Support NeoGAF

[onQ123]

Ahead of our interview with ID@Xbox director Chris Charla, we asked a few independent developers and publishers how they were feeling about Xbox.

The responses were largely very positive. The ID@Xbox programme – now celebrating its tenth anniversary – continues to be a success, and teams had nothing but good things to say about how Xbox works with them. But, as you'd expect, there were a few questions and concerns. And every single one of those was about one thing: Game Pass.

"Business people being worried about the direction of the business is a perfectly normal, natural, and healthy thing," Charla tells us during last week's Game Developer Conference..

"When free-to-play came to consoles, there were a lot of people who thought this was going to completely change everything, every game will become free-to-play and nobody will be able to get people to purchase a video game again. But that's not what happened. But were those concerns valid, rational, normal, and healthy? Absolutely. It is all our jobs in the games industry to take those concerns seriously, to think about them, and work together to make the industry work."

Charla says that concerns over subscriptions and how it might disrupt the games business isn't something that Xbox is seeing in its data.

"I wouldn't describe it as disruptive, because I don't think it is in the way that like Uber came in and got rid of all the taxis in that industry," Charla tells us.

"People still buy a lot of games and they still buy a lot of games on Xbox"

"It's additive. People still buy a lot of games and they still buy a lot of games on Xbox. They buy games through Game Pass at a discount, which is what they get as members. And so I don't think Game Pass has been a disruptive business model, it's been additive in a really positive way. And we as an industry needs to look at more of those additive business models. A bit like digital distribution, that may have been somewhat disruptive to the retail space, but it was ultimately additive because not every game needed to be of the size to justify being on a disc."

The introduction of digital downloading is an interesting comparison, because turn back the clock 15 years, and the argument was that digital was additive to the traditional retail business. Back then, most players bought games in boxes, so if there was suddenly a lot of talk and excitement around a specific game – perhaps because of a digital promotion, or the introduction of some DLC – it would result in a sales bump at physical retail.

That all changed when digital downloading started to accelerate and took a larger share of the market. So although Game Pass may be additive right now, is Charla convinced that will remain the case in the future?

"I do think it will," he says. "We see Game Pass players play more games, engage with more games in more genres than they've ever engaged with. Those kind-of metrics is what we saw at the beginning of Game Pass, and every time we look we still see it. So yeah, I remain super hopeful about it. When we see developers coming to us and talking to us about second, third, fourth and fifth games in Game Pass, it's clearly working for them. That's good extrinsic validation about the value of the programme."

https://www.gamesindustry.biz/xboxs-chris-charla-game-pass-isnt-disruptive

 

[feynoob]

Any new business idea is disruptive to the old ritual business.
The dvd was disruptive to the cartridge business, same with how digital market is disruptive to the physical market.

This is nothing new. Its just indication of market change.

 

[Ozzy Onya A2Z]

I think transformative is a better word for it than additive. The metrics in recent years and developers going back for seconds, thirds and more game releases through those programs and Game Pass is enough proof of the pudding.

"We see Game Pass players play more games, engage with more games in more genres than they've ever engaged with. Those kind-of metrics is what we saw at the beginning of Game Pass, and every time we look we still see it. So yeah, I remain super hopeful about it. When we see developers coming to us and talking to us about second, third, fourth and fifth games in Game Pass, it's clearly working for them. That's good extrinsic validation about the value of the programme."

This part rings true for me, and it rings true for both my kids (boy and girl). We've played more, installed more to give them a go (also uninstalled what we don't like) and purchased more games/add-ons/MTX because we're able to play much more in front of us. It's a family ritual to browse the newest releases for GP and play then share them with each other. It doesn't matter if single player, coop or PvP; good games get played and bought and shared. If GP keeps a game free we stick with that mostly, there are exceptions where we want to buy them early with discount usually anyhow. If a game is removed from GP we liked we buy it after the fact at a heavier discount. If we like a game we often buy expansions or content for it.

 

[Three]

"When free-to-play came to consoles, there were a lot of people who thought this was going to completely change everything, every game will become free-to-play and nobody will be able to get people to purchase a video game again. But that's not what happened. But were those concerns valid, rational, normal, and healthy? Absolutely. It is all our jobs in the games industry to take those concerns seriously, to think about them, and work together to make the industry work."

Not sure I buy what Chris is saying here. It absolutely was disruptive. It's why Apex legends happened and not a new Titanfall. f2ps monetisation was also why we got no new GTA for an entire gen, it was why Rare developed one GaaS game and nothing else since 2015. Did it kill ALL game sales, not really, but it was completely disruptive to studio output.

 

[DenchDeckard]

Game Pass is great and I'll let the suits worry about how it's sustained. If it doesn't work it dies....

Simple

 

[Tangerine]

The word disruptive has a negative connotation amongst most I'd imagine.

In the business sense of the word it is disruptive and that's business.

 

[Topher]

Game Pass isn't disruptive. Microsoft doesn't expect Game Pass to go beyond 15% of its overall game revenue. So most gamers are still inclined to buy games even on Xbox. Microsoft has added a revenue stream with a subscription service. So has Sony. Don't see how any of it would be called disruptive.

 

[Gaelyon]

Didn't Microsoft admit in a recent document provided for the ABK deal that Gamepass was impacting games sales ?

 

[Varteras]

I think transformative is a better word for it than additive. The metrics in recent years and developers going back for seconds, thirds and more game releases through those programs and Game Pass is enough proof of the pudding.



This part rings true for me, and it rings true for both my kids (boy and girl). We've played more, installed more to give them a go (also uninstalled what we don't like) and purchased more games/add-ons/MTX because we're able to play much more in front of us. It's a family ritual to browse the newest releases for GP and play then share them with each other. It doesn't matter if single player, coop or PvP; good games get played and bought and shared. If GP keeps a game free we stick with that mostly, there are exceptions where we want to buy them early with discount usually anyhow. If a game is removed from GP we liked we buy it after the fact at a heavier discount. If we like a game we often buy expansions or content for it.

I do the same thing and my buddy does it on PS+. I have concerns about how sub services will impact game development in the future, but they are a fantastic way to play games I wouldn't have bothered with and discover things I like. I would have NEVER bought A Plague Tale. But I saw it on PS+ and gave it a shot. I really enjoyed it.

 

[Topher]

Didn't Microsoft admit in a recent document provided for the ABK deal that Gamepass was impacting games sales ?

They said something like that, but for them I think it doesn't really matter since they are shifting revenue from sales to subs. The long term vision for Game Pass is streaming which would widen that revenue stream greatly. Whether or not streaming takes hold with consumers is another question.

 

[Three]

Game Pass isn't disruptive. Microsoft doesn't expect Game Pass to go beyond 15% of its overall game revenue. So most gamers are still inclined to buy games even on Xbox. Microsoft has added a revenue stream with a subscription service. So has Sony. Don't see how any of it would be called disruptive.

The 15% wouldn't tell you much if a great deal of the remaining 85% happens to be hardware, or mtx and DLC from f2p and gamepass. It can still disrupt game sales.

 

[Bo_Hazem]

Since PS Plus Premium/Extra, I rarely buy non-Sony games. So yes, it's disruptive.

 

[jumpship]

They said something like that, but for them I think it doesn't really matter since they are shifting revenue from sales to subs. The long term vision for Game Pass is streaming which would widen that revenue stream greatly. Whether or not streaming takes hold with consumers is another question.

Isn't that the point though. MS shifting revenue from sales to subs + buying publishers one by one = eventual market disruption. With enough publisher buy-outs they could flip the market to a sub model. The change in consumer behaviour could make it very difficult for companies still demanding full price sales.

 

[Topher]

Isn't that the point though. MS shifting revenue from sales to subs + buying publishers one by one = eventual market disruption. With enough publisher buy-outs they could flip the market to a sub model. The change in consumer behaviour could make it very difficult for companies still demanding full price sales.

lol....well, if you throw corporation consolidation into the mix then yeah, we are definitely talking about disruption now.

 

[Punished Miku]

Since PS Plus Premium/Extra, I rarely buy non-Sony games. So yes, it's disruptive.

GP also disrupted nearly every thread on here for years.

 

[jumpship]

lol....well, if you throw corporation consolidation into the mix then yeah, we are definitely talking about disruption now.

Yeah in isolation its fine, but has the potential to be very disruptive.

 

[reinking]

My anecdotal evidence, my XBSX is a Game Pass machine. I primarily play on PC/PS5 and do not expect to purchase a game on the XBSX. I will buy an expansion if one comes along that I am interested in but I feel I have no reason to buy a game if it is on Game Pass. Why would I pay twice to play the same game?

 

[Sony]

Game Pass is great and I'll let the suits worry about how it's sustained. If it doesn't work it dies....

Simple

Preach.
"I'm getting great value but it the business model doesn't make sense and they're all lying about their returns!!!!!!"

 

[diffusionx]

The subscription business is massively overblown. Look at the tv/movie services. Netflix is doing the equivalent of searching under the sofa for loose change to boost revenue, the CEO of Disney is all but admitting that it’s a disaster business, HBO is taking HBO content off the HBO service to avoid royalties, and the rest are frantically looking for a merger that will never come. This business SUCKS and it sucks because in the end, a business is built on the ability to actually make AND sell something. The entire streaming thing was predicated on the idea that sales are irrelevant and they’re not. They are only relevant in a world of zero interest rates and endless free money from uncle sucker.

 

[j.k.2021]

Game pass is a blessing for gaming devs. who don't own big popular games.For example, A Plague Tale: Requiem would be a total flop if not for game pass.It's also a blessing for gamers who can't afford to pay $70 per game.

 

[j.k.2021]

Didn't Microsoft admit in a recent document provided for the ABK deal that Gamepass was impacting games sales ?

Game pass games losing sales is obvious.Else, What would be the point of game pass?...Those devs. who support game pass gets handsomely rewarded for that.

 

[Gaelyon]

Game pass games losing sales is obvious.Else, What would be the point of game pass?...Those devs. who support game pass gets handsomely rewarded for that.

Handsomely rewarded.. by Microsoft who spend the money earned by subscriptions to compensate TP devs, and then put day one their FP games cutting down sales revenues despite ever increasing cost for game dev.
That spiral can only be sustained long term by a strong continuous rise of subscriptions number, but when X-box consoles sale is not that good it's a problem. So MS take the loss thanks to its deep pockets and that's why there's many questions about the viabillity of this strategy.

 

[EverydayBeast]

Xbox thinks game pass will be natural and you won’t need to buy games full price anymore.

 

[j.k.2021]

Handsomely rewarded.. by Microsoft who spend the money earned by subscriptions to compensate TP devs, and then put day one their FP games cutting down sales revenues despite ever increasing cost for game dev.
That spiral can only be sustained long term by a strong continuous rise of subscriptions number, but when X-box consoles sale is not that good it's a problem. So MS take the loss thanks to its deep pockets and that's why there's many questions about the viabillity of this strategy.

Has Microsoft put a gun to their head?....It's been five years since game pass launched.I am sure devs. know what's beneficial to them by now than random people on internet.What you people don't realize is that not every game will sell in big numbers.For example, A Plague Tale: Requiem would have been a total flop if not for game pass launch.Game pass is pretty much saving these studios.

 

[Heisenberg007]

Has Microsoft put a gun to their head?....It's been five years since game pass launched.I am sure devs. know what's beneficial to them by now than random people on internet.What you people don't realize is that not every game will sell in big numbers.For example, A Plague Tale: Requiem would have been a total flop if not for game pass launch.Game pass is pretty much saving these studios.

Why do you keep saying that?

Why would have Plague Tale Requiem failed? A good game will find success more often than not.

And Plague Tale Requiem only got 1 million players despite being on Game Pass that apparently has more than 25 million subscribers. This 1 million player count includes Xbox, PC, and PlayStation sales.

So, really, how did a Game Pass launch save Plague Tale Requiem when less than 3% of Game Pass subscribers launch the game?

 

[j.k.2021]

Why do you keep saying that?

Why would have Plague Tale Requiem failed? A good game will find success more often than not.

And Plague Tale Requiem only got 1 million players despite being on Game Pass that apparently has more than 25 million subscribers. This 1 million player count includes Xbox, PC, and PlayStation sales.

So, really, how did a Game Pass launch save Plague Tale Requiem when less than 3% of Game Pass subscribers launch the game?

Plague Tale Requiem only reached 4,927 concurrent players on steam.That's pathetic for a big release like that which received great reception.It also did worse than Forspoken on PlayStation charts.

Game pass player count is irrelevant as Microsoft is ready to pay guaranteed money to devs. for game pass support.If not for game pass release then the studio would be in big financial trouble.

 

[Gaelyon]

Has Microsoft put a gun to their head?....It's been five years since game pass launched.I am sure devs. know what's beneficial to them by now than random people on internet.What you people don't realize is that not every game will sell in big numbers.For example, A Plague Tale: Requiem would have been a total flop if not for game pass launch.Game pass is pretty much saving these studios.

That's funny you keep taking A plague Tale Requiem as a good example of an Indie bless by GP. No, Asobo's A Plague Tale wasn't save by Gamepass. I live at Bordeaux where Asobo is, I know a dev as a 30 years old friend (we plays D&D together at my home), and I can attest that while MS and Asobo have a great relationship A Plague Tale was Ok without GP but MS did offer lots of money. Also for info they're not for sale either. They have a 10 year contract with MS for Flight Simulator 2020 service dev. with a 250 people team on it (A Plague Tale is about 70 persons).

 

[MacReady13]

The subscription business is massively overblown. Look at the tv/movie services. Netflix is doing the equivalent of searching under the sofa for loose change to boost revenue, the CEO of Disney is all but admitting that it’s a disaster business, HBO is taking HBO content off the HBO service to avoid royalties, and the rest are frantically looking for a merger that will never come. This business SUCKS and it sucks because in the end, a business is built on the ability to actually make AND sell something. The entire streaming thing was predicated on the idea that sales are irrelevant and they’re not. They are only relevant in a world of zero interest rates and endless free money from uncle sucker.

Exactly. Why is this so hard to understand? Short term it is fine for people to play "free" games but long term? You just watch if it takes over and then you'll suffer the consequences of having to have "content" to keep people paying monthly. It's happening now with TV sub services and the quality is largely awful.

 

[DenchDeckard]

Why do you keep saying that?

Why would have Plague Tale Requiem failed? A good game will find success more often than not.

And Plague Tale Requiem only got 1 million players despite being on Game Pass that apparently has more than 25 million subscribers. This 1 million player count includes Xbox, PC, and PlayStation sales.

So, really, how did a Game Pass launch save Plague Tale Requiem when less than 3% of Game Pass subscribers launch the game?

Maybe becuase they got paid by Microsoft for the game, and more players did play it than would have done if it was purchase only?

I could see that being the case.

 

[Topher]

Plague Tale Requiem only reached 4,927 concurrent players on steam.That's pathetic for a big release like that which received great reception.It also did worse than Forspoken on PlayStation charts.

Game pass player count is irrelevant as Microsoft is ready to pay guaranteed money to devs. for game pass support.If not for game pass release then the studio would be in big financial trouble.

Plague Tale R sold a million copies in its first month. For a full priced indie game, that's damn good.

 

[Bumblebeetuna]

Exactly. Why is this so hard to understand? Short term it is fine for people to play "free" games but long term? You just watch if it takes over and then you'll suffer the consequences of having to have "content" to keep people paying monthly. It's happening now with TV sub services and the quality is largely awful.

MS still sells Xbox games outside of GamePass and have said repeatedly that the majority of their revenue will come that way. It’s completely different than the video streaming services you mention, especially Netflix.

If GamePass fails in a business sense, MS can kill it and just sell games the normal way. If Netflix or Hulu or HBO Max fails, that’s the entire business for those ventures.

 

[Topher]

Maybe becuase they got paid by Microsoft for the game, and more players did play it than would have done if it was purchase only?

I could see that being the case.

Clearly they made more money going the Game Pass route, but saying it would have been a total flop without Game Pass has no merit to it. The game sold well.

 

[DenchDeckard]

Exactly. Why is this so hard to understand? Short term it is fine for people to play "free" games but long term? You just watch if it takes over and then you'll suffer the consequences of having to have "content" to keep people paying monthly. It's happening now with TV sub services and the quality is largely awful.

I've never really watched that much TV but thanks to streaming services I've seen some of the best content in years.

I would love for gaming to be able to deliver experiences like severance, succession and so many more. I think we need shorter dev times and more daring content. Everything is sequels or licensed stuff so let's try it out.... I think it could end up being awesome.

 

[diffusionx]

Has Microsoft put a gun to their head?....It's been five years since game pass launched.I am sure devs. know what's beneficial to them by now than random people on internet.What you people don't realize is that not every game will sell in big numbers.For example, A Plague Tale: Requiem would have been a total flop if not for game pass launch.Game pass is pretty much saving these studios.

If true then the people who made that game made a deal with the devil. The path to a sustainable prosperous business is, again, being able to make something then sell that thing. Not attach yourself to a giant company’s current strategy like a barnacle on a ship, where they write you a check based on God knows what. What if MS decides they are done with GP? Then those devs are screwed because they can’t read the market and make a game for it. It’s a disaster. If plague tale can’t stand on its own two feet then the devs are wasting their time and effort making plague tale, period.

Obviously this is a problem for game devs since the beginning of the industry but GP is no more a solution than say selling your company to EA.

 

[Heisenberg007]

Plague Tale Requiem only reached 4,927 concurrent players on steam.That's pathetic for a big release like that which received great reception.It also did worse than Forspoken on PlayStation charts.

Game pass player count is irrelevant as Microsoft is ready to pay guaranteed money to devs. for game pass support.If not for game pass release then the studio would be in big financial trouble.

You're making huge assumptions with no basis, though.

Do you know the amount Microsoft paid to Asobo for Game Pass deal? Do you know if they offered lump sum amount or was the deal about per download?

Because if it were the latter, the deal would not have done anything notable for Asobo in terms of revenue.

 

[ChorizoPicozo]

Xbox PR suuuccccks


i remember Nadella (or another MS/xbox executive) saying basically the opposite

 

[fermcr]

If Gamepass isn't profitable, Microsoft will simply cancel/change it and move on.
As a PC gamer, I like Gamepass. In the next year some interesting games will launch on the service.

 

[MacReady13]

My anecdotal evidence, my XBSX is a Game Pass machine. I primarily play on PC/PS5 and do not expect to purchase a game on the XBSX. I will buy an expansion if one comes along that I am interested in but I feel I have no reason to buy a game if it is on Game Pass. Why would I pay twice to play the same game?

And this is the potential future of gaming if all these companies decide that sub services are the way of the future...

 

[j.k.2021]

You're making huge assumptions with no basis, though.

Do you know the amount Microsoft paid to Asobo for Game Pass deal? Do you know if they offered lump sum amount or was the deal about per download?

Because if it were the latter, the deal would not have done anything notable for Asobo in terms of revenue.

They paid enough that Asobo wouldn't go out of the business after that big of a flop.

 

[oldergamer]

I wouldn't say dvd was disruptive to cartridge in in the same way iPhone was disruptive to cellphones

 

[Topher]

They paid enough that Asobo wouldn't go out of the business after that big of a flop.

The company wouldn't have gone out of business regardless. A million sold is better than most games developed by companies this size. In no way was the game a flop, with or without Game Pass.

 

[MacReady13]

MS still sells Xbox games outside of GamePass and have said repeatedly that the majority of their revenue will come that way. It’s completely different than the video streaming services you mention, especially Netflix.

If GamePass fails in a business sense, MS can kill it and just sell games the normal way. If Netflix or Hulu or HBO Max fails, that’s the entire business for those ventures.

They seem to be not only advertising plenty for game pass but putting a tonne of effort into making sure everyone knows that not only are games releasing on Xbox and PC but for some strange reason they're releasing ON game pass as well... almost like it's a separate platform!

 

[j.k.2021]

The company wouldn't have gone out of business regardless. A million sold is better than most games developed by companies this size. In no way was the game a flop, with or without Game Pass.

Asobo is from from a small studio.They have 260 employees on just LinkedIn.A million sold is a disaster when you consider 30% cut and the high production it had.It definitely cost big.

 

[ChorizoPicozo]

I asked my babe A.I.

Q:
did Nadella or any other MS or Xbox executive ever said something about Game Pass being disruptive?

A:
Yes, Satya Nadella, the CEO of Microsoft, has described Game Pass as a "disruptive force" in the gaming industry. In an earnings call in July 2021, Nadella stated that Game Pass is "changing how people discover, connect and play games" and that it has "become a real cultural phenomenon."

In addition to Nadella, other Microsoft executives have also acknowledged Game Pass's disruptive potential. Phil Spencer, the head of Xbox, has described Game Pass as a "game changer" and a "new business model for games," while Matt Booty, the head of Xbox Game Studios, has called it a "disruptive force" that is transforming the way people play games.

 

[j.k.2021]

I asked my babe A.I.

Q:
did Nadella or any other MS or Xbox executive ever said something about Game Pass being disruptive?

A:
Yes, Satya Nadella, the CEO of Microsoft, has described Game Pass as a "disruptive force" in the gaming industry. In an earnings call in July 2021, Nadella stated that Game Pass is "changing how people discover, connect and play games" and that it has "become a real cultural phenomenon."

In addition to Nadella, other Microsoft executives have also acknowledged Game Pass's disruptive potential. Phil Spencer, the head of Xbox, has described Game Pass as a "game changer" and a "new business model for games," while Matt Booty, the head of Xbox Game Studios, has called it a "disruptive force" that is transforming the way people play games.

You are doing apple to oranges comparison... "I wouldn't describe it as disruptive, because I don't think it is in the way that like Uber came in and got rid of all the taxis in that industry,"

 

[ChorizoPicozo]

You are doing apple to oranges comparison... "I wouldn't describe it as disruptive, because I don't think it is in the way that like Uber came in and got rid of all the taxis in that industry,"

wait wat?

 

[MacReady13]

I've never really watched that much TV but thanks to streaming services I've seen some of the best content in years.

I would love for gaming to be able to deliver experiences like severance, succession and so many more. I think we need shorter dev times and more daring content. Everything is sequels or licensed stuff so let's try it out.... I think it could end up being awesome.

You obviously never watched TV before they needed to release content to keep people paying for their services. Not saying it's all shit now. Of course shows/films will come out that are fine, but have you seen some of those amazing netflix Kevin Hart films? They seem to release movies every month that are just awful shit that wouldn't even be considered above Z grade in years gone past. And don't get me started on some of the awful shit on Disney plus...

Shows like Twin Peaks, Sopranos, Seinfeld, The Simpsons, The X Files, Deadwood, The Wire, Madmen etc were all shows before streaming and didn't need to be mass produced to provide content like today to keep people subscribed. TV/movies have never been worse and if people can't see that, they're either blind or have low expectations. And gaming will follow that path.

 

[MacReady13]

If Gamepass isn't profitable, Microsoft will simply cancel/change it and move on.
As a PC gamer, I like Gamepass. In the next year some interesting games will launch on the service.

No they won't! They have so much money they can (and will continue) to lose money to try take a share of the gaming market away from Sony. This is a company willing to spend over 60 billion to purchase another company to keep game pass games ticking over. They are ruthless and will stop at next to nothing to try ruin the competition.

 

[Torrent of Pork]

I've been a Gamepass sub since day 1, and rarely buy more than 3 games per year (outside of deep sales) nowadays. Roughly 6-7 day 1 games-worth of money.

I play a shit load more than 6-7 games per year, thanks to Gamepass.

 

[Bumblebeetuna]

I've never really watched that much TV but thanks to streaming services I've seen some of the best content in years.

I would love for gaming to be able to deliver experiences like severance, succession and so many more. I think we need shorter dev times and more daring content. Everything is sequels or licensed stuff so let's try it out.... I think it could end up being awesome.

“Streaming service content sucks!” is the biggest load of crap ever. Idk why people always go to that.