Microsoft’s X019 conference was quite the show as they announced numerous new games and new additions to the Xbox and Game Pass. The massive announcement included games like Wasteland 3, Ori and the Will of the Wisp, Halo Reach, Witcher 3, Carrion, Rage 2, Flight Simulator, several Final Fantasy games, and even some of the recent Yakuza games. While there are some differences between the console version and the PC (Beta) version, both are set to provide access to many recent and future launch-day releases.
On top of that, they announced Black Friday discounts that include knocking $150 off the Xbox One X and $100 off the One S bundles. That brings the all-digital version of the console down to $150 – which is, of course, a prime candidate for this enticing Game Pass expansion. They’re even offering three months of the Ultimate service for $1. These deals are all on top of game discounts and other typical deals you’ll see for the ever-growing consumer holiday.
There isn’t much debating the value Microsoft is bringing to the table today. It’s undeniably a great way to expand your gaming catalog and try games that may have otherwise been out of your reach. The question people seem to be glossing over is, why is Microsoft working so hard to get you on this subscription service? The obvious answer for anyone aware of Sony’s success is that they want to pick up more of the market share that the PlayStation 4 has consumed selling more than 102 million units. However, there’s another longer-term goal being addressed with this move.
Console developers have been trying to get rid of physical media for a long time. The manufacturing and shipping cost savings alone would be notable, but a significant part has always been eliminating the reselling of media. Gamestop has thrived on this market for many years now and both console manufacturers and game publishers don’t see a penny of that trade-in cash. At one point, the idea of “online passes” was attempted with some major backlash, which ultimately ended the practice. These companies were not about to give up on the issue though.
With subscription services providing great value for access to new and old games, the digital media transition has finally started gaining ground. Consoles like the All-Digital Xbox One S are now not only viable but a solid choice given it’s $50 discount. The nature of subscriptions means that, even in countries where owning a game license is the equivalent of owning physical media, you won’t ever actually own these games. You will only have access via a subscription. Without ownership, you can’t trade-in or resell a game and people that want to own a copy will either have to buy one new or get their subscription.
Every new person that subscribes to Game Pass may cause Microsoft and game publishers to lose some revenue upfront, but they gain all of the potential customers that would buy used physical copies down the line. While this whole process may not sound horrible to you as a savvy consumer, it has other effects. For instance, GameStop, who is in an ongoing battle with a steady downfall in stock price since 2015, will take an even harder hit. Many may not miss GameStop much, but they do provide local jobs, which is something digital games can’t do. There’s also the potential for these services, once ubiquitous, to finally make the change to remove physical media without the protest that it once caused. The price is great right now (the cost of two AAA games a year), but without other options, price increases may be inevitable.
It’s hard to say, at this point, whether all of this may play out exactly as I’ve described here. It has been confirmed that Project Scarlett and the PlayStation 5 will have physical media, so that’s a good sign that at least the next generation will maintain the status quo. It just doesn’t seem remotely plausible to me that the motive for Microsoft and other companies pushing these services is just for the “good of consumers.” They exist as publicly traded companies to make money and will do what it takes to make that happen as effectively as possible. A future where they sell a piece of hardware and lease a subscription service is one where they control the entire financial stream.