Business aspects of Subscription Game Libraries [XGP, PSNow]

Discussion in 'Console Industry' started by iroboto, Feb 3, 2020.

  1. iroboto

    iroboto Daft Funk
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    https://www.ccn.com/microsoft-schools-the-gaming-industry-with-winning-xbox-game-pass-model

     
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  2. iroboto

    iroboto Daft Funk
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  3. Malo

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    Game Pass has massive growth because of crazy low $1 plans to get players on board, in the hope that they'll continue using it when it eventually moves to it's intended price ($15/month). Just because there are huge numbers on Game Pass, doesn't make it successful as they have to be subsidizing it somehow. It can't be profitable at $1/month.

    It's a classic capitalist market tactic to dump the value of your own product to get people using it and force out competition. In some cases it's actually illegal (not saying what MS doing is illegal, don't rage).

    How many users will continue when it's $15/month? It's still good value IMO, but with the massive rise of subscription services in many aspects of our entertainment, consumers are waking up to the amount they're spending on all this stuff and started to balk at it all.
     
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  4. AzBat

    AzBat Agent of the Bat
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    It worked for me. I won't play Xbox anymore without Game Pass Ultimate. I balked at it when it first launched. I thought the Xbox Live Gold subscription was the better deal, but Ultimate now is. Highly recommend it.

    Tommy McClain
     
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  5. iroboto

    iroboto Daft Funk
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    The deep discounts are to get people to try it. There will be those who see value in it and those that don't.
    As long as they capture the ones who do see value it in, they will stay subscribed at $15/mo.

    That's sort of the catch there. Even at $15 a month it's $180 a year. That's the price of 3x AAA titles per year. Someone is going to do the math here and notice that you're going to get more than 3x AAA launch titles per year, and then some.
    So even at the regular price point there will be those who see the value. The value will continue to rise as when xCloud leaves beta.

    Even then, the discussion around the cheap $1 doesn't seem far off the mark than what Humble Bundle has done for ages now. A great many people donate near nothing for 30+ titles.
     
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  6. BRiT

    BRiT Verified (╯°□°)╯
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    I would happily pay the $180 a year for GamePass Ultimate, if I had to.

    I figure my deal price is $40 for Live so that leaves another $140 to account for. I used to buy at least 3 Microsoft Studios games on release day, so that's easily more than $47 a game. At full retail price, those 3 games would be $180 alone. I now have bonus access to more than 230 other console games and can even play a vast selection on PC too.

    I am curious to see how xCloud rolls out as a product offering, if it'll be a perk of Game Pass Ultimate.
     
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  7. iroboto

    iroboto Daft Funk
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    At this point in time; purchasing of games will drop off for me nearly entirely as a result of not having enough time, game pass puts in a reliable place holder on what I'm willing to spend on this hobby for software. Hardware is another question I need to answer soon. I do try more games now than I ever would. But I'm pretty much ready to leave gaming if I'm ready to leave game pass.
     
  8. mpg1

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    If feel like the long term killer app for Microsoft is XCloud + GamePass + Live Gold for $15USD/month.

    That would be on roughly on par with some of video streaming services like Netflix and HBO Now.
     
  9. iroboto

    iroboto Daft Funk
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    Games cost less than TV series but have more hours of fulfillment ?
     
  10. Shifty Geezer

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    Absolutely, and it's working! However, headlines about growth are tricky to interpret when there's basically free stuff on offer. Like Epic Game Store getting 100 million users already. That's crazy growth, but then they've been giving games away. how many of those EGS accounts will go on to spend money once the free stuff stops? There's also the freebies from Bing - I've been collecting 120 points every day for a few months and have enough for three months Game Pass, but no time to actually play any games!

    I think the real issue with this article is the way it's phrased as MS showing everyone else how it should be done. The value proposition is easy when you don't care about profitability but there's only a few companies that can use that business model. I expect Stadia growth to be head lining massive growth once the free tier becomes available - millions of sceptical gamers will be giving it a go just to see how bad it really is!
     
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  11. mpg1

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    What do you think they can charge then?..
     
  12. Malo

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    Keep in mind that 75%+ of that they already had with Fortnite.
     
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  13. iroboto

    iroboto Daft Funk
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    I’m not sure to be honest. It was me thinking out loud I guess. Shows cost over 100 million to make I think. Their advantage is that the crowds that watch it are larger.

    considering most games are cheaper to make; i suppose that in some ways may be much cheaper (expense wise) than netfiz. But revenue is going to be less as well
     
  14. egoless

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    I'm just waiting for moviepass to collapse from an unsustainable business model. Did I say moviepass? Silly me, I meant game pass....
     
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  15. BRiT

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    You should be waiting until well after Stadia dies.
     
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  16. AzBat

    AzBat Agent of the Bat
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    Someone is anti-games on a game forum? The horror.

    Tommy McClain
     
  17. egoless

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    Haha, sure Google and Microsoft drop support and kill off products the same way. Except Microsoft scorched the earth since Satya started. I've heard the marketing how Game Pass is fine. And I also remember all that other canceled Microsoft software and hardware was fine, or they just didn't say anything until the last minute when they axed it. All that "free" from game pass, crossplay, and day and date releases can't last. Just like it didn't for moviepass.
     
    #17 egoless, Feb 4, 2020
    Last edited: Feb 4, 2020
  18. BRiT

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    Movie Pass was never the content owner, publisher, platform owner, concession stand supplier, or parking lot owner. Two completely different business models. So many different ways for Microsoft to still make money on active users where as Movie Pass couldn't.
     
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  19. Jay

    Jay
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    Do you think Netflix and things like cineworld unlimited is going to die?
    Just wondering if only comparing it to a failed subscription service.
     
  20. egoless

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    Operative words, active users. They're currently in third place. There's only so much money you can squeeze out of a small fan base, especially when you dilute it with, again, crossplay, day and date release and steam.

    Netflix is more like PS Now, with the absence of day and date releases available elsewhere. For instance, I can get Halo MCC on steam and still play with Live users. So I don't pay for Game Pass which includes the hidden cost of paying to play multiplayer on PC. There's also a movement to only activate Netflix for the month you want to binge a series, then cancel. So yes, with the rise of other streaming services with desirable content, Netflix constantly creeping up their price, and the password sharing that has to inflate those MAU numbers, it's not a sure fire sustainable service.
     
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