With over 25 million subscribers and counting, there seems to be no brakes on the Xbox/PC Game Pass train, but a notable critic of the service has surprisingly emerged in the form of Ed Fries, one of the original executives who helped bring the first-generation Xbox console to market. Fries warned in a new interview with Xbox Expansion Pass about how Game Pass could, if it were to become the dominant model in video games, be hugely detrimental to the revenue potential of the gaming industry, likening it to other subscription services such as Spotify, which Fries says “destroyed the music business” and “literally cut the annual revenue of the music business in half.” His fear seems to be that nobody will buy games anymore if these kinds of services really begin to take off and become ubiquitous.
“The one thing that they’re doing that makes me nervous is Game Pass,” Fries said. “Game Pass scares me because there’s a somewhat analogous thing called Spotify that was created for the music business.”
“When Spotify took off it destroyed the music business, it literally cut the annual revenue of the music business in half. It’s made it so people just don’t buy songs anymore.”
“People don’t buy songs on iPhone for example, because why would you? They’re all on your subscription service app. Apple’s said they’re going to take away buying songs because no one’s buying them any more.”
“So we have to be careful we don’t create the same system in the game business. These markets are more fragile than people realize. I saw the games industry destroy itself in the early ’80s. I saw the educational software business destroy itself in the mid-90s….they literally destroyed a multi-billion dollar market in a few years.”
“So Game Pass makes me nervous. As a customer, I love it. I love Spotify as a customer: I have all the songs I’d ever want…it’s a great deal as a customer. But it isn’t necessarily great for the industry.”
Fries didn’t give an explicit answer but said that he was ‘scared’ of the impact Game Pass could have, should it become a dominant business model like Spotify has in the music industry. He also made broad claims about Spotify’s impact on the music industry, some of which have been disputed by experts.
Xbox Game Pass launched in June 2017 and has become central to Microsoft’s gaming business, offering members access to over 100 titles for a monthly subscription fee.
As of January 2022, Game Pass has over 25 million subscribers, according to Microsoft, so it still has a long way to go before it reaches the level of Spotify (182m) and Netflix (222m). In fact, it was recently estimated that subscription services account for just 4% of annual games revenues in Europe and North America, compared to 65% of global music revenues.