I work in a big corporate thing. I discuss business & games. LinkTree: https://nitter.cf/t.co/swvQpFoRce YouTube: https://nitter.cf/t.co/nZvRpZINg6
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Joined February 2017
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I agree. When I started seeing all the rumors mill BS pop up around it, I was hesitant to buy in (and still am until we see it).
Star Wars discontent is real. The franchise has fallen in general value since Disney took over. People care less about Star Wars than they did many years ago. Additionally, between multiple box office failures, and a lot of people aging out (not being replaced by younger generations), why go with another Star Wars shooter?
And pay another licensing fee?
Maybe...EA is trying to take serious cost out of the equation? Are they building on what they already own? Are they using a A.I. to shorten the cycle? I don't know.
I just know that from a purely analytical perspective, Battlefront 3 is an odd choice (to me).
One last note: The shooter market is over-supplied as it is. This is another layer that EA must contend with, and it's one that they already know is saturated.
They struggled to keep people engaged on REDSEC / BF6 (as it settled into a more consistent audience). While those number are perfectly fine, they don't reach the heights EA wanted at first.
And now Battlefront 3?
If it is real, I hope they negotiated a lower than normal licensing fee.
$500M for Gears of War E-Day is almost certainly an operational cost, not the specific cost associated with Gears of War. That doesn't make it much better, but we should be specific what we're talking about.
As I explained over in my latest long form article, operational cost is what kills a studio.
lordsofgaming.net/2026/09/th…
At the end of the day, it really doesn't matter if the employee is working on a certain project or not. They are paid to be there.
Let's assume E-Day used a 6 year development cycle. The number of employees at The Coalition is unclear and I had a hard time nailing it down. Let's use 250 people.
250 x 15,000 = 3.75M per month
3.75M per month x 12 months = 45M per year.
45M per year x 6 years = $270M
If we use a $20,000 charge rate, the number is $360M.
Now, add in contracts with PCF and others.
You can see why people are saying E-Day cost $500M. What they capitalized to the project is probably a lot less than $500M, but in order to run the studio over the last 6-7 years (plus contracts), they spent a ton in compensation burn.
Western "AAA" development is exceedingly expensive, especially when the team is over 200 people.
Gears of War E-Day financials are complicated, especially with the mix of various purchasing options. We can't assume to know everything, especially with...
Premium Pass
+
Traditional Sales
+
Game Pass Ultimate (payers, engagement, length of time, etc.)
It's not just sales.
That said, the same challenges exist across the board that I've already discussed: Too many people, in a high cost area, working entirely too long on a project (+ contracts).
This is an industry challenge. It's not specific to Xbox, but rather it impacts Xbox more than others because of their myriad of other problems and "bad bets."
Roblox reported their Q3 2026 financials on Oct 29, 2026. The report was a mixed bag versus expectations. Roblox actually came in stronger on Q3 than expected, but Q4 guidance is weaker than investors were hoping to see.
Seasonal swings cause Roblox financials to generally rebound this time of year, but they haven't rebounded to 2025 levels in terms of engagement.
Q3 DAUs: 138M (-9% YoY)
Q3 Bookings: $1.7B (-12% YoY)
Q3 ABPDAU: $12.29 (-3%)
Q3 Operating Cash Flow: $395M
Q3 Free Cash: $364M
As far as expenses go, Trust and Safety, and Cost of Revenue, hit new high marks. This will undoubtedly cut into the general positive earnings that Roblox is able to produce (despite being the accounting loss that they post every quarter). The platform is currently dealing with multiple lawsuits and various questions from government authorities. This pressure is pushing them to, again, revamp Trust & Safety.
The company is guiding to a free cash flow loss in Q4.
Q4 Operating Cash: +$190M
Now add in a bunch of capital expenditures and purchases in Q4:
Q4 Free Cash Guidance: -$190M
Thoughts?
Roblox continues to be an absolute juggernaut when it comes to user engagement. There really is nothing else like it, save for maybe Minecraft and Fortnite.
However, general engagement and financial health are slipping from the previous peaks in 2025. Social and political pressure are increasing costs in certain expenses, placing additional pressure on earnings.
Investors were not pleased with the soft Q4 guidance.
Source: s27.q4cdn.com/984876518/file…
I would not look at Battlefront 3 as being the death of Mass Effect (and Bioware). Don't get me wrong, a company will move funds around, but there is a misalignment here:
If EA truly believed in Bioware, and thought that Mass Effect 5 stood a healthy chance of generating cash for that company, they would have funded it (especially considering Battlefront 3 will likely be more expensive on a per project basis). Hell, EA needs to pay licensing for BF3, it's going to be expensive.
Battlefront 3 is years off. EA is obviously thinking about it, but the budget decision on Bioware was made in the here and now. They didn't believe in Bioware, the Bioware of today, enough to fund it (and organization shifts probably caused their biggest advocates to be lost in the shuffle).
Again, I'm all for saving Mass Effect, but let's understand the decision-making going on now.
I don't need another shooter with a 100 person team.
I'd much rather see what 15 can do, knowing their constraints. I'm more than willing to pay for that.
Maybe it will be great. Maybe it will be terrible. I don't know.
But I don't need a 100 person dev team shooter that looks and feels like it was designed by 100 people.
videogameschronicle.com/news…
I don't see why rumored numbers regarding #GearsofWar E-Day change anything. We don't need those numbers to make an educated guess that the game likely did not pay itself back, especially from an operational cost perspective.
We don't even need to know what they capitalized to the project since MSFT openly states that they don't start capitalizing software until late in the process. It's all pointless.
We can see, with our own eyes, that the game saw moderate engagement from the general core audience. We can use some very basic formulas to closely approximate the cost that should be associated with the game. We know Game Pass payers pay in every months and basically cover a large spread of Xbox projects, but Game Pass can't save everything.
But it doesn't matter! Gears of War isn't highly relevant anymore. The market isn't all that interested in it. It's not going to pull in millions upon millions of players. We don't need that deep of an analysis to understand that.
Why do you think the studio is out there stating their next game won't take as long? Because, if they even get approved for another Gears, they can't afford a long dev cycle. The numbers don't make sense. They never made sense.
You don't need leaks from games media to understand that.
The NA industry needs to recalibrate, and do it quickly.
Apparently, @InfinityWard is doing their best to turn DMZ into another version of Warzone. Getting anything done on the map is next to impossible.
You'd think with how critical it is for a game like Call of Duty to engage millions of players (due to its cost), that they would try to keep a wider group of players at least somewhat satisfied (can't please everyone). They know that beta DMZ turned into another version of Warzone, and they aren't doing anything to mitigate that problem.
Back to normal PvP and campaign.
There isn't anything that surprises me about the US unit console sales LTD.
PlayStation 5 is basically flat to PS4.
Xbox Series undersold Xbox One.
In fact, my takeaway is the soft cap is unbroken. Unless the business model changes, people start buying companion devices, or GTAVI breaks the ceiling (all possible), we know (approximately) the lifetime sales path for a roughly equivalent generational console.
Source: bsky.app/profile/matpiscatel…
The Steam concurrency numbers on Phantom Blade 0 are above 680,000 (and possibly still growing when I took this screen clip).
PB0 demonstrates the increasing impact of APAC development, especially when regional support of such games combines with global success.
Philip Holt (Undead Labs) is handling the split from XBOX in the best manner possible (in my opinion):
- What does the studio need to do to survive?
- Does not dwell on being cut from MSFT
- Employees given stake in company so they feel the economics of the industry, and it acts as a motivator.
- Is employing a partial co-dev model (more of the industry heading in this direction).
Does any of this make State of Decay 3 a game worth playing? I don't know yet. We'll when we get there.
gamesindustry.biz/it-was-a-p…
On the negative side, it is disappointing to see yet another studio that let themselves fall victim to the trap of over-scoping their next game. This feels like a story that keeps repeating itself, especially for studios that started their next project during the late 2010s and early 2020s.
If they had properly reigned in their ideas years ago, SoD3 would be done by now.
Microsoft released FY27 Q1 numbers. The #XBOX components of the quarterly numbers are nearly always summary level results, but we should go through them anyway.
XBOX is part of the "Devices and Consumer" segment (renamed from "More Personal Computing").
Xbox Revenue: $5.4B
- Microsoft split out several components of the business, de-emphasizing businesses such as Windows and Xbox. Xbox is now the 5th largest revenue driver in the company, out of 8.
- In "Devices and Consumer," the company mentioned that operating expenses declined, driven by XBOX. This is unlikely to be savings from layoffs. Severance packages were continuing throughout the quarter. Instead, this would likely be related to contracts, purchases, suppliers, etc.
- They also mentioned that amortized costs of of the ABK acquisition are now lower, which raises operating income. Remember, this is a non-cash number, but it is how the business calculates profitability in the accounting realm. ABK amortization costs will likely continue to decline over time.
- XBOX content and services revenue (the core metric) declined 2% YoY (1% in constant currency), making it essentially flat to the previous year. Declines in game pass and third party are probably seasonal, but it's something to keep an eye one. Continued Game Pass decline is somewhat concerning to me. They highlighted increases in first party as a partial offset (likely Minecraft).
- Xbox is predicting content and services growth to be up "mid to high single digits" in FY27 Q2.
- Xbox YoY growth will likely be strongest in Q2. You can probably assume this is due to MW4 and GTAVI.
Thoughts?
The US summer months are often a softer period in the games industry, but XBOX does appear to be leveling off in terms of their performance decline. It's difficult to make any concrete statement about the business. They are in a transition period and the cost savings from restructuring is yet to kick in. We also can't make a definitive statement about any longer term plans, as it's still too early to tell.
Again, too early to tell.
Quarters like this are going to further send signals to leadership that revenue consistency, and growth, comes from their reliable core franchises. When games such as Minecraft are the silver lining in a slow time period, you don't need to be an MBA to understand what kind of signal that sends (especially with how Roblox and Minecraft are capturing so much of the market right now).
Minecraft, like Roblox, is a platform service (effectively).
Links:
Slide Deck: view.officeapps.live.com/op/…
Full investor page: microsoft.com/en-us/investor…
I'll take a deeper look tonight, but here's my translation:
The revenue decline is slowing, but obviously continued in a slightly negative direction. However, revenue isn't the bottom line and Sharma reports that accountability margin improved. While the devil is in the details, this can be translated into #XBOX being more profitable than the comparable period.
Perhaps unsurprisingly, but Minecraft and WoW Forever are driving engagement in their respective domains.
It's also generally accepted that Modern Warfare 4 is looking at healthy numbers and a significant improvement over BO7.
Console? What else do we say? Xbox has struggled to deliver devices the entirety of this device "generation" (even when they were in higher demand). It hurt them in the long run and it appears that they understand it is an issue. Does this improve, especially under higher device COGS? I don't know.
In Q1, XBOX revenue declined 2% YoY, compared with a 10% decline a quarter ago, while our accountability margin improved. Minecraft and WoW Forever set records, Call of Duty had its most acclaimed release in more than a decade, and our PC platform revenue grew double digits. Console sales remain constrained by supply, with more demand than consoles available. We’re working to get more consoles into players’ hands, including through our expanded refurbishment program. We’re making progress, with a lot more work ahead.
One more note: PC platform revenue growth has been continually highlighted over the years. I assume this means sales via the XBOX PC app, but it's not entirely clear if this includes sales via Steam as well. Regardless, the numbers are the numbers. If they are looking at growth in PC, it matches up with their overall strategy for Xbox to effectively encompass Windows + Console.
XBOX's Scott Van Vliet responded to the feedback that reviewing games (on the platform) is too cumbersome, causing many to skip over it:
