And it gets even better. Instead of up to 33% leaving, say 50% of that group convert to Premium instead of Ultimate. That isn’t any lost revenue since the price is going up to what Ultimate used to be. So that cushions their numbers even more.
SnotFlickerman@lemmy.blahaj.zone 1 day ago
The thing about this shit is…
Microsoft, like Google, is now a user-data driven company and they have already made loss/profit ratio analysis on this long before they released the price increase. They’re absolutely banking on people cancelling but making up the difference and then some from the people who stay.
For a thought experiment lets consider how many subscribers they were reported to have in Feburary: 34 million. Let’s assume that everyone is paying for the highest tier to make the math easier. So current income would be 34 million x $20 a month and thats $680 million a month. 34 million x $30 a month is $1.02 billion. The difference is $340 million a month. Let’s divide that by $30 a month. That gets us about 11,333,333. So they can hemorage 11 million users and still break even.
The math doesn’t bode well for us who vote with our wallets.
ramble81@lemmy.zip 1 day ago
quackerjo@lemmy.wtf 1 day ago
I’m not a certified math surgeon, but I think your math is wildly optimistic in favor of Microsoft due to how the subscriptions are actually brokendown per price tier.
I don’t doubt that they did a lot of math to figure out an acceptable level of churn for this change, I just don’t think it’s nearly as generous and wide as you’re calculating.
Jakule17@lemmy.world 22 hours ago
Okay, but wouldn’t a higher price also discourage new people from subscribing in the first place? Or are companies that shortsighted?
Minnels@lemmy.zip 22 hours ago
Most of them are. Just make profit NOW!!
ColeSloth@discuss.tchncs.de 1 day ago
Now factor in the cost savings from a lower server load and less staff to run the back end, and possibly the smaller licensing\use costs for the games available to play since less people would be accessing those games.
Rentlar@lemmy.ca 1 day ago
One could imagine that conveniently, Microsoft’s online support pages and the support staff were designed to only handle hundreds of thousands of cancelations at a time.