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Former PlayStation Studio Head Claims that the Xbox Game Pass Isn’t a “Business Model That Works” Yet

The Xbox Game Pass is possibly one of Microsoft’s biggest advantages in the gaming industry. A simple $10 subscription that gives gamers access to over a hundred titles has been one of the primary driving factors behind growing Xbox Series X|S sales. However, according to Shawn Layden (former PlayStation Studios head), Sony’s $120 million titles are unlikely to ever work with a Game-Pass-like subscription service.

People don’t buy consoles because they want more steel and plastic in the living room. People buy consoles because they want access to the content. If you can find a way to get the content into people’s homes without a box, then yes, indeed. Everyone has a streaming solution of some form. Most of it is limited by whether you have a decent internet connection. And they haven’t constructed the business model that works yet for that.

It’s very hard to launch a $120m game on a subscription service charging $9.99 a month. You pencil it out, you’re going to have to have 500 million subscribers before you start to recoup your investment. That’s why right now you need to take a loss-leading position to try to grow that base. But still, if you have only 250 million consoles out there, you’re not going to get to half a billion subscribers. So how do you circle that square? Nobody has figured that out yet.

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Quite frankly I’m one of those people who find Sony’s 1st party titles too mainstream: Shiny graphics, and a decent plot but a lack of depth in terms of writing and gameplay, Horizon Zero Dawn being a good example of this. Read here why it’s overhyped and overrated. Regardless, Layden isn’t making much sense here. If you have 500 million subscribers as he says, the overall revenue from Game Pass would easily come to 5 billion, which is more than enough to fund several “blockbusters”.

Nevertheless, at the moment, Game Pass has a user base of around 23 million users which should bring in a revenue of 230 million. While that’s not quite enough to fund several AAA games, it shouldn’t take Microsoft long to get there. Furthermore, the fact Sony has been building up its own lineup of games with PS Now means that the company believes in this particular business model, and is willing to invest in it.

Areej

Computer Engineering dropout (3 years), writer, journalist, and amateur poet. I started my first technology blog, Techquila while in college to address my hardware passion. Although largely successful, it was a classic example of too many people trying out multiple different things but getting nothing done. Left in late 2019 and been working on Hardware Times ever since.

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