Microsoft says Xbox Game Pass isn’t a threat to developers or consumers

In a recent report by Variety, Microsoft said that their Xbox Game Pass subscription program wouldn’t act as a financial threat to game developers, but rather as a boon for discoverability.

Xbox Game Pass, which launched in mid-2017, allows customers to subscribe to a Netflix-like selection of older and new games for $9.99 a month. The service includes some new games like Sea of Thieves, Warhammer: Vermintide II, and Rocket League, as well as older Xbox 360 titles like Rage and Fable III.

“Discoverability is one of the bugbears of our industry,” 505 Games Senior Vice President of Global Brands Tim Woodley said to Variety. “Our titles also experience a much higher level of engagement than they otherwise would have.”

Comments like these come hot off the heels of a recent report by the Verge that Xbox will soon offer bundles that include Game Pass and Xbox Live Gold together. The report states the Xbox One X bundle cost consumers $34.99 a month, which comes out to $419.88 a year, with a two year commitment. There’s currently no information on if the Xbox One S bundle will cost less, although if the service is predicated on the online services and not the hardware, it’s unlikely. The bundle subscription will first only be available in the United States, with Microsoft gauging interest before expanding operations.

Perhaps the biggest concern for developers is how the increased emphasis on Game Pass will impact their bottom line. Rather than a $60-$70 profit for a physical copy of a game (or even a single digital download), a subscription model has the potential to dramatically shift the margins at which developers earn their profits.

To Microsoft’s credit, the value of discoverability can be raised in a subscription format. Programs like PlayStation Plus’s monthly free game assortment have allowed players to catch up on slightly less fresh titles, like Mafia III and Heavy Rain. The difference here is that PlayStation users are paying for one overall service package, with a small handful of games becoming available on a monthly basis. Xbox Game Pass has dozens more options for players to choose from, but it still comes out of their wallet whether they’re playing something from the catalog or not. (And this is in addition to paying for Xbox Live.)

“It’s more about balancing content,” said Ben Decker, general manager of services at Microsoft in an interview with Variety. “We want to make sure there is something for everyone. We want to retain a highly curated catalog so that we think every game in the catalog is great. Initially, we thought that number was going to be really important. But what we hear now is, ‘I don’t want thousands and thousands of games, I want really good games.’”

Microsoft reported that users who subscribed to Game Pass played 20 percent more games (Game Pass or otherwise) than they did before subscribing, and a 40 percent rise in how many games subscribers play, which emboldens the argument for discoverability.

It may be consumers who have to worry the most then. Whether it’s the $9.99 model or the bundled $34.99 (complete with Xbox), consumers have to remember that programs like these are expressly for securing a more consistent and larger intake of funds from a customer base. If that proves ineffective (and by all accounts, Microsoft is very happy with the success of Game Pass), don’t be surprised to see it go away like Amazon and Twitch Prime benefits.

Are you a game developer who feels the expansion of subscription models will have an impact on your work? Reach out to GameDaily.biz at tips@gamedaily.biz or on Twitter @GameDailyBiz.