Former Senior Public Relations Manager at Microsoft on how Game Pass and the Activision acquisition hurt smaller games and studios at Microsoft

[Quad Damage 1,763]

https://www.linkedin.com/posts/bradhilderbrand_there-are-two-reasons-why-all-those-bethesda-activity-7193668143305670657-wUSw

 

"There are two reasons why all those Bethesda studios closed, and neither of them have anything to do with Bethesda (directly)...

Game Pass and Activision.

The biggest paradox with Game Pass is that basically every game that launches on the service badly misses its sales goals. Makes sense though, why pay full price to buy a game when you can play it for "free" as part of your subscription? This is accounted for somewhat by attributing portions of revenue to top-performing Game Pass games every month, but there are factors working against games. Namely, the fact that most games don't stay at the top of the chart for more than a month or two, and also that Game Pass growth has stagnated. So games like Hi-Fi Rush, which is incredible mind you, gets a very small bump in revenue from being the hot Game Pass game for a month, then it falls off a cliff when everyone moves onto the next thing. Poor Redfall had it even worse since it launched so rough, it never had a chance.

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.

But, all that wouldn't have mattered even 3 or 4 years ago because back then Xbox was basically a rounding error on Microsoft's books. The division made some money, but more importantly, it didn't cost that much and other parts of the business easily covered the gap. Then Xbox went on a buying spree and spent a lot of money on Bethesda, but orders of magnitude more on Activision. Now, the Eye of Sauron has turned, and Xbox is expected to start making that $70B back, or at least cut expenses to the bone (and then some) while they try.

That brings us back to Game Pass. So far, the big bets on driving new subscriptions (Redfall, Starfield) haven't spurred near enough growth, and there's not much on the horizon that is likely to restart the momentum. The best bet is COD, but do you really risk the guaranteed sales revenue that franchise brings by putting it on Game Pass on Day 1 and potentially lose massive sales? I don't know what the plans are, but either you put it on Game Pass and lose money, or you don't and the subscribers revolt because they think that's what they signed up for.

COD will be fine though, as will the other mega-studios with huge IPs, 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 like Hi-Fi Rush are, they're never going to make enough money to make up that $70B hole that Xbox now has to dig itself out of."

 

 

for anyone still in doubt, yes, the two things xbox fans were repping hard - game pass and acquisitions - ultimately killed xbox  

[Nightshade79 23]

How much are they gonna have to spend to figure out the right move with COD on GamePass. It seems like a lose-lose situation.