The evolution of the gaming industry has been somewhat of a whirlwind over the past three decades. Games that were once cutting edge can now be played on mobile devices, as the newest console hardware is forever in pursuit of delivering photo realistic graphics and game changing experiences. Companies have competed over the ages to deliver the ‘must have’ console as well as produce the best first party games to complement. Xbox entered the arena in late 2001 and back then it was just a console to compete with all the others….now it is much more.
Phil Spencer recently stated that Sony and Nintendo are not the only direct competition to Xbox, like they may well have been regarded in the past. Instead he cited Amazon and Google as the two of the giants the Redmond company would be locking horns with going forward. Sure Spencer would love the console adoption rate of PlayStation 4, and the hardcore fan base of Nintendo, but Xbox is now focusing it attention on a new way to market its gaming division. Xbox is a service across multiple devices. The Xbox console family is Xbox. PC is Xbox. Mobile gaming and the cloud is Xbox.
At the heart of this is Games Pass. The Netflix of the gaming industry. Games Pass is widely regarded as one of the best value services available. 100 plus games for subscribers to download and try out over the family of Xbox devices. At first it was received with skepticism. Not many people anticipated just how popular the service would become. Whilst it is true to say some gamer’s still value physical media, the adoption rate of digital sales has grown exponentially. Games pass now boasts around 15 million users at $10 a month, meaning an average monthly income of 150 million dollars. Obviously there are outgoings on development/publishing fees etc but Spencer has already stated that even without the inclusion of newly acquired publisher Zenimax titles, the service is totally sustainable.
If you can pair up the advantages of Games Pass with other unique services such as X-cloud, Microsoft may be going down a path no one else has dared to take. The business model no longer relies upon hardware sales to drive the base of the financial reward, it becomes the user base across multiple devices, leading some to speculate we may even see Games Pass on other consoles in the future.
Integration into smart TVs, tablets, phones and PC means Xbox becomes a truly mobile gaming platform without the costs of manufacturing a dedicated mobile device. The commitment to new first party studios and financial weight of Microsoft behind the purchase of Bethesda shows the Redmond company not only to be thinking about the here and now…but well into the future of gaming. With many games already in production and even more in the pipeline Xbox can finally shrug off the monkey around its neck of not having a stellar first party line up. The future of Xbox is exciting and we cant wait to see what they have in store for us next!
