People say physical media is dead? Microsoft disagree.

Submitted by its_muh_username t3_yiag6m in gaming

Phil Spencer of Microsoft just did an interview where he said that Games Pass is 15% of their revenue and he doesn't expect it to get any bigger on consoles. He doesn't think it will ever be 50%, 60% or 70% and that Games Pass has reached its peak at 15% as all the people that want to join have already joined. He said that more people still go out and buy games physically and that physical sales are far far higher than Games Pass numbers, even on Xbox. Microsoft has also said that for the last 2yrs in a row they have failed to meet Games Pass milestones. They wanted 75% growth but only reached 28%.

So, with Microsoft admitting that Games Pass has reached its peak, and is still lagging way behind physical sales, what do you think of the future of gaming now? Do you think Microsoft will continue with Games Pass? 🤔

3

Comments

You must log in or register to comment.

minev1128 t1_iuho192 wrote

Gamepass doesn't really appeal to me. I prefer to own games.

While there are some benefits like testing out games without the risk of wasting money. I just buy and play games that I'm confident I wouldn't regret buying.

13

pipboy_warrior t1_iui3ykm wrote

I think it works well for people that want to try out a variety of games, or for games that you think you'll likely only play once.

Now for anything longer or games that will likely get replayed multiple times, owning is probably preferable.

5

yaosio t1_iui1qm5 wrote

Gamepass appeals to me. It's cheaper than buying games.

4

its_muh_username OP t1_iuhoxhy wrote

Exactly the same as me. I tried Games Pass when it was 3 months for £1 and never again. It just didn't appeal to me and I already owned all the good games on there.

2

mr_showboat t1_iuhngrm wrote

At this point, they can't stop game pass. It would piss off too many people. They'll do what every subscription service has done since the beginning of time when they are operating at a loss on the product, and raise prices or cut content.

6

its_muh_username OP t1_iuhorq5 wrote

Phil Spencer did say that price rises are on the way for Games Pass and Xbox. But they won't happen until next year. I'm thinking that they may start dropping big new games releasing on Games Pass and charging full price for them. Like what Sony does with its subscription service.

1

mr_showboat t1_iuhqev4 wrote

I don't see them cutting day 1 releases entirely -- it feels like it's too much a part of the marketing of Game Pass. I could see them introducing multiple tiers where only the most expensive includes all day 1 releases.

Either way, it'll be very interesting to see how they handle the Starfield launch. I'm sure they want to make the biggest splash financially off their flagship acquisition's first big single player title (which is something that Xbox has very much struggled with in the past). I would think that'll be the catalyst for some changes to Game Pass.

2

Gungnir257 t1_iuhpyd1 wrote

Erm. No, no, he didn't say that.

He said...

GP makes 10-15% of revenue, that he thinks GP will saturate at a little higher than it is (currently 25M subs), and that game sales are just as important. However he didn't distinguish between sales of physical media, and digital media. Why would he? A sale is a sale, they get licensing fees either way.

3

[deleted] t1_iuit4mj wrote

Many disagree.
Something about putting in a disc in a console or on PC to install it is something many prefer.

3

MechaCoffeeBean t1_iuhpjsv wrote

Digital sales has definitely taken off big time in the last generation or two I guess. That's fine as long as we don't get a worse experience though, which is important.

Currently I can't play my switch and my kid plays the switch lite if we both want to play games bought through the store (there are tricks, but imagine your kid just wants to play and can't figure it out) if we had a physical copy of either game, it works fine. It's basically to stop account sharing. I gotta feel there's a better way to do it.

So I guess I don't particularly care if physical media dies, it's definitely more convenient to not have to swap discs and cartridges, but if the experience is worse and we don't own óir games anymore then we just lose.

2

Ze-Doctor t1_iuhne7k wrote

I am not so sure about it but I think it will still continue. Maybe all third party games won't be there anymore but all the games which are owned by Microsoft will still be available if they do decide to change their plans.

1

Coubsauce t1_iuhnldh wrote

Take that with a grain of salt.

He is in the middle of a lawsuit with Playstation about making COD free on game pass.

1

Andis-x t1_iuho2ju wrote

Well at this point physical games might as well be just CD, with single text file containing key. As most of them need day one updates from internet anyway.

Difference here is that Game Pass ir a subscription service, while Steam (atleast looks like) regular store, where you outright buy and own* the game.

Because of this, on PC physical media games are dead. Don't know if digital stores on console offer to buy game and not pay any subscription.

1

Witch_of_Dunwich t1_iuhq3mx wrote

I wish people would stop spreading this false information.

Over 80% of current gen games are all on the disc, according to the group currently preserving video games. That means no day 1 patch.

2

its_muh_username OP t1_iuhp17l wrote

All of Sony's exclusives are on the disc. They obviously have after patches but there are perfectly playable versions on the disc.

1

JhonWeak56 t1_iuhs3fh wrote

I think it’s a generational thing that will eventually fade out, most gamers nowadays are still people who used to buy games physically, but the new generation is much more leaning towards digital version, gamepass will continue to growth as it’s the biggest advantage for gamers that xbox has over Sony, eventually it will become very big, i don’t know if it will ever represent 100% of the sales but I’m convinced that it will definitely become bigger than physical sales over the course of the next decade. Because unlike Netflix, games last much longer than tv show or film, you can replay some games literally 100s of time and spend 1000s of hours on it, but i don’t know a lot of people who have watched Titanic a 100 times, game production is also cheaper in some sense, because a lot of the gamepass catalog is made of indie game that brings a lot of value for not a whole lot of money.

1

gothpunkboy89 t1_iuhvmp4 wrote

Games don't sit around for you to play hundreds of hours in gamepass.

2

JhonWeak56 t1_iuhytvb wrote

What do you mean ?

1

gothpunkboy89 t1_iui1n6w wrote

3rd party games rotate out all the time.

2

JhonWeak56 t1_iui20xb wrote

Surely but you usually have plenty of time to complete them, and most of the big titles owned by Microsoft stay forever. So my point is stil relevant for the average joe there’s a good value in game pass with probably more game than he needs hence explaining why as the generational shift slowly occurs and the gamepass develop probably less and less people will find buying physical copy of a game a sensible thing to do

3

gothpunkboy89 t1_iui2j2s wrote

>Surely but you usually have plenty of time to complete them,

Probably. But not the continual replay 100 times as you claimed.

1

its_muh_username OP t1_iui87db wrote

It depends when you sign up and a game is set to be removed from the platform. When I signed up to Games Pass to play Fallout 4 it was removed from the service about 3 days later so I couldn't complete it. I bought a physical copy in the end.

1

JhonWeak56 t1_iuiik5n wrote

Obviously there’s some edge cases, but overall most people are very satisfied by this model no matter if it’s from xbox or playstation people will buy it.

1

InfamousDonut4266 t1_iui636g wrote

Game pass for me is a cheap (if I can get on deal) to test a game I'd maybe went to buy.

1

HachObby t1_iuitxkl wrote

i think Phil is downplaying GamePass for the CMA. The new gen PlayStation and Xbox have been sluggish and haven't really given people a reason to buy in. A lot of people moved to PC where GamePass is growing, but as the economy slows and PC parts get more ridiculous with very little in average performance gains I think the Series S and GamePass will be a big part of the near future of gaming.

1

its_muh_username OP t1_iuixp44 wrote

They've been selling like hot cakes. Well, PlayStation 5 has. Playstation 5 has smashed sales records all over the world that were previously set by the PS4. Across Europe Series S sits left untouched on shelves, even at launch. And developers are now trying to get Microsoft to drop the Series S as they say it's weak and holding back next gen development.

1

ThandiGhandi t1_iujf8yf wrote

I tried gamepass for the first time to try some games I was thinking about buying. Once im done with them I will cancel and buy the ones I liked

1

R-Worded-Guy t1_iuhn680 wrote

You can't trade virtual media.

0

BangEnergyCuresED t1_iuhpg0o wrote

Conveniently omitting the fact the PC game pass subscriptions went up 153 percent. Also that he said it was profitable

0

its_muh_username OP t1_iuhpl7o wrote

I said on consoles. I can't see how it's profitable and pays for all the billions they've spent on buying all them studios.

−5

BangEnergyCuresED t1_iuhpwmk wrote

I know you said consoles, but your extrapolating console data to cover their operations as a whole.

How much do you think xboxs total revenue is?

1

its_muh_username OP t1_iuhqvow wrote

Well 2021's revenue Xbox was $16 Billion and PlayStation was $25 Billion. Factor in how many billions Microsoft has spent on Bethesda and COD etc etc. They spend a ton of money. I live right near developer Ninja Theory that makes Hell Blade. They aren't even a AAA developer yet Microsoft has built them an entire new building in one of the most expensive parts of the UK. They bought the land and built them a huge building and fully kitted it out. That seems crazy to me.

0

BangEnergyCuresED t1_iuhrvqr wrote

Companies invest in themselves, it's not nuts

2

its_muh_username OP t1_iuhtsg9 wrote

It's not nuts to invest but it is nuts the amount of money that they invest. Ninja Theory's old building was fine. To buy that amount of land in an expensive part of the UK and build an entire massive building for them and fully kit it out seems wild. Because let's face it, Ninja Theory has had 1 hit game and that was a surprise hit.

1

BangEnergyCuresED t1_iui98n9 wrote

I don't think you're wrapping your head around how big of a company Microsoft is

0

its_muh_username OP t1_iuixc29 wrote

I know how big it is. I just don't see the point. If a developer has a perfectly good building and only put out 1 hit game that was a surprise hit. Why invest many many millions in building them a new studio. Especially at a time when Microsoft say they want to make money. Surely leave them in the building they were in and wait and see if they can put out more hit games first.

1

BangEnergyCuresED t1_iujw16i wrote

They aren't buying studios and just crossing their fingers that they're good.

1

Trickster289 t1_iuhrqsl wrote

They aren't an AAA developer yet. Microsoft could be planning to make them one. Sony's done it before.

1

cannabisarus t1_iuhwve1 wrote

Gamepass can’t go anywhere it’s literally the bread and butter of Xbox right now. The only thing that can happen is price hikes

0

its_muh_username OP t1_iui8o91 wrote

Did you not read? Phil Spencer said Games Pass is just 15% of Xbox's revenue and that way more people still prefer buying physical copies than they do join Games Pass. And he thinks Games Pass has reached its peak in terms of subscribers on console.

−1

cannabisarus t1_iuiayus wrote

Yes I read it. Gamepass is still the bread and butter of why people join Xbox especially nowadays. It’s their main marketing tool. Physical is garbage and dying I assure you this. I’m sure digital sales dwarf physical and it’s not even close. Shit on steam you can’t even by physical games and look how poppin that joint is. It’s the standard for buying pc games.

0

its_muh_username OP t1_iuixzw0 wrote

But it's not. Phil Spencer said that way more people still buy physical.copies than they do join Games Pass, even on Xbox. Games Pass is just 15% of Xboxs revenue. So it's not the bread and butter. To be Xboxs bread and butter it needs to be over 50%. Even free to play and microtransactions across Fortnite and Fall Guys brings Xbox more money than games pass.

0