Business aspects of Subscription Game Libraries [Xbox GamePass, PSNow]

[liams]

another thing i could see them doing is making a gampass basic tier, which would be say $8 a month, and would get the first party titles for a period of time then a rotating back catalogue of first party titles. That way you could get 3 tiers without pissing anyone off to bad
$8 gamepass basic
$10 gamepass standard
$15 gamepass ultimate
then after a price increase you would get tiers at $10/$12/$17

 

[AzBat]

Maybe just copy how EA does its tiers?

Please no. I'm with the folks on Kinda Funny XCast. Different release dates for different tiers are the devil. It's confusing for the average person. Give everybody the content at the same time, please.

Tommy McClain

 

[pharma]

Take-Two Interactive Is Skeptical About Microsoft's Gaming Subscription Service
November 6, 2020

CEO Strauss Zelnick made comments suggesting that the company is far from gung-ho on subscription-based gaming services. Zelnick said that he was highly skeptical that subscription services, such as Microsoft's (NASDAQ:MSFT) Netflix-like Xbox Games Pass, would emerge as the primary distribution channel for games.

Continued growth for the subscription-based gaming model could be great for a platform holder like Microsoft, but it could present real threats to other leading games companies. Game development is expensive, and Zelnick specifically mentioned games being relatively cheap in terms of the hours of entertainment they offer as a reason why subscription services might not be a great fit for the industry.
...
Given Take-Two Interactive's focus on big-budget game development, it makes sense that the company would be tepid about a future in which major releases would likely have diminished earnings potential. The company's biggest games have production and marketing budgets that stretch into the hundreds of millions of dollars, and it expects to sell triple-A releases starting at $70 per unit. Meanwhile, the base-level subscription tier of Xbox Game Pass offers users a library of hundreds of games for $10 per month.
...
While Take-Two appears is far from eager to throw its full weight behind the subscription model, its management team has repeatedly stated that company will be where the consumer is. Take-Two's core franchises put up great sales under the current retail model, so it makes sense that the company isn't looking to change it.

https://www.fool.com/investing/2020/11/06/take-two-interactive-is-skeptical-about-microsofts/

 

[Johnny Awesome]

I can agree that Take Two should be very scared of GamePass.

 

[Deleted member 11852]

I can agree that Take Two should be very scared of GamePass.

I'm sure Take Two Interactive are quaking in their money shoes, which are made out of money, with they use to walk on their money carpet, which is also made out of money. In a building - you guessed it - also made out of money.

 

[Silenti]

I'm sure Take Two Interactive are quaking in their money shoes, which are made out of money, with they use to walk on their money carpet, which is also made out of money. In a building - you guessed it - also made out of money.

I have developed this picture in my head of the people actually working at Rockstar and what the interior of their HQ looks like. It resembles the more Caligula like scenes of The Wolf of Wall Street.

 

[Silenti]

https://twitter.com/i/web/status/1327285784764948482

Pretty impressive number so far.

 

[Johnny Awesome]

Very impressive. I haven't needed to buy anything yet for my XSX due to GamePass. There will likely be a dead zone in the spring where I pickup up CyberPunk 2077, but Gears Tactics, Forza Horizon 4, Ori WoW, Jedi Fallen Order, Doom Eternal, Tetris and soon The Medium will likely keep me busy for quite some time.

 

[cheapchips]

Very impressive. I haven't needed to buy anything yet for my XSX due to GamePass. There will likely be a dead zone in the spring where I pickup up CyberPunk 2077, but Gears Tactics, Forza Horizon 4, Ori WoW, Jedi Fallen Order, Doom Eternal, Tetris and soon The Medium will likely keep me busy for quite some time.

Out of curiousity, are you a new or existing Xbox owner?

While the 70% Gamepass attachment rate is impressive, I'd have thought most people with Series Xboxes at present are the Xbox faithful.

 

[Deleted member 11852]

While the 70% Gamepass attachment rate is impressive, I'd have thought most people with Series Xboxes at present are the Xbox faithful.

You beat me to it, I would have thought this would have been committed Xbox fans buying on launch day in the Year of the COVID. This could be the peculiarity that is Series S at play, or it's just a lot of committed Xbox owners are not ready for GamePass yet.

But great news! Just a few months back I think most of us were all wondering how well nextgen would fair in 2020.

 

[cheapchips]

or it's just a lot of committed Xbox owners are not ready for GamePass yet

There are enough eager COD/FIFA/Fortnite players who are day one type people. The idea of a subscription service with other games will be a weird and alien concept.

 

[Johnny Awesome]

Out of curiousity, are you a new or existing Xbox owner?

While the 70% Gamepass attachment rate is impressive, I'd have thought most people with Series Xboxes at present are the Xbox faithful.

I've been an Xbox fan since I covered it as a gaming journalist at E3 2001 and was a beta tester for Xbox Live. LOL

My younger son has GamePass and I just download on his account and play the games. I feel like it's hitting it's stride now where I doubt I will need to buy more than a couple games per year.

My older son is the kind of gamer that GamePass will be tough to entice. He plays the shooter of the day and nothing else. He'll play the new CoD on his One S until the next big thing comes out, which might actually be Halo Infinite. He doesn't do single player.

 

[Deleted member 11852]

In an interview with The Verge, Phil Spencer explained how developers get paid through GamePass.

In essence, they'll consider anything that works - but they are still working it out.

 

[mrcorbo]

In an interview with The Verge, Phil Spencer explained how developers get paid through GamePass.

In essence, they'll consider anything that works - but they are still working it out.

Seems like a good idea for them to continue to be flexible and to give partners options on how they want to be compensated.

 

[Deleted member 11852]

IMO MS is going to make everything as exclusive to the Xbox/PC ecosystem as it legally can.

It would be kind of stupid if they didn't. What makes the whole thing extra complicated is the economics of AAA game development and GamePass - which itself is finding its feet.

Take for example Elder Scrolls VI. If this is exclusive to Xbox and Windows and included day one for GamePass subscribers, this will obviously not be the revenue storm that a traditional multi-platform release would be. All the existing GamePass subscribers, with the vast majority being Xbox users, will not be contributing any more to Microsoft's revenues. Any revenue bump will come from non-GamePass subscribers who just buy the game outright on Windows or Xbox, or any increase in GamePass subs. But whether they last is, I guess, the gamble. Lure people in, get to the sub long-term is the foal.

Elder Scrolls (and Fallout) games typically have insanely good replay value I started a new Skyrim play through just last month! The economics of ephemeral GamePass subscriptions vs. outright purchases vs. long-term new GamePass subscriptions balances with loss of PlayStation/Nintendo revenue is going to be an absolute f***er to predict/calculate.

It'll be fascinating to watch unfold over the coming years.

 

[Malo]

They could decide to break up ES6 into parts like many big publisher do nowadays and release a base game with lots of DLC and microtransactions to potentially make far more than a simple box price game. Combined with locking down modding to a shop with both free and premium mods and you're raking it in. You just have to ignore the outrage from all the fans and laugh.

 

[eastmen]

IMO MS is going to make everything as exclusive to the Xbox/PC ecosystem as it legally can.

I think that is the end goal.

Yes selling on sony would bring them short term gain but long term it doesn't net them any benefit. Even steam is a short term play to avoid people crying about exclusive content on windows.

MS needs to have content that they control constantly release on Game pass. Game pass is their play for the future , Its the platform.

If you watch other types of stream able entertainment there is always the same cycle . Just look at Netflix. It was built on the backs of all tv/movie companies and started making a lot of money. So what happened ? Those companies started charging more for that content until their own platforms were ready to launch. 8 years ago you could have netflix and get 80% of the content out there. Then you got hulu and now you have Netflix , Disney plus , hulu , peacock , paramount plus , hbo max and god knows what else. Now netflix is making more content then they ever did before and each year they make more. Now they are trying to out Disney .. Disney in animation. They are green lighting as much content as possible .

Microsoft seems to have learned from these issues. If you make enough of your own content from the start you can position yourself as the main platform that almost everyone has and then people go to the secondary formats.

If they bring bethesda slowly into being fully exclusive then they have Halo , Perfect Dark , Gears, Doom , Wolfenstein , Quake and Rage. They could have 2 or 3 big shooters a year hit game pass.

They could have starfield , elder scrolls , fall out , avowed , fable and others. Again 2 or 3 RPGs a year.

If they keep going there wont be an issue. They can have constant content hitting the platform in all the big genres. You and I might love Shooters but I may love PD and Gears and you might love Halo and Doom so its important to offer as much diverse content as possible.

I have said before that they want to have a triple A title every few months ( i believe 2 but it could be 3 ) when they get their studios rolling. They will do this with Purchases and bringing more studios online.

 

[liams]

I have said before that they want to have a triple A title every few months ( i believe 2 but it could be 3 ) when they get their studios rolling. They will do this with Purchases and bringing more studios online.

The crazy thing is they are already there. They have 23 studios (minus alphadog because they make mobile games, and roundhouse because they are small/new), so call it 21. Thats already more than 1 game per quarter, and not even counting the multiple teams that some studios have. and on top of that a AAA game per quarter is assuming every game needs 5 years of development, which of course not every game needs.

If they acquired SEGA and Paradox (or equivalent) they would be looking at a first party release every month (not necessarily AAA tbf, but first party nonetheless)

 

[eastmen]

The crazy thing is they are already there. They have 23 studios (minus alphadog because they make mobile games, and roundhouse because they are small/new), so call it 21. Thats already more than 1 game per quarter, and not even counting the multiple teams that some studios have. and on top of that a AAA game per quarter is assuming every game needs 5 years of development, which of course not every game needs.

If they acquired SEGA and Paradox (or equivalent) they would be looking at a first party release every month (not necessarily AAA tbf, but first party nonetheless)

Yes but they also want to let game devs have the time they need. When you have enough content a year you can push back some of it to ensure its good vs ending up with huge content holes like what has happened in the past.

 

[dobwal]

Building your own library is important. It’s a one time cost unlike licensing.

Every gamer going forward isn't going to be long time console fans. New gamers enter the console market every year.

If gamepass proves to be a success, MS will have a library that spans 100s of games giving new gamers 1000s of hours of content in 10-20 years. MS will only have to worry about pumping out enough titles to keep long time subscribers engaged.