Image: Xbox

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.

Source: Xbox Expansion Pass (via VGC)

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20 comments

  1. The problem with a subscription service is that you have to have new, compelling content at a rate that at least equals how fast it’s being consumed.

    Microsoft is ~way~ behind on compelling first party titles. Even with its acquisitions it’s not likely to get up to speed soon, AAA games take years to develop. The recent delays from Bethesda really hurt.
  2. I'm one of those people who do NOT want to play games through a f*cking subscription service. I actually buy the games I wanna play (or use community demos if devs are @ssholes). If I'm not doing that then I am borrowing games from friends. I am NOT a fan of GamePass being like Netflix and removing games from the service, and I do NOT agree with subscription services where if you stop paying for the service you lose access to all the games. I don't know how many gamers out there are like me, but I don't think Ed Fries' worries are any real basis for concern.
  3. I'm one of those people who do NOT want to play games through a f*cking subscription service. I actually buy the games I wanna play (or use community demos if devs are @ssholes). If I'm not doing that then I am borrowing games from friends. I am NOT a fan of GamePass being like Netflix and removing games from the service, and I do NOT agree with subscription services where if you stop paying for the service you lose access to all the games. I don't know how many gamers out there are like me, but I don't think Ed Fries' worries are any real basis for concern.
    The problem is that these companies want to create a whole "lifestyle" out of these games and IP's. They want you to pay the subscription fees and consume monthly or otherwise scheduled release content and consume stuff via microtransactions. Games like Destiny 2 create a grind that essentially forces you to spend all your free time on the game to remain competitive. Sure, the cash shop stuff is all cosmetic, but there is that "keeping up with the Jones'" aspect of that. Games that make me feel obligated to play because I'm subscribing are a no go for me.

    That being said, my issue is not necessarily that I dislike subscription services as a whole. I simply dislike the model of artificially long grinds and a lack of real content for the money spent. I never feel like a subscription service gives me value for the money. No, I don't really like the idea of a subscription service, but if they are going to expect me to pay $15 a month or whatever, I expect sufficient content for my money. I just don't ever see that.
  4. Games that make me feel obligated to play because I'm subscribing are a no go for me.
    I play games according to my own schedule, and I do it for fun. I'm not looking to turn my game-playing into a f*cking job. If I feel obligated to play because of a subscription or to keep up with other people, that feels more like work. When that happens, I'm out.

    I never feel like a subscription service gives me value for the money. No, I don't really like the idea of a subscription service, but if they are going to expect me to pay $15 a month or whatever, I expect sufficient content for my money. I just don't ever see that.
    Word.
  5. Life is too complicated as is and I have my hands full just for the streaming subscriptions we currently use, so I have no desire to add gaming into the mix. Gaming shouldn't have to be any more complicated than it already is plus I'm getting tired of all the digital mouths to feed. I'm still annoyed with all the launchers I have to use just to play something. I've simplified as much as I can with GOG/Steam/Epic/Amazon. I also cut the cord with EA origin a few month's and have no plans to pick up any others. I don' think the bubble will burst with any of these subscription services but I do believe they will all eventually see a leveling out of subscribership once they've been around long enough and the overall ecosystem stops expanding. The ebb and flow of new releases will always play a factor as well.
  6. Unfortunately, I think games as a service as the future. I'd very much like to be wrong about that but I feel like that's where things are headed.
  7. Unfortunately, I think games as a service as the future. I'd very much like to be wrong about that but I feel like that's where things are headed.
    Unfortunately, I have to agree.
  8. I've made my peace with subscription services.

    For starters, it makes more sense when you are younger, I think (not that I am terribly young, or accusing anyone here of being old). If you haven't already invested in your personal library, having access to hundreds of titles for one low price is a nice way to instantly have one. But over time, as your personal library grows, the value of that as a service goes down.

    That said, having a library is only good if you use it. Granted, a few people do have books and albums just to set on a shelf an look at (guilty of that myself to some degree), but if you don't listen to the music, watch the movies, or play the games - then it's pointless. For music, I value the diversity of a large library a lot - having a lot of various tracks to play through at any time is of high value to me, and if a bad track plays, well, 3-5 minutes of my life while I wait for the next (or hit skip) isn't so bad. For movies/TV/games/books/etc, I don't randomly select titles to there- I'm fairly specific on those. A few hours of my life isn't something I'm willing to give over to a bad experience, and they are a much larger investment in my time and energy.

    And you need to churn out quality stuff if you want people to stay subscribed.

    So if you want to have a subscription service with something more substantial than music, you need to bring the goods. Netflix I think realized this shortly after prioritizing digital. They knew if they were beholden to the content providers they would never be able to turn a profit, so they invested heavily in their own content creation. I would say their success with that is a mixed bag, but you can clearly see how it's costing them and what they are trying to achieve. That's also why every single content creator (HBO, Disney, CBS, NBC, etc) are all making their own streaming services, and guarding/walling off their content jealously.

    Same thing with gaming.

    So, all that said, back to my original point. I'm ok with subscription services.

    For starters, when you can just sign up for a month, pay something fairly low, and play a game that would have retailed for $60+ -- that's not too bad. Granted, I may eventually lose access to that game (either because I drop my subscription or the game drifts off the service), but by the time I do, it probably won't cost $60+ any longer if I wanted to retain access to it. As for the argument that you could end up paying a lot more than $60 for access to that title -- true, if you just look at one title in a vacuum. But the value of the service is that you get access to hundreds of titles at the same time -- that's where you have to make your own value judgement. The biggest benefit I see in these subscription services is that you aren't locked into a long term contract; you can just sign up for 1 month and let it lapse after you are done with whatever content they have at the time. I've done this with XBGP a couple of times, and got to play a few good games through for $1 - and I'm done with those games now.

    Second point would be, that even if you buy the game, you aren't guaranteed access to it, and you don't own the game, you only license it -- you only own whatever physical media the game came with. I can point to a lot of titles I've "bought" that I can't play any more, because they've been shut down or lack updates to run on modern systems. I happen to play a lot of multiplayer / MMO stuff, so I guess you could say "well, I only play single player games, so that won't happen"... and... maybe, but not necessarily. I can still think of a lot of single player games that didn't get shut down, but they haven't got updates for anything past DOS/Win95/old consoles/etc, and you have to jump through some considerable hoops to trick them into running today, if you can at all.

    So, if you don't like subscription services, I don't blame you much - it's a value proposition for everyone, and if you just play a handful of titles heavily, it won't make any sense. But if you dabble, or are new to a platform, or just want to play releases to beat them once and be done with it - it ~can~ make sense. Provided the content provider can keep the price down low enough and provide a deep enough library of content to allow it to make sense.
  9. Guess I'm glad, that for me, the end is almost in sight for when I give all this up. Probably only have another 10 years or so until I put it all down for other things.
    What are you planning to pick up? Metamucil and great-grandkids?

    One interesting thing about MMO communities I've been in; there has never failed to be a portion of the population that are older. Surprisingly older. And while they aren't chasing world records or world first achievements, or trending on Twitch streams, they are still amazing competent at the content. That may just be because PVE MMOs tend to get fairly predictable and "easy" (idk much about pvp/fps communities, I don't tend to run in those circles), but it hasn't stopped a lot of grandmas and grandpas that I've seen still kicking it around.
  10. Games that make me feel obligated to play because I'm subscribing are a no go for me.
    But aren't all subscription based games like that? I paid for it, therefore I have to play it otherwise it is wasted money.
    That's why I'm not on board with subscription services.

    I want to play games at my own pace, especially when so many games are released incomplete with multiple issues. You'd want to wait for patches but you can't because of the subscription.
    For starters, it makes more sense when you are younger, I think (not that I am terribly young, or accusing anyone here of being old). If you haven't already invested in your personal library, having access to hundreds of titles for one low price is a nice way to instantly have one. But over time, as your personal library grows, the value of that as a service goes down.
    I don't think young people want to play old games though. So I doubt the value of subscription changes with how old you are.

    For starters, when you can just sign up for a month, pay something fairly low, and play a game that would have retailed for $60+ -- that's not too bad. Granted, I may eventually lose access to that game (either because I drop my subscription or the game drifts off the service), but by the time I do, it probably won't cost $60+ any longer if I wanted to retain access to it. As for the argument that you could end up paying a lot more than $60 for access to that title -- true, if you just look at one title in a vacuum.
    But how many $60 games come out within a month that you actually want to play? For me it's not more than 4-5 a year across all services.

    If all games were on a single service I might be able to justify paying $15 / month all year long, but not otherwise. And I do fear that if games are treated as a service instead of a product it will hurt quality big time, heck it alraedy is hurting quality, the way they try to chain you to the games to keep playing them.
  11. But aren't all subscription based games like that? I paid for it, therefore I have to play it otherwise it is wasted money.
    That's why I'm not on board with subscription services.
    Yes.
  12. I'm sorry but subscription services as people will learn about them will become something that is used to 'demo' a game and the REAL game will be bought so vendors can have microtransactions for other BS in the games that proves very profitable.

    For instance... Forza horizon 5 or whatever it is. You can buy car packs, and additional expansions and all as they come out. What is the sense in buying that for something that has a finite life on your subscription service?

    Same for games that include skins or other benefits.
  13. For instance... Forza horizon 5 or whatever it is. You can buy car packs, and additional expansions and all as they come out. What is the sense in buying that for something that has a finite life on your subscription service?
    Well, as a first-party title, I don't think Microsoft has any intention of dropping Forza 5 from the service. Then again, Microsoft would rather you stay subscribed than purchase the game, but not to the point where they won't turn away your purchase. I think if they thought they could get away with it, they absolutely would make every game they publish only accessible on XBGP, but I think the second-place finish to Sony has convinced them that the wider net they can cast, the better off they will be.

    For third-party titles with a limited run, you have a point about though. And that's a point that MS, I'm sure, uses to try to keep third party titles from expiring on the service.
  14. I'm sure there is a market for this kind of thing, not sure how profitable it is on the other hand, let's say you play 12 games/year that would cost you normally let's say 650$ give or take. but at 15$ month for a sub on the other hand that's 180$ to divide amongst all companies that put games on there if you played them or not.

    That's going to take a metric ton of DLC to make up for the loss of income, Paradox interactive style DLC amounts
  15. I'm sure there is a market for this kind of thing, not sure how profitable it is on the other hand, let's say you play 12 games/year that would cost you normally let's say 650$ give or take. but at 15$ month for a sub on the other hand that's 180$ to divide amongst all companies that put games on there if you played them or not.

    That's going to take a metric ton of DLC to make up for the loss of income, Paradox interactive style DLC amounts
    They don't even release 12 AAA titles in a year, so that example is unrealistic. Their goal is to make you spend more in-game.
    This strategy obviously doesn't work on us, who oppose in game spending on principle, but there is a generation that grew up buying fortnite skins left right and center.
  16. ...there is a generation that grew up buying fortnite skins left right and center
    I cover my eyes and ears and pretend they don't exist. Cuz I don't like spending my days depressed.
  17. I'm one of those people who do NOT want to play games through a f*cking subscription service. I actually buy the games I wanna play (or use community demos if devs are @ssholes). If I'm not doing that then I am borrowing games from friends. I am NOT a fan of GamePass being like Netflix and removing games from the service, and I do NOT agree with subscription services where if you stop paying for the service you lose access to all the games. I don't know how many gamers out there are like me, but I don't think Ed Fries' worries are any real basis for concern.

    Same.

    I'm pretty particular about the games I want to play. There are specific titles and series I look forward to.

    I don't just play any old game. I want to play the exact games I am interested in, not just whatever random titles Microsoft chooses to include in their subscription service. About a year and a half ago I went through the entire list of titles available at that point in Game Pass. There were about 250 titles in all, and of them there were only 3 that interested me. Of those three I already owned two of them.

    I don't think I am going to sign up for a monthly subscription for that. That's a bad deal at any price. I'd rather just buy the games I want, and as you note, for the titles where the devs or publishers are being *******s (like requiring me to install yet another launcher I don't want) I just get them through other means.

    I'm happy to pay for the games I play, but if the devs or publishers are being jerks and forcing things on me I don't want in the process, yeah, I'm not going to put up with that. That said, Denuvo has become increasingly difficult to break. There is apparently only one person who breaks the latest versions of Denuvo, someone who goes by the handle of "Empress". She takes requests, for a donation of $500...

    For instance, I have two free coupons (maybe not valid anymore, I don't know) for Far Cry 6, but there was no way I was going to install Ubisoft Connect and create an account just so they can data mine me and force me to be always online to play a single player game, so I decided to wait for the "community edition" instead, but the days of Denuvo being broken in a few hours are apparently over. It has been several months at this point.

    I'm not folding though. I'd rather never play the game than put up with their bullshit.

    • I'd redeem my hardware purchase coupons
    • I'd even pay for the game on Steam, no problem
    • There isn't a snowballs chance in hell of me ever agreeing to install Ubisoft Connect on my machine and create an Ubisoft account through

    So, until something changes (community editon, Ubisoft stops trying to push their launcher on us, something else) I guess I'll just have to pass.

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