A look into what Azure really costs the Xbox division

[OSJJ1985 134]

As Microsoft have stated on their own website... "no subscription" the worst case scenario I can see is one-time purchase for offline mode and a subscription model for the streaming service. And I'd much rather take the streaming service then them charging micro-sums for every single city they want to upgrade or whatever add-ons they want to bring forward themselves. It's the same with an amusement park... I rather pay a larger entry fee and ride whatever and how often the H I want than paying a small fee (which in most cases isn't that small) for every single ride. The latter usually gets me to buy less and pay more. I have no clue what their business strategy is or how they are going to keep this thing alive for the planned 10 years. All I do know is that if they do choose to offer this with a subscription just for the online streaming goodies (offline world and whatever you pre-cached prior with a let's say just one-month subscription will still be perfectly usable) it's not that evil thing as many may see in it, albeit obviously not as good as getting everything with just the $?XX.XX one-time purchase. With this model the flying bit will be subscription free in any case. I will say this again I am not trying to figure out what Microsoft could or will do. I am just voicing my opinions should Microsoft choose to go one way or another. And if the decision should be made to charge for streamed goods (not the software critical updates/patches, etc..) I would rather prefer subscription than micro price tags on every single updates building/city or whatever. Imagine paying $1 for every single airport you want to check the charts on navigraph. Maybe it's just me, but I prefer to know what I am paying a month and be able to use a specific service without limitations.

[KillerKlient 92]

8 hours ago, b737800 said:

It is a fallacy to think that making use of unused equipment in a datacentre has no cost associated with it. Unless the datacentre owners purchased equipment that they never needed, in which case they would be out of business if they kept doing it, that unused equipment is there for a reason. It is there for resilience / redundancy. It is there for peak demand usage, which becomes leaner with economies of scale.

As soon as it is used for something else on an ongoing basis it has to be replaced to cover the original need. If not, it wouldn't have been purchased in the first place.

What you don't have to do is build new datacentres, employ and train more staff (although the datacentre might depending on current levels, and they still need to get paid), add new air-con, negotiate new power and bandwidth contracts, add new fire suppression systems, dig up all the roads around the building to ensure all the duplicated utilities have different entry points, buy expensive generators and massive UPS systems and add all the n+1s because that has already been done. Hence it is much cheaper and much faster to get to market if that infrastructure is in place.

Even the space in the racks would cost at the point the datacentre was full because you've removed the ability to sell it to an external customer.

No one said that at any point, way to twist someones words.  Also, you clearly don't have a clue what is required to run a platform like Azure, they have to buy and install equipment that has to sit around being unused.  The whole point of big corporations putting things in the "cloud" is so they can upscale for those rare moments and descale and not worry about what to do with all the unused equipment in their business as usual.  But the data center owners do.  The whole concept means that most of the time they have huge amounts of unused extra capcity which is ready for any large upscaling at this very second.  You think a full capacity data center can do that? Ha, you don't have a clue.

It is a fallacy to assume Azure runs at maximum capacity and as soon as new capacity is added it is immediately being used by something on an ongoing basis.

Edited October 30, 2019 by KillerKlient

[JanH 4]

And indeed all major cloud computing services offer significant price reductions if you're making use of that spare capacity off-peak so to speak  and are ready to yield to higher-paying customers at a moment's notice. Within the context of MSFS, this might be suitable for the Bing data to scenery data conversion for example - that wouldn't seem a time-critical task and only needs to run on demand anyway (i.e. when there's actually new Bing data or some improvement of the conversion algorithms that means the scenery data has to be regenerated)

[b737800 470]

21 minutes ago, KillerKlient said:

No one said that at any point, way to twist someones words.  Also, you clearly don't have a clue what is required to run a platform like Azure, they have to buy and install equipment that has to sit around being unused.  The whole point of big corporations putting things in the "cloud" is so they can upscale for those rare moments and descale and not worry about what to do with all the unused equipment in their business as usual.  But the data center owners do.  The whole concept means that most of the time they have huge amounts of unused extra capcity which is ready for any large upscaling at this very second.  You think a full capacity data center can do that? Ha, you don't have a clue.

It is a fallacy to assume Azure runs at maximum capacity and as soon as new capacity is added it is immediately being used by something on an ongoing basis.

Maybe re-read what I actually wrote. Read the words and understand their meaning. Pay particular attention to "economies of scale" and "it is there for peak demand usage". Maybe wind down your tone just a little and give just a tad more thought before you write things such as "you don't have a clue" or "way to twist someones words" unless of course you're that confident that you are the man.

"It is a fallacy to assume Azure runs at maximum capacity". Where did I or anyone else write that? What I wrote was "Even the space in the racks would cost at the point the datacentre was full because you've removed the ability to sell it to an external customer.". The fact that resources exist to at least match peak demand does not mean there is no cost for XBox or FS or anyone else to use them unless that usage can only happen during off peak usage from other customers. That is also why I mentioned economies of scale. The larger they get, the smaller the peaks and troughs. If Microsoft's otherwise unused resources start being used for new Microsoft services then they've eaten into their "spare" capacity, which means they need to increase that capacity to retain the same buffer, which means there is a cost involved.

Perhaps consider that there are a few of us who might have cut teeth in datacenters right from the beginning. Perhaps one or two of us have been involved with rather large cloud based systems and maybe still are. Just don't let my customers know that I haven't got a clue as they might stop paying me.

[KillerKlient 92]

4 minutes ago, b737800 said:

Maybe re-read what I actually wrote. Read the words and understand their meaning. Pay particular attention to "economies of scale" and "it is there for peak demand usage". Maybe wind down your tone just a little and give just a tad more thought before you write things such as "you don't have a clue" or "way to twist someones words" unless of course you're that confident that you are the man.

"It is a fallacy to assume Azure runs at maximum capacity". Where did I or anyone else write that? What I wrote was "Even the space in the racks would cost at the point the datacentre was full because you've removed the ability to sell it to an external customer.". The fact that resources exist to at least match peak demand does not mean there is no cost for XBox or FS or anyone else to use them unless that usage can only happen during off peak usage from other customers. That is also why I mentioned economies of scale. The larger they get, the smaller the peaks and troughs. If Microsoft's otherwise unused resources start being used for new Microsoft services then they've eaten into their "spare" capacity, which means they need to increase that capacity to retain the same buffer, which means there is a cost involved.

Perhaps consider that there are a few of us who might have cut teeth in datacenters right from the beginning. Perhaps one or two of us have been involved with rather large cloud based systems and maybe still are. Just don't let my customers know that I haven't got a clue as they might stop paying me.

Lol, calm down.  I clearly made the statement bold to show what I was referring to, let me paste it here again:

"It is a fallacy to think that making use of unused equipment in a datacentre has no cost associated with it."

Who said this and where? You still have not answered this question.

You don't like people making generic statements like "It is a fallacy to assume Azure runs at maximum capacity" when you didn't say that? Oh I wonder why I made it 🤔? Isn't that some what ironic?

Next time, before you go off on one putting words into peoples mouths and then arguing it, maybe you should read what they actually wrote.

[b737800 470]

10 minutes ago, KillerKlient said:

Lol, calm down.  I clearly made the statement bold to show what I was referring to, let me paste it here again:

"It is a fallacy to think that making use of unused equipment in a datacentre has no cost associated with it."

Who said this and where? You still have not answered this question.

You don't like people making generic statements like "It is a fallacy to assume Azure runs at maximum capacity" when you didn't say that? Oh I wonder why I made it 🤔? Isn't that some what ironic?

Next time, before you go off on one putting words into peoples mouths and then arguing it, maybe you should read what they actually wrote.

MattNischan wrote upthread "MSFS's demand peaks will not be able to be pushed around, it's a real time game. It's going to have the most demand during primetime US and EU hours, just like the majority of cloud loads do. So, if MSFS adds 5% more demand at peak times (a ludicrously huge number given Azure's size, but the actual value is not relevant), no impl team is gonna allow you to just eat 5% into the calculated overhead, you still need to buy 5% more capacity in hardware to keep that overhead the same for bursty loads. There's no "free ride" just because you own the hardware."

My comments echoed and expanded on that very valid point but by all means, double down on the keyboard warrioring.

He also wrote "Anyway, as usual these things tend to devolve a bit into bickering, and I think I've said my piece." which was rather insightful and with that in mind, have a nice day.

[Scottoest 1,561]

9 hours ago, Krakin said:

@b737800 you say traditional multiplayer does not do computational work but I've already mentioned Crackdown 3. Did you miss that or chose to completely ignore it in your speculation? $5 per month for FS2020? Really? I can get Game Pass Ultimate for $4.99. Who in their right mind is going to think that's a good deal? I'll tell you who. People who are out of touch with the way the gaming industry works. For 10 bucks a month people are already streaming entire games via PS Now from a library of over 700 games....

You're pointing to a peculiar exception, to try and prove a general rule.  Crackdown 3's multiplayer wasn't traditional at all - it was basically a long-in-development proof of concept for the idea that you could offload physics calculations to the cloud in real-time, that ended up looking nothing like the tech demo they had originally showed off years earlier.

We already have countless examples of individual games that charge monthly subscriptions - in many cases significantly more than $5 a month.  A bevy of MMORPGs over the years, all charging for access to their server infrastructure and bandwidth.  Or multiplayer games that don't charge subscriptions. but make money indirectly through other forms of ongoing monetization like microtransactions.

You're being oddly aggressive in your rhetoric, considering we are otherwise having a calm, theoretical conversation about the economics of a cloud computing platform, as it regards a game with no announced business model yet.

[Krakin 5,770]

1 hour ago, Scottoest said:

You're pointing to a peculiar exception, to try and prove a general rule.  Crackdown 3's multiplayer wasn't traditional at all - it was basically a long-in-development proof of concept for the idea that you could offload physics calculations to the cloud in real-time, that ended up looking nothing like the tech demo they had originally showed off years earlier.

We already have countless examples of individual games that charge monthly subscriptions - in many cases significantly more than $5 a month.  A bevy of MMORPGs over the years, all charging for access to their server infrastructure and bandwidth.  Or multiplayer games that don't charge subscriptions. but make money indirectly through other forms of ongoing monetization like microtransactions.

You're shifting the goalpost with my crackdown 3 example. It's still the same concept and it's using the same infrastructure and yet no subscription.

I'm glad you brought up MMOs because you're giving my point strength. Microsoft Flight Simulator is not a MMO. You do realize that what has kept flight simulators going all these years have been essentially microtransactions? The point is the end user has the choice. A mandatory subscription is a much tougher pill to swallow.

[Scottoest 1,561]

5 hours ago, Krakin said:

You're shifting the goalpost with my crackdown 3 example. It's still the same concept and it's using the same infrastructure and yet no subscription.

I'm glad you brought up MMOs because you're giving my point strength. Microsoft Flight Simulator is not a MMO. You do realize that what has kept flight simulators going all these years have been essentially microtransactions? The point is the end user has the choice. A mandatory subscription is a much tougher pill to swallow.

I don't know if I'd call flight sim third party addons "microtransactions", haha.  Nothing "micro" about them.  But in those cases, you're buying and selling discrete widgets for a sim, not an ongoing service.

And Crackdown 3 is not the same concept.  That was doing basic physics calculations on a small arena, in addition to the usual work a multiplayer server does, in a single, discrete game mode.  It was a proof-of-concept, meant to show off the "power of the cloud"... back when it was first announced, in like 2014.  With MSFS, Azure is serving up massive hunks of data, using in-depth machine learning to enhance autogen and clean up satellite data, and I'm going to bet will be doing some amount of offloaded calculation regarding physics, weather, and lighting too.

I don't know if "Flight Simulator isn't an MMO" is the ringer of a counterargument you think it is, because that was never my point - my point was that, regardless of services like Game Pass or PS Now, several games have had no problem charging monthly subscriptions for ongoing access to their infrastructure, whereas you were implying the sheer existence of PS Now at $9.99, or Game Pass at $4.99, made the idea of charging $5 for MSFS a prima facie ridiculous idea.

None of this means they will actually bother with a sub model for access to the live servers.  If they do, I personally think it's likely that they will include access as part of Game Pass, and maybe have a discrete sub option for people not on Game Pass.  And none of this would be "mandatory", because the game has cached and offline modes, as we already know.

My ultimate point is that how much it "costs" Microsoft to provide this service, isn't really that prudent of a consideration in whether they will charge for it.  And a lot of arguments against the idea of charging for it, seem to rely on dubious claims of it costing them next-to-nothing, or completely theoretical arguments about MSFS being some kind of loss leader show pony to show potential clients what Azure can do for them, and not a money-making operation.

[Krakin 5,770]

3 hours ago, Scottoest said:

 

Um all of you "there's probably going to be a sub" people have been relying on zero evidence to come up with the possibility. You guys have no idea what this is costing MS but because the word "streaming" is in the mix, crazy assumptions are being made. I keep saying. I don't agree with those who say this project will be a loss leader and no one is saying it will cost next to nothing, just not as much as some people are trying to suggest. At least I've been able to present some evidence on that straight from the horse's mouth. You've said there are plenty of games that charge subs but I haven't seen you give any examples outside of MMOs (A lot of big MMOs are moving away from the subscription model btw)

[G-RFRY 1,712]

Phil Spencer has said no title will be reliant on sales numbers it will be part of the Game Pass package that will support it which is a good thing, the possible downside is that the studio has no pressure to bring updated addition to a title that users want. 

[188AHC 2,138]

I have read all the comments in this topic and I have to wonder it's relevance. 

What Azure costs Microsoft to set up MSFS is really none of our business or concern. They will do it and use it to further some purpose that we won't be aware of.

This whole topic and it's arguments is really just opinions about something we know nothing about and shouldn't even consider.

Matt N has provided some numbers and as he works with Azure, I would think he knows of what he speaks.

 

[Krakin 5,770]

On 10/31/2019 at 9:20 AM, 188AHC said:

I have read all the comments in this topic and I have to wonder it's relevance. 

What Azure costs Microsoft to set up MSFS is really none of our business or concern. They will do it and use it to further some purpose that we won't be aware of.

This whole topic and it's arguments is really just opinions about something we know nothing about and shouldn't even consider.

Matt N has provided some numbers and as he works with Azure, I would think he knows of what he speaks.

 

Where it really counts, his numbers are guesses. I've presented precedence to back up what I think is going to happen. As I've said before, Crackdown 3 is a game that exists that uses Azure to augment its performance and there's no extra cost. MS has been talking about using the power of the cloud since they unveiled the Xbox One back in 2013 and not once have they said anything about extra costs to end users. 

Edited November 4, 2019 by Krakin