Kill the console
Protocol
June 11, 2021
Few business models are more lucrative than recurring monthly subscriptions, and yet the video game industry has resisted them for decades. Since 2017, Microsoft has harbored ambitions to change that with Xbox Game Pass, an all-you-can-play software library launched that year that costs between $10 and $15 a month and features more than 300 games.
Game Pass wasn't the first subscription service in gaming; we've had individual game subscriptions since the '90s, and newer models like seasonal battle passes have popularized recurring in-app purchases. But Game Pass has become the most ambitious model to date and the closest to a true "Netflix for gaming." And it's about to become a whole lot more accessible.
Microsoft announced major expansion plans for Xbox Game Pass yesterday that promise to bring that all-you-can-play game library to many more screens.
Microsoft says it's working with device manufacturers to build Game Pass directly into smart TVs, so the subscription service can be accessible with just a controller, no extra hardware required.Even more ambitious are the company's plans to build its own streaming devices, perhaps similar to Google's Chromecast or the Apple TV, that could also enable access to Game Pass with just a controller.
The cloud is the center of this vision, in particular Microsoft's existing yet still-in-beta cloud gaming platform previously known as xCloud. Less powerful hardware, like streaming set-top boxes and smart TVs, would require the cloud to stream console-quality games.
Now called simply Xbox Cloud Gaming, Microsoft's cloud gaming platform is available on Android phones, the iPhone and iPad, and web browsers to select subscribers of Microsoft's $15 Game Pass plan.Microsoft is planning to expand access to the web browser version of Game Pass to all Ultimate plan customers in the coming weeks. Cloud gaming is also launching in new countries later this year, including Australia, Brazil, Mexico and Japan.Microsoft says it's updating the data centers that power the cloud gaming service with new Xbox Series X hardware to improve performance. It's also launching a version of the service within the Xbox app on PC and on its consoles to make it easier to try games instantly before a player decides either to download or buy them.
Microsoft could fundamentally change the gaming market with an Xbox business oriented around Game Pass, ushering in the kind of paradigm shift that subscription streaming services like Netflix and Spotify brought to the TV and music industries. But only if Microsoft succeeds in convincing gamers to come aboard.
Xbox games could conceivably become accessible from almost any screen, anywhere, at any time. The approach, and a shift in its business model, could also reduce Microsoft's need to compete directly against Sony's PlayStation or the Nintendo Switch.Microsoft hopes its position in the cloud computing, gaming and desktop operating system sectors make it uniquely capable at delivering a streaming subscription platform and product experience of this scale where others, like Google Stadia, have struggled.A key selling point of Game Pass will be access to Microsoft's first-party games, including Halo: Infinite and new games from its Bethesda subsidiary, the day they release, for no extra cost. Microsoft is expected to reveal more about its upcoming releases Sunday during its E3 2021 showcase.
Microsoft doesn't have an easy road ahead of it. It's not clear what the long-term effects of its subscription push will mean for funding blockbuster games, and whether the economics of the industry can sustain such a model without widespread adoption from other publishers. It's also not a given that most consumers even want a game industry dominated by yet more subscription services. But Microsoft is gambling the future of Xbox on this vision of the future, and on ensuring it gets there first.
— Nick Statt ( email | twitter)
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