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Xbox Game Pass Is Not Trying To Squeeze Out Retail Or Other Models, Phil Spencer Says

"For us at Xbox, there's not one business model that we think is going to win."


Xbox Game Pass is a major focus for Xbox going forward, but developers don't need to launch their games into the catalog to find success on Xbox. Microsoft Gaming boss Phil Spencer spoke about this during the Game Developers Conference this week, saying there is no one specific business model that will dominate at Xbox going forward. The executive sees a bright future for not just Game Pass, but also the traditional retail model and the free-to-play experience, just to name a couple options outside Game Pass.

"For us at Xbox, there's not one business model that we think is going to win. I often get asked by developers, 'If I'm not in the subscription, am I just not viable on Xbox anymore?' It's absolutely not true. We look at retail--people selling games, buying games--it's an important part of our P&L. Free-to-play games, we want those to flourish on our platform. It's really about the diversity of business models," he said.

Spencer went on to say that he pushes back against the idea that gaming is following in the footsteps of other entertainment mediums in consolidating around one business model or another. In gaming, digital, retail, subscriptions, and other models can successful co-exist at the same time, Spencer said.

This sounds similar to what Microsoft believes could happen with cloud gaming. While it could become popular, it's unlikely to be the only way people play games soon, if it ever does.

Xbox's Sarah Bond also appeared during the GDC event, and she shared statistics that speak to the positive impact of putting games on Game Pass. Bond said "engagement" in a particular title goes up by about 8X when it's added to Game Pass versus where it was before joining the program. Additionally, Game Pass subscribers spend 50% more than non-members, Bond said.

Microsoft is understandably and obviously pushing Game Pass, but not everyone in the industry believes the subscription-based model is such a good thing. Strauss Zelnick, the head of Rockstar Games parent company Take-Two, has said he's unsure if the economics of a program like Game Pass actually make sense. Is it possible for everyone in the chain--developers, publishers, and consumers alike--to come out ahead with subscription-based service like Game Pass? Zelnick isn't sure.

For more on the economics of Game Pass, check out GameSpot's feature, "Xbox Game Pass Is A New Paradigm."

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