According to Microsoft’s director of the ID@Xbox program, Chris Charla, Xbox Game Pass is “additive” instead of “disruptive” for the industry.
That’s what Charla said in a recent interview with GamesIndustry’s Christopher Dring when asked about concerns over subscription services, and more particularly, Microsoft’s Game Pass. “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,” the ID@Xbox director told GamesIndustry.
According to Charla, Xbox Game Pass is additive to the game sales business.
He explained, “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.”
Interestingly, market research firm DFC Intelligence appears to see this otherwise with the firm recently saying that only Nintendo’s subscription model currently works as an enhancement to the company’s overall business model. “The bottom line is that game subscription services seem to work well as a value-add proposition”, DFC wrote in a recent article. “Nintendo has shown that with Nintendo Switch Online. There are tens of millions of users that will pay $60+ for a game and a cheap mediocre online service. Taking it to the level of a Game Pass requires not only significantly more expenditure but requires giving up a large established revenue stream.”
Over the past few years, a lot has been said and written about Game Pass with Microsoft recently admitting that, in a way, its subscription service cannibalizes game sales. Interestingly, in the past, Microsoft’s Phil Spencer has denied that this is the case. “Microsoft also submitted that its internal analysis shows a [redacted] percent decline in base game sales twelve months following their addition on Game Pass”, UK regulator CMA wrote in its provisionary report about the Microsoft Activision-Blizzard deal.
What are your thoughts on this matter? Is Xbox Game Pass additive for the game sales business, or do you believe its disrupting game sales instead? Hit the comments down below.
