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Game Pass’s “only (outside) shot” for sustainability is to get GTA 6 or Call of Duty, says former Microsoft senior PR leadXbox under pressure “to cut expenses to the bone”
Xbox under pressure “to cut expenses to the bone”
Image credit:Take-Two Interactive/Rock Paper Shotgun
Image credit:Take-Two Interactive/Rock Paper Shotgun
Former Microsoft senior PR manager Brad Hilderbrand has blogged aboutthe recent closure of Tango Gameworks and Arkane Austin, making a familiar case that Microsoft’s gaming division are now expected “to cut expenses to the bone” in the wake of the wildly expensive acquisition of Activision Blizzard and amid slowing growth of the Game Pass subscription business. In Hilderbrand’s view, Game Pass will likely never be sustainable or profitable. Microsoft’s only chance on this front, he says, is “to put all the world’s biggest games on the service” – namely, Call of Duty, which still earns hundreds of millions annually in direct sales, orGTA 6, which, hahahaha.
“This system was fine for a while when Game Pass was growing like gangbusters, but now it’s slowed way down and the amount of revenue it’s attributing to games isn’t keeping up with the budgets to make them.”
Hilderbrand’s post has sprouted a thread of industry comms and producer-level people sharing their own thoughts. There’s one from Douglass Perry, IGN co-founder, about the likelihood of Call Of Duty turfing up on Game Pass, to which Hilderbrand responds: “it definitely seems like a non-starter, but there’s also a constant pressure for Game Pass to be the killer app that you simply can’t live without”, adding that an additional pressure on the service is that “budgets for games keep expanding”.
“I still think Game Pass was the right strategy when it was announced, the world seemed to be moving toward subscriptions and the value prop is through the roof (there are a lot of very good games on the service),” he goes on. “However, with Xbox being perpetually stuck in 3rd place I don’t think they’re ever going to hit the critical mass needed to make it profitable/sustainable.
“The only (outside) shot, is to put all the world’s biggest games on the service and make it an absolute must-have in the eyes of players. Minecraft is there already, Fortnite is there but it’s F2P so you’re not really adding value, the only things left are COD or GTA VI. No chance GTA goes to Game Pass, and I think with COD you’re doing the same math and basically saying it’s too much of a risk to give up the guaranteed sales revenue for the hope of driving enough Game Pass subs.”
Hilderbrand thinks Call of Duty’s future is assured, whatever the outcome. “COD will be fine though, as will the other mega-studios with huge IPs,” he concludes in his original post. “But you’re seeing the impact; all those smaller studios making really interesting games are going to fall away, simply because as good as games likeHi-Fi Rushare, they’re never going to make enough money to make up that $70B hole that Xbox now has to dig itself out of.”
