Kate Mills
May 13, 2024
Tango Gameworks, Arkane Austin, and Alpha Dog Games announced their closures earlier this week, whereas, Roundhouse Games will join ZeniMax Online Studios.
The influence of Xbox Game Pass on the titles in its catalogue has been debated for years. However, some studios favour this revenue model, claiming that joining the service elevates their products to new heights, others contend that it hurts gameplay performance.
Brad Hilderbrand, former Senior PR Lead at Microsoft, addressed the problem explaining that the most significant contradiction of Microsoft's programme is that "all games released on the service fail to meet their sales targets." But why? Essentially, players would rather buy a subscription and play them "for free" than pay full price.
According to the former employee, games that debut on the service receive a significant boost immediately but are unable to remain at the top for more than one or two months. He also notes that the growth of Xbox Game Pass has stagnated.
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"Then titles like Hi-Fi RUSH, which are fantastic, receive a modest revenue boost from being the most popular game on Xbox Game Pass for a month but then plummet when everyone goes on to the next item. Poor Redfall was much worse off since its debut was so disastrous that it never had a chance.
Brad Hilderbrand goes on to say that the subscription service "was fine" in its prime, but that its growth has slowed, and as a result, the amount of income attributed to games does not meet the budget. This is where the second issue arises: studio acquisitions, particularly Activision Blizzard.
The former Microsoft employee argues that the subscription service's problems were insignificant three or four years ago, however, that changed when big sums of money were spent acquiring third-party studios. Top management now expects Xbox to "start recouping those $70 billion, or at least minimise spending."
"I don't know what the plans are, but you put it on Game Pass and you lose money or you don't and subscribers revolt because they feel that's what they signed up for," said the executive.
The former Microsoft employee reiterated that Xbox Game Pass was the proper plan when it was released, but warns that when subscription growth plateaus, game costs increase.
"The only chance (externally) is to put in service all the biggest games in the world and make them indispensable to players. The only thing left is CoD or GTA VI.
"It's difficult for GTA to come to Game Pass, and I believe Call of Duty does the same calculations and concludes that it's too hazardous to give up sales money in the hopes of obtaining enough members," he said.
