"We don't see a future where subscriptions are dominant" - Microsoft

Earlier this month, we ran an editorial on how the race to produce a "Netflix of games" could wind up hurting developers, even if it works out well for customers as well as the people running these services. After that article, Microsoft reached out to offer an interview on the subject with the company's head of gaming services Ben Decker and Game Pass head of planning Matt Percy.

Much of the editorial discussed the implications of subscription services like Game Pass becoming the primary way for people to enjoy the hobby in the same way some people rely on Netflix or services like Spotify and Pandora for all their needs in other media. Decker insisted that isn't the plan for Game Pass.

"When we launched it, we thought an ever-increasing number of titles might be something that was really important to gamers," he admitted. "But as it turns out, that's not really what they're asking for. What we get from our customers isn't, 'I want a subscription that has thousands and thousands of games.' What we heard from them is, 'I want a subscription with 100, or a little more than 100, games. But I want them to be really good games. And I want a curated portfolio where I know what's in there is going to be really great to play.'

"We don't have a goal of being the subscription where you get all your content. This is meant to be additive to the ecosystem. We don't see a future where subscriptions are dominant. We see a future where customers have choice between a subscription and purchase-to-own, where there's a mixed ecosystem because that's what customers want, and that's what developers want."

"I don't think [Sea of Thieves and State of Decay] reach that level of adoption in the community without their inclusion in Game Pass"

Ben Decker

In its current form, Game Pass charges a $9.99 monthly fee and provides a rotating selection of 100 games with changes to the catalog made each month. While many of the titles are older, Microsoft has committed to having all its first-party games available in Game Pass on the day they launch, and has also been striking deals with third-party developers to have their games debut in the Game Pass service at release as well. And at least for the moment, Decker said it's been working out well for everyone involved.

"Sea of Thieves has seen over 5 million players, and we attribute a lot of that success to the fact that the game is in Game Pass," Decker said. "State of Decay has seen over 3 million players. I don't think those titles reach that level of adoption in the community without their inclusion in Game Pass."

He added, "Our partners in Game Pass to date have been really happy with the performance they've seen," he said. "I will say that. I don't think we've had a partner who hasn't viewed their experience in Game Pass as being additive to the franchise and the title they included in Game Pass. People have generally been very happy with the licensing fees and the engagement it's driven. And for titles that offer additional purchases within games, I think people have been happy with the incremental business they've seen there from a significantly larger player base as a result of being in Game Pass."

Microsoft has been looking at the habits of Game Pass subscribers in the three months before they signed up and the three months after, and finding some data to support that position. On average, Game Pass members have increased their time spent gaming on Xbox by about 20%, with Percy noting a "significant portion" of that time is spent playing non-Game Pass games. The number of games they played increased by 40%, with increased purchasing and engaging with titles outside the Game Pass service.

Of course, all these numbers are based on Game Pass in its current form. And for all Microsoft may want a vibrant ecosystem where purchases and subscription are both viable ways to buy and sell games, Decker said the company isn't dogmatic about sticking to that if the market shifts in the other direction.

"What we want to do is make sure we provide the best service possible to our customers while also providing the best possible ecosystem for our partners and the most vibrant marketplace," Decker said. "If customers choose to buy, great. If they choose to subscribe, great. If you want to release your game into Game Pass, great. If you want to do only purchases, that's also fine. It's developer choice and customer choice. We want to create a thriving ecosystem. I wouldn't say we're dogmatic on either side."

When asked whether Microsoft believes a subscription-dominated PC and console gaming scene would be harmful to the industry, Decker reiterated that the company sees Game Pass as complementary to the company's direct purchasing model, not as a replacement for it.

"What's great about gaming is you have a diversity of business models versus other forms of media, and we see Game Pass as extending that," he said.