In the wake of Microsoft’s surprise announcement it was closing down developers Arkane Austin and Tango Gameworks, there are new reports coming out about what exactly is going on at Xbox, and none paint a particularly rosy picture.
One of the biggest headlines is from The Verge, where Tom Warren reports that Microsoft is currently debating whether it should put the next Call of Duty, and future Call of Duties, onto Game Pass rather than continuing to sell them independently for full price to its players.
While it seems like this is something that should have been settled in the minds of leadership before this $70 billion Activision Blizzard purchase was finalized, given that Call of Duty was far and away the biggest IP from that sale, that either didn’t happen or it is revisiting their plans.
Microsoft faces steep downsides in either direction. If it continues to sell Call of Duty as-is to Xbox players, that breaks a stated tradition of all first-party games coming day one to Game Pass. It also does not encourage additional Game Pass sign-ups with Call of Duty acting as a lure, something it badly needs with severely slowing subscription growth.
But if Microsoft does put Call of Duty on Game Pass, that is forgoing potentially billions in revenue over the long term, given how much the game sells and how important it is to Xbox players who would buy it anyway even if it wasn’t on Game Pass. This is why it will continue to sell the game on PlayStation, because as they stated in court, it would be extremely unwise to forgo that revenue. But then it might do exactly that for Xbox. It’s a little hard to fathom that COD on Game Pass would move the subscription needle enough to offset revenue from those $70 copies every year, but this is a huge test of Microsoft’s current Game Pass-focused philosophy.
Modern Warfare 3
It’s representative of the entire Game Pass gamble. Is it sustainable to fund the development of all your games, small, big and absolutely massive, when all your exclusive offerings are given away “for free” on Game Pass? Microsoft wanted to be first in market to craft a “Netflix for gaming” with Game Pass, but it seems to be having the struggles of many of Netflix’s competitors in the space, and it feels less and less like this model may make sense as subscriptions hit a very clear ceiling.
There’s a dream that Microsoft will somehow burst beyond the console market and get a bunch of new players on other devices through cloud streaming, but that has not manifested and does not seem especially close to manifesting. It is limited by the reach of its hardware which is half of what PlayStation is selling and decreasing further as each new decision it makes, like bring games to PlayStation for instance, creates fewer and fewer reasons to own an Xbox. On “solution” here is that, surprise, Microsoft may consider raising the price of Game Pass again, a way it thinks it can print money to offset these huge costs.
Microsoft has to make a decision about this relatively quickly. The new Call of Duty, likely a Black Ops title, will be out this fall, just a few months from now. It has a summer showcase which will reveal this game just a month from now, and whether or not the game will be on Game Pass really should be announced then.
My gut tells me that since this is still Phil Spencer’s team that has been pushing Game Pass this hard, they’ll do it. They’ll put Call of Duty on Game Pass. But whether that’s the right call or not could determine a whole lot about the series’ future and Xbox as a whole.
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2024-05-09 12:27:23Z
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