March 30, 2023

Xbox Game Pass: Good or Bad for the Industry?

Arguing the merits of Xbox Game Pass is easy, with the service giving us access to a huge number of games at a very affordable price. On the developer side, it has also been highlighted as a great showcase, especially for indie titles, however, not everything is rosy when it comes to the model and who says it is Microsoft itself.

Xbox Game Pass

Credit: Disclosure/Microsoft

With the company’s intention to acquire Activision Blizzard still looking far from complete, Microsoft’s attempt to convince regulators ended up creating a bit of an awkward situation for itself.

This happened when presenting data to the UK entity responsible for ensuring more competitive markets (CMA). To defend that the acquisition will not be harmful to consumers, Gigante de Redmond’s lawyers have submitted a document in which they admit that Game Pass will cannibalize sales of games featured on the service.

According to the report released by CMA auditors, “Microsoft also reported that internal analyzes show a decline [censurado]% in game sales 12 months after being added to Game Pass.”

As game sales data is rarely detailed, we have to collect the information that is released from time to time to try to understand the situation. At first, Microsoft’s revelation may seem a little obvious, since the presence of a title in the Game Pass catalog makes us imagine that fewer people would pay to buy it.

Also, a year tends to be a long time when it comes to video games, and few games manage to maintain a good flow of sales after that period. With audiences and even publishers always looking for the next big thing, I’d be surprised if they told me the service was helping sell games after all this time.

Hi-Fi Rush, the latest Game Pass hit (Credit: Disclosure/Tango Gameworks)

However, this would be a little different from what the head of the Xbox division defended in 2018. On the occasion, the executive spoke to the Level Up channel and stated that at least some titles will benefit from being on the service.

“When you put a game like Forza horizon 4 on Game Pass, you immediately have more players, which actually leads to more game sales,” said Phil Spencer. “You say, ‘Well, not everyone is going to sign up for $10 to play this.’ But no, players find things to play based on what everyone else is playing.”

What we need to consider here is that Spencer’s words would not necessarily be false. Considering what was said in the document passed by Microsoft, the drop in sales will only happen after 12 months, so we can conclude that within this period they could be exploited.

The problem is that when it comes to counter opinions on how Game Pass (or even PS Plus) affects the success of games, they’re pretty controversial. On the one hand, we have those who are full of praise for these business models, with the excuse that visibility has helped them and that the player base has reached a level that would be difficult to reach otherwise.

On the opposite side of this debate, we have companies complaining about how sales would have been hurt by making their creations available there at launch and others, like Rockstar, even saying it wouldn’t make sense to offer their titles with that way. Bandai Namco for its part even believes that a subscription system would be a threat to business.

The interesting thing is that perhaps no one is wrong in this debate, with the cases having to be evaluated one by one. Something like Game Pass can be great for one publisher, while for another it ends up hurting them, and the conflict is even internal, with one company doing well with one game but not with another.

Variety, one of the highlights of Game Pass (Credit: Disclosure/Microsoft)

As a consumer, if in 2018 I thought the existence of something like Microsoft’s subscription service was worth celebrating, I still think so today. Having access to so many games, many of them already on release day, without having to take a risk with their purchases, is an undeniable advantage that many people I know have taken advantage of.

Best of all, Game Pass isn’t meant to replace the traditional sales model, and those who want to continue buying their games individually can still do so. For me, this is a win-win scenario and it’s up to everyone to choose which model best suits their consumer pattern.

As for game developers, I imagine time will allow them to better understand whether or not it’s worth being present in this kind of business. Overall, I’ve seen more praise than criticism, but I get the impression that there’s no blueprint for success, either in or out of Game Pass.

Source: Toy industry

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