FH5: Hot Wheels DLC -- Why isn't Xbox releasing DLCs on Gamepass day one?

[ethomaz]

F2P games are very different than Xbox's paid first-party games that launch on Gamepass (e.g., Forza Horizon 5). F2P games are "free" to play. Gamepass charges $10-$15 to be able to play those games every month.

I've explained the confusion in the OP.

Xbox has claimed that Gamepass increases game sales (which I know is bullshit). Assuming that is indeed true, shouldn't putting the FH5 DLC on GP increase the DLC sales?

Second, regarding "Xbox needs to monetize Gamepass day one releases." They are monetizing that with $15 per month. Now an argument can be made that the $15 p/m fee isn't enough and Xbox needs retail sales to minimize the loss. In that case, doesn't this just prove that the GP model is inherently flawed?

I can't understand how these two completely opposite business strategies can be applied simultaneously. One of them has to be wrong.

GP model is inherently flawed.

If not Netflix should be not suffering in the movie industry and halting investment in the platform until find a better model.

It worked better in the music industry because the live shows were the biggest revenue for artists and not the disc/music sales… so the popularity gives with Spotfly like services are essential to keep the live presentations happening at high prices.

But the live presentation like in movie industry should be dramatics theater but these are not the same industry like in music… they are separately… so movies have no option for live presentations.

And games doesn’t have something that the popularity of a Gamepass like service will push to get high revenue just like Netflix doesn’t too.

So you need to monetize in all fronts possible to keep the model working… Netflix is thinking in put ads in the low paid model and start to release movies first on cinema for after put in their services.

Games in that regard has the advantage over Netflix… they can monetize with MTX, Battlepass, lootboxes, DLCs, etc… Netflix can’t.

 

[peter42O]

That seems unrealistic to me.

I don't think Xbox will ever make multiplayer free. They could abandon Gold and then tie multiplayer to the $15 GPU tier (which would only make MP more expensive for gamers), but I don't see them making it free altogether with no strings attached.

This strategy will also make them lose two revenue streams simultaneously: (1) free MP and (2) DLCs on Gamepass.

I believe that it's just a matter of time. Once Microsoft is actually able to release their first party exclusives on a consistent every quarter basis which isn't a question of if but when and in turn increase their subscriber count for Game Pass to where they can offset the money lost by eliminating Gold.

Including DLC into Game Pass isn't going to eliminate those who still prefer to buy and own their games and DLC. Making MP free would actually increase revenue because first, people don't have to pay to play online which will make them much more likely to spend more money in the eco-system and for certain games, buy more micro-transactions and whatnot then they normally would due to the fact that they would feel like they're saving a good amount of money and thus, be more willing to spend more money on all that other stuff.

One other aspect is that online co-op/multi-player is free on PC and paying for it on Xbox is simply outdated and obsolete. It simply makes no sense when you consider their play anywhere slogan. Can't do this if one aspect is free on PC but on Xbox, it's not. And of course, if there's one company that can afford to do this, it's Microsoft.

 

[laynelane]

I've always just assumed those extras were to make money on top of whatever the sub fee provides. I understand what you're asking, but the pull is supposed to be first party games day 1 and a varied catalogue of third party games. Getting people to jump into the sub service (particularly with the promise of day one 1st party) is the primary goal, not DLC that comes out months/weeks after the game released.

 

[IntentionalPun]

It's because they think they can make more money that way.

I'm confused why you are confused.. Gamepass absolutely isn't priced in a way to be the only way MS makes money from a Gamepass subscriber. There are loads of games releasing on Xbox that never come to Gamepass.. the 3rd party games are temporary, and you are encouraged to buy them before they leave the service.. and of course MTX/DLC are baked into the profit model.

 

[kyliethicc]

DLC is separate content, subscription services never include it as far as I remember.

Well PS Plus does sometimes. Just depends on what edition of the game is included.

Marvel's Spider-Man, Ghost of Tsushima, and Death Stranding all have the DLC included.

While Bloodborne does not.

 

[Heisenberg007]

It's because they think they can make more money that way.

I'm confused why you are confused.. Gamepass absolutely isn't priced in a way to be the only way MS makes money from a Gamepass subscriber. There are loads of games releasing on Xbox that never come to Gamepass.. the 3rd party games are temporary, and you are encouraged to buy them before they leave the service.. and of course MTX/DLC are baked into the profit model.

But MS believes that putting games on GP is worth more (at least in the long run) than prioritizing retail sales, right? Why don't they believe the same for DLCs and expansions?

When it comes to $100M AAA releases, they are prioritizing the longer game of growing subs instead of prioritizing short-term revenue. But for smaller DLCs and expansions that might cost less $10M, they are prioritizing short-term revenue instead of their actual business goal, i.e., growing the GP usersbase.

P.S. While Xbox can keep both these revenue streams open, these cannot co-exist forever. It eventually has to be one or the other because it's a zero-sum game (the more GP users you have, the fewer copies you'll eventually sell, and vice versa).

 

[ethomaz]

But MS believes that putting games on GP is worth more (at least in the long run) than prioritizing retail sales, right? Why don't they believe the same for DLCs and expansions?

When it comes to $100M AAA releases, they are prioritizing the longer game of growing subs instead of prioritizing short-term revenue. But for smaller DLCs and expansions that might cost less $10M, they are prioritizing short-term revenue instead of their actual business goal, i.e., growing the GP usersbase.

P.S. While Xbox can keep both these revenue streams open, these cannot co-exist forever. It eventually has to be one or the other because it's a zero-sum game (the more GP users you have, the fewer copies you'll eventually sell, and vice versa).

It is not.
Prioritizing retail sales first give way more revenue… the exceptions are games with very low sales (unsuccessful indies because indies with more than 1m sales are probably better having day one retail sales before enter ganepass… of course the deal with Gamepass needs to be analyzed case by case).

But MS have a issue to resolve that lead then to Gamepass… they don’t have the market share in retail sales to rely on it… even they biggest games don’t sell what they used to sell maybe with exception of Forza Horizon spinoff… Gears, Halo, Forza Motorsport, and others sells considerable low numbers for a big AAA release.

If MS was in 360 days where most of games retail sales were on Xbox they should never go with Gamepass as the model of day one releases.

The low market share allowed or perhaps forced MS to try the day one model imo.

 

[Alabtrosmyster]

Xbox has claimed that Gamepass increases game sales (which I know is bullshit). Assuming that is indeed true, shouldn't putting the FH5 DLC on GP increase the DLC sales?

The problem is that they want ALL revenue streams, purchases, DLC and subscription.

So we get this:
- games are on rotation on the service (subs)
- DLC mostly not included, so you buy it on the remted game
- discounts on Gamepass games (yay?)


No compromise for the subscription provider!

 

[Dr Bass]

I feel like everyone knows why this is happening.

Some of us have said from the start these kinds of things would happen since the service is clearly a massive money hole as-is.

Nothing surprising about this at all.

 

[Swift_Star]

Because game pass doesn’t make money. That’s their endgame. To make you get their games at a cheaper price and then shower you with DLC.
Oh, just wait for Starfield dlc… it’s going to be a shitshow.

 

[IntentionalPun]

But MS believes that putting games on GP is worth more (at least in the long run) than prioritizing retail sales, right? Why don't they believe the same for DLCs and expansions?

When it comes to $100M AAA releases, they are prioritizing the longer game of growing subs instead of prioritizing short-term revenue. But for smaller DLCs and expansions that might cost less $10M, they are prioritizing short-term revenue instead of their actual business goal, i.e., growing the GP usersbase.

P.S. While Xbox can keep both these revenue streams open, these cannot co-exist forever. It eventually has to be one or the other because it's a zero-sum game (the more GP users you have, the fewer copies you'll eventually sell, and vice versa).

I'm so confused what your logic is here..

Xbox absolutely must keep all the revenue streams open and their is absolutely zero goal for them to be collecting monthly fees from Gamepass subs and nothing else.

Hence why they always go on and on about how Gamepass subscribers spend more money on games than other users.

It is absolutely not and never has been a service designed for the monthly fee to be the only revenue.

They eventually want a cloud platform "anyone can use" but that will not only be collecting Gamepass fees.... they will let you buy games and keep them "in the cloud" too. It's quite feasible that eventually "cloud" will be separate from Gamepass, and will just be either free or it's own small fee to access your entire Xbox library... including the Gamepass games you are essentially "Renting."

The end goal is to have hundreds of millions of users and hoping all or most have Gamepass subs.. and hoping they also buy games / MTX / DLC / etc.

 

[ethomaz]

I'm so confused what your logic is here..

Xbox absolutely must keep all the revenue streams open and their is absolutely zero goal for them to be collecting monthly fees from Gamepass subs and nothing else.

Hence why they always go on and on about how Gamepass subscribers spend more money on games than other users.

It is absolutely not and never has been a service designed for the monthly fee to be the only revenue.

They eventually want a cloud platform "anyone can use" but that will not only be collecting Gamepass fees.... they will let you buy games and keep them "in the cloud" too. It's quite feasible that eventually "cloud" will be separate from Gamepass, and will just be either free or it's own small fee to access your entire Xbox library... including the Gamepass games you are essentially "Renting."

The end goal is to have hundreds of millions of users and hoping all or most have Gamepass subs.. and hoping they also buy games / MTX / DLC / etc.

Plus that is an advantage game based services have over movie based services… Netflix could be in a way better position if they have the option to monetize DLC, MTX, Passes, etc.

 

[Heisenberg007]

I'm so confused what your logic is here..

Xbox absolutely must keep all the revenue streams open and their is absolutely zero goal for them to be collecting monthly fees from Gamepass subs and nothing else.

Hence why they always go on and on about how Gamepass subscribers spend more money on games than other users.

It is absolutely not and never has been a service designed for the monthly fee to be the only revenue.

They eventually want a cloud platform "anyone can use" but that will not only be collecting Gamepass fees.... they will let you buy games and keep them "in the cloud" too. It's quite feasible that eventually "cloud" will be separate from Gamepass, and will just be either free or it's own small fee to access your entire Xbox library... including the Gamepass games you are essentially "Renting."

The end goal is to have hundreds of millions of users and hoping all or most have Gamepass subs.. and hoping they also buy games / MTX / DLC / etc.

I'm not saying they should not have sold the DLC at all.

I'm just wondering why they are not treating the DLCs the same way they treat their (full) games. Launch the game/DLC on Gamepass day one (to grow the sub), and let non-GP users buy the game/DLC.

 

[DonFerrari]

but… but… if they include the DLC in the subscription then how can they change all their games to DLC infested F2P trash? Isn’t that the common “fear” amongst non-subscribers?

How is this even a question? They don’t include the DLC because it generates money. Same reason why games have MTX and battle passes and day one DLC, etc.

 

[Themaskedcrag]

Clearly they want you to buy their DLC, and then when they inevitably pull the base game off GamePass when the next FH is released, they hope you'll buy the base game again, as that's the only way you'll be able to play the DLC again that you previously bought!

 

[IntentionalPun]

I'm not saying they should not have sold the DLC at all.

I'm just wondering why they are not treating the DLCs the same way they treat their (full) games. Launch the game/DLC on Gamepass day one (to grow the sub), and let non-GP users buy the game/DLC.

This is just some weird black and white thinking.. it's pretty simple..

MS believes that selling DLC on top of their games being on Gamepass will make them more money than including those DLCs in the games on Gamepass.

Another way to look at it: MS likely only ever decided the "all games day 1 on Gamepass" thing was a good idea because of the chance to sell DLC/MTX to people.

 

[IntentionalPun]

Clearly they want you to buy their DLC, and then when they inevitably pull the base game off GamePass when the next FH is released, they hope you'll buy the base game again, as that's the only way you'll be able to play the DLC again that you previously bought!

I don't think they've ever pulled an Xbox 1st party game from Gamepass though.

 

[Themaskedcrag]

I don't think they've ever pulled an Xbox 1st party game from Gamepass though.

FH3 is no longer on Xbox Store or GamePass, so the same will happen to FH4. These type of games have a shelve life.

 

[IntentionalPun]

FH3 is no longer on Xbox Store or GamePass, so the same will happen to FH4. These type of games have a shelve life.

Oh yeah music licensing bullshit (I googled.)

Well with FH3 people had notice to buy the game.. but yeah in general DLC/MTX are kinda sketchy on what amounts to a rental service. Really a ploy to get you to buy a game that they even allow it.

 

[Bernd Lauert]

Phil Spencer has been very clear about this. Gamepass is just one of several pillars of Xbox. Business wise, it makes total sense. Hook people on games via a cheap entry point and then sell them DLC for those games. This is also one of the things that makes Gamepass viable (the other is Microsoft owning Azure).