Xbox’s New Strategy To Retake The Throne

Xbox One is a great console with several SKUs for people to choose from. Early adopters have the original Xbox One and new customers are able to buy the Xbox One S and Xbox One X. Xbox One S is a new default version of the Xbox One but with the added feature of 4K connectivity. Xbox One X, the world’s most powerful console, is a beefy and suped-up version of the Xbox One that can play games at 4K and improve older games. Microsoft keeps its units-sold number close to the chest when it comes to Xbox One units in the wild. However, we can estimate that PS4 is outselling Xbox by 2:1. There are currently about 66 million PS4s, so we can assume that there are around 34 million Xbox One consoles. That’s  nothing to scoff at, but the mindset of this generation has revolved around PlayStation.

Microsoft may be behind this generation, but never underestimate the resourcefulness of an underdog. Gamers are starting to see the formation of Xbox’s bright future and how it will affect the video game industry as a whole. Phil Spencer is currently laying down the tracks to get the Xbox brand recognized as a powerhouse software company. What does this mean for their hardware? Well, let’s first talk about the changes and recent rumors of what they’ve been up to.

First-Party Games Launch Day One on Game Pass

Microsoft made a decision that could impact the gaming landscape a couple of years down the line. The company announced that first-party games will be available on Game Pass on day one. This is a major move for the console maker that’s currently criticized for their lack of great first-party games this generation.

The Xbox One is behind when it comes to console sales, but its numbers are still above and beyond the performance of the Xbox 360. 2017 became the big push and reveal of Microsoft’s most powerful console: the Xbox One X. So imagine a scenario where you own the most powerful console on the market, a Game Pass subscription with 100+ games, and all first-party games on day one. They’re talking about games like Sea of Thieves, State of Decay 2, Crackdown 3, Forza, Halo (6?), and Gears of War (5?).

This could help shape the gaming landscape as we know it in the same vein as Amazon and Netflix. Amazon changed how we shop online, and the infrastructure necessary to deliver huge amounts of merchandise. Netflix developed a brand-new market of video on demand (VOD) programming that evolved over years, and is the main powerhouse with several hit shows. Could Microsoft and the Xbox brand develop a platform that delivers games for a low monthly subscription? Of course… but not without addressing a few issues that are guaranteed to come up for both customers and developers.

Let me state this again. Game Pass is improving at a rapid rate and providing great value for Xbox One owners. PlayStation doesn’t believe in backward compatibility, and instead created a game streaming service known as PS Now. While not as great as Game Pass, PlayStation owners are only allowed to stream their games, instead of downloading them.

Rocky Sailing

Microsoft is building a software subscription service that replaces traditional retail and digital game sales. There are a few issues that need to be addressed in order to lead games as a service into a new stage of gaming.

1. How long will a game stay in the rotation?
2. How will publishers and developers be compensated for licensing their games on Game Pass?
3. Who maintains the curation of quality games?
4. Is this business model sustainable?
5. If we head into a subscription-based future, what will happen to retail relationships?

If Xbox becomes the Netflix of the video game industry, it needs to invest heavily in its own IP. Netflix is the powerhouse it is today because it licensed shows and movies at a time when there was no competition. Netflix maintained its lead as the competition started to spring up in the forms of Hulu, Amazon Video, HBO Go, etc. This resulted in Netflix making a killer line-up of shows and going after niche audiences.

It took Netflix more than a decade to build the foundation that produces great content and caters to its viewers. The video game industry is a completely different beast in which AAA video games take, at minimum, three years to make. Actors and film crews also have set rules and unions that need to be upheld. It has been a point of discussion that, one day, video game programmers might unionize, which in turn will drive production costs higher. Xbox can support their service using first-party studios, but that won’t be enough output.

I certainly don’t have the answers to all these questions, and looking at other video streaming platforms isn’t the answer either. Let’s not forget that the reason most digital games aren’t cheap is that retailers don’t want to be undercut. Most games don’t go on sale digitally until several months down the line in order to appease brick-and-mortar video game retailers. What would happen if Microsoft decided to abandon making consoles? Could their service be accessed on smart televisions without the proper hardware?

Xbox’s Game Pass Potential is Huge!

Microsoft is a king when it comes to software! They have the resources and ingenuity to create something that will shake the core of the video game industry. The company pioneered console online connectivity and created an online digital shop before any other console. Xbox is a strong and great brand that is recognized around the world with access to powerful cloud-based technology.

Only time will tell how far the Xbox brand is willing to go to make a subscription business model for gaming. Then again, this could simply be pro-consumer features designed to give Microsoft’s console an edge over the PS4. Buying a system that grants access to its first-party line up and 100+ games for $10/mo. is a great value.