this post was submitted on 26 Mar 2024
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XBOX has seen the writing on the wall. People that want a console want a PlayStation. Everyone else wants a Steam deck or a PC and everyone else wants a switch.
But Game Pass makes all of that irrelevant. With game pass they don't have to sell hardware at all which always involves taking a loss on hardware.
I figure the next thing we are going to see from them is a thin client that can stream games from XBOX Live+ Me Edition. For 39.99 a month you get Xbox Live and Game Pass and your games get streamed directly from Microsofts datacenter. On the other side, Game Pass for PC will be 30 for local play and 40 to stream and then in 2026 the Xbox handheld will launch which will be a Qualcomm AV1 decoder/Wifi Chip with an X on it that starts at $199, and includes 6 months of Game pass+.
This is the future they've been waiting for since The Xbox 360 Elite.
This is not the near future of xbox. Not for mainstream use, at least.
Video games streaming exists. It runs well enough with amazing internet that it's actually even good enough to use. I did some playing on stadia back before it closed down. With my gigabit fiber internet, it only had a little bit of lag (felt like 20ms, i noticed it, but was quickly able to get used to it too) with the occassional hitch.
The problem is that gigabit fiber is reserved for people who live on the right street in a big city, and absolutely nobody else. And it id a requirement for game streaming to do well.
Once genuinely good internet is available to most everyone, then you will find game streaming services being mass adopted. Until then, game streaming will follow the other cool tech product that has huge market limiting requirements; VR.
Consoles like xbox are made for the casual user. You can't have a product that works best for the casual user but has huge not-casual requirements to run it.
The next xbox thing wont be a thin client for streaming games, but the product after this one just might be.
Ten bucks says they work with Valve on the next Steam Deck, ‘Now with Game Pass!’
If they get gamepass on Linux I'll re subscribe.
I use XBPlay to play game pass titles on my steam deck and phone. It might work on other Linux distros. It’s listed on steam and may have a free trial. It can connect to a console to stream your library or connect to cloud play to stream game pass titles.
It won't happen.
Game Pass is subsidized to sell consoles. The fact that it also covers Windows is more of a byproduct. But Microsoft won't subsidize other platforms, you won't see Game Pass on PlayStation either. And Microsoft doesn't care about the PC, they care about you using Microsoft products.
I mean I get it. It's a business. I just wish Microsoft works stop saying "PC" when they mean "Microsoft Windows".
Other way around: consoles are there to sell Game Pass. Microsoft wanted to put it on PlayStation, in fact, but Sony wouldn't allow it. It's been clear for quite a few years that MS has been prioritising software over hardware.
There's barely any profit to be made in console sales themselves. They often start out the console generation as loss-leaders, in fact, and then as the manufacturing scales and becomes cheaper they'll see small profits per console. But making $50 profit on a console sale is nothing compared to the cut they take on software (game) sales and subscriptions. A $70 game where the storefront takes a 30% cut means they take $21 per game sale. Not all of that will be pure profit, of course - there are some infrastructure costs and such - but let's assume the average person buys three games per year; that's ~$60 per year, rather than the one-off $50 from the console sale. And obviously that number goes up the more games someone buys, whereas the profit on the console is static.
Microsoft has stated that Game Pass is profitable in its own right.
The benefit of selling consoles is not making money from the sale, but having a large install base that will give you leverage over developers.
I agree that the money is in software, no doubt about that. The fact that Sony doesn't want Game Pass is simply that it would weaken their position: people just using Game Pass have no need to buy the games where Sony would be taking the cut. The Steam Deck on the other hand doesn't really compete with the others, Valve to my knowledge is making money on every device sold (though this seemed close for the 64 GB model), sure it broadens their Steam base but I don't think it made a huge impact. Noticable yes.
There's another issue with Game Pass. As a publisher, Game Pass is kind of a looking threat to your early sales. People might be waiting out before buying in case it becomes free later.
Lastly, I don't think Microsoft is completely honest about Game Pass profitability. Subscription fees might cover the licensing costs, yes. But on the other hand, Microsoft paid $7.5 billion for Bethesda, and all their games came to Game Pass immediately, meaning the direct sales of these games won't cover the investment. So if they were honest, they'd put that expense partially against Game Pass.
To combine these last two points, it's said that Microsoft bought Bethesda also to prevent them from publishing for PlayStation 5 exclusively. I'd guess Game Pass played a role there - but obviously this is all speculation.
Honestly, I can see them doing it if they can get Valve to do most of the work.