In case you missed the news earlier this week, Microsoft has launched an ambitious new campaign for its monthly Game Pass program, in which it will be adding some of its newer games to premiere on it from day one. These include games like Sea of Thieves, Crackdown 3 and State of Decay 2, as well as upcoming entries in the Halo and Gears of War series.
While this will no doubt boost subscriber numbers for Microsoft’s Xbox Game Pass service, it has led to some interesting questions regarding the company’s game plan for the future, as well as what this could mean for profits overall. So, we’ve decided to weigh the pros and cons of Microsoft’s move towards an on-demand future, and see where it could end up overall. It’s too soon to tell if this is a winning move or not, but we’ve got a pretty good guess how things could go.
Microsoft struggled last year when it came to showing its first party superiority on the Xbox One front. One of its biggest hits, Crackdown 3, was delayed into this year, and the company abruptly cancelled development on both Scalebound and Fable Legends, around the time that fans were showing genuine interest in them.
With this move into on-demand territory, Microsoft has the ability to showcase its forthcoming first-party hits for a minimal price, generating high interest in games like Crackdown 3 and Sea of Thieves. It also presents the games in a “try-before-you-buy” fashion for some, so people won’t have to feel down about plunking $60 into a game that they probably won’t play much of – instead, they just lose $10 a month, and that’s easier to take.
That said, there’s a question that comes up with this move…
Microsoft has billions of dollars in the tank and isn’t going anywhere anytime soon, so that’s not a big concern. But the real question is what happens to developers that put millions of these dollars into the development of games, and don’t see much coming back in the way of profits. After all, users are only paying $10 monthly to enjoy the likes of Sea of Thieves and other games, and that doesn’t nearly add up like the $60 purchases that were made in the past.
Of course, there is more interest in games these days, and the general price doesn’t include money that can be spent on Microtransactions or DLC, so that does count as a profit. But it really comes down to how the distribution of these games comes back on the bottom line – and, more importantly, if they will affect the developers in the long haul. We want Rare to stick around, if mainly because we keep dreaming of that Battletoads reboot.
On-demand services like Netflix and Hulu are huge right now, mainly because the execs behind them provide such killer content, as well as popular favorites. Xbox Game Pass does the same sort of thing, with the new games joining an already impressive line-up of hits and titles that users probably would have missed out on otherwise.
And this move could provide a boost in that market, with more killer games being featured, and forcing the competition to come up with equal and/or better game plans as a result. We’re sure Sony needs to do something to keep PlayStation Now competitive (make it $10 a month or $50 a year, instead of double that), and even Nintendo could reconfigure its plans for the Nintendo Network, even though the prices are unbeatable already, going for $20 a year.
Along with developers of AAA hits that will be featured on the Xbox Game Pass service, there’s also a question of how said service could affect indie developers that choose to feature their games on it. Sure, they’d get huge distribution and word of mouth, but what would that do when it comes to earnings of the game?
Granted, Microsoft could probably set it up the same way that Sony would with its PlayStation Plus exclusives. Pay some big cash up front, keep the game up on the service for a while, then let it loose and see who chooses to add it to their game library – or pay the fee and let it rotate onto the channel again. So there is some business sense here, but it’s hard to see exactly where revenue will end up when it comes to the finish line. It’s a big gamble, but one that Microsoft could easily make pay off.
With Microsoft’s move into the Xbox Game Pass business, we could be looking at a change in terms of how game distribution is done. On-demand services could easily pick up – like Jump! did around the same time as Game Pass – and money could be spread around in terms of offering the games on said service, instead of selling them directly. This could be a boon for some folks that are having a hard time driving game sales, mainly due to the lack of funds for advertising.
But maybe some folks like the business model the way it is. Digital games are just starting to get accepted on the same level as physical ones, and there are those who feel like owning the games outright beats having them on-demand – especially if, for instance, the Internet goes down and you can’t access said games. So maybe it’s not quite the future that Microsoft is making it out to be, though a roadmap appears to be in place to offer an alternate solution.
We’ll see how this plays out over the next few months as Xbox Game Pass picks up in business, but it’s a bold move. Now it’s just a matter of seeing what Microsoft does to assure that it keeps the on-demand flame burning bright.