Are the recent Xbox Game statistics so worrying?

In this article, we are going to review the latest statistics of the Xbox GamePas service and its possible future. Are the statistics worrying?

Current strategy Microsoft In the world of video games, it has evolved over the last few years. Since Phil Spencer took over as head of Xbox, the brand has been able to achieve its own independent identity alongside PlayStation and Nintendo. One of the most important Xbox tools in achieving this success has been the Xbox Game Pass sharing service. However, the question is, does Microsoft have the patience to make a profit with Xbox GamePas? In this article, we intend to review the recent statistics of this service and its possible future.

The Xbox can no longer be underestimated like the eighth generation. It has been a while since this brand has been able to separate itself from its competitors and reach a certain identity. Under Phil Spencer and Satya Nadella, the Xbox has established itself as a platform and an ecosystem. An ecosystem that is accessible wherever possible and can be integrated using a variety of hardware. The backbone of this ecosystem is first-class services and infrastructure that provide players with many opportunities without the need for high costs. All the decisions made by Xbox over the last five years have been to achieve this goal.

The success of the Xbox is no longer the same as that of the PlayStation and Nintendo. They do not try to sell more consoles or games. Of course, this does not mean that they do not welcome such events; However, it is even more important to create a sustainable ecosystem that is able to generate permanent income in the long run. This success is even more critical for Microsoft. One of the key pieces in achieving such a goal has been the Game Pass service.

Strategies such as bundling it with consoles, discounts of up to a dollar, constant marketing and branding, and of course the simultaneous offering of Xbox monopolies on the service alongside the big AAA games are proof of this claim. Over the past few years, Xbox has received its deadly software, and that software is not a game, but an Xbox gameplay service.

However, there is a problem with setting up and maintaining a good service, and it is costly. It took years for Netflix and Spotify to reach profitability. They owed millions of dollars for years. The reason for this is naturally clear. To add a work to your service, you need to purchase a license, but you do not have the ability to generate direct revenue. Your income is a fixed amount of money that subscribers pay for a service on a monthly basis.

In the early years of a service, your subscribers interact a lot with its content. So in fact, the revenue you make from it is less than what you would pay for content production. Of course, as the years go by and the service becomes more popular, this problem will be solved and your subscribers will increase so much that they will pay for the content themselves.

This is the main reason for the long time it takes to become profitable in shared services. It takes a lot of money to maintain a service in its infancy. Licensing more content as well as producing proprietary content becomes essential to keeping the service attractive.

Starting a shared service requires a lot of investment. A huge investment that will literally cost hundreds of millions of dollars over the years and there is no guarantee of profitability. Just think about the current large number of shared services and see how many of them have become profitable. The only services we know of that have reached profitability are Netflix and Spotify. What about other great services like Apple TV, Amazon Prime, Apple Music and Disney Plus? They are still backed by billion-dollar companies that may one day become profitable.

This is the main reason why Sony and Nintendo did not follow in the footsteps of Microsoft to establish a game-like service. In an ideal world, you could experience God of War and Breath of the Wild for just $ 10 a month. However, the truth is that Sony and Nintendo are much smaller companies than Microsoft. Microsoft is a trillion-dollar company that can use its other divisions to invest in the Xbox. For Sony and Nintendo, every new game has to be profitable on its own to justify its existence.

PS Now service does not receive new games at the same time. This service consists mostly of old games and was originally introduced as a way to experience PlayStation 3 games. Nintendo Online also has access to older NES, SNES and N64 console games. This means they do not have to pay much for new content. Even the cost of licenses is significantly reduced due to the older games. If these services can generate revenue with such methods, then there is a possibility of adding new content to them as well.

Earlier last week, Axios reported that Microsoft had failed to meet its goal of growing game subscribers. Game Pass subscribers grew by about 37 percent last year, 11 percent from Microsoft’s previous forecast. At first glance, this figure may not seem so bad. After all, we are still growing and 37% is a significant number. However, there are several factors that make the final image a little more complex.

First of all, Microsoft has not achieved its goal while in the period of COVID-19 and the outbreak of Corona virus with a significant increase in demand for content. Widespread quarantines have led people to turn to home media for entertainment, and the demand for video games and hardware has skyrocketed during this period. Other shared services, such as Netflix, have seen insane growth. Single projects such as The Queen’s Gambit and Animal Crossing New Horizons were also successful during this period.

Another factor is that Microsoft has significantly increased its marketing for Game Pass over the past year. There were big deals between the company and the publishers, and games like Back 4 Blood and Outriders became available on the service from day one. In addition, we saw applications such as Xbox All Access and the launch of xCloud in general. A new generation of consoles was launched in the meantime, which is a good opportunity to attract new customers for the Xbox. Despite all this, Game Pass still failed to achieve its goal of attracting new subscribers.

As I said before, a high number of subscribers is essential to keeping a shared service healthy in the long run. Until now, we thought that even if the Game Pass is not profitable, it will eventually reach the profitability stage, but the main question is what if this does not happen?

Xbox has opened a special account on Game Pass success. Their main strategy revolves around this service. What if the game then joins a huge number of services that have never reached the profitability stage? There is no doubt that gameplay is a great service for the audience; However, this will not be the first time a shared service has failed. How long will Microsoft continue to pay for the Game Pass?

Of course, it is too early to sound the alarm. After all, the Game Pass grew by more than a third last year. One of the reasons for not achieving the goals can be considered the delay of Halo Infinite until the fall of 2021. Also, due to the lack of Xbox Series X and S Series consoles in the market, many have not been able to enter the ninth generation. Microsoft has been in the service for some time now. Office, for example, is now more of a service. So it must be said that the company is well aware of the basics and prerequisites for the success of a shared service and does not make decisions too soon.

It is now clear that Microsoft has a long-term commitment to the game. The main issue is that they must remain committed to this system for the time being. Reaching the profitability stage for this service can take a decade. Services like Spotify and Netflix needed such time to become profitable, while accessing the software of these services is much easier. Spotify or Netflix work on any system that has a processor, but so do gamepas and other shared gaming services.

Is the game completely safe? If we want to stick to the definition of the word stable, the answer is no. Shared services cost millions of dollars just to get out of harm’s way. That’s why we need big companies to support them. So GamePas, which is currently in a loss phase, is not “safe”. Maybe one day this service will be profitable. We just have to hope that Microsoft has the patience to get there.