worth paying.

It's a fucking nightmare hell world for artists and I resent it.
 
Suswave said:
It's a fucking nightmare hell world for artists and I resent it.
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Rightfully so.
I initially assumed it at least worked for the corporate side of things, fwiw, but Spotify (and others) seem to be struggling there as well, to a degree at least.
Worst of both worlds, in the end. Yikes.
 
so uhhh one of Microsoft's former guys just wrote about Gamepass on linkin and...it wasn't pretty
GNIN568WIAAzQb8
 
Imitatio said:
Huh; TIL! Good to know.

So streaming platforms and sub services like these are basically a dead end, no matter the industry (music, tv/film, games), at least in their current form.
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That is true.

These streaming services were created out of the music industry being shocked by the rise of Napster in the late 1990's. Napster was both stone cold piracy AND a reaction to the industry's greed in discontinuing selling single songs for $1 in the mid 1990's. For the first time in the history of the recorded music industry, music fans had to buy the whole album for $18 even if they only wanted one song. Singles had existed back to the 1910's! My boomer parents grew up buying single 45's for a quarter when they were kids until they had enough money to get a $3 LP. Even then, you'd only buy the LP if you knew that you wanted to listen to the whole album. Otherwise, go for the $.25 single. Older Millennial and GenX kids grew up with 45's, cassette singles, and CD singles (for a brief window in the early to mid '90's).

iTunes was sold to the music industry as a way to get back the revenue lost from discontinuing singles that was lost to piracy by fans who only wanted one song AND a way to improve security around piracy. Of course, the big record labels only heard the second part because they were about as smart as Xbox and they wanted to return to the outsized profits of the 1990's without doing the work of providing a better value proposition for the customer. In truth, Steve Jobs viewed iTunes as a supplement to buying records and CD's that had what was viewed as an improved delivery mechanism and DRM. He talked about how he owned records and CD's for when he wanted to sit down and listen. The record industry also got weary about the amount of control outsider Apple, Inc. had over their business.


Yet, piracy still persisted as it always will. Rather than taking the Nintendo route of both fighting pirates AND and trying to make their games replayable and special and an experience that is unachievable except through Nintendo hardware, the music industry kept on focusing on stamping out piracy even though Napster was gone and they were making good money off iTunes and CD sales through the 2000's. Internet radio had existed since podcasts started in about 2004. The VC/software industry sold racing to the bottom with the pirates as the way to beat the pirates. Of course, it was an arrangement where the software bros. control everything. The record companies decided to invest in Spotify after the VC money dried up because they bought the 2010's hype about streaming being the path to prosperity.

Now, they own lots of equity in something that can't ever make a profit. They had many chances to correct their business. Fans showed them the way with bringing records back as the premium experience and they are at least running with that part of the market. They still haven't ramped up CD sales yet even though Taylor Swift has shown that fans will buy them along with records if you give the fan a good enough value proposition. CD's are much, much cheaper to make than records but they don't sound as good and don't look as cool. But they do the job of delivering packaged music to a customer for not that much money. Figure out how to cut costs on CD's (it's not that hard, CD's cost about $.05 to produce if that), market them as something retro-cool just like records, make them have special keys for content etc. Also, go Nintendo-ninja like on pirates.


The movie industry is even sadder because they were never shocked by Napster. They just bought the 2010's software bro hype about streaming and unilaterally torched 50% of their gross revenue and destroyed retailer relations and pay software bros to go bankrupt. This was an active choice rather than a road to hell paved with defensible incremental business logic like with music (I've thought they were idiots since they discontinued records in favor of CD's but you could make an argument in favor of each increment choice regardless of them being short-sighted and self-defeating). I kind of want movies to crash because they stopped making anything I want to see and want to deliver it to me in a format and pay structure that I refuse to buy into because I'm not paying $20 a month to maybe watch a movie I might want to watch rather than buying something I definitely want to watch.

Phil Spencer and Xbox wanted to bankrupt SIE and Nintendo by forcing them to compete on Microsoft's terms and lose money on this unsustainable business model. He wanted to make the industry about software services delivery rather than entertainment content. He knew that nobody can compete with Microsoft on software services delivery and SIE and Nintendo would go bankrupt if they took the bait. The plan was then to pick their assets and IP up for pennies on the dollar in bankruptcy. Then monopolize the industry. That was the plan. Just like the various TV/movie streamers all wish to monopolize the movie industry. That's all this is about.

Good thing for us that reality still exists and a business still needs to generate cash. And I mean CASH, not net income! Cash! Netflix always generates net income but often loses lots of cash.
 
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Old Sorta Fan said:
That is true.

These streaming services were created out of the music industry being shocked by the rise of Napster in the late 1990's. Napster was both stone cold piracy AND a reaction to the industry's greed in discontinuing selling single songs for $1 in the mid 1990's. For the first time in the history of the recorded music industry, music fans had to buy the whole album for $18 even if they only wanted one song. Singles had existed back to the 1910's! My boomer parents grew up buying single 45's for a quarter when they were kids until they had enough money to get a $3 LP. Even then, you'd only buy the LP if you knew that you wanted to listen to the whole album. Otherwise, go for the $.25 single. Older Millennial and GenX kids grew up with 45's, cassette singles, and CD singles (for a brief window in the early to mid '90's).

iTunes was sold to the music industry as a way to get back the revenue lost from discontinuing singles that was lost to piracy by fans who only wanted one song AND a way to improve security around piracy. Of course, the big record labels only heard the second part because they were about as smart as Xbox and they wanted to return to the outsized profits of the 1990's without doing the work of providing a better value proposition for the customer. In truth, Steve Jobs viewed iTunes as a supplement to buying records and CD's that had what was viewed as an improved delivery mechanism and DRM. He talked about how he owned records and CD's for when he wanted to sit down and listen. The record industry also got weary about the amount of control outsider Apple, Inc. had over their business.


Yet, piracy still persisted as it always will. Rather than taking the Nintendo route of both fighting pirates AND and trying to make their games replayable and special and an experience that is unachievable except through Nintendo hardware, the music industry kept on focusing on stamping out piracy even though Napster was gone and they were making good money off iTunes and CD sales through the 2000's. Internet radio had existed since podcasts started in about 2004. The VC/software industry sold racing to the bottom with the pirates as the way to beat the pirates. Of course, it was an arrangement where the software bros. control everything. The record companies decided to invest in Spotify after the VC money dried up because they bought the 2010's hype about streaming being the path to prosperity.

Now, they own lots of equity in something that can't ever make a profit. They had many chances to correct their business. Fans showed them the way with bringing records back as the premium experience and they are at least running with that part of the market. They still haven't ramped up CD sales yet even though Taylor Swift has shown that fans will buy them along with records if you give the fan a good enough value proposition. CD's are much, much cheaper to make than records but they don't sound as good and don't look as cool. But they do the job of delivering packaged music to a customer for not that much money. Figure out how to cut costs on CD's (it's not that hard, CD's cost about $.05 to produce if that), market them as something retro-cool just like records, make them have special keys for content etc. Also, go Nintendo-ninja like on pirates.


The movie industry is even sadder because they were never shocked by Napster. They just bought the 2010's software bro hype about streaming and unilaterally torched 50% of their gross revenue and destroyed retailer relations and pay software bros to go bankrupt. This was an active choice rather than a road to hell paved with defensible incremental business logic like with music (I've thought they were idiots since they discontinued records in favor of CD's but you could make an argument in favor of each increment choice regardless of them being short-sighted and self-defeating). I kind of want movies to crash because they stopped making anything I want to see and want to deliver it to me in a format and pay structure that I refuse to buy into because I'm not paying $20 a month to maybe watch a movie I might want to watch rather than buying something I definitely want to watch.

Phil Spencer and Xbox wanted to bankrupt SIE and Nintendo by forcing them to compete on Microsoft's terms and lose money on this unsustainable business model. He wanted to make the industry about software services delivery rather than entertainment content. He knew that nobody can compete with Microsoft on software services delivery and SIE and Nintendo would go bankrupt if they took the bait. The plan was then to pick their assets and IP up for pennies on the dollar in bankruptcy. Then monopolize the industry. That was the plan. Just like the various TV/movie streamers all wish to monopolize the movie industry. That's all this is about.

Good thing for us that reality still exists and a business still needs to generate cash. And I mean CASH, not net income! Cash! Netflix always generates net income but often loses lots of cash.
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Wow, wish I could like this twice. Great analysis.
 
Old Sorta Fan said:
Phil Spencer and Xbox wanted to bankrupt SIE and Nintendo by forcing them to compete on Microsoft's terms and lose money on this unsustainable business model. He wanted to make the industry about software services delivery rather than entertainment content. He knew that nobody can compete with Microsoft on software services delivery and SIE and Nintendo would go bankrupt if they took the bait. The plan was then to pick their assets and IP up for pennies on the dollar in bankruptcy. Then monopolize the industry. That was the plan. Just like the various TV/movie streamers all wish to monopolize the movie industry. That's all this is about.
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That's honestly how I thought it was gonna go when Gamepass first started up. I thought, "they're practically giving away new games how could people not want that?" and "How is this not gonna bankrupt the industry like it's bankrupting movies?" It never occurred to me at the time how different habits are towards games vs movies/tv.

The most telling sign to me was when PC Gamepass failed to get any traction. The most accessible market other than phones and your service just doesn't move.
 
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