It is hard to deny that Xbox Game Pass is on a roll recently. For the past few weeks, the service has been the talk of the town. From day one inclusion of third-party AAA games to getting a swath of Bethesda titles released on Game Pass, it seems that the service is garnering a lot of mind share recently. This shows that it is indeed at a turning point.
Last year, we argued that Xbox Game Pass was disrupting the industry. It is literally rewriting the rules of how revenue is created in the video game space. Back in January, Microsoft touted that the service had 18 million subscribers. It is highly likely that figure has grown since then. But what is also interesting is how ingrained the service has become to Microsoft’s leadership.
There is no getting away from it, subscriptions are the future in many industries. Everything from the entertainment industry to graphic design programs is moving towards recurring revenue streams. Video games are no different.
In fact, Microsoft is so keen on growing Xbox Game Pass that it has become one of the metrics that account for the annual bonus of the company’s CEO, Satya Nadella. Xbox Game Pass subscriber growth accounted for 7% of the CEO’s bonus in 2020. In other words, even the higher-ups are committed to growing the service. With that commitment, Xbox made some moves when it came to the service.
Some of these moves efforts are bearing fruit today. Outriders launched day and date on Xbox Game Pass. MLB: The Show is making its full Xbox debut on the service. But it does not stop there. I fully expect that more games will launch day and date into Xbox Game Pass.
Rumors (mandatory grain of salt warning) suggest that an upcoming FPS title will launch day one on Game Pass. It could be Left 4 Dead’s spiritual successor Back for Blood, while others said it is Battlefield 6. But who knows for sure? Also, Bandai Namco’s upcoming title Scarlet Nexus could possibly launch on the service. But again, grain of salt people.
Despite this, it goes to show that the industry is reacting positively towards Game Pass. SEGA has come out to say how impressed they were with the service. It is likely that Microsoft cut developers a hefty check for putting their games day and date on the service. Some have compared the service to Netflix, including Lords of Gaming. But it’s more than that.
Not the Netflix of Gaming
Many have proclaimed that Xbox Game Pass is the “Netflix” of video games. But in reality, it couldn’t be farther from the truth. Jez Corden of Windows Central rightfully argued that there is a monetization limit in Netflix unlike in video games. Video games have DLC, microtransactions, season passes are other sources of revenue that simply are not available on Netflix. Whereas with Netflix, you pay the subscription and watch the content. However, some tried to change up the formula. For instance, Disney+ is now floating the idea of tiered subscriptions. But again, that is also still limited and is not comparable to other revenue streams found in video games.
Corden also said that since Microsoft wholly owns its platform infrastructure. It does not need to pay another company to host its services. Unlike Netflix who pays Amazon AWS to host its infrastructure. With that said, there are some challenges for Xbox Game Pass.
Xbox Game Pass and The Road Ahead
While it’s clear that Xbox Game Pass is one of the main drivers propelling Xbox’s path to success, there are some hurdles to contend with. Xbox Head, Phil Spencer, constantly refers to reaching 3 billion gamers. While it seems initially seems farfetched, the statement is more of a vision and broader mission statement than anything else. Regardless, it does mean that Xbox is trying to expand into regions it traditionally has not paid much attention to before.
In order to grow into these regions successfully, Xbox can learn from Netflix’s experience. When the video streaming service expanded to India, it curtailed specific offerings towards the south Asian country. Xbox can learn from these approaches and incorporate them to expand its platform in emerging markets like India and South East Asia region. This explains why Xbox enlisted virtual YouTubers to promote its services and ecosystem in countries like Japan.
Another challenge Xbox contends with is making access easy for its customers. I am from the Middle East and buying digital games can sometimes be a real hassle. I have to jump through hoops and sometimes require pure luck to have an accepted payment method that I can use in the Xbox store. If Xbox is serious about reaching 3 billion gamers, it should ensure that gamers can access their content with ease.
Room for Growth
Lastly, Xbox Game Pass PC is quickly becoming the awkward stepchild of the service. Microsoft has to step up its offerings on the PC side if it wants to grow the service. While titles like Crusader Kings 3 launched into Xbox Game Pass PC will likely resonate well with PC gamers, that same energy is inconsistent. Why hasn’t Xbox released Outriders day and date on Xbox Game Pass PC? It is these missed opportunities that prevent it from being propelled to must-have status with the PC crowd.
Surprisingly though, it seems that PC gamers still choose to buy Xbox titles, like Sea of Thieves, on Steam rather than sign up for Xbox Game Pass PC. Perhaps this is where marketing can step in and communicate to PC gamers the benefits of the service.
At the end of the day, Xbox Game Pass is making amazing strides and garnering industry-wide acceptance. It is likely that more games will be available day one on Xbox Game Pass this year. This will be a stopgap measure until Xbox’s 23 developers start churning out their titles into the service.
Are you a subscriber of Xbox Game Pass? Tell us what you think of the service in the comment section below.