Nintendo

Nintendo And Sony Have No Reason To Be Affected By Xbox Game Pass

Microsoft’s recent announcement regarding the Xbox Game Pass, and how all of their first party games going forward will be available on it day one sent shockwaves through the industry. Indeed, this is a move that could have far-reaching implications for video games, how they are distributed, and how we engage with them. With this move, Microsoft has expressed its clearest desire for a future where games can be distributed as a service, regardless of what kind of game it is- which is, indeed, in keeping with the rest of the company, which sells subscriptions for Windows, for Office, for OneDrive and SharePoint, for Azure, for Skype, and more.

It is also a future where games are no longer valued as discrete $60 products but are instead enjoyed as perks for an ongoing subscription- no different, in fact, that is how Netflix or Spotify treat movies or music. In such a future, games as physical commodities would become marginalized, cutting out the retailers, who are middlemen when it comes to games distribution, entirely. Indeed, it seems that retailers feel threatened by Microsoft’s move, too- an Austrian retailer has already boycotted Xbox products in response to Microsoft’s announcement about the GamePass.

“Microsoft has thrown a wrench in things, and possibly kickstarted a motion towards the rest of the industry following in its footsteps.”

Surely, then, Microsoft has thrown a wrench in things, and possibly kickstarted a motion towards the rest of the industry following in its footsteps? After all, wouldn’t new customers rather spend money on the console where they are guaranteed a “free” (I know it’s not actually free, but psychologically, functionally, they are as free as PS Plus or Games with Gold games are), sizeable library on an ongoing basis, including the latest and greatest new games? Why continue to spend $60 on a new game,  if you can cut out the expense on the game entirely?

But while Microsoft’s move might make the most sense for Microsoft as a company, and for its own vision for what games should be, and what the company as a whole wants its offerings at large to be, it is not a move that makes sense for everyone else. For instance, Sony and Nintendo fans should not necessarily hope (or fear) that those companies will follow in Game Pass’ footsteps- and in the end, I feel like that will be a good thing.

The first and most important thing to remember is that a model like Game Pass makes the most sense if there is potential to actually monetize the game beyond the initial asking price. Put simply, if Microsoft can expect that everyone gets the game “for free”, but that after that they will spend money on the game thanks to in-game purchases- whether DLC or microtransactions- this model is economically feasible. And indeed, most of Microsoft’s games are of this nature. Gears, Halo, Forza, most Microsoft games are indeed titles that offer additional in-game purchases via additional monetization opportunities. Players, no longer spending $60 per game discretely, have less of a psychological barrier towards spending money on in-game purchases as well.

“For Sony, even though it has some games that have GaAs elements within them, a Game Pass model simply doesn’t make sense.”

A model like Game Pass doesn’t preclude a single player game- and it would be in Microsoft’s best interests to have a major single-player adventure or two as loss leaders on there as well, that attracts players of those games to the service as well- but it makes sense if the bulk of the games are decidedly not one and done single player games, and offer additional monetization opportunities. While that is true of Microsoft’s lineup, it is not true of Sony’s and Nintendo’s.

While some Sony games offer in-game microtransactions, and most offer some form of discrete post-launch DLC and expansions, Sony’s first-party titles are largely less ongoing ‘Games as a Service’ and juster… games. If Sony were to put BloodborneHorizon, and Ratchet and Clank on a PlayStation Pass, then it would be foregoing $60 (or $40 or $30) purchases, while only maybe getting $15 or $20 from players who might potentially be interested enough in a game to spend money on a story expansion for it- if they would even feel tempted to do so, instead of just turning their attention to other games. For Sony, even though it has some games that have GaAs elements within them, a Game Pass model simply doesn’t make sense.

“If Nintendo put its games on a service like Game Pass, it would literally be giving away the bulk of its profits. It would also be at odds entirely with Nintendo’s whole approach to how it sells its games.”

A model like that makes even less sense for Nintendo. For a minute, consider Nintendo’s offerings- very few have DLC and microtransactions. Even Nintendo’s GaAs style games, such as Splatoon or ARMS, offer additional content to the player for free. If Nintendo put its games on a service like Game Pass, it would literally be giving away the bulk of its profits.

It would also be at odds entirely with Nintendo’s whole approach to how it sells its games. Put simply, Nintendo heavily stands against the devaluation of its games and IP. That is why its games remain at full price for so long, and why Nintendo rarely puts games on sale, or why Virtual Console prices can charge $10 for 20-year-old games, or has any official price drops. For Nintendo, it is more beneficial if its users value its games enough to spend $60 on them- even if they never spend any more money on that game, because it has no DLC or microtransactions, the fact that everyone who buys that game will buy it for $60 (as well as the fact that the IP will not be “devalued”) is central to Nintendo’s strategy. Offering these games for literally no money as part of an ongoing subscription completely undermines this strategy. It flies in the face of it, in fact.

So, yes, Microsoft’s move is important, and we may continue to see its effects and impact for years to come. I am not denying that, and I think a lot of the industry may make a move towards Game Pass style models in the future if Microsoft’s gambit pays off. But while the Game Pass model makes sense for Microsoft, it only makes sense for Microsoft- Sony and Nintendo neither have any incentive to follow in Microsoft’s footsteps nor will they, hopefully. I would rather they continue to provide us with the kinds of excellent single player focused games they have been rather than the shift towards the kinds of GaAs style games that would be necessary to sustain a Game Pass style service.

 

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