Whilst fans love the value of Microsoft’s Xbox Game Pass, this Netflix-style subscription service for games has not come without some obvious questions about its economic sustainability and impact.
For a single monthly subscription fee, users get access to a library of hundreds of games from across multiple console generations and of sizes ranging from AAA big-budget titles to small indie ones. That said, titles can (and have been) pulled from the line-up at any time and not all are winners.
For the value it’s offering though, and especially with its availability on PC, it’s a steal for consumers. Still, one wonders how much of the cost the deep-pocketed Microsoft is absorbing at this point to let it succeed and what impact it will have on game developers at third-party studios.
During a recent earnings call, Take-Two’s CEO Strauss Zelnick discussed the financial situation surrounding services like Game Pass and says he doesn’t think that launching brand new major games on the services makes much sense financially for his company:
“Our views remain unchanged. We think a subscription model can make sense for deep catalog titles, but it doesn’t really make sense for frontline titles. For any business model to make sense in the entertainment business, it has to work for the creators of the entertainment as well as the consumers of the entertainment. I think catalog can make sense for the publishers, it can make sense for the consumers who are avid, who really want access to a lot of product. But if you’re getting into frontline product, then the economics are much more difficult to make sense of.”
Zelnick also says that consumption patterns when it comes to games are different to that of other forms of entertainment like movies or TV where you’ll cycle through more titles far quicker:
“Consumers who are involved with interactive entertainment have different consumption patterns than those involved with linear entertainment. Linear entertainment consumers consume something like 150 hours of programming a month. That’s probably well over 100 different titles.
In the case of interactive entertainment, consumers are consuming something like 45 hours a month, and that may be one, two, three, four titles. But it’s certainly not 100 titles. So from a consumer point of view, it’s not clear that a subscription model really makes sense, for the bulk of consumers.
We’re open-minded. We have made catalog titles available for subscription services. Very occasionally we’ve made frontline titles available as well. But we do see this more as a catalog offering than a frontline offering.”
Microsoft’s first-party game titles like the upcoming “Forza Horizon 5” and “Halo Infinite” are seemingly coming to Xbox Game Pass at launch, but third party titles have so far remained limited to mostly catalogue titles and smaller indie ones.
Take-Two owns 2K and Rockstar, makers of franchises like “Grand Theft Auto,” “Red Dead Redemption,” “Bioshock,” “Borderlands,” “Mafia,” and “X-COM”. The company has seen some catalogue titles added to Game Pass in the past but haven’t lingered there long.