Xbox game pass $1 sea of thieves10/25/2023 ![]() Right now, we cannot purchase games for use on Xbox Cloud Gaming, as you could with Stadia or can today with NVIDIA GeForce Now. Xbox Cloud Gaming could be the "digital lock-in" mechanism that Xbox is neglecting by way of degraded console sales. Microsoft also has a big hill to climb with regard to technology. Meanwhile, Nintendo and PlayStation are locking customers into their platforms digitally with every non-refundable digital copy sold, making it impossible for most users to switch or abandon platforms. If user habits truly are changing (largely assumptions based on retail sales charts that have lots of data holes), then Microsoft is training users not to buy its games, and not to digitally tie themselves to the Xbox platform. Netflix and Spotify sustain themselves by raising subscription prices regularly, something Xbox Game Pass hasn't really done in its core markets. Xbox Game Pass is simply one aspect of a wider, diversified Xbox gaming pie - but the deeper Microsoft gets into it, the more difficult it might be to pull out of it. There are no microtransactions attached to their products. Netflix and Spotify have little to no upsell. I've written previously about how comparisons to Netflix and Spotify for Xbox Game Pass don't make a ton of sense. ![]() ![]() Thankfully, that's not what's going on here. But for those invested in the hobby and the platform itself, nobody wants to see their investments in digital content go up in smoke in a Stadia-like bonfire because Xbox went all-in on a business model that didn't make any sense. It shouldn't matter to consumers at large, and frankly it more than likely doesn't. If they were turning XGP into a loss leader, you'd see them accelerate on things like marketing while committing vast sums of cash to exclusivity deals on AAA games - and it's pointless for them to go too hard right now, due to a variety of constraints. I wholly expect Microsoft is spending as much as it makes from Xbox Game Pass in its growth phase, but there's no reason to think they're taking losses. ![]() If you have month-over-month guaranteed income that you can project, it makes it pretty easy to attribute expenditure. Detractors will often say "revenue doesn't mean profit," and sure, but it's pretty clear to me from conversations I've had with Microsoft sources that Xbox Game Pass is playing it conservatively with sustainability in mind. ![]()
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