How do you think Microsoft's aggressive subsidising of Game Pass will effect the Industry?

[12Danny123]

I don't think it's no longer a doubt that Microsoft as a whole is now subsidising Game Pass to make up the losses that are being made by investing very aggressively in Xbox Game Pass.

However it isn't bad news, I think this is good news, this will mean that Microsoft as a whole is now backing Xbox and that the higher management have big plans for the Xbox Division hence why they are willing to take massive losses, Xbox is no doubt now in Azure-Office 365 Level investment.

But what do you think will this mean in the overall industry? Now that MS using the Netflix business model, will this mean, like the movie industry force companies to also create their own subscription service? Will it also draw the indie crowd away from Steam to XGP because of MS's upfront cost?

What do you think?

 

[Deleted member 36578]

I think a lot of devs will feel the need to cut deals with Microsoft to get their games on the service.

 

[slothrop]

Investors love recurring revenue more than anything else in software businesses. That's how you get sky high valuations. I think the industry was going to trend this way whether Microsoft started it first or not.

 

[MrTired]

I think a lot of devs will feel the need to cut deals with Microsoft to get their games on the service.

Click to shrink...

Is it the other way round?

 

[dom]

Everyone that's not the platform holder will add more F2P pay models.

 

[Komo]

However it isn't bad news, I think this is good news, this will mean that Microsoft as a whole is now backing Xbox and that the higher management have big plans for the Xbox Division hence why they are willing to take massive losses, Xbox is no doubt now in Azure-Office 365 Level investment.

Click to shrink...

As soon as Nadella put Xbox on the table with the rest of the teams it was clear they weren't going to use Xbox as a side project or some small part of Microsoft it's a brand they're never going to let go.

But what do you think will this mean in the overall industry? Now that MS using the Netflix business model, will this mean, like the movie industry force companies to also create their own subscription service? Will it also draw the indie crowd away from Steam to XGP because of MS's upfront cost?

Click to shrink...

Nah I doubt enough publishers can do that, and honestly the subscription services need to go through Xbox and Sony so it's gonna be very very hard for them to attract new users.

 

[Garrett 2U]

There is absolutely no doubt that Microsoft's plans to expand the AAA gaming audience to 2 billion worldwide consumers through streaming and subscription services is absolutely good news for the industry.

 

[Deleted member 36578]

Is it the other way round?

Click to shrink...

Microsoft reached out to the devs to get the service kicking right off the bat, but down the road I think the shoe will be on the other foot. At least in my mind the service has changed my perspective on many titles. Bloodstained for example, feels like it just came out yet it's already hitting game pass. Since I sub to the service I'm really going to second guess my purchases going forward and I'm probably not alone. I would've bought Creature in the Well too, but that's on game pass day 1 too. The more games that show up there the less I'm inclined to purchase anything. I think devs will be knocking on Microsofts door to get their games on the service when they realize a lot of people aren't buying them anymore. Thats the future precedent I believe Game Pass is setting.

 

[M4xim1l1ano]

could this be used as a method of selling future Xbox:es with a subscription model?

Basically, you pay xx/month for Xbox hardware and game pass for 3-4 years.

For some it might be better like that than pony up 400-500 dollars and still no games..

 

[Xx 720]

It's a positive, overdue move - especially for third party games. In the past, a game only had retail, then dlc microtransactions to generate revenue. Contrast that with movies - they have a box office run, then pay per view, then netflix, HBO broadcast etc. For games now, they can have a retail run, sell dlc or what not, after the game sales level off they go to subscription services like gamepass, and some people there will surely buy the game, dlc and stuff. Nintendo online is worth it for the huge library of nes/SNES games and gamepass u could easily not have to buy as much games. I hope Sony follows with their own service.

 

[Pasha]

Investors love recurring revenue more than anything else in software businesses. That's how you get sky high valuations. I think the industry was going to trend this way whether Microsoft started it first or not.

Click to shrink...

Wasn't EA the first though?

Anyway I think the industry will not change much, not many companies have the infrastructure and capital in order to make such significant investments into their own Game Pass type of service. We already have EA Access and Uplay Plus, but those are limited services, and I doubt many more companies will try to do the same.

 

[nsilvias]

more micro transactions and dlc for everyone!
imnot looking forward to it. games already have shady balancing to encourage you to spend money now. some gamers tho will say "lol no you're crazy it wont affect how games are balanced." it will and its already happening to an extent

 

[Bleu]

cheap subscription models are only compatible with the current way of making games (and indies existing) for as long they are a niche part of the market, once they become dominant, any game that is not a juggernaut or a gass will cease to exist, because subscription models are not sustainable economically for any game that cannot eat a huge share of the time spent per users within the subscription (given that time spent per user is the economic model off all of them so far for sharing revenue).
The parasite will kill the host.
Only First party offerings ( money burned to promote the service ), F2p with ingame MTX based economy and gaas will survive then.
/doom take

 

[LittleAlchemist]

Everyone that's not the platform holder will add more F2P pay models.

Click to shrink...

Well you won't necessarily have to do that in order to make a profit, since the platform holders have to pay money to get your content on their service, and I'm assuming that even once full $60 sales start going away that will just jack up the price that platform holders have to pay in order to get content onto their service.

I think for DMC5 Microsoft paid Capcom like $19-30 mil? Which is about 316k-500k $60 copies worth of revenue? That's about as much copies as the game was probably going to sell on Xbox lifetime, period.

Then again as platform holders get more first parties, they'll also probably depend on third parties less, which might drive down prices.

 

[MrTired]

As soon as Nadella put Xbox on the table with the rest of the teams it was clear they weren't going to use Xbox as a side project or some small part of Microsoft it's a brand they're never going to let go.



Nah I doubt enough publishers can do that, and honestly the subscription services need to go through Xbox and Sony so it's gonna be very very hard for them to attract new users.

Click to shrink...

Nope that's exactly what going to happen. EA already got there own sub, Ubisoft got there coming out, Activision, 2K and Square Enix are large enough to release there own. Gaming will go exactly like streaming in that scenario.

 

[Grayson]

There is absolutely no doubt that Microsoft's plans to expand the AAA gaming audience to 2 billion worldwide consumers through streaming and subscription services is absolutely good news for the industry.

Click to shrink...

This seems ludicrous. At this point Apple Arcade has a better shot of that.

 

[Kthulhu]

Investors love recurring revenue more than anything else in software businesses. That's how you get sky high valuations. I think the industry was going to trend this way whether Microsoft started it first or not.

Click to shrink...

This.

If Game Pass wasn't made by MS then someone else probably would've done it.

Technically they weren't even the first. EA had EA Access going years before.

 

[A1an]

How long will Microsoft continue subsidising Game Pass though.

Isn't the trend that more people are buying games but individuals are buying less games, I used to buy loads of games but now I only buy a few a year and make sure they are all solid games and that I get my monies-worth.

 

[MilesQ]

Wasn't EA the first though?

Anyway I think the industry will not change much, not many companies have the infrastructure and capital in order to make such significant investments into their own Game Pass type of service. We already have EA Access and Uplay Plus, but those are limited services, and I doubt many more companies will try to do the same.

Click to shrink...

THQ Nordic seem like they are gearing up for a sub service with how many studios and IP they've bought and continue to buy.

 

[Bit_Reactor]

I don't know, after seeing things like ADobe and other software go to shit with subscriptions I'm not too thrilled about it. People keep talking about the Netflix model as well and that's already collapsing because now everyone wants their own sub service their own sub fees and their own line to consumers pockets. So now everything is splintering off into 3, 4 and more services soon.

We're literally cycling back to "Choose your cable plan" mentality with television and movies currently and I don't really see that as a positive move for the industry. And with the amount of launchers already attempting to gate off content to specific pubs and stuff I don't see myself really venturing outside of just Nintendo games and PC exclusives after that.

People want to pay less to get more, and I get that, but that money has to come from somewhere and the gaming industry has shown they'll do anything to make those profits even if it means shuttering studios/firing a bunch of people/putting in mtx that are downright predatory. I don't really see this going well for the industry if as a whole it shifts towards this but I'd love to be wrong.

 

[12Danny123]

This seems ludicrous. At this point Apple Arcade has a better shot of that.

Click to shrink...

Apple Arcade is targeting the crowd that is purely in the Apple Ecosystem with Apple Devices that's the strength of Apple Arcade. Microsoft's service is likely going to be agnostic and run on any device.

So the Android/Windows Crowd.

 

[MrTired]

Microsoft reached out to the devs to get the service kicking right off the bat, but down the road I think the shoe will be on the other foot. At least in my mind the service has changed my perspective on many titles. Bloodstained for example, feels like it just came out yet it's already hitting game pass. Since I sub to the service I'm really going to second guess my purchases going forward and I'm probably not alone. I would've bought Creature in the Well too, but that's on game pass day 1 too. The more games that show up there the less I'm inclined to purchase anything. I think devs will be knocking on Microsofts door to get their games on the service when they realize a lot of people aren't buying them anymore. Thats the future precedent I believe Game Pass is setting.

Click to shrink...

Indie games maybe if they think the visibility the game from it will lead to more games sales. But Microsoft are definitely going to pay for content. I actually don't see a time when they won't pay content creators upfront. You yourself have shown the downside of this model. Your purchasing less games because of the possibility of the game coming to the service. If the becomes the norm for the industry then current AAA games become unsustainable to produce.

 

[Cat Party]

They're subsidizing GP right now because they want you to have an active GP sub when the next Xbox launches. It's not rocket science. When the new Xbox launches, I'm certain a bunch of the launch games will be on GP.

 

[Komo]

Nope that's exactly what going to happen. EA already got there own sub, Ubisoft got there coming out, Activision, 2K and Square Enix are large enough to release there own. Gaming will go exactly like streaming in that scenario.

Click to shrink...

Yeah and those would only be catering to PC users. EA access works because it's shit cheap. Activision, 2K, and SQE would need to rival $5 to even be remotely viable.

 

[Deleted member 36578]

Indie games maybe if they think the visibility the game from it will lead to more games sales. But Microsoft are definitely going to pay for content. I actually don't see a time when they won't pay content creators upfront. You yourself have shown the downside of this model. Your purchasing less games because of the possibility of the game coming to the service. If the becomes the norm for the industry then current AAA games become unsustainable to produce.

Click to shrink...

You're totally right, Microsoft will always be paying upfront for the devs to put the games on there. I just think more and more devs will approach them and ask if Microsoft is willing to do that for em.

 

[Grayson]

Apple Arcade is targeting the crowd that is purely in the Apple Ecosystem with Apple Devices that's the strength of Apple Arcade. Microsoft's service is likely going to be agnostic and run on any device.

So the Android/Windows Crowd.

Click to shrink...

Apple has access to a loyal built in market. And a more viable product right now.

 

[Imitation Of Life]

They're subsidizing GP right now because they want you to have an active GP sub when the next Xbox launches. It's not rocket science. When the new Xbox launches, I'm certain a bunch of the launch games will be on GP.

Click to shrink...

They will need to subsidize Game Pass for a LONG time before it turns a profit. It's a real all-in move and they can afford see how it plays out. Most can't.

 

[British]

If I'm releasing a sequel, then I'd put my original game onto Game Pass. It's potentially more revenue than direct sales, and it will get loads of people familiar with the series, so they might buy the new one full price if they like it.

 

[plow]

Game like God of War will not be possible.
Narrative Single Player Games with 15-20 Hours playtime will cease to exist because they are not profitable anymore.

 

[Bane]

I like Game Pass but I do fear it will end up with everyone having there own sub service and also a race to the bottom mobile gaming experienced, in that everything will be valued so little that microtransactions will become the default way companies make money going forward. We've already seen it start with all the f2p games already out on console and pc, I just worry it won't stay as fair as some of those have been so far. I'm on pain killers right now, I hope that all made sense. Feels a bit messy.

And yes, I know there are still premium mobile games. I don't mean it as any kind of attack on that platform.

 

[MrTired]

Yeah and those would only be catering to PC users. EA access works because it's shit cheap. Activision, 2K, and SQE would need to rival $5 to even be remotely viable.

Click to shrink...

It needs to be $5 because? You think EA with FIFA and Madden, Battlefield can't charge more. Ubisoft with Assassin's Creed, Division, Tom Clancy games can't charge more. That exactly why EA and Ubisoft is looking into streaming they want to get rid of the middle man.

You're totally right, Microsoft will always be paying upfront for the devs to put the games on there. I just think more and more devs will approach them and ask if Microsoft is willing to do that for em.

Click to shrink...

Off course currently they can have there cake and eat it too.

 

[12Danny123]

They're subsidizing GP right now because they want you to have an active GP sub when the next Xbox launches. It's not rocket science. When the new Xbox launches, I'm certain a bunch of the launch games will be on GP.

Click to shrink...

I don't think its connected to the Xbox hardware at all, Consoles to MS are merely just a piece of hardware to promote their services it's mostly connected to the Xbox service itself.

 

[P A Z]

One thing that typically goes unmentioned with Gamepass is that Microsoft are one of very few tech companies with the financial chops to pull off such a service.

I don't think it's realistic to expect Sony and Nintendo to follow suit, certainly not in the exact same fashion, and to be fair, they don't need to right now either. A purely back catalogue service is what I'd expect from those two at most.

I imagine sometime in the next couple of years we'll start to see major third party games launch on Gamepass.

Maybe not something on the level of GTA6 or new Elder Scrolls but I could absolutely see a Capcom game or a Square game launching on . It would make a lot of sense to try and use Gamepass to bring big Japanese games to an audience that is reluctant to play them/doesn't have familiarity with a series due to series not having roots on Xbox.

I think Gamepass will end up the best service of its kind, at least the Gamepass we have now, due to having a greater and more varied selection of games on offer. None of the publisher based services do anything for me. And that's the only way I see Gamepass eventually failing, publishers pulling their own games to put them on inferior rival services.

 

[Godzilla24]

Game pass will continue to grow as the word of mouth spread how awesome the service is. I got many friends and family to sign up. Many are family sharing game pass which makes the deal even more insane.

 

[rokkerkory]

Another GP thread. How is MS subsidizing it exactly if it is so clear? Are they paying publishers?

 

[Oracle]

I personally absolutely love it.

My dream world ? Sony does the same.

I'll gladly pay 2 subscriptions for unlimited all exclusive titles plus more day one. I would never buy a hard copy game again. I will be exposed to new genres and game types, it would cure my occasional ocd of playing games simply because I bought it regardless of enjoyment. I'll have options that are a first for me ( and gaming as a whole ) over the past 30 years I've been gaming

 

[Deleted member 20284]

How quickly we forget developers/publishers such as ID and really the entire industry across multiple platforms such as PC or C64 used to give away 10-35% of their games for free and then offer deals to get buyers e.g. Wolfenstein 3D, Keen, Doom. Shit limited games used to get packaged right in with magazines.

It's just an evolution of that old model.

Also this idea that Xbox/MS have continuous massive losses is such shit. They're making plenty of coin, it's just accounting practices for write downs.

 

[TangoAlphaLima]

Is there any proof that Microsoft is subsidizing the service? They may very well be, but most in the thread are assuming this, without any proof whatsoever.

 

[watdaeff4]

I think for DMC5 Microsoft paid Capcom like $19-30 mil? Which is about 316k-500k $60 copies worth of revenue? That's about as much copies as the game was probably going to sell on Xbox lifetime, period.

Click to shrink...

I understand the latter is just guessing on your part but am curious if there is a legit source for the former? I didn't realize we had any info what they are paying to have games on the service

 

[LittleAlchemist]

I understand the latter is just guessing on your part but am curious if there is a legit source for the former? I didn't realize we had any info what they are paying to have games on the service

Click to shrink...

https://www.videogameschronicle.com/news/capcom-receives-19-million-one-off-ip-royalty-payment/

Capcom disclosed a $19 million one-off payment for IP royalties in their digital contents section during a fiscal report.

The same day that was talked about, DMC5 for Gamepass leaked

https://www.resetera.com/threads/devil-may-cry-5-coming-to-game-pass-seems-to-have-leaked.132679/

and then a few weeks later:

https://venturebeat.com/2019/08/19/xbox-game-pass-gets-devil-may-cry-5-and-ape-out/

 

[0VERBYTE]

https://www.videogameschronicle.com/news/capcom-receives-19-million-one-off-ip-royalty-payment/

Capcom disclosed a $19 million one-off payment for IP royalties in their digital contents section during a fiscal report.

The same day that was talked about, DMC5 for Gamepass leaked

https://www.resetera.com/threads/devil-may-cry-5-coming-to-game-pass-seems-to-have-leaked.132679/

and then a few weeks later:

https://venturebeat.com/2019/08/19/xbox-game-pass-gets-devil-may-cry-5-and-ape-out/

Click to shrink...

Id say thats a pretty evident deal.

 

[watdaeff4]

https://www.videogameschronicle.com/news/capcom-receives-19-million-one-off-ip-royalty-payment/

Capcom disclosed a $19 million one-off payment for IP royalties in their digital contents section during a fiscal report.

The same day that was talked about, DMC5 for Gamepass leaked

https://www.resetera.com/threads/devil-may-cry-5-coming-to-game-pass-seems-to-have-leaked.132679/

and then a few weeks later:

https://venturebeat.com/2019/08/19/xbox-game-pass-gets-devil-may-cry-5-and-ape-out/

Click to shrink...

Cool thanks.

I don't live on ERA so I miss threads etc

 

[elzeus]

It'll be positive for the industry imo. One way that it differs from the "Netflix" model is that they still sell the games directly whereas Netflix does not so nothing is lost in subbing. I think they may even start funding games through the Gamepass division similar to Epic's long term plan with their store (not stealing exclusives but funding them from the start). Also the way Gamepass and Xcloud compliment each other could be a very big payoff for them.

 

[Jawmuncher]

I don't know, after seeing things like ADobe and other software go to shit with subscriptions I'm not too thrilled about it. People keep talking about the Netflix model as well and that's already collapsing because now everyone wants their own sub service their own sub fees and their own line to consumers pockets. So now everything is splintering off into 3, 4 and more services soon.

We're literally cycling back to "Choose your cable plan" mentality with television and movies currently and I don't really see that as a positive move for the industry. And with the amount of launchers already attempting to gate off content to specific pubs and stuff I don't see myself really venturing outside of just Nintendo games and PC exclusives after that.

People want to pay less to get more, and I get that, but that money has to come from somewhere and the gaming industry has shown they'll do anything to make those profits even if it means shuttering studios/firing a bunch of people/putting in mtx that are downright predatory. I don't really see this going well for the industry if as a whole it shifts towards this but I'd love to be wrong.

Click to shrink...

I think this is the one benefit that console provide with their "closed garden" mentality. While MS allowed EA Access in the past, there's nothing that makes them forced to offer that to other publishers and such. Especially if both Console Makers feel the same way. So we should be safe from PS4 and Xbox having a different sub for every publisher under the sun. At least somewhat.

 

[Doctoglethorpe]

Games are going to take the same rout as movies and tv. It's inevitable. And yes that means every major publisher will have its own service like EA. And that's a good thing imo. Subbing for one month to play a game is fine by me. But no doubt people will endlessly complain about "too many subscriptions" like they do with tv.

 

[ForgedByGeeks]

Game like God of War will not be possible.
Narrative Single Player Games with 15-20 Hours playtime will cease to exist because they are not profitable anymore.

Click to shrink...

Yes obviously.... Just look at Netflix spending over $100m for multiple 10 episode per season series.

Completely impossible to fun $50 - $80m games on a subscription service.

/s

 

[Xeontech]

Double edged sword.

Could be amazingly successful if they can win back some major player base worldwide they lost this generation.

Otherwise it's going to be seen as a terrible business decision with the amount of money lost in game purchases on first party titles.

The idea is great. The sub price is ideal. But gamers subbing for 9.99 a single month when a new game is released the canceling the sub is potentially tens of millions lost on every first party game released.

 

[DrDeckard]

We really are getting the same worries we had with netflix and the movie industry.

The reality is the industry will adjust if it needs to.

We have had constant reports of the gaming industry being unsustainable on a business and human level. Not that gamepass is the cure but it may alleviate some pressures.

As long as the content is good it's all good.

 

[Boiled Goose]

I think it already has affected the industry.
Not sure if in a good way.

 

[Joe White]

What do you think?

Click to shrink...

Change is inevitable, don't fear it, embrace it. All will be good at the end.