Xbox Game Pass amazes developers: increased revenues and higher sales

Xbox Game Pass amazes developers

Over the past four years, Xbox Game Pass has revolutionized the video game market by offering the opportunity to play a large number of titles for a relatively small amount on a subscription that renews on a regular basis. Initially blamed as a detrimental service to sales, it has nevertheless proved to be a source of surprises.

Dave Thier of Forbes has interviewed some developers asking them what they think about Game Pass and how it has revolutionized the game. their market strategy. Jonathan Bunney, Codemasters' VP of Publishing, described it as "another of the many tools in the publisher arsenal". Codemasters was one of the first to support Xbox Game Pass, and recently brought DiRT 5, the most recent installment of its rally series, to the service. The UK studio, now owned by Electronic Arts, sees Xbox Game Pass as "a way to extend the life cycle of games and welcome players who wouldn't buy them." Bunney himself confessed to discovering titles he had never heard of, or games he had just glimpsed and for which he would never pay $ 60.

Sarah Bond, Microsoft's Corporate VP of Gaming Ecosystem, is keen to distinguish between Xbox Game Pass and television and music subscription services. "When you subscribe to a channel that allows you to watch a video, like Netflix, the monetization cycle ends there. In gaming it's the opposite: there are items you can buy in the game, there are extensions you can buy, there are are other episodes of the franchise that you can take an interest in, other genres to discover ". Bond says Xbox Game Pass subscribers spend 20% more time playing games, play more games (+ 30%), are interested in more genres (+ 40%), and most importantly, they spend 20% more money on video games and gaming content.

The developers at No More Robots have had different experiences with their games available in Xbox Game Pass, all of which are positive. Descenders, for example, has seen both players and sales rise: "We've noticed that Game Pass subscribers tell their friends, 'Hey, come play with me.' If they don't want to sign up for a subscription service, they buy In the end, we welcomed a lot of new users with Game Pass and also sold a lot, "said Mike Rose, founder of the studio. Things went well even with games like Hypnospace Outlaw and Nowhere Prophet, although not like Descenders: "The main thing for us is that sales haven't dropped. it happened. "

The service, meanwhile, continues to grow: after welcoming a bunch of Bethesda games, Xbox Game Pass welcomed 12 more games in the second half of March. Thanks to xCloud it will soon arrive also on Apple iOS and PC via web browser.

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Game Pass’ Massive Growth Is Bringing Developers Some Surprises

Halo Infinite

Credit: Microsoft

Game Pass was pretty big last month, but even from that perspective, the last two weeks have been massive. Microsoft and Xbox’s subscription service is continuing Katamari-like trek through the game industry, scooping up titles at a rate that is actually beginning to approximate that fabled “Netflix of Game”, a buzzword that’s been bouncing around for at least a decade but that you don’t hear quite as much now that, well, it might actually be here.

It’s been boiling for a while, but recently its been moving fast. First came the Bethesda drop: after Microsoft finalized its acquisition of Zenimax Media the service got 20 massive games all at once, all the way from retro gems like The Elder Scrolls 3: Morrowind to current blockbusters like Doom Eternal and critical darlings like Dishonored 2 and Prey. Then, the announcement that upcoming looter Outriders would be launching on Game Pass on Day One, followed by an announcement of some more beloved games like Undertale, Octopath Traveler and Nier Automata, all surprises in their own right. Finally, for good measure, we got the long-awaited drop of EA Play on PC. In the near-term, it’s clear that this thing isn’t getting any smaller.

The value of Game Pass for the consumer is pretty straightforward: pay not all that much money, get an absolute ton of games. For those in in the industry, things are a bit more complicated: subscription services on this scale are still relatively new in the world of games, but other sectors give us some scenarios of just how things might go down. The world of TV and movies seems to be moving quickly to complete subscription dominance, and while there are a whole lot more high-budget prestige TV and True Crime documentaries coming out, movie theaters are a little less happy about how it’s all happening. In the world of music, subscriptions are widely regarded as catastrophic: you’ll be hard pressed to find a musician that talks about Spotify in any but the most derisive terms. A viral tweet from E3 2019 sums up some of the caution surrounding the whole idea succinctly:

Nearly four years into the Game Pass experiment, however, things are already shaking out differently than they had for those other industries. I talked to British Developer Codemasters, which makes the DiRT series of racing games and has been involved with Game Pass from Day 1, before its recent acquisition by EA. For Vice President of Publishing Jonathan Bunney, it has yet to be a sea change in the industry: like so many disruptive developments in the past, it’s just one more facet of an ever-growing space, bringing new things to the table without supplanting old ones. He sees it as an additive experience, “one of the many tools in the modern game publisher’s arsenal,” as he puts it.

“We see it as a way of extending the life of our games and bringing in players who wouldn't necessarily buy the game. speaking as a consumer. I find myself discovering games that I had never heard of, or games that I've heard of but am just not prepared to spend $60.”

Bunney says that Game Pass has been a good way to find new fans and to grow games in the US Market, where Xbox is stronger, and believes that overall, it’s helped with sales on top of the players through Game Pass.

DiRT 5

Credit: Codemasters

For Microsoft’s Sarah Bond, one of the major differentiators between Game Pass and the subscription services that have come to dominate the video and music industries is that it remains joined at the hip to the Xbox Live retail store, and so the relationship between playing on subscription and buying games is fluid in a way that isn’t replicated for those other services.

“When you subscribe to a channel that enables you to watch a video, like Netflix,” she says, “that’s kind of the end of the monetization cycle that you have with that piece of content. In gaming it’s the opposite: there are items that you can buy in the game, there are extensions you can buy, there’s a next franchise you can purchase, there are other genres that you can leap to.”

On average, according to Bond, Game Pass subscribers spend 20% more time playing games, play 30% more games, play 40% more genres and, crucially, spend about 20% more on gaming overall. That could always change if Game Pass and other subscriptions become a bigger part of the industry overall, but Bond stresses that there’s still a lot of room for overall growth, especially since Xbox is tying its streaming services to Game Pass.

“There are 200 million people who buy a console, and there are 3 billion people who play games,” she says. “Today, a lot of those people don’t have the option to play many of these amazing experiences and iconic games that you see. When you really look at what we’re doing with Game Pass is we’re making that possible by linking that to subscription, and putting our streaming into subscription. We’re able to make the economics of all that work”.

Hypnospace Outlaw

credit: No More Robots

Mike Rose, founder of No More Robots, was cautious when the subscription train first started rolling. The company publishes some weird, esoteric titles, the sort that many initially worried might have gotten subsumed by the continued growth of services like Game Pass. Developers of narrative-based games, in particular, were concerned that a metrics-driven approach to titles on subscription services might begin to favor addictive multiplayer titles over unique single-player ones. With four games on the service, however, he’s been pleasantly surprised about the support for a wide range of titles.

“It was a worry for me a few years ago, it's less of a worry for me now,” he says. “With them signing Hypnospace Outlaw and Nowhere Prophet, games that arguably don't fit the game pass model very well and are kind of niche and weird, It eases my concerns a little bit because it seems that they want their spread of games.”

All No More Robots’ games have had a different experience when they hit Game Pass. Online multiplayer game Descenders, he says, was perfectly tuned for the service, and it exploded as soon as it dropped both in terms of overall play and traditional sales, which he says quadrupled.

“The effect that we see is that people are playing on Game Pass, they're telling their friends: ‘hey come play this game with me’, they don't want another subscription, so they just go buy the game. We end up getting a ton of players on Game Pass, and we sell a ton as well.” 

We’ve seen the same effect for titles on Sony’s PlayStation Plus service, which is not nearly as expansive as Game Pass but still gives away games for free. Rocket League is the foundational story there, where a massive infusion of free players at launch led to a long, successful launch as a premiere multiplayer title, but recently we’ve seen similar stories with titles like Fall Guys: Ultimate Knockout or Bugsnax, both of which launched free on PlayStation Plus.

Other No More Robots titles like dreamscape police simulator and late 90s internet ode Hypnospace Outlaw or card battler Nowhere Prophet were not quite as well-geared as Descenders, but they still saw smaller sales bumps. Kingdom management RPG Yes Your Grace hit the service around the Xbox Series X launch, and saw a larger increase as a result.

“The main thing for us is that sales didn't go down,” says Rose. “ You worry that you make the thing free and no one will buy it anymore: that didn't happen.”

Game Pass is firmly in its growth stage, when it has huge incentive to be generous both players and developers, and while gamers are still adapting to the idea. When asked if he worries if this dynamic will shift in the future, Rose adapts a pretty typical stance of indies in any creative space: “I worry about everything,” he says.

While the past few years seem to have largely calmed down some of the wider industry concerns towards these services, Developers continue to be nimble, responding to an industry that tends to go through several seismic shifts a decade. For Rose’s part, he notes that gamers simply approach their purchasing decisions in a different way than in other sectors, that for whatever reason—the high level of commitment that people can bring to individual titles being the likely culprit—just because something is free, doesn’t mean gamers won’t pay for it.

“We get so many people telling us that they bought their games as well as playing them on Game Pass. Other people saying they feel like they don't own it if it's just on Game Pass. So they buy it! That, to me, seems crazy!”