Former Xbox Exec 'Scared' That Game Pass May Hurt Game Sales

I know a few people who have stopped buying games & are happy to wait until it's on Gamepass, one of my friends won't buy anything multiplatform in the first 18 months just in case it pops up on there. But he buys all the Playstation/Nintendo stuff day one.

I've picked up games after they've appeared on gamepass, Control, Disneyland Adventures, Mass Effect to name a few. Guess it just depends on a person to person basis.

There had to be a chance he's right. I have gamepass and have bought games at about the rate of when I had my PS4 but you definitely give it a second thought if you think it will come to gamepass soon.

I buy more now than I did before gp came out ,I buy a lot of games anyway and some come out on GP later and I also buy dlc to games I never would have tried before GP came out

I’ve had my Series X since Nov 2020 and haven’t bought one game for it. I have no plans to buy any in the near future. It gets played as much as my PS5 and Switch.

Difference is that with Spotify the music generally never leaves. Games, except first party and EA Play, will eventually leave GP and some people may then purchase them. Of course, they often sell DLC as well.

I'll worry about being a customer, and let MS worry about making money.

I don't buy games too often no more. I'm actually scared to because there's been a few times where I bought a game, and then it came to GP.

I believe GP IS hurting sales, and it will eventually result in devs making a lot of lame games.
But I also believe that this is the last traditional console generation (besides Nintendo probably), and the beginning of the transition into VR virtual worlds.

I have personally not bought any Series games, but that might be fine, because I got the console specifically to be GP machine. So there you go.. no story.
However, I am concerned with MS Studios and output they are providing recently.

Gamepass can hurt sales, if people are willing to wait. It can help if people are gonna buy a game after or before it leaves the service. It's all subjective to the individual. Same with $70 full price games. If it sells, good, more money. But if people are going to wait for a sale, doesn't that hurt just as much?
So, in summation gaming, now-a-days, is bad for gaming.

Spotify has this effect because historically music consumers didn’t ever feel the urge to own their misuc. Almost everyone had a few CDs, but it wasn’t really that extremely common for people to have huge folders full of CDs. Many were perfectly happy with listening to the radio.

I’d say similar about movies, since it was more common to rent them and pay for them in the theater than to buy them.

If anything, game pass is going to fill the hole that used to be serviced by blockbuster and Redbox.

Most modern games are terrible and not worth buying. You either get a copy paste sequel, a cash grab Remaster or overhyped Trash. Game Pass is the best solution for modern gaming.

People used to buy songs? lol

What's hurting some games is people are waiting to see if new games get added to gamepass within a certain time frame, and some people like me only have an xbox just for gamepass so we won't buy any games anyway so xbox sales for games will be less than the competition.

First, this guy hasn’t been part of Xbox since 2004?
I think there’s a world of difference between something being ‘destroyed’ and something being ‘changed’. I mean we all know nobody is being paid releasing on Spotify, right? I have sleepless nights over Rogans finances.
Spotify contributed to the change in how we consume music. It didn’t destroy the music business. I don’t believe anyone is forced to place their music on Spotify….which makes a safe assumption there must be benefits from doing so. This isn’t Napster in its prime sucking anybody dry. Spotify no doubt contributes hugely to getting band recognition…which in turn results in more money via more people seeing tours.
I imagine gamepass does something similar…making more people aware of a certain game meaning more people are more likely to buy dlc or invest in some way in that game. It’s just common sense…it’s a numbers game.

What I don’t buy is gamepass equals more sales of the game in full…physical or digital. I think it’s safe to say the vast majority of gamers that use gamepass play a game on gamepass and don’t then buy that game once it leaves the service. Let’s be real about that.
But then these games make money every time somebody downloads them right? As well as money upfront for being placed on the service. One would have to imagine that that’s comparable or outweighs potential physical/digital sales…which they still gain from those outside of the service. Otherwise are we to assume that all these publishers putting their games on gamepass for the last 5 or so years are idiots? …and keep coming back to the service because they’re making no money from it?
But this is again a reminder on why subscription services in particular need exclusive first party support…because that keep the subs and makes the most money. Look at how Disney+ does things and how it’s growing.

The consumption of gaming is changing…but then it’s always changing. Yes we all wish we could have those days back when games came on cassette tapes I know. But things change.

The difference is that the Music and Film industry didn't really look after the 'talent' - the Publisher makes the money whilst the Artist gets very little. A lot of artists may well suffer on Spotify but also many others who self publish actually benefit. I stopped going to the Cinema when VHS rentals were an option and stopped renting/buying any films with Sky+ (now SkyQ). I still buy CDs though...

Game Pass isn't the same as Spotify. Games can leave that service and also promote additional expenditure (like DLC, MTX, Season Passes, in game currency packs etc) so its not all about the game sales. If people are spending their time in a game they are enjoying and not already invested £50+, they are more inclined to buy extra content and/or spend their money on other games - all of which is off-setting the 'loss' of sales revenue.

For example, FH5 may of sold 4m in the first few months meaning that just '4m' are in the Forza Horizon Store and having spent a lot of money, won't be willing to buy any of the 'additional' content . However, with Game Pass, you have 20m in your 'Store' in the first week but only sell 1m due to Game Pass, more likely to buy any extra content and because they are playing in the Xbox Ecosystem, spending that money they would of on FH5, but now on Xbox Sale games, games leaving Game Pass, Indies etc - all things that bring MS money too and offsets the 3m loss of sales. Point is, Player Numbers can matter more.

Sea of Thieves would never of reached over 25m players. It most likely would of flopped without Game Pass. It may of sold 2m or so in the first few months, but as its a MP game, those people would have drifted away due to lack of players, wouldn't have bought extra content so would likely of flopped had it relied purely on Sales.

Game Pass doesn't eliminate ALL sales. It can also promote more 'sales' as people buy games they wouldn't because of GP (got to try them first, got great deals when they leave, more willing to buy extra content, discover new genres etc). Its most important factor is getting people into their store (Game) and in their ecosystem. If you are happy in the store, you are more likely to invest time and money there.

Games are a Store - selling you first on the prospect of 'entertainment', something you want to spend your time playing. Whether you have to pay an entrance fee up front or not, its still trying to sell itself to you to spend your time. If it does that, you'll pay the entrance fee and 'hope' you haven't been misled by flashy visuals and/or hype.

What Game Pass does is remove the entry fee to get you in the store, to check out the game for yourself. If the Game lives up to or exceeds expectations, you'll spend your time and money in that ecosystem. Its better to have 20m+ contented gamers in your store, spending their Time and Money in your ecosystem instead of selling 3-5m copies over a games lifetime and 'few' of those buying a lot of digital extras/games - so not spending money in 'their' store.

Most of the games that make money are the so called service games anyway.
Games Pass let's you play games you likely would never have bought and may sway you in buying the developer's next game.

This guy hasn't worked at Xbox in like 20 years lol

Didn’t a capcom report just come out regarding 2021 fiscal sales with PS at 2.8 million, switch 3.65 and xbox at only below 400k physical and from total sales only 10-15% between the big 3

Why I don't get is how Microsoft makes much money with game pass full stop as just doing the rewards every month you can easily get enough every month to never pay for it. Im all for a game service like it but I still wonder how much they are subsidising it themselves trying to get as may people to use the ecosystem and spend their money on smaller transactions rather than the games.

generally i wait till stuff comes out on gamepass play it then if i liked it buy it later when on sale with my reward points.

so yes i dont spend any money buying games on xbox

@Zenszulu it’s incentive I guess. Everything in a subscription service should be designed to keep you subscribing. Them investing in all these studios is to ensure a steady stream on content to keep you subscribing. The rewards system is the same…you keep building up points each month. Now to your point, if I do everything every day I can get gamepass effectively for free…but the people that have the time to invest doing this (regardless of how little effort you and I may consider it to be) are the minority. The majority of any consoles install base is always and has always been the casual. And the casual are far less likely to earn enough points each and every day to get gamepass free. But they may earn enough each month to amount to a free fiver or something every year…regardless of the amount it’s still used as incentive to keep using the subscription…like all the other additional perks beyond the actual games. Basically at the end of the day they gain more from offering rewards than the lose. MS is a trillion dollar company…they’re not in the business of losing money.

@Enigk thats how it has worked for me ,I will use moving out as a example ,I never heard of it before gamepass I played it ,loved it and purchased the dlc,if the game is taken off gamepass and they release more dlc I'll buy that and the game , if they release a sequal I'll buy day one if it's not on gamepass and it's dlc so the developers are earning off GP and me

Thanks to Spotify I listen to more music.

Thanks to Game Pass I play more games.

As a consumer, I’m quite happy with this setup.

It is fair to say that I buy more games on other consoles though.

I guess it depends on the game. I intend to buy all the Kiryu saga of Yakuza after playing them on Gamer Pass, but I'm not sure if I'd like to buy Like a Dragon. Game Pass helps us better judge the games we want, and that's not a bad thing.

There is some merit to what he says, but if a game releases outside of game pass that I really want then I buy it. I only wait for the games I have semi internet in to hit game pass. A lot of game pass games get announced as day one releases though so the wait and see approach is pretty small in my opinion.

You could say the same about any form of subscription service for media, be it music, movies or TV.
The reality is this is how the customer wants to enjoy their entertainment, and video games are just late to the party.

If anything, the current model of ballooning $200-300m AAA video game budgets is unsustainable in the long term as costs continue to increase, so a subscription model at least guarantees a steady revenue pool for the platform holder rather than hoping 2 or 3 exclusives a year sell 5m+ units each.

Is the music industry and the gaming industry really comparable though? That's my question.

I personally try to own all the consoles, when money lets me and I've currently got a Series S with Gamepass, now I do buy a fair few games for our 9 year old and I have supported certain games when they have left GP as I really enjoyed them.

Hades is a prime example, I would have never played that game if it was only for sale, but I've purchased it now as it fantastic and I want to support the Devs. Also I am more inclined to buy DLC and maybe even things from the shop in games (as long as it's not silly mobile priced) because I see the value in GP.

The Devs get some sort of guaranteed income from putting games on GP and then possibly added DLC/shop sales from that.

Without data on how much a game could possibly make with or without GP, and without data on games DLC and shop purchases it's a bit of a Schrodinger's cat situation. I'm not sure anyone can say with complete certainly that game X would or would not make more/less money by going with/not going with GP.

Also I am presuming a certain amount of advertising is done by MS in the form of front page exposure and GP quests that link to a game as well, which I imagine a smaller game like Stellaris or Hades might not be able to muster. I can't imagine a small studio being able to muscle in on a prime bit of land like the front page of Xbox when it's against Ubisoft, EA, Rockstar etc

The main key difference here is that Spotify gives you basically the entire industry's catalog of music, forever, just for subscribing, so the single $10/mo fee is the only fee you'll ever pay for music. Ever.

Game Pass only has a selection of games and they're only there for a finite time, meaning playing anything else requires purchasing. (Except first party, but the first party catalog as the cost of operating the service and pulling subscribers is an expected cost of operations.)

So there's a very different customer relationship there.

OTOH I'm not sure "Spotify cut the music industry's revenue in half" is quite accurate a look, either. It assumes there was not going to be a shift or correction in consumer spending away from music, or that music sales were not at a particular spike at the time of comparison. We were shifting from physical album sales to digital music in general, which alone reduced the price of albums substantially (thus cutting revenue heavily) spearheaded with the success of the iPod and the early "mp3 revolution", but didn't necessarily cut profits as much, because it cut out the record store middleman. But that also cut the total industry revenue but cutting out the retail middleman. The rise of portable audio also caused a surge in music sales because portable music collections beyond a single mixtape from the 80's became a new hot thing. A surge that likely would not have lasted forever as the shift from buying physical to digital media and the end of the Walkman idea of portable music would have closed, and in that time, additional services and activities arrived, like portable video on phones, games on phones, etc that would have siphoned revenue from the music industry to other industries causing a net decline.

Spotify may have hurt music sales somewhat, but not to the first glace extremes. OTOH it also cause a lot of people to subscribe to music services they pay for monthly because it's "just $10" , where they might not have spent on music at all those months.....

Games are expensive and before gamepass I'd wait for heavy discounts and/or buy second hand. I'd definitely play a lot less games if it wasn't for Gamepass and i would definitely not play as many genres and Indies. So yeah i buy less than i used to but then I was buying it in a manner that the devs didn't see any money from me...so they are getting a bigger cut from me now actually.

But did it really destroy the music business? Less revenue for the industry as a whole, and less money for really big artists that made millions upon millions upon millions of dollars, but now that wealth has been distributed and trickled downward to people who would never otherwise have a chance of being discovered or getting their work out there. I cringe to think about all the incredible artists that we had in the early 2000's, 90s, and before, that never got the chance to have their work discovered because they didn't know the right people in Hollywood or they simply didn't have the money for production and distribution. Think about all the incredible music that we missed out on, some of it potentially as good as or better than any of the big artists from yesterday. Very sad to think about the incredible work we've missed out on from potentially great artists that were never given a chance to shine. Now they can. Sure, they probably get a one lump sum to have their work on Spotify and other services, but they can at least grow from that and at least have a chance to even see if there is an audience for their creative work.

It's the same with something like Game Pass. If it weren't for GP, some of these games would basically never see the light of day and may potentially earn nothing at all for all that work. Now they at least have a chance. It's not the best choice for everyone, but it's a very, very good choice for many that don't have big studios and publishers, a big name, or that don't know certain people to propel them forward. People seriously need to stop bitching about GP because it's simply another option. You CAN still buy games. You can buy any game that is on GP, and even for a discount. You don't have to sub GP, or Spotify, or Netflix, or any of it. Just make the choice not to and stop bitching about these services because there is someone out there that has given us an incredible experience at some point, and it was only made possible because of such services.

I have stopped buying xbox games due to gamepass but if I really enjoyed a game I will usually buy it on switch. Game pass is a fantastic rental service.

I bought Death’s Door and Mortal Shell and not long after doing so both found their way onto Game Pass. Buying recent indies on Xbox often feels like a fairly risky gamble these days.

At least I finished DD before it was added to GP (really great game btw) so not too bothered about that one. I tried to get into MS but really struggled to adjust to the combat flow (which somehow feels very different to FromSoftware titles) and fell off the game, so it was banished to backlog purgatory - perfect example of a game where I really should’ve held off buying until it came onto GP.

Game Pass is great. I haven’t bought a single Xbox game since Forza 7. I used to buy around 30+ (Physical and Digital) Xbox games a year. Game Pass has saved me an absolute fortune.

This guy absolutely gets it.
I don't care if there's a few people who may buy more games as a result, its quite clear they are a very small minority of people. Overall a service like Gamespass will reduce sales of titles. Lets not pretend that's not why we like it. Its clearly a money saver for most, and that's money we would have spent on the business otherwise.
I've not bought a single game on my series x, not one, and I think its pretty unlikely I'll spend a single penny on software for it during its lifetime. My situation will not be unique and for many people the whole point was to get free games.

@Tharsman
That's interesting. It's the complete opposite of my experience in the 80s, 90s, and early 00s.
I could not even think of a single person that didn't own at least 20 CDs or tapes. Everyone wanted to own their own music. Trading CDs, finding new bands, or bootlegs etc was something that the vast majority of people did.
Sure we recorded some songs off the radio. But singles weren't albums, and people cared about albums.
My father had a CD and LP collection that was in the hundreds, probably closer to a thousand.
Everyone freaked out by the size of it. But everyone and their parents had their own collection at home.
It wasn't until the early 2000s until music became so easy to find and steal that people didn't "care" about owning their own music.

@themightyant
Thanks.
It was a sweeping statement and implied that overall that's how I see it, but I will readily concede that for a smaller indie title, it can be the exposure that drives real sales.

It's one GP's great strengths that it often highlights over looked titles which may have struggled to find their market without GP exposure, and its one of the reasons I support the service. You have provided some excellent examples.

However, there's no question that on pure spending terms across all titles, I'm definitely spending less (zero), and this is true of those players I know who use Xbox. I don't have any friends on Xbox who have bought any games. I've never been able to say that about any console in the past, but GP is a new way to consume I guess.

I still spend elsewhere on games of course (I don't mind £70 for a top AAA), but overall my spending on games has gone down since GP, which is no surprise as its one of the main attractions!

I've long wondered if it will be good for the industry and there no definitive answer of that, except to say its a business model that wont disappear, and with Sony's revamped PSN its a model we are likely to see more of for the future.

@themightyant Very true - you’re speaking to someone who had a windows phone!
I should have reworded it as “MS is a trillion dollar company…they’re not in the business of giving away free money for a loss” in reference to the Xbox rewards scheme…the amount they gain from it out ways how much they may lose from the gamers that fully take advantage of it. It’s a great incentive.

But yeah, there’s been many ventures MS has lost money in. Not many of the failed ones have lasted longer than Xbox already has though. And I don’t think any of them had the investment Xbox and gamepass has had. MS aren’t just testing the waters with gaming anymore…they’re all in.
I don’t know if gamepass is making them profit yet… I don’t think it’s taking such a loss that questions over it being sustainable are valid yet either though. I think gamepass and Xbox are in a far better place today than they were only 4 years back. And they keep investing…so you have to assume they still see potential growth there. Unless they have no big games actually come out this gen…or they all fall way short…I think growth in gamepass is almost guaranteed.

Once I've had a chance to play things on game pass, some I'll buy when they leave because the game pass gave me a taste lol. However I'm not happy with game pass so far this year tbh. Rainbow six extraction, and the up and coming Sniper elite 5 and AC origins are the only decent games so far this year, and we're pretty much half way through 2022. Plenty of 2D games and pixelated metroidvania but why when I'm on Series X? For the first time in a long time I'm not resubscribing until they sort it out.

@themightyant yeah I’ve been spending less money on Xbox than I did this time last gen on Xbox one - but then Xbox one had more exclusives at this point I couldn’t play anywhere else.
Thing is, we’re not who MS is going after. Casual gamers are who Xbox want…and they’ll probably end up spending a lot more on gamepass subs throughout the generation than they would have for the handful of games they’d get.
Monetisation though is also going to be a big part of it. Games like Fortnite are no longer behind a pay wall (you can bet Xbox loved we didn’t push for f2p games actually being free for years)… so they can’t get away with gaining subs on the back of those. Instead they will probably shoehorn in more microtransactions in games that are on the service. Invest more in games as a service (like Sony are doing) so they can add monetisation.
I can imagine them one day getting to a point where ads creep into the service too before games. In fact, maybe they should go full Spotify then…offer a free gamepass model where ads are placed before games. Not something I’d personally want.

So many unknowns about how things will turn out is why I don’t worry myself about how sustainable something is. Right now are the golden years where they all fight for our money again and offer us great deals. Just enjoy that for now. If subscription services die they’ll still be games. If subs succeed we’ll ultimately vote with our wallets. Hopefully we won’t be so slow to react if things do start taking the piss though like we were with F2P behind paywalls. And continue to be with multiplayer behind paywalls.

@Fishticon VR worlds. Yeah that’s just not going to happen. VR will always be niche. We will see more digital but consoles are not going anywhere for a long time yet. Every time something new appear people panic. It happened with 3D glasses. Died a death. VR is fine but not mass market.

Right now GamePass is awesome. Why would I spend money if I don’t have to. It certainly won’t hurt the industry as a whole - that’s just nonsense. Nintendo sales are still sky high and their physical sales are not slowing down. It MAY affect Xbox at some stage but that’s what their execs are paid to deal with. All I see right now is great games being accessible to even more people. How is that bad? It’s not.

Also, GamePass is nothing like Spotify. Spotify don’t pay artists. Well they do but is pennies. That is why it has killed a lot of the business and why many have started to take their music off the service. It’s basically like piracy. Anyone who has Spotify has no understanding of the music business at all.

Xbox are still paying devs and publishers their rightful money and therefore the comparison is totally misguided and just another big wig trying to scaremonger when it’s not needed. Microsoft have plenty of reserves and they can afford to operate this model. It’s why devs want their games on the service and the impact on physical sales is minimal if anything at all.

GamePass is consumer friendly and it just means people try before they buy rather than not but at all and that is a big difference in this issue.

@themightyant The one big concern is that Xbox push gamepass as a ‘play anywhere’ service… with clear efforts to make games more mobile phone friendly. Mobile gaming I think it’s been reported there’s a lot more money in than console gaming. And I wouldn’t be surprised if that also translates to more people play mobile games than games on traditional hardware. Xbox will ultimately go where the money is. And if we’re voting with our wallet (as a majority) and we’re putting more money into mobile via gamepass…guess where gamepass’ focus ends up going…and what comes with mobile games…
It’s not just MS that wants to make moves in mobile. Sony will too. But regardless of how big mobile focused games are we’ll still get AAA sp focused games…I can just see them being offered less… I mean we’re already seeing them offered less often really.

But that’s a fear mongering future. Right now MS should look at how Disney + has been growing their subscription. That’s growing. Offering new releases day 1. Investing in a steady stream of new content. Taking full advantage of their acquisitions.

@Zenszulu I'm pretty sure that the vast majority of folks still don't know about MS rewards and don't care to use them. I am also just using my points for extra GPU time but i get a lot less point's than folks in the US or UK. And some parts don't have MS Rewards. But them getting you into the ecosystem and having that MTX/DLC revenue is be what it's all about. Was it Ubisoft or someone else that reported 71% of their revenue was MTX vs game sales. I feel like gamepass will actually save a lot of the games we love from disappearing into the GAAS model everyone is chasing.

@themightyant One difference Game Pass has vs Groove, Zune, Mixer, WinPhone, etc is it actually has public interest and customer interaction. Those other services failed from the start to gain any actual traction. They were always a niche along side the actual main industry they were in and were never a major player in their market. Game Pass is dead-center right now. Very different scenario. Winning mindshare is more or less the only game in these product expansions, be it services like Groove vs Spotify or products like Zune and Winphone vs iPod and Android.